You put a lot of energy into what you do and into making sure your customers have a great experience. Taking the time to get shipping right can make all the difference from making money or busting your margins to delighting your customers or sorely disappointing them. This is going to be the point where your customers finally touch your product in person, and your strategy for getting it to them and within budget depends in large part on your shipping strategy.
All physical products that you ship will need a few things clarified before they make their final journey into the hands of your customers.
When we purchased our first home we purchased a 98-year old historic home and I instantly realized that I was in a littler over my head and regardless of what I knew and didn't know, I was about to spend a lot of time in this new space. As with any old house, I had a list of 100 things I knew about that needed my attention, and probably another 100 things I hadn't discovered yet.
The big question on hand: free shipping or another method? First off, no matter what direction you choose to go in, you want to be clear and upfront about shipping costs! 28% of people will abandon their cart if they come up against unexpected shipping costs, the key word here is unexpected. Keep in mind the best marketers you have are satisfied customers, so find out what your target customers expect and be explicitly clear about what you're offering and why.
Free Shipping
According to a 2018 Pitney Bowes Global E-Commerce Study 91% of all consumers will leave a website in the first few minutes if fast and free shipping is not offered. However, "free shipping" is never free. The obvious first solution is that you cover the full cost of shipping. The main issue with this is it will eat into your margins. Depending on what your margins are, what average shipping costs are, and who you are willing to ship to, this may not work. So, the question this is, how do you make it work?
Here are a few options:
The main takeaway: Every industry and product has different types of margins, so get creative, experiment and figure out how to make this a win for both you and the customer.
Flat Rate
This rate is just like it sounds, it's flat and does not change. This works best if there is not a great deal of variance in the size or weight of the products you are shipping and is fairly straightforward for people to understand. If customers are ok with paying for your flat rate, then it also incentivizes them to purchase more than one product at a time, to "make shipping worth it." The overall goal is to not drastically overcharge or undercharge on shipping, so you cover your costs and people still see the rate as "reasonable," and go ahead with their purchase.
Real Time Rates (Shipping Tools)
Another effective strategy is to provide real time rates that are calculated on the spot. These calculations take into account: shipping destination, shipping origin location, total product weight, and average package size.
In order for this method to work well and not end up costing you more than your "real time rate," you need to have a pretty consistent product weight and size or have the exact dimension and weight of your products in a system that the rate calculator can reference when calculating shipping rates at checkout.
Systems like Shopify have this real time shipping rate calculator built into their checkout system if you have product data (weight and size included on your product). There are also third party platforms that do a great job of this as well.
I like to use a service called Shipstation. They provide real time rates and give you "bulk pricing" from carriers like FedEx, UPS, USPS and DHL. They also provide a number of other really useful shipping related services.
Local Delivery
If you are willing and able to deliver your products to customers, this is a great option that can help you cut down on shipping costs, get products into people's hands sooner and win over more local business. In order to successfully offer this you will need an need an app for platforms like WooCommerce that would calculate if your customer is within your "radius" of free delivery, or if you use a platform like Shopify it has this functionality already built in.
Local Pickup
Depending on where your distribution center or store is located local pick up is another great way to allow people to purchase your product and pick it up that day. If you are a retailer who is selling products in your shop and online from the same inventory stock, then you would need to have an integrated inventory management tool that ensured you did not just sell a product online that a walk-in customer purchased the last one of five minutes ago.
3PL
If you have a large number of products and want to ship to a large number of customers across the nation or internationally then consider partnering with a 3PL (Third Party Logistics) Partner. These companies will integrate with your store, hold, manage, pack and ship your product from the closest warehouse to where your customer lives, thus reducing your shipping costs per item. Obviously, 3PL partners charge a premium for their services and considering a partnership with one begins to make sense when you are able to sell products online at scale.
With a myriad of shipping needs and solutions out there the most consistent and reliable cloud based shipping software available is Shipstation. Its shipping ecosystem allows you to manage inventory across multiple channels simultaneously (i.e. eBay, e-commerce website, Facebook, etc.), print labels and picking orders in batch, initiate smoother customer tracking (and returns, when necessary) and provides you with a very useful phone app to track shipments on the go.
