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What is the shipping strategy of your ShopFactory online store?

Does the following sound familiar?

A new buyer comes to your web store, identifies the product he or she wants and it's at the proper price point. He/She adds it to his shopping basket. He or she goes to the checkout page and then it happens. The shipping and handling rates show up and all of a sudden the buyer starts second-guessing their decision to buy.

Suddenly a product which was at a fair price is starting to seem a little too expensive. One of two things happens next. Either the buyer decides to press on despite the increased costs, or they abandon the cart and leaves your store disappointed.

So what can you do to influence this decision?

Let's take a look at few shipping strategies and how you can use them in your ShopFactory online store

The real challenge to figuring out your shipping strategy is determining a solution that cuts into your margins as little as possible yet remains attractive to your buyers. And, this is something you're going to want to get right. Studies have shown that shipping and handling fees are the top factors driving shopping cart abandonment.

With this information in mind, let's look at the three most frequent shipping options and the pros and cons of each.

What is the shipping strategy of your ShopFactory online store?

Option A: Charge What You Get Charged

In ShopFactory it's possible to set up real-time shipping providers. In other words, your customers more or less pay exactly what you would pay to have the products shipped (Such as: Sendcloud / FedEx / DHL / UPS). In other words, once a customer gets to the checkout, they input the address details for where they want their order shipped to and the calculator does the rest. There are always small discrepancies that can happen. But, in most cases, you can end up breaking even between the shipping charges you collect and what you ultimately have to pay to ship the package.

Option B: Offer Free Shipping

Offering free shipping - usually just for domestic orders - is a sure-fire way to get your customer's attention. However, depending on your margins, it can also potentially cut into your profits. That said, a marketing option that displays 'Free Shipping' on your website can be a significant advantage over any competitors who don't offer the same incentive. Deciding to offer free shipping will require you to either absorb the cost or slightly increase your product prices to cover it. If you implement it proudly display it on your online store so buyers know that the price they see is the price they pay.

A quick tip: You could also try offering free shipping with a minimum order amount or a minimum number of items. This should drive up your average order value and help you have more profit dollars to apply the shipping cost against.

Identifying whether to offer free shipping or require a minimum threshold often comes down to your margins and the niche you operate in. If you offer premium or one-of-a-kind items, rolling in an extra percentage for shipping and handling into the cost of your products probably isn't too much of an issue. However, if you're competing with Amazon retailers where both free shipping and the lowest prices are the norms, marking up your products to cover shipping costs may not the best idea. This is where you have to consider either a different option entirely or absorbing the cost for the shipping on most of your items.

Exceptions exist though.

Large or particularly heavy items like Fitness Gear or dumbbell can cause some problems for your 'Free Shipping' campaign. Doing your research and knowing your numbers about things like how much each of your products actually costs to ship, how your competitors handle shipping, and your allowable profit margin can help you make the right decision. Using a real-time calculator like Sendcloud or Packlink can earn you a lot of trust with your customers. It shows that you aren't inflating your quoted shipping fees or raising your item prices to cover the charges.

This approach doesn't have the same persuasion power 'free shipping' does. But it's an easy way to make sure that you're not draining shipping costs out of your earnings, and that your customers are getting the best deal possible. This is also a good option to use for heavy or oversized shipments that you simply cannot or do not want to allow to ship out under a free shipping promotion.

Option C: Offer Flat Rates

Your third option is to offer a flat rate for every package, or flat rates for weight ranges and order totals. This particular method of charging for shipping requires a bit of anticipation as you need to figure out your average cost of shipping a package. This is a best practice you should be doing anyway to make sure that you don't drastically undercharge or overcharge your customers. When you hit the right cost, you'll probably be over - or under - the actual shipping cost by a little, but it should even out in the end.

Figuring out what flat rate works for you, and if you need to do it by order totals or weight ranges will require some testing. Luckily, few carriers like USPS do offer a few different sizes of flat rates boxes, and if you have particularly small, but heavy objects, taking advantage of the cost savings from cubic shipping prices can help to bring your flat rates into a comfortable range. Of course, every ShopFactory online store is different, and only through testing will you find out what works best for you.

You'll need to find out the statistics on your products and the best ways to ship them to be able to make the most strategic decision possible. This is where additional apps can help you find information and alternatives (both with shipping carriers and methods) that you may not have had access to previously.

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