Are you an ecommerce entrepreneur or planning to start an online store?
Does this story sounds very similar – “A new customer lands onto your online store, select the product after considering price and adds it to the cart. He proceeds to the ‘Checkout’ section and gets hit with the handling and shipping charges and reconsiders their buying decision.” And then – it is possible that they purchase the product reluctantly or abandon the shopping cart leaving you unhappy!
Moral of the story –a proper shipping strategy or lack of it can affect ecommerce sales in a big way. Here’s a lowdown at some shopping strategies and how you can use them:
Shipping Rates Affect Shopping Cart Abandonment
Studies by North American Retail online survey demonstrates ‘high shipping and handling costs’ are the main reason for shopping cart abandonment. Hesitation and low prices on different sites are the next 2 big factors. The real challenge lies in devising a delivery strategy that would claim your customers to not destroy your margins
Some Popular Ecommerce Shipping Strategies
Free Shipping
Let’s start with the most surefire way to attract ecommerce customers, at least in the domestic market, Free Shipping. The challenge is – it can decrease your profits. However, it can give you an edge over rivals who don’t offer that, in terms of sales and marketing. Presently there are 2 angles in this strategy – you can either increase the cost of products slightly to recover the cost or retain the expense expecting higher sales. Consider both these techniques and utilize them over a regular period to see which one gets you better results.
One well-known way is to offer ‘free shipping’ with least order amounts or with minimum item numbers. That’s would attract average order value, sales value, and more benefits against which shipping cost can be balanced. Advertising ‘free shipping’ on your ecommerce website can drive up conversion rates to a considerable extent.
Here is an example from www.forever21.com
Free shipping for ecommerce websites also depends on the product type. If you are selling luxury items with higher profit percentage, then offering free shipping is not a big issue, but where the pricing is low for the products you are selling, for instance ‘books’, then it may turn into a critical factor. Special cases are always there. Proper research of competitive pricing strategy, shipping expenditure, your cost, and allowable profit margin would assist you to devise a correct shipping strategy.
Flat Shipping Rates
This ecommerce shipping strategy is as popular as ‘free shipping’ as customers know exactly what they would be charged and it’s easier to set up on the website. This methodology is recommended when the items have almost comparable costs like that of t-shirts.
Here’s an example from www.cableas.com
Variable Rate Shipping
‘Charge what you get charged’ is another ecommerce shipping strategy. It’s a simple strategy where you will charge nearly what you have to pay to ship a specific product. This ecommerce shipping strategy is ideal for heavy shipments on which ‘free shipping’ could drain your profits away. Utilizing a real-time calculator can enable you to win the trust of customers that shows you are not boosting your shipping charges.
An example of a shipping calculator from ‘Simple Sugars’
This strategy won’t be as popular as free shipping however will assist you to save costs and give customers a reasonably decent deal.
Conclusion
Shipping is a very tough part of the ecommerce website, especially with the problems that could arise which are out of your hands. Every business has various factors working in support of them. Testing different strategies over a period will assist you in finding the best one. Discover the statistics on your products and the most ideal approach to ship them within a budget.
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