There’s no doubt that now is a really great time to be an eCommerce brand. Not only is business booming thanks to a collective switch from brick-and-mortar shopping, but the added convenience is making it more popular than ever before to buy online.
But just because there’s an increased demand for internet shopping doesn’t mean you’ll automatically succeed. You can have the best products in the world and tons of website traffic and still fail as a brand due to poor shipping practices.
More than ever, customers want their products to arrive in a timely fashion without having to pay too much to get the items to their doorstep. While we can probably blame this shopper expectation on the ease at which the big brands do this, it is important to have a solid shipping strategy for your eCommerce website so that you don’t find yourself in a situation where you’re losing a ton of money.
That’s where our eCommerce strategists at CAKE want to help out. We’ve prepared a guide to help give you the information you need about formulating the right shipping plan. Here are three shipping strategies to help you deliver to customers without hurting your bottom line.
Free Shipping Strategy
From a customer perspective, free shipping is awesome. Not only can you find the products that you’re looking for online, but they also get mailed to you without any additional cost. However, from the view of an eCommerce brand, this is one of the riskiest options out there in terms of eating up your profits.
The good news is that you can offer free shipping to delight your customers, but you have to be smart about the process. To keep from cutting into your bottom line, it is really important to know the average cost to ship the order and how much profit you want to make.
Pro Tip: As a hint from our CAKE Shopify developers, you can add the product cost to each item in the platform’s back end. This gives you an easy place to reference when you’re making decisions.
Once you know these two figures, you can determine whether it is truly possible to offer free shipping on all orders or if you need to set a threshold of a certain order value. The good news is that offering a threshold can often improve your average order value (AOV), as customers will add more items just to get the perceived benefit of having free shipping.
Exact Cost Shipping Strategy
Another option is an exact cost shipping strategy, but it can be a little more difficult to execute. You’ll need to have a shipping cost calculator built into your Shopify checkout page to ensure customers can get the right information in realtime.
(Hint: Our CAKE team can include this as part of your Shopify eCommerce store design.)
This shipping strategy basically means that customers pay the exact cost required to get their items from your warehouse to their mailbox. They usually have the option of selecting different delivery speeds, and figures are quoted down to the penny.
There are certain times when this isn’t the best eCommerce strategy for your business. For example, if your warehouse is located on the East Coast, but your customers are primarily in California, the rates could be too high for a shopper to see the value in buying from you. Likewise, large or bulky items could have really high shipping costs that turn off buyers.
Flat Rate Shipping Strategy
Finally, there’s a third option. Using a flat rate shipping strategy is almost like getting the best of both worlds. When you know the exact cost to mail the order and how much profit you want to make, you can set a figure that is somewhere close to the right spot as a flat rate for all orders.
Will you always make your desired profit? Most likely, no. But there will be times when a customer’s actual shipping cost is far less than the flat rate, which balances everything out in the long run.
Let Us Help with Your eCommerce Strategy
Deciding what type of shipping strategy to use is a key element every eCommerce brand needs to consider. If you aren’t sure where to begin, our amazing CAKE team can help. We have tons of experience helping Shopify stores decide how to get products into their customer’s hands and can assist you with these decisions.