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4 Ways To Make Your Shipping Process More Efficient For Your Online Orders

Posted On February 10, 2015 by Laura

When managing an eCommerce website, handling your inventory is just part of the equation. The shipping strategy you choose will have a major impact in building a solid and satisfied customer base. It happens all too often where a customer falls in love with a product they found online, adds it to their shopping cart, clicks on the checkout and then starts to have second thoughts after calculating the shipping and handling costs. Suddenly you find you have an abandoned cart. This is a crucial point in a buyers purchase cycle that can either make or break their decision to enter their credit card information to purchase. Your shipping process can make all the difference in their final purchase decision. According to a study conducted by Forrester Research, Shipping and handling fees are the number one factor driving shopping cart abandonment.

When examining your shipping options, you’ll need to find a way to offer competitive shipping rates without sacrificing your margins. Here are a few solutions that will help you get started:

Offer Free Shipping

To combat this issue and stay competitive, some companies offer free shipping. Not the most ideal solution since today’s savvy consumer often assumes that these costs are built into the product price so they feel like they are most likely paying for it either way. Instead, offering free shipping with a minimum order such as Target might make up some of your company’s profit loss and still keep the consumer happy. Determining whether this strategy will work for you often depends on the niche you operate in and how close your margins are. Free shipping typically works well for high end brands like Nordstrom who carry luxury items or for companies that make handmade or rare products that have higher margins on their units. If you’re in a highly competitive market where you sell high product volumes with narrow margins, you can’t afford to make up the difference of these costs.

Make Flat Rate Available

Another strategy is to offer a flat rate for every package or flat rates based on weight ranges and order totals. You would need to calculate your average cost for shipping the package ahead of time. You might be over or under the actual shipping cost slightly but the overall average should be fairly even. This works well for low cost items since most people don’t want to pay a shipping cost that is over the amount of the total purchase price of the item. You might have to do a comparison between couriers to see which offers the best shipping price and fastest delivery time. Often times this flat rate option works out nicely with multiple items regardless of the weight. This method may not work out as well for someone who has a large number of products but works well for those with only a few different product offerings. FitBusiness.com offers a rate chart comparison of all shipping options for USPS, FedEx and UPS that may be helpful in determining which courier makes the most sense for your business and products.

Give Real-Time Shipping Quotes

Some shopping carts offer real-time shipping quotes so your customer can calculate their own shipping costs and pay exactly what you would pay to ship your products. On the one hand, this can win trust with your customers since the calculator is set up to price out shipping costs directly through the courier services and demonstrates that you aren’t raising your product prices to cover charges or inflating shipping fees. On the other hand, however, this has also been known to lead to shopping cart abandonment in some cases usually effected by product weight which could lead to sticker shock.This strategy works best for serious and loyal buyers when selling heavy or unique specialty items such as antiques or collectibles versus using the free shipping strategy. Keep in mind, shipping options are usually limited to USPS only.

Use A 3rd Party Fulfillment Provider

These third-party services are a great alternative if you manage large volumes of products and want to spend more time on other areas of your business. Many of them are set up to handle the details of the entire distribution supply chain from order fulfillment to delivery. Because of their large volumes of products they handle from multiple clients, they are able to negotiate special discount shipping rates with multiple couriers for both domestic and international shipments. They have expertise in safe packaging to make sure your products are delivered intact to your customers and many even handle the customer service aspects of their clients’ business so you don’t have to worry about the returns process.

package-delivery

It will take some research to find what strategy will work best for your company and your needs will most likely change as your business grows. If you take the time to review some of these options, you’re sure to find the right shipping formula to suit you at whatever stage your business is in.