Ecommerce

Determining What to Sell on an eCommerce Shop: Shipping Size and Cost

While it may seem trivial to most customers (and sometimes even sellers), shipping options also make or break the sale. Read more about determining shipping costs and sizes.

MTI Team
UXUI Design, Branding, Marketing, Web and Mobile Design

Shipping options are another integral part of operating your eCommerce shop. Aside from affecting the overall price of your product, shipping is also another way to attract and retain more customers. Here are the most common shipping options and the pros and cons of each.


Free Shipping

Free shipping is one of the best strategies that you can employ to attract more customers and keep your current ones to continue buying from you. There is nothing in the world sweeter to a customer than seeing that ‘Free Shipping’ on a product page.

Of course, everyone knows that shipping isn’t really free and your courier will need to charge something to get that package to the customer’s front door. The key here though is to make sure that you can cover the cost. Shipping the product not only involves costs on shipping itself, but packaging and labor too. So, you need to ensure that your selling price can cover all of those while still maintaining a reasonable margin.  


Flat Rate Shipping

Flat rate shipping is also an effective strategy to get packages from your store to your customers’ front doors. The key to employing this approach is balancing the cost of shipping to ensure that the customer doesn’t get overcharged nor undercharged. When you hit the sweet spot, it means that you’ll only be a little under or over the actual shipping costs.


Price-Based Shipping

When you see eCommerce shops that offer free shipping for orders above a certain amount, then these sellers have implemented a price-based shipping approach. Price-based shipping is dependent on how much a customer is buying for a certain transaction.

There are usually tiers when it comes to different prices. Products that cost less usually have higher shipping costs and big-ticket items or a transaction over a certain amount usually have free shipping. The best part about this strategy is that it will encourage your customers to put more items in their cart to get a better shipping option. On your end, it also saves on costs and effort because you can bundle products into one shipment.


Real-Time Shipping Rates

Another popular strategy is to charge the customer the real-time rates for the products that they buy. The good news is that most, if not all, eCommerce platforms already have this feature integrated with their shopping carts. This makes getting real-time rates for different shipping options from the carriers easier.  

This option is also better for your business because customers will cover their own shipping. Meaning, therefore, that you don’t have to add courier rates on top of your presented pricing. Your margin also doesn’t have to suffer - unlike free shipping.   

The biggest downside to this type of shipping option is that it adds another point of decision to the customer. So, instead of just deciding to buy the product from you, the customer now also needs to consider if your shipping rates are amenable.

It is a given that most rates across different courier services are standard. What might happen though is that deal hunters might not push through with the order at all. They will first try to find other sellers with better shipping options like free shipping or lower flat-rate shipping rates.  This might result to abandoned carts and lost sales.


Shipping Options Make or Break the Sale too

While it may seem trivial to most customers (and sometimes even sellers), shipping options also make or break the sale. Customers actually make two decisions when they shop from your store. The first one, obviously, is whether or not they are amenable with the price you set for your product. The second decision customers make is that whether your shipping options are favorable to them or not.

As much as possible you want to lessen these customer decision points and just make shopping your store a seamless experience as much as possible. And this is why your shipping options are important, you want to lessen these decision points and just get the customer to click on that ‘Check Out’ button.

Your biggest challenge here is to find the perfect balance between having an acceptable margin and a smooth transaction with the customers. And the best way to decide on which approach to adapt would once again depend on how well you know your buyers.


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