Five Shipping Strategies to Keep Customers Satisfied and Protect Profits

Shipping should be free for all except for a few large retailers. Shipping companies and business owners know this doesn't make any sense. Shipping is expensive, and will always be. Someone must pay.

36% of online customers abandon a purchase because they don’t want to pay shipping.

It doesn't matter what carrier you use -- USPS or UPS, FedEx or any other -- free shipping will always cost you money. It doesn't matter if other businesses offer free shipping, it doesn’t mean that you should. You want to find a shipping strategy that is both profitable and pleasing to customers.

Also, everyone wins when you have a shipping strategy.

You have three options when you are just starting to learn shipping methods, and fulfillment. These are the flat rates, variable rates, and free shipping. There is a lot to choose from. Prices can vary greatly between major carriers depending on several factors.

Let's work together to find the best shipping strategy and tools for your company.

Shipping costs are affected by factors

These factors play a significant role in final shipping costs. You need to have a thoughtful and planned strategy.

Size and weight

Depending on the carrier, a heavier package may cost less to ship than one that is smaller. Your best shipping strategy is different if all of your products are the same weight and size than if they come in different sizes and weights.

Packaging and packaging materials

Extra padding is required for certain products to be shipped safely. Other products are fragile or temperature sensitive and require additional padding. Shipping costs can rise due to special packaging, shipping methods, and materials. ( Find out more about safe packaging to delight your customers.

Photo © https://curedboulder.com/

Cured is an online shop selling wine, cheese and other fine food. Although you won't have much room initially, let them know your plans and goals for the future. They will then help you to create a pricing structure that rewards those efforts.

Human Resources

Transporting products requires both time and staff. Either you have to pick up the packages or deliver them to your carrier. Create labels. Each product must be placed in a box. Seal it by securing it. You will need someone to do all this work and keep it running smoothly. This process is time-consuming and costly. Extensions like WooCommerce Shipping can automate this process and help you save a lot of time.

Learn more: 

• Magento Pos
• Shopify Pos
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Margins: Determine your shipping costs

After you have chosen a carrier, you can determine the shipping cost for your order based on its size, weight, destination and method. Your carrier may offer discounts or an extension such as WooCommerce Shipping, which can save you up to 90% on USPS shipping costs.

How much should you charge your customers for shipping? While you want to increase sales, don't forget to protect your margins.

Let's suppose you have a product that costs $20.00, $8.00 to ship and $5.00 to properly package. Before any profit, your cost is $33.00

To achieve a 40% profit margin you would need to charge $46.20 for the total amount that the customer pays. You might sell the product at $38.20, plus $8.00 shipping charges. Your profit margins can drop to 15% by offering free shipping Customers could be charged a portion of shipping costs. This would put you somewhere in the middle.

Which is better? It all depends. These are five shipping options to consider when you decide what is best for your online business.

1. Offer live rates

Live rates, also known for real-time shipping calculation, let you offer shipping rates at the carrier for different sizes, weights and distances. You can charge whatever you like for products without worrying about shipping costs. They sync in real-time, so if your carrier raises their rates by 5% the shipping costs on the site will also change. Customers pay exactly what shipping costs will cost for each order. This increases trust in your ability to be transparent about shipping charges.

Customers can choose from a range of shipping options to suit their needs. The FedEx Shipping Method extension provides more than ten domestic options. These include priority overnight, two-day, freight, and many other options. These can be offered in any combination without the need to calculate rates for every product. You'll also know you're charging the correct amount. Similar extensions can be used to perform the same functionality for other carriers such as UPS Shipping Mode and USPS shipping Method.

Live rates are popular because they offer customers choices. Customers will be able to make the decision, and live rates allow them to do so. They'll also have more options, including higher-cost shipping options. This will make them more likely to pay for cheaper options, which can eliminate the need to offer free shipping.

2. Table rates available

Table rates are a method of calculating shipping rates. They use a variety of factors, including weights and sizes, shipping classes, order totals and destinations. These rates offer the greatest customization possibilities and are particularly useful if your products have a variety of shapes, sizes, or types.

These are just a few examples you might use to create rules:

• If you order more than $20, you can only ship one product.
• Shipping costs for packages less than 8 pounds are $5.00 Anything weighing eight or more pounds will be charged $10.00
• Free shipping is available if the destination location is New York.

Combining conditions can create complex shipping rules with minimal setup. It is easy and intuitive to create rules using the WooCommerce table rate shipping extension.

Photo © https://jococups.com/

Joco Cups makes use of this extension to streamline their shipping procedures. They sell straws and reusable bottles, and ship them internationally. This can be a problem quickly. They offer table rate shipping which allows their products to be delivered anywhere in the world at a reasonable cost.

3. Flat rates available

Flat rate shipping is the most straightforward to set up. You charge the same amount regardless if your order is large or small. If your products are identical in size and weight or if most customers order the same amount, flat rate shipping is the best option. You risk losing sales and overcharging customers, as well as losing money and your customer base.

Flat rate shipping is a popular choice for business owners because it's easy and straight-forward and eliminates the guesswork from calculating rates.

Flat rate shipping can be used in marketing campaigns. Flat rate shipping can also be used in your marketing efforts. A message such as "Shipping is always $5.00" may have a natural appeal because it is simple and clear. This will encourage shoppers to place more orders without worrying about high shipping costs.

You can set default WooCommerce settings to allow you to charge a flat fee per item, a percentage-based cost or a minimum .

The Flat-Rate Box Shipping extension is a great option if you need to set a flat rate for shipping boxes. This automatically organizes products into boxes according to their volume and size. Then, you can charge a flat fee for each size. Although it is slightly more complex than flat rate shipping, it offers many of the same benefits and allows you to calculate even more precise rates.

4. Shipping free of charge

Customers love free shipping 93% shoppers buy more products when free shipping is offered, and 58% purchase more products just to get free shipping.

However, this is not the best fit for all stores. Even with higher sales, shipping costs can vary greatly.

It is important to avoid losing all your profits on shipping. For example, you could raise prices to include shipping costs in your product prices. You could charge $11.00 shipping if you charge $8.00 per item, but it usually costs $3.00 to ship. Customers will know what they'll pay upfront and there won't be any surprises at checkout.

It is important to determine how much shipping costs your products will incur and whether customers are willing to pay more. Another option is to use a half-and -half approach. You add shipping costs to the product price, and you pay the rest yourself. This will increase sales, but less profit.

Photo © https://www.scratchpetfood.com.au/

Scratch Pet Food is an Australian dog food company using all natural ingredients. They offer food subscriptions with free shipping to all Australian customers. They can afford to ship free because they have a steady income from loyal customers.

5. Combining multiple shipping options

Mix and match shipping strategies if you are having trouble deciding on the right one for your company.

A common strategy is to offer free shipping if orders exceed a certain amount. For orders below $50, flat rate shipping could be offered. Orders over $50 will get free shipping. This approach is a good one if your average order is less than $30.00. It encourages customers to add to their carts, and it saves money on shipping.

If you have different order sizes, product prices and product weights, you can offer free shipping with USPS Ground and calculate real-time rates to speed up delivery.

As part of a larger marketing strategy, you can offer free shipping for a short time. This is a great way to increase sales for holidays or other times of the year, even if shipping costs are normally charged.

Implement your shipping strategy

A shipping strategy that works is about finding the right balance between your business's needs and those of your customers. Take into account shipping costs for each product and then decide the best way to ship. This will ensure that you don't lose money while still delighting your customers. As you get to know your audience better, don't be afraid of changing tactics!