Starting an e-commerce business isn’t as simple as creating a product line and setting up your online store. You also need to advertise, build a mailing list, deal with customer service, and choose a shipping method that your customers can trust and afford. It’s this latter element that many entrepreneurs don’t think about until they are already experiencing issues with abandoned virtual shopping carts, so don’t fall into the same trap!
A report published by UPS shows that 44 percent of abandoned carts are due to shipping costs. Even when your products are attractive, and your prices are fair, many customers will decide against making a purchase once they see the total price with the shipping costs added in. Despite such problems, finding a shipping strategy that works for you and your customers is not impossible.
E-commerce Shipping Options
There are several shipping methods that are used by successful online merchants all over the world, but what works for one business doesn’t necessarily work for another. Discovering which method is best for your e-commerce business will require you to take into account your product price, shipping costs, and the willingness of your customers to meet these costs.
The real-time shipping method lets customers see the actual fees from various shipping providers while still on your product page. Not only does this let them choose a shipping method for themselves, but also it motivates them to trust your business due to its transparency.
Some companies choose to use a flat fee for shipping no matter what the order. If you want to employ this strategy, you will need to calculate your average shipping cost and use that as the flat fee. Some orders will cost more to ship; others, less. Over the long run, you should break even.
For obvious reasons, free shipping is incredibly popular with online shoppers. Forty-seven percent of online purchases include free shipping, and 60 percent of online retailers cite “free shipping with conditions” as their most successful marketing tool. If you do choose to provide free shipping to your customers, you have to make the choice to raise your product prices, or lose a portion of your profit.
You might also choose to combine the previous shipping methods and use a unique hybrid model. Offer free shipping on orders over a certain amount, for example, or only on specific products. Shoppers will spend an average of 30 percent more per order when they know free shipping is included, while 28 percent of them will abandon their shopping carts when presented with unexpected shipping costs. If you can work in free shipping somehow, and advertise your business this way, you’ll stand a much better chance of attracting buyers that won’t leave a full shopping cart behind.
How to Choose Your Shipping Method
Research conducted by David Bell shows that customers are more likely to make a purchase when $6.99 shipping costs are waived than they are to make the same purchase with a $10 discount. Of course, not every business can afford to offer free shipping, so the method you choose needs to be as low-cost as possible. If you are having trouble deciding which is best, you may be interested in conducting a split test to determine which shipping method is the most valuable to your business.
The method you choose to ship your product needs to meet a few key requirements. Primarily, your method must be:
If you and your customers can’t depend on shipments reaching their destinations, you’ll lose money, clients and your reputation. On the other hand, you need to employ a shipper that is affordable for you and your end consumer.
Finally, shipping needs to be flexible enough for customers in different cities and countries to be able to buy from you. There are few things as disappointing as checking out only to discover that rural addresses or international destinations aren’t included in a company’s shipping policy.
It’s Okay to Experiment
By all means, go ahead and experiment with a few different shipping methods before you make a decision! There’s no unwritten online business rule that says you need to pick UPS and stick with it. Shop around, ask shipping companies directly about their products, and don’t get shy about asking for special packages or discounts.
Great Shipping Means More Revenue
Shipping can both be a good and bad thing for your business, so it’s important to use a strategy that will work for you and your customers. High shipping rates can only increase the number of your abandoned carts, which means low sales and revenue. Thus, by considering some of the suggested shipping strategies in this article, you can attract customers, save lost orders and simplify your life.