So you ship products huh?

With double digit year over year growth, e-commerce shows no signs of slowing down. As traditional brick and mortar stores expand into the online sales world or startups plan to sell their products online, determining a shipping price plan can be a hurdle and a deal breaker.

With varying ways to calculate shipping, store owners can easily get lost in building out their shipping cost matrix. Some common shipping options are:

  1. Live Rate Shipping – The measurements and weight of your order are passed along to Fedex, UPS, USPS or another vendor which will return a shipping price quote in real time to be added to the order.
  2. Flat Rate Shipping – This allows you to define a fixed price on either a per item basis or per order.
  3. Percentage of Total Shipping – By charging a percentage of your order total, you can adjust that percentage to cover your average shipping costs.
  4. Free Shipping – By allowing free shipping, you extend a similar experience and price point of your in-store shopping to online.
  5. Free Local Pickup – This allows a local pickup option if the customer is within a certain zip code range at the time of checkout.

Additionally far more complex options can be considered and blended. You may use a percentage of total for orders under $200 and for orders over $200, you might offer free shipping. You must be diligent and think this through as confusing a customer on shipping calculations will immediately lead to an abandoned card and your left with no sale.

Another consideration in your shipping configuration is where you source your products. If you maintain adequate inventory levels within an onsite warehouse, you can establish a shipping timeline for customers that is accurate. If you blend onsite products with drop shipped products, you will need to consider how you will ship the drop shipped items. Will you send the customer two packages, or receive the drop shipped items and consolidate your shipping to maintain a unified delivery?

The best thing you can do is watch your own shopping habits while you shop online. Did you notice that shipping 1 product is $5 and 2 products is $20? That doesn’t make sense and you know it! Pull out some paper and take some notes on your current shipping policies and see if the customer’s shopping experience can be improved upon.

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