Tips on shipping prices practices

Posted by lina 30/03/2018 0 Comment(s) Sellers,

shipping practices guidelines

 

We have been receiving much questions about the shipping, such as  how much should I charge my customers for shipping? Is it too much or too little? Would it be worth it to offer shipping for free?

 

Every seller should first think about the shipment they are going to provide to their customers. The shipment costs are extremely important to be evaluated beforehand. For example if you are selling a handmade one of a kind piece of art the shipping wouldn't be much of an issue, as your customers will get something unique for their order, but if you are in more competitive situation, where you provide something more mainstream, it will be best to see how your competitors are proceeding.  Whether you are going to provide free delivery for your items or paid service, you should take into consideration to what this may lead. We will give you some details about the different options you have below.

 

Calculated Shipping

 

Knowing your exact cost for shipping is profoundly important to business success. You don't want to charge too little because that would hurt your profits, but you also don't want to charge too much because that would make your products less attractive and may result in customers turning you down. If you would like to provide an accurate shipping costs you must first pick the appropriate shipping provider. Then, it will be easier to simply focus on providing the exact shipping rate.

In order to be precise you should first know the exact cost of the shipping services for your product to the exact country you would like to ship to. Every international shipping  provider has specific rates, so we advise you to know your exact dimensions and weight. On most of the websites of the shipping providers there are calculators, so you can get a glimpse of what to expect. There are, however, less expensive ways to ship internationally, but you must get in touch with the shipping provider and get to know their policies and how you can benefit from using them. For example if you use frequently their services there may be some discounts that apply or depending on different contracts you may get a monthly fee discounts. We have a list with international shipping providers, you can contact and get exact pricing here.

 

Giving several options for shipping will also help you improve the customer experience. For example less shipping costs can mean that you product will be shipped for a week. You can include in the shipment options a fast delivery, which will naturally cost more, but will give the customer the option to pick and thus will have the feeling they have more freedom picking up options.

However, if you stick to the calculated shipping, you should know that shipping fees are one of the most frequent deal breakers and lead to cart abandonment.  Shipping prices greatly affect consumers decision to buy. A big percentage of consumers that abandon their online shopping cart do so because of shipping costs as they are not  satisfied with shipping costs added to their purchase. If your company decides to have shipping costs, make sure it is clearly labeled on the products.

 

Free Shipping

 

Approximately half of the e-commerce sites out there are providing free shipping and consumers have come to expect it. While, free shipping is a good marketing tip to  get the attention of your potential customers, depending on your margins it can result in additional costs for you. If you are  a small business, the question isn’t if you should offer free shipping, but whether and when your business can afford it. The answer lies in the right combination of ensuring you aren’t overextending your budget and creating enticing offers. Free shipping can be an effective marketing tool that aims to benefit both the consumer and the retailer. There are many ingenious ways to generate revenue and keep consumers returning. The majority of businesses choose to offer free shipping in conjunction with additional delivery options such as overnight express delivery at a cost to the consumer.

There are two ways to offer free delivery option - the first one is conditional, where the seller offers this option only if there is specific minimum order value covered, there are specific items in promotion or it is used economy delivery.

As previously mentioned, you can make free shipping work for your business setting up restrictions. Setting a minimum order amount for free shipping, also known as a free shipping threshold, is the perfect way to ensure that free shipping doesn't destroy your margins. Also you can add an extra to your products with shipment fees, such as free item, a card or a personalized feature such as message, packaging or plus one item as a complimentary.

Before putting “free shipping” in the description of your products, however, consider the financial implications of your offer. If your expenses skyrocket with sales, your company could lose more than it gains by having to pay excessive shipping costs.

 

Flat Rates

 

This particular method of charging for shipping requires a bit of preparation as you need to figure out your average cost of shipping a package. This is a best practice you should be doing anyway to make sure that you don't drastically undercharge or overcharge your customers. Flat-rate shipping fees are the next-best thing to free shipping for the following 2 reasons:

Flat-rate shipping is 100% transparent and easy to understand. This is a good idea for small businesses that want to keep things simple for their customers. It works best for products that are fairly small and not too heavy.

Displaying something like: 3.99 € shipping on all orders on your product page header lets buyers know what they’re getting into. It’s easy for them to do the math and eliminates sticker shock at checkout.

Be Transparent

Whether or not you are offering flat shipment rates or no shipping , etc. you should inform your customers upfront, so that there is no surprises for the buyer. One very important area to focus on when increasing transparency is pricing. You need to show customers the entire price they will be paying for an item. At the end of the checkout, they don’t want to see sneaky shipping fees that are attached to the item that they are buying that they didn’t know about. It is much easier and more constructive to let customers know from the beginning how much shipping will cost them so they can factor that into how much they would like to spend.