Shipping Rate StrategiesDo you want to offer free shipping? A flat rate? A variable rate? Or even combination of these? Which one should you choose? The answer depends on two components: Your margins and your customers experience. Here are four different shipping rate strategies for you to consider:
1. Free ShippingThis reassures your customers that they won’t be charge excessively for shipping at checkout. It’s also very easy for you to setup in Shopify. This strategy works great if your store has a limited number of products that only you sell, and where shipping cost is no more than 20% of the product price.
2. Flat Rate ShippingFlat rate shipping shares the same advantages of a free shipping strategy. Customers know exactly what they will be charged and it’s also easy for you to setup.
Consider this approach if all your products have similar shipping costs, like for a t-shirt store. In the United States, USPS now offers “Priority Mail Flat Rates”, one standard rate for whatever fits in their boxes. If you can take advantage of this, you should consider flat rate shipping.
3. Variable Rate ShippingVariable rate shipping charges your customers a different rate based on what they purchased. This method is commonly used and favored by retailers as it gives you more control on how much to charge based on your customers order.
If you sell many products with variable weight and dimensions or/and customers buy more than one at the time, you should favor a variable rate strategy. In other words, your shipping cost varies a lot order to order.
4. A Combination of These StrategiesA lot of online store owners choose to use a combination of all the above shipping methods. For example:
- Free shipping for orders over $75 and everything $10 shipping flat rate.
- Free shipping for orders over $100 and a variable rate for anything under.
- $10 shipping for orders over $100 and a variable rate for anything under.
This a great way to offer special promotions and increase your average order by encouraging customers to spend more to save on shipping.
Quick Advice About Shipping
- To estimate your shipping cost use carrier calculators such as USPS's.
- Make it easy for customers to understand your shipping fees by stating them on your website. Include the destinations you ship to.
- Be careful using carrier calculators for packages that aren’t standard dimension. Visit your local carrier’s office for an accurate rate.
- Charging the exact rate is tricky. You will win on some orders and lose on others. Over estimate by 10% and continuously adjust, adjust and adjust.