Shipping rates have a direct impact on sales, yet many business owners struggle to understand how to establish the most ideal rates.
A whopping 58% of online shoppers revealed that high shipping costs contributed to an abandoned cart. Today’s customers want their items shipped now and for a low fee, and if they can’t get that from your business, they’ll look elsewhere.
Shipping rates influence nearly every aspect of your business, so it’s necessary to research your options. Read on for our top four tips for setting shipping rates for your small business.
1. Know Your Options
Since your shipping rates have an unequivocal influence on your sales, you must take time to research your options and choose the one that’s right for your business. There is no one-size-fits-all shipping strategy, but the following are among the most popular:
- Flat-rate shipping –
Flat-rate shipping is a single rate for all orders regardless of shape, weight, and size. The only time the shipping price might differ here is when shipping internationally. With this method, customers purchase as many items as they like and only pay one fee set by you.
You can determine this fee by taking the average shipping cost for the whole company. Although this method requires a bit of preparation, you’ll save substantial time during the packing and shipping process.
- Free shipping – Online shoppers often decide whether or not to do business with you solely based on the cost of shipping. Everyone is a sucker for a deal, so offering free shipping is a surefire way to keep your customers happy and engaged.
According to a Shippo survey, 93% of shoppers will take action to qualify for free shipping, even if they end up spending more money in the long run. Offering something for free heavily influences customers’ behavior.
Here’s how you can offer free shipping to your customers:
- Build the cost of the shipping into the product price
- Absorb the shipping costs, hoping that extra sales will offset the costs
- Offer a minimum spend threshold to qualify for free shipping
- Real-time rates – Real-time shipping rates help companies balance shipping speed and delivery costs. This option offers the most accurate shipping rates and helps you avoid undercharging or overcharging your customers– here’s how it works:
- The rates take order weight, size, and the shipping destination into account to display the most accurate shipping rate.
- The total rate will be calculated once customers are done adding items to their carts.
- Business owners charge the customer the exact amount it will cost to ship the order. This helps ensure you don’t lose money on shipping.
The downside to real-time shipping rates is shopping cart abandonment. Customers are more likely to abandon their cart before checking out if the shipping rate sends their heart racing from sticker shock.
2. Learn About Zone Limitations
If you want to offer your customers the most efficient shipping solution, you must learn about zone limitations. Considering shipping zones allows you to meet customer expectations by reducing time in transit and shipping costs. Zones are calculated based on where the packages originate; the greater the zone, the greater the cost.
If you’re shipping internationally, you must factor in landed cost. This might include the purchase price, transportation fees, currency conversion, taxes, and more. Determining the landing cost isn’t always straightforward since it depends on the country of export. Any agreements regarding global shipping should be set before sending goods.
3. Gather the Right Information
As an eCommerce business owner, you must understand how to calculate shipping costs for specific orders. This information will help you determine which shipping strategy to use.
You’ll need four elements to calculate accurate shipping costs for your customers:
- Shipping origin and destination – Generally speaking, the farther the package has to travel, the higher the shipping costs. Keep this in mind as you determine costs for domestic delivery versus international.
- The weight of the package – Calculating shipping costs based on weight is quite straightforward. Simply weigh each parcel and use a shipping cost calculator to get an accurate shipping cost.Be sure to include the weight for bubble wrap, cardboard, shredded paper, fliers, receipts, or any other items included in the packaging.
- Package dimensions – A package’s dimensions are calculated by measuring the length, width, and height. For odd-shaped or bulky items, dimensional volume is more commonly used.
Considering the dimensional shipping weight can help you reduce shipping costs and overall package volume.
- Delivery times – Delivery speed is another factor that can increase or decrease shipping costs. For example, overnight shipping services are significantly pricier than a 10-day option.
Many businesses offer multiple shipping options for their customers to choose from based on how quickly they need the item. Customers appreciate the ability to choose their ideal price point and delivery timeframe.
4. Create a Better Shipping Experience With Outsourcing
If the costs of packing and shipping orders are taking a toll, a fulfillment center can help you save money and time. A sensible fulfillment company will be upfront and transparent about its costs and refrain from hidden fees. In the long run, partnering with a fulfillment service will save you money on labor, packing supplies, overhead, shipping costs, and more.
When you don’t have to worry about shipping, you will have more time to focus on other crucial parts of your business. Fulfillment centers can also help you extend your reach, free up your warehouse storage space, and improve your customer service.
Relinquish Your Shipping Duties to MintFulfill
If processing orders and setting shipping rates is bringing you down, you need the shipping expertise of Mintfulfill! Our expert systems will take over the expensive hassles of shipping and fulfillment so you can increase sales. We pride ourselves on having quick processing times, excellent communication, and a customizable price range to fit your unique needs.
We have created an environment that feels like family, from customers to employees. Reach out to join the MintFulfill Family today!