Amazon- the leading retailer e-commerce is continuously growing with innovative strategies. It’s one of the paid subscription services- Amazon Prime has lent a hand in boosting the revenue with free shipping to stand to the customer’s expectations. The free two-day shipping is now assumed as by default. In the event, the shipping bill is sent to the customers, it’s probably an out-of-the-world case for them because free shipping has become a norm for the customers.
Conclusion = Free shipping and speedy shipping are the purchase drivers in the online space.
Meeting the expectations shaped by Amazon is no easy task for the start-ups and even established players because free shipping hurts the bottom line. In the holiday season, free shipping becomes an intimidating factor for the Ecommerce stores.
What does it signal?
- Offer free shipping
- Don’t offer free shipping.
- Show unmodified USPS rates.
- Using a strategic approach with a mix of free and premium shipping.
The answer- there is no one-size-fits-all solution. However, the shipping, which is less often given much credence, is powerful enough to differentiate your brand in the crowded market when strategic shipping options are considered. It will increase your margins and delight your customers too.
Still, not convinced? We give you more reasons to create a well-thought and well-planned shipping strategy. They are:
- Higher conversion: The unavailability of preferred shipping options or higher shipping rates may lead the users to abandon the cart. The massive impact can be observed in conversion rates by providing the myriad of shipping options and rates that customers expect the most.
- Increase average order volume: The free shipping threshold or free expedited shipping at a certain price point works as stimulators and makes the users increase the basket size to avail free shipping
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- Intensify customer outreach: Enabling product shipping globally by providing local delivery, in-store pickup, or international shipping options, the target audience reach can be extended.
- Enhance operational efficiency: With real-time information about new packaging type or new fulfillment process, the fulfillment teams can make data-driven decisions regarding order packaging and shipping.
I hope you are now pretty persuaded with the shipping strategy importance. If you are a small company and cannot afford to leverage 3PL fulfillment services or drop shipping, then you will likely be storing, managing, and shipping the packages by yourself. It’s not an easy deal. It requires coordination among multiple teams to create a solid shipping strategy that keeps your business profitable.
We have created a step-by-step guide that will help you know how to begin, create, and execute the shipping strategy while considering multiple things in between.
Let’s dive in!
How to implement the shipping practices?
- Make the right team
As discussed, every member of each department (Marketing, app development, fulfillment, and customer service) in the organization plays a key role in helping you make a business decision. The right people on the team when brought to the conversation, the brilliant decisions are made.
- Define the goals
When you have created the right team on board, it’s time to set the goals before creating a shipping strategy to make the results achievable.
- Selecting a shipping strategy
When the team and goals are set, it’s a turn of choosing the shipping strategy that will help in accomplishing the goals. As a retailer, you can choose the free shipping, premium shipping, or a mix of two. The studies had proven that the latter option has brought impressive success to the retailers when rightly embraced and executed.
- Improve it
Finally, implement the shipping strategy, test its results in the real world, and then iterate to bring the winning upshots.
Shipping variables to consider
When the team jumps on the strategy selection bandwagon to meet the defined goals, the pros and cons of every shipping strategy with several variables need to be considered. To offer several shipping options and lowest shipping rates, complete control over shipping is required that allows retailers to cover the cost without negatively impacting the ROI. The three important Ecommerce considerations are:
Product size and weight: The accurate size and weight of the products must be computed well to get the rates straight from the shipping carriers like- DHL, FedEx, or UPS. The carriers consider either the size of the package or its dimensional weight to bill the product shipping charges accordingly.
Destinations: For local shipping, the free shipping or flat rate shipping model would work, but for shipping into different zones or countries, the distance between origin and destination is calculated to define the shipping rates. As a rule of thumb, the higher the shipping distance, the expensive the package shipping will be.
Shipping options: It’s not essential to chase the retail giants from top to toe to offer same-day delivery for next-day delivery to achieve success. Similarly, instead of choosing big carriers, you can partner with the local courier companies to enable shipping at reasonable rates. You can opt for free shipping, same-day delivery, LTL freight carriers, and free in-store pick-up as shipping options.
Free shipping: Responding to customer expectations, the retailer enables free shipping and pay to the carrier for the order shipping. It must be employed strategically as the shipping cost must be covered with each order, else it hurts the revenue.
Flat rate shipping: Shipping the orders to the customers of various regions at the flat shipping fee.
Table rate shipping: The customers near to fulfillment centers are charged lesser shipping fees from those who are living far away.
Live rates: The shipping carriers directly provide the shipping rates in real-time, which are then shown to the customers. It’s sometimes used as a promotional tool by tweaking the product and shipping rates accordingly.
Mixed strategy: The alternative strategies in conjunction with another shipping option make a great option for the customers. For instance, using free shipping and expedited shopping, in-store pickup and same-day delivery, and much more.
How will you maintain equilibrium between a happy customer and business revenue?
We all know that free shipping is the most sought after Ecommerce shipping strategy, which contributes a ton to the Ecommerce unmatched growth, but it influences the ROI. However, when a couple of facts from the consumer side are considered such as free shipping for extended delivery time is favored rather than premium speedy delivery, consumers ready to increase the basket size to qualify for free shipping, and consumers prefer to apply free shipping code; it implies free shipping stays at the heart to improve sales and revenue.
How the Ecommerce shipping delivery app makes it work without having a big financial reserve? This issue is popping-up before many Ecommerce players from the last few years. Neither free shipping can be ignored nor profitability. There are some tactics to make dollars even after enabling the free shipping option. They are:
- Determine your Ecommerce shipping tracking strategy for the industry niche
- Check shipping fee is putting extra burden on marketing expenses or covered in the product costs.
- Enable free shipping to limited regions.
- Add some conditions to qualify for free shipping.
- Leverage shipping as a promotional tool.
- Charge extra money for expedited delivery.
Weigh things in this way to set your business for iconic success.
The Ecommerce app development in India is gaining traction as the online shopping picking up the pace at speed. For new Ecommerce ventures, shipping the package from point A to B is not that much difficult as creating the right shipping strategy with the number of variables because it has a direct impact on business productivity and profitability.
Creating the best strategy is not the work of an average Joe. There are a lot of things involved that must be measured and evaluated to craft a shipping strategy that brings expected results.
Also, shipping strategy engineering is not a one-time job. It must be constantly monitored to deliver a phenomenal experience to the customers alongside keeping the business profitable forever. Follow the aforementioned guide.