Smart Shipping: Using Shipping & Packing Strategies To Market Your Brand
These days, while Amazon Prime rules the land of shipping, it can be difficult for smaller merchants to impress impatient customers. Modern customers expect their purchases to arrive quickly, without any extra expense. What’s more, they expect to be able to track shipments as they make their way to their doorsteps.
For a small merchant, all of these expectations can be overwhelming. Shipping is a complex (and expensive!) aspect of online selling. Customers have no idea how much time and effort it takes to find affordable shipping options and set up software to automate shipping processes.
In customers’ eyes, shipping is simple. They just have to choose between three shipping speeds (fast, normal, and free), and then their products will automatically arrive at their door. Of course, they’re dead wrong, but for the sake of your business’s success, they should stay in the dark.
In fact, you can use the illusion of simple shipping to your advantage. If you provide customers with clear shipping options, you increase your chances of securing sales. The trick is maintaining your profits at the same time.
In this article, we’ll be covering a few ways you can optimize your shipping strategy to encourage more sales while preserving your profit margins. Keep reading to learn more about shipping best practices.
Table of Contents
The most important advice I can offer is to be upfront with your customers about shipping costs. According to one study by Kissmetrics, unexpected shipping rates are one of the main reasons for cart abandonment. 28% of study participants said that the main reason they had abandoned an order was that shipping costs were higher than expected.
Minimize that sticker shock in order to reduce abandoned carts. Make your shipping policies clear on every product page, and feature a shipping calculator in your customer’s shopping cart. Give your customers plenty of opportunities to see shipping rates before they proceed to checkout.
Give Them Options
When customers do arrive at checkout, make sure you provide them with multiple shipping speeds to choose from. List a standard shipping rate, a first class shipping rate, and an expedited shipping rate. This will give customers a sense of control and meet their expectations of what an online store should offer.
Offer Free Shipping
Free shipping is widely discussed and debated across eCommerce forums. One fact is certain: customers have come to expect free shipping. One study reveals that 90% of customers name free shipping as the top factor that influences them to shop online frequently.
However, this push for free shipping can often be too much for smaller merchants. After all, shipping is not free and offering such a bargain regularly can seriously eat into your profits.
Fortunately, universal free shipping is not the only way to go about setting lower shipping rates. Here are a few alternative free shipping models you might want to try instead.
Set Minimum Limits
Setting a minimum limit is one of the most popular free shipping techniques in the industry. Provide free shipping to customers who spend over a set amount ($35, $50, $100, etc.). The amount you set will depend on the average price of your products and your average order totals. It’s a good idea to set your minimum limit slightly over your average order total. This will encourage customers to spend a few dollars more on your site while still providing a free shipping option.
You might even consider adding a few cheaper “add-on items” to help customers reach those purchase limits.
Offer Free Shipping to Specific Customer Groups
Another option is to offer free shipping to a specific customer group via a promo code. You could send out these discounts to your most loyal customers or to customers who have recently joined your email list.
With any luck (and some A/B testing), your exclusive offer of free shipping will inspire repeat purchases.
Set Flat Rate Shipping
If you can’t afford to offer free shipping very frequently, you might look into setting up a flat rate shipping option.
Flat rate shipping takes the guesswork out of shipping on your customers’ end. It allows you to charge the same shipping rate for all of your items, so shipping expenses are never a surprise.
Flat rate shipping works best for merchants who sell products of roughly the same size and weight (shoes or clothing, for example). Merchants who sell products that vary widely in size will not benefit from flat rate shipping.
There are a couple of ways you can go about calculating your flat rate. The first method is to simply calculate the average expense of shipping your products. Let that average be your flat rate. You’ll lose money on some orders and gain money on others, and it should all average out in the end.
However, this isn’t the only way to set a flat rate. Cart 66 suggests a $5 alternative. According to Cart 66, $5 is the magic number when it comes to shipping rates. $5 is roughly the amount customers expect to pay for shipping, and it’s only a bit under actual shipping rates for most smaller items. In order to make this work, you must reprice your items to make up for any differences in shipping prices. For example, if one of your products costs $8 to ship, you’d simply add $3 to the product price and charge $5 for shipping. This method allows you to never lose money on shipping while still keeping things simple for your customers.
Integrate with Carriers for Real-Time Shipping Rates
Your final option is to simply charge your customers the amount that it costs you to ship your products. Integrate directly with shipping carriers or a shipping software to give customers real-time, accurate shipping estimates. Customers then pay the entire cost of their shipments. As you might imagine, this strategy is not nearly as popular among customers; however, it is the only way you can 100% guarantee your shipping expenses will be covered.
If you choose to go this route, you should consider using a shipping software for your calculations. As you likely know, there are a lot of variables that go into determining shipping rates (just take a look at one of USPS’s rates tables). Shipping software will allow you to quickly compare shipping rates from multiple carriers. All you have to do is make sure you’ve entered all of your products’ weights and dimensions in your eCommerce platform’s backend. Your shipping software will take things from there.
Don’t Forget Your Marketing Arsenal
Packaging is an excellent opportunity to further your brand. Don’t forget to include your company logo on any packing slips and other inserts. If you have the resources for it, think about investing in branded boxes to set your company apart from big marketplace sellers.
Consider including coupons and product announcements in your shipments as well. You don’t want to overwhelm your customers with too much marketing material, but no one objects to a coupon for their next purchase!
Finally, add a personal touch to your inserts. Address your customers by name, and think about including hand-written thank you notes in your shipments. This will help your customers establish an emotional connection with your store.
Be Clear About Your Return Policies
Online shoppers are incredibly wary. And the fear of commitment often keeps customers from making a purchase online. Offer free returns to eliminate those fears.
This is especially important if you sell clothing or anything else with a fit. A free returns policy gives customers the security of mind they need to complete a purchase.
You should, of course, attempt to minimize your return rates in every way possible. Include high-quality product images and product descriptions to give your customers an accurate depiction of your merchandise. Provide size charts for clothes and shoes, and let customers leave reviews and pictures of your products. Following all of these tips will help reduce the number of returns you have to process.
Mix It Up
Many businesses use a variety of shipping strategies in their fulfillment processes. You may find that you benefit most from a combination of free shipping and flat rate shipping. Or, you may offer tiered flat rate shipping depending on the weight of your products. Consider your current shipping practices and expenses as you decide which route to take.
Remember, the best practices are to be clear about your shipping rates with customers and keep those rates simple. Straightforward shipping rates will keep your customers happy, boosting your sales and customer loyalty.
Simpler shipping can also be a great benefit to your business. Take a look at our next article to learn how to simplify your shipping even further by outsourcing the whole process. Just click the link below.
See More Articles From Our Shipping Series