The online shopping cart abandonment rate is close to 70 percent, and that’s mainly due to shipping and handling fees.
That puts retailers in a difficult situation. They have to find a way to offer consumers an attractive shipping option without hurting their bottom line. Your strategy for accomplishing this depends on various factors. Let’s look at your options so you can pick the one that is best for you.
If you have the means to support this model, you can’t beat free shipping. Consumers will flock to your site because you’ll offer something many of your competitors don’t. Of course, you’ll have to foot the bill for the shipping, and that can be hard if your profit margins are already tight. You might consider raising your prices a bit or having a minimum threshold for the free shipping offer. For instance, you could offer free shipping on all orders $50 and over.
This shipping option typically doesn’t work well if you sell heavy items that are expensive to ship. It also won’t work well if you’re already having a hard time staying in the black. However, if you have the means to offer free shipping, it’s a great choice. Your conversions should go up over time as more and more people realize you ship items for free.
Flat Rate Shipping
You can simplify the shipping process for your customers by offering flat rate shipping. Every customer gets charged the same amount for shipping, no matter what he or she orders. Some customers will overpay a bit and others will underpay a bit. As long as you do your research and set the right shipping price, it should balance out at the end of the day.
If your products cost close to the same amount to ship, this can be an attractive option, especially if you can offer a low shipping amount. For example, if you offer $2.99 on all shipments, your customers will likely be pleased. It also might encourage them to place bigger orders.
Just make sure you do your homework so you know the average shipping cost. Otherwise, you could end up losing a ton of money on this.
You can also use real-time shipping quotes so your customers pay what you pay. Customers enter their shipping information and the calculator spits out the shipping amount. This helps you build trust with your customers. They realize you aren’t making money off the shipping, so that makes them more likely to come back to you over and over again. This is also an excellent option if you sell large items that won’t work well with free or flat rate shipping. For instance, if you ship furniture, real-time shipping quotes are likely the way to go.
Think about your profit margin and your customer base, and then choose the shipping option that is best for you. Each option has its benefits and drawbacks, so choose wisely and then use it to attract customers.