How To Know You Are Getting the Best Ecommerce Shipping Rate
Offering the best ecommerce shipping rate is essential to retaining a solid customer base in the highly competitive world of retail, where the USPS increases its shipping rates each year, as do the other major carrioers.
Did you know that 66% of your customers expect free shipping according to a Consumer Trends report conducted by Jungle Scout. What’s more, 80% of customers expect free shipping when ordering a specific dollar amount on online merchandise.
Today, we’ll go over what shipping costs are, how to know you are getting the best ecommerce shipping costs and a few simple ways to cut down on shipping costs as you revamp your ecommerce shipping and fullfillment strategy to the benefit of your bottom line.
What Exactly are Shipping Costs?
Shipping costs are the costs linked to moving your merchandise from your warehouse or store shelf to a customer’s front door. These costs include, but are not limited to:
- Cost of stickers, tape, packaging and boxes
- Cost of paying a worker to pick, pack and dispatch items
- Courier cost to pick up and deliver item
- Export/import fees when shipping internationally
- Shipping software
- Shipping insurance
The Importance of Calculating Shipping Costs
Offering free shipping as many of your competitors do may be extremely tempting. The truth is that these businesses most likely have gone through a thorough cost evaluation process to enable them to offer these discounts. Charging too much for shipping can lead to cart abandonment and loss of customers. Charging too little can shrink your company’s profit margins,
Transparency is key when it comes to shipping costs with customers. Knowing your shipping costs enables you to provide an instant shipping quote at checkout which has come to be expected. This typically takes some work on your end by setting up shipping rates for each item in your inventory and inputting shipping zones.
Allowing customers to choose their level of shipping service gives them the feeling of being in control of their shopping experience. Transparency and choice help build brand and customer loyalty. Customer loyalty is extremely powerful, for instance 59% of American customers say that once they’re loyal to a brand they are loyal to it for life according to a survey conducted by Acquia.
Three Types of Shipping to Offer
- Calculated Shipping – Measure the weight and dimensions of your package. The shipping charge is based on these measurements and the customer’s
- Flat-rate Shipping – Charge one price for shipping regardless of shape, weight or size of package. The only time the price may vary is when shipping internationally.
- Free Shipping – Either build the cost of shipping into the product list price or absorb the cost of shipping and reduce margins.
Performing an evaluation with your merchandise and these three types of shipping pricing options will enable you to determine actual cost and if it’s the best ecommerce shipping rate for your online business and customers.
How to Reduce the Cost of Shipping
Start with the shipping software you’re using, because it’s an essential tool for any ecommerce business. It saves time, automates the shipping process, offers a team of dedicated professionals to assist with any issues that may arise and supplies tools such as label printing and inventory management… to name a few.
- Check USPS rates for options to reduce shipping costs: As an ecommerce business that does a certain amount of shipping per month it can be greatly beneficial to investigate what kind of shipping discounts you are eligible for with the USPS.
- Print your own shipping labels: An ecommerce shipping software as mentioned previously will enable you to print your own labels and is a perfect way to save on shipping costs.
- Reuse packaging from orders you receive : Taking a play from the “Three R’s” of conservation –reduce, reuse, recycle – reusing packaging from orders your business receives can greatly cut shipping costs while also helping the environment.
- Build shipping into the price of your product: Building shipping into the price of your product can help reduce shipping costs but take care not to over price your items to the point that it turns customers away from making a purchase.