The goal of every eCommerce store is finding a shipping costs strategy that pleases customers but still protects profits. In other words, you need a shipping costs strategy for everyone to win. As 7 Things You Need To Consider For Ecommerce Shipping mentioned, there are 3 general options: free shipping, flat rate, and variable rates. But within those options lies a lot of wiggle room; costs vary widely between major carriers based on a few different factors.

Let’s find the best shipping costs strategy for your business. 

Factors that affect shipping costs

shipping costs

Each of these factors plays important role in your final shipping costs. Thus, you need a well-considered strategy.

Weight and size 

A heavier package but it is smaller in size may not cost more to ship than a lighter package but is larger. If your products have a variety of sizes and weights, your best strategy will be different than if all your product deliveries have a similar weight and size.

Packaging and packing materials

Some products require ships safely because it is fragile, perishable or sensitive. These shipping methods increase shipping costs. For example, a company that sells cheese, wine, and other fine foods, admits that shipping can be more expensive. 

Human resources

The shipping business requires time and lots of people. You have to create labels, place products in the box, secure them, and seal them. Someone has to manage these products. Consider the time and cost of the work that goes into this process. 

Margins: Determine your shipping costs

You have to know how to determine shipping costs for e particular weight, destination, method, and size. You also be able to negotiate discounted rates with your carries

Let’s say you have a product that costs $25.00 to produce, $5.00 to ship, and $6.00 to package properly. Your cost, before any profit, is $36.00. 

If you want a 30% profit margin, the total amount charged to the customer would need to be $46.8. So, you might list the product for $38.20 and add $8.00 in shipping fees. You could also charge customers a portion of the shipping costs, and end up somewhere in the middle.

What’s better? That depends. Here are five shipping strategies to consider when decipơ06ing what makes sense for your online business.

1. Offer live rates 

Live rates are computed in real-time, allowing you to deliver shipping costs at exact carrier costs for different sizes, weights, and distances - charging what you want to charge for products without worrying about shipping costs. So if your carrier increases their rates by 5%, the shipping costs on your website will update too.

Your customers can choose between many shipping options that meet their needs. Anh this is the common reason to use live rates. Plus, because they’ll have several choices, including a more expensive shipping fee with more convenience or pay a low-cost shipping fee. It depends on the customers’ choice. 

2. Offer table rates

Table rate uses a set of rules to calculate the shipping cost based on everything from sizes and weights to classes, order totals, destinations, or a number of items purchased. This type of shopping costs option provides the most customization and helps you buy products that vary in shape, size, type.

Here are some examples:

  • Totaling 25$ or more for only ship a specific product delivery.

  • Charge $7.00 for shipping for any package weighing less than eight pounds. Charge $14.00 for anything that weighs eight pounds or more.

It can become complicated quickly. 

3. Offer flat rates

Flat rate shipping is very easy to set up. The shipping fee is the same regardless of order weight or size. This is used if your products are of the same size and weight or if the majority of customers order similar quantities. Therefore, you can overcharge your customers and lose them or undercharge and lose profit. This way is simple, straightforward and takes the guesswork out of calculating rates. You can use flat rate for your marketing shipment solutions with a message like” Shipping is always just…”. It is a natural appeal for its simplicity and clarity. Flat rates may encourage shoppers to order more items without fear of shipping costs like live rates. 

4. Offer free shipping

shipping costs

Certainly, customers love free shipping, 93% of customers purchase more products if it is free shipping. And 59% of people add more products to qualify for free shipping. But it’s not fit for every store. Free shipping costs can end up losing money dramatically even with increased sales. 

The tip is to blow your product price. Instead of charging 10$ for product delivery and 3$ to ship, you could offer free shipping and charge 11$ for the product. 

You'll have to consider how much delivery costs for your items and if clients will endure more exorbitant costs. You may likewise attempt a cream approach: add a portion of the delivery costs into the item cost and pay the rest yourself, trusting that expanded deals will counterbalance more modest edges.

5. Combine several shipping options

If you don’t know how to determine shipping costs, you can mix and match them to create the right fit for shipment solutions. 

The common strategy is to offer free shipping for orders that meet a minimum total, you could offer flat rate shipping for order under $60 and free shipping for orders over 60$. If your average order size is $30, this strategy is smart. It encourages your costumes to add more product and ensures you protect your profits. 

Then again, on the off chance that you have an assortment of request sizes, item loads, and costs, you could offer free transportation for USPS Ground just and ascertain constant rates for quicker conveyance choices. 

You can likewise offer free transportation temporarily as a component of a bigger showcasing methodology. In the event that you ordinarily charge for transportation, this gives you an approach to support deals for a specific occasion or season.

Conclusion

An effective shipping costs strategy is all about balancing all needs for both your customers and your business. Consider shipping costs for product delivery, it is the best way for promoting your shipping business. You can use Magento Shipping Cost Calculator Extension to calculate, create and display shipping fee or check the location of your shipment items. See more demo to know more. If you have any questions about the shipment, leave a comment below and let us know how we can help you