How to Create an eCommerce Shipping Strategy

Why It Matters

Shipping is the most cited reason for why consumers abandon their shopping cart. In fact, according to Business Insider, over $4 trillion worth of merchandise will be left unpurchased in shopping carts by online shoppers this year. This is a staggering factor that directly impacts your margins.

Here’s some shipping related cart abandonment stats from Business Insider:

• 61% of consumers are “somewhat likely” to cancel their purchase if free shipping isn’t offered.
• 54% of online shoppers say that if shipping costs made total cost more than expected, then they would abandon their shopping carts.
• 34% of customers say that if shipping costs are shown too late in the checkout, then they would abandon their shopping carts.

Creating an effective eCommerce shipping strategy can lead to a lower shopping cart abandonment rate.

How to Create Your Shipping Strategy

1. Determine the shipping method. When it comes to shipping, not every item is treated the same way. Most retailers and customers are familiar with parcel shipping with UPS, FedEx, and USPS but if your store sells fragile, oversized, or specialty items then parcel isn’t going to cut it. To safely get these items to your customers, you’ll need to establish relationships with freight, blanket-wrap, and/or specialty shipping companies.
2. Decide on the types of shipping your online store offers. Are you going to offer free shipping, flat rate shipping and / or premium shipping options? This step requires an evaluation of your pricing model for your products and looking at significant amounts of shipping data. If you’re going to offer free or flat rate shipping, you need to ensure the margin for each product covers the cost of shipping, and provides a profit. when deciding whether or not to offer free shipping it is important to know that online shoppers spend, on average, 30% more per order when free shipping is included.*
3. Figure out how to optimally pack your items. Once you’ve decided the proper methods to ship your products, you’ll need to determine the best way to pack them. With FedEx and UPS shifting to dimensional weight pricing, packing efficiently directly impacts your bottom line. The following chart displays the difference in FedEx shipping costs for packing items in one box versus two boxes.

*http://www.monetate.com/blog/infographic-free-shipping-nice-to-have-or-essential-for-purchase/

**http://pressroom.ups.com/pressroom/staticfiles/pdf/fact_sheets/2013_PulseShopper_FINAL.pdf