One of the elements common to any e-commerce web site is situations when customers will place products in their virtual shopping cart but never follow through with the transaction. There are a multitude of reasons for this behavior, but one of the largest is because they felt the shipping and handling costs were too high. Shipping and handling costs can not only cause potential purchases to be abandoned, but they can leave customers disheartened and more likely to look elsewhere in the future. This is why a key part of any successful e-commerce logistics operation is an affordable freight shipping strategy. Establishing an affordable means of shipping for your customers is a key logistics decision that will help improve your business. Fortunately, there are a few different ways to go about this.
The most direct shipping strategy is to simply not charge customers for it. The promise of free shipping can be a potent lure when customers are doing comparative shopping, but if not handled properly it can also do more harm than good. It is possible, for instance, to raise your prices slightly in order to cover the shipping costs. This can work in certain cases like if you sell high-grade or unique products, but is less viable in competitive markets where businesses are fighting to offer the lowest prices they can.
An alternative option is to waive the delivery fee only if a certain purchase threshold is reached. This allows the delivery costs to be absorbed by the purchases themselves, but can turn off customers who only want a single low-cost item.
The nature of your product also needs to be considered. Generally speaking, the larger or more unwieldy your product, the harder it will be to find a reasonable means of offering free shipping.
Even if you don’t—or can’t—offer free shipping as a regular feature, it is worth considering on a temporary basis to enhance sales during key periods like holidays or during sales.
Another option is to tailor the delivery charge so that the customer only pays what you would. This is partially technology-dependent, since not all shopping cart programs are able to establish real-time shipping prices.
The main benefits of this method are twofold. First, your customers can plainly see how the delivery charge is calculated, which is an important trust-builder. They will understand how their shipping and handling charge is being calculated and that you aren’t using inflated product or delivery costs.
The second is that it allows you to break even on e-commerce freight deliveries while also getting your customers the lowest price manageable. As a final benefit, equivalent charging works just as well with large less-than-truckload shipments as it does with small ones.
Finding an effective end-to-end e-commerce program that can give the kind of shopping cart calculations can be a bit tricky. But such programs do exist and are worth looking into as an option.
Lastly, you can consider charging a flat rate based on order size, weight, number of packages, or total price. This is more effective for e-commerce businesses with a smaller selection of products since it requires a certain level of consistency to be reliably affordable. Flat rates need to be carefully calculated and thought out beforehand, more so than the other methods, because the risk of over or undercharging customers is higher.
If done correctly, flat rate shipping charges should leave you around even—slightly higher or slightly lower is not uncommon but also not a major issue since it will balance out overall. Should the opportunity present itself, try to partner with a shipping firm to better establish consistent shipping rates.
APS Fulfillment, Inc. is a specialist in direct mail marketing and warehouse order fulfillment based in Florida. Look to our web site for more tips on how to identify the best e-commerce and shipping fulfillment strategies.