Does Your Business Have a Shipping Strategy

Does Your Business Have a Shipping Strategy?

27th March 2020, 3:03am in Business by Cassie Puah

Let's start with a statistic - 68% of online shoppers will abandon their cart due to a poor cart experience. Scary right?

When it comes to running your business, you've got to think about your products, your advertising and marketing, your finances and the list goes on and on. It's not hard to see why shipping is often an afterthought when it comes to the customer experience. But if you think about your shipping strategy as a marketing device - if done well, it'll almost guarantee you return customers - the importance of a shipping strategy comes into focus. But how do you put one together when you have no experience in eCommerce?

What is a shipping strategy and why do you need it?

There are several common shipping options that eCommerce business owners often offer.The most popular options include same-day, express and free delivery. Interparcel offers customers the option to customise their shipping options for customers. Which ones should you use and what are the best practices when it comes to running your eComm business and shipping out goods?

A good shipping strategy can:

  • Drive conversions and reduce cart abandonment
  • Increase your average order value
  • Make your product available to a wider audience
  • Reduce your costs
  • Make operations easier and more efficient

How to calculate shipping costs?

Before you can choose a shipping strategy, you first need to understand how the cost of shipping is calculated. One of the main determining factors is the size and weight of your parcel. The larger the parcel the more expensive it is to ship. Likewise, heavier parcels will push the price up. Popular shipping carriers like USPS, FedEx and UPS calculate shipping charges based on whichever is greater: the weight of the parcel or its dimensional weight. You can use a shipping calculator from a courier broker service, like Interparcel to compare quotes from a range of courier services.

What is the cheapest way to ship?

The short answer: there's no one service that will provide you with the cheapest shipping method (unfortunately). The best way is to use a shipping cost calculator to compare quotes from a range of courier services. Again, it all depends on the size, weight and dimensions of your parcel and of course, the shipping destination. Having said that, there are a few methods you can use to minimise shipping costs for your business:

  • If you're shipping high volume, you may be able to leverage off the custom pricing deals of a courier broker, like Interparcel. We have negotiated custom pricing for our business customers.
  • If you're shipping multiple packages, our Smart Boxing system allows you to combine multiple packages into a single parcel. This saves you time as well as money (and it's eco-friendly too).

What are the popular shipping strategies?

There are typically three main shipping strategies that online businesses run with; free shipping, charging customers the exact cost of shipping and flat rate shipping.

Free shipping

Free shipping can become your competitive advantage. 36% of online shoppers expect free delivery for small items.

Most businesses only focus on the top of the funnel. Drive traffic to your site and the rest will follow suit. But that's not always the case; what happens when your customers get to the checkout?

There are a few ways to integrate free shipping into your business. We recommend using an incentive to drive action when thinking about free shipping for your business:

  • Increase average order value by offering free shipping after a customer has reached a certain threshold
  • Use free shipping as a promotion, perhaps as a way to sell slow-selling or seasonal items
  • Add the cost of shipping on top of the cost of a product.

If you're a local seller, the cost of shipping is almost negligible, but would make you a preferred seller in the eyes of your customer.

Charge exact shipping costs

If you're a new business, a good way to reduce costs is to charge customers exactly what it costs to ship their goods. You will be able to see all the rates for different services using our shipping calculator

Flat rate shipping

Flat rate shipping is perfect if you're sending parcels of similar weight and size. This is a standard fee that you would charge your customers to deliver your goods to their location. If you're sending packages of different sizes, but these products can be easier categorized you could look at a tiered system of shipping.

Using your shipping strategy as a sales tool

With the Interparcel shipping cost calculator, you have visibility over your shipping costs for each shipping option. If you're a new business with limited resources, you could charge the exact amount of shipping to your customers.

Flat-rate shipping is when a single rate is charged for shipping any package, regardless of weight or dimensions. While offering standard shipping often simplifies the process for business owners, it doesn't offer much for customers. Interparcel's Shipping Manager allow you to view competitive live shipping rates at checkout. This dynamic shopping cart, allows both the customer and business owner to have visibility over what each shipping option entails.

How can I improve my shipping?

Dedicated eCommerce business owners are always trying to streamline their shipping processes, and maximise savings:

  1. Provide many shipping options for your customers
  2. Provide visibility on shipping rates
  3. Offer some sort of free shipping
  4. Show shipping cut-off times
  5. Choose a courier broker that provides complete tracking and customer service
  6. Create a list of courier services you can trust
  7. Leverage the buying power of a courier broker to maximise your savings on multiple shipments

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