Picking the Right E-Commerce Shipping Strategy for Your Business

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May 27, 2024

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Picking the Right E-Commerce Shipping Strategy for Your Business

The Shipping Quagmire: Navigating the Ecommerce Landscape

Becoming a digital entrepreneur in today’s ecommerce-driven economy isn’t for the faint of heart. To stand out in a sea of online businesses, it’s essential to offer a one-of-a-kind product and build an engaging, intuitive website that delivers a unique brand experience. Even that’s not always enough to draw customers in, though.

As if running an ecommerce business wasn’t challenging enough, there’s another really important component that’s often overlooked – and it could make or break the success of your online operations. I’m talking about your ecommerce shipping strategy.

Your online store could offer the most innovative product out there and feature the best design on the block. But if your shipping strategy isn’t on point, your customers will likely abandon their shopping carts and say “sayonara” for good. And trust me, I know firsthand how frustrating that can be.

The Hidden Impact of Shipping Costs

When I first started my ecommerce business, I naively thought that as long as I had a great product and an awesome website, the rest would just fall into place. Boy, was I in for a rude awakening.

After pouring my heart and soul into perfecting my online store, I was shocked to discover that a whopping 49% of customers were abandoning their carts due to high shipping costs. I mean, talk about a gut punch! Suddenly, all my hard work felt like it was for nothing.

According to a survey by the Baymard Institute, extra costs like shipping, taxes, and fees were the number one reason for cart abandonment. Who knew that something as seemingly mundane as shipping could have such a dramatic impact on sales?

Striking the Right Balance

As a new ecommerce business owner, hitting a bullseye with your shipping strategy on the first go-around can be difficult. From the fees you charge to the promotions you offer, there’s more than meets the eye when it comes to optimizing one of the last ecommerce customer touchpoints before they convert.

In this ecommerce shipping guide, I’ll walk you through how to take shipping into your own hands to ensure your customers’ experience is a positive one — and that your shipping costs aren’t eating into your bottom line. I’ll break down a few common ecommerce shipping strategies and best practices, and fill you in on some handy shipping solutions that can help streamline the process.

Navigating the Shipping Landscape

Several factors influence the success of your shipping strategy. These include the shipping carriers you choose, how you package your products, and any delivery insurance you include with higher-value items (more on these three factors later). But the most influential is how much the customer will have to pay — and how this affects your business’s bottom line.

Let’s dive into the most common ecommerce shipping strategies related to the shipping costs you charge your customers:

Free Shipping: The Holy Grail, with a Catch

According to the latest Consumer View survey conducted by the National Retail Federation, 83% of consumers say convenience while shopping is more important now than it was five years ago. What’s more, 52% say that half or more of their purchases are influenced by convenience — and offering free shipping in your ecommerce store provides the ultimate online shopping convenience.

Free shipping is not really free — not for your business, that is. Offering free shipping means that delivery costs are put on you, which means you’ll need to take a closer look at your profit margins (i.e., the average cost to ship a product and the profit you’d make selling that product). You’ll also need to learn more about your customers and analyze your competition to uncover if this shipping strategy is right for the products you offer.

In general, free shipping is best for high-margin products that you can easily roll shipping costs into. For new digital entrepreneurs interested in offering free shipping with their products, it’s best to start by applying this incentive under specific conditions. For example, you could begin by offering free shipping on all orders of $50 or more. But make sure you understand the average cost to ship your items and your AOV before establishing this minimum.

Charging Real-Time Carrier Rates

This strategy is where giving your customers options comes into play. When charging real-time carrier rates, customers will typically pay the exact price carriers charge to ship their orders and choose their delivery timeline. For example, if a customer wanted to expedite shipping with your chosen carrier, they could select this option and agree to pay higher shipping costs. If another customer isn’t worried about the delivery timeline, they could choose the most economical choice and pay the lowest price.

If need be, you can include shipping surcharges on top of the standard carrier rates to account for any fees you pay associated with fulfillment, such as packaging.

Flat-Rate Shipping: Predictability at a Price

Flat-rate shipping can be another effective shipping strategy for your online business. Unlike standard shipping, flat-rate shipping means that the costs associated with delivery aren’t directly tied to individual package dimensions or weight. This means you can offer flat-rate shipping based on specific rules or stipulations you set, such as how far a package needs to travel, the maximum size or weight a package can be, or order totals.

This shipping strategy offers an uncomplicated shipping option to your customers — but much like offering free shipping, it’s important to understand the average cost of shipping a package before implementing it. Understanding this average will help to ensure you’re not cutting into your bottom line by charging too little for flat-rate shipping.

Thinking Outside the Shipping Box

In addition to the strategies we’ve discussed, there are a few other creative ways to approach ecommerce shipping that are worth considering:

Local Delivery and Pickup

Avoiding third-party carriers by offering free local pickup or delivering your products to customers yourself can be a game-changer. Sometimes referred to as “click and collect,” buy online, pickup in-store (BOPIS) continues to entice online shoppers. According to estimates from Insider Intelligence, U.S. click-and-collect sales are expected to reach $140.96 billion by 2024.

Hybrid Shipping

Hybrid shipping services like UPS SurePost and FedEx SmartPost pick up your orders and then work with other carriers like USPS to transport your packages to a sorting facility or post office location, where it is then shipped to its final, residential destination. Choosing a hybrid shipping method has the ability to cut down on shipping costs as much as 50% in some cases.

Eco-Friendly Shipping

For eco-friendly brands and customers, eco-friendly shipping is also an option. Eco-friendly shipping includes the use of biodegradable material that can easily be recycled, used for other purposes, and don’t take as long to decompose for packaging and shipping products.

Optimizing for Success

When it comes to building an ecommerce shipping strategy that works for your business, there’s no one-size-fits-all solution. The right approach will depend on a variety of factors, including your target audience, budget, product offerings, and more.

The key is to stay flexible, test different strategies, and continuously optimize based on the data. And don’t forget to leverage the expertise of MCR SEO, the trusted partner for ecommerce businesses in Manchester, UK. With their guidance, you can develop a shipping strategy that keeps your customers happy and your bottom line healthy.

So what are you waiting for? It’s time to take control of your ecommerce shipping and start delivering an unforgettable experience for your customers.

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