Menu

How to Optimize Your Shipping Practices for Better Conversions

10 Minute Read

Companies like ours, Smith Corona, use SearchSpring to help website visitors discover the products they are looking for.  Without the power of an enhanced site search, our customers might never find the right products. However, getting customers to the products they are looking for is only one, albeit, an important step, in the buying process.

The next part of the buyer’s journey, the checkout funnel, is where most companies lose nearly 70% of all transactions.  But why are 7 out of 10 website visitors abandoning their shopping carts?

According to UPS, out of all the factors associated with shopping cart abandonment, problems with shipping accounted for 66% of all shopping cart abandonment. In short, shoppers hate shipping costs – especially when they are made aware of those costs late in the checkout process.

So what can be done to decrease shopping cart abandonment due to shipping concerns?

Shipping Problem #1 – Shipping and Handling Costs Were Too High

ecommerce shipping optimization

Let’s start with the most complained about shipping problem: excessive shipping charges.

 1. Offer Free Shipping

Customers can’t abandon checkout due to unexpected shipping costs if there are no shipping costs at all, right?

One option to explore is to combine shipping costs with the cost of the product, resulting in a total cost displayed to the consumer. This will work best if you manufacture and sell at a high retail markup, so you aren’t completely absorbing all shipping costs and losing money.

Free shipping doesn’t necessarily mean all items need to have a high retail markup. Some products like jewelry, cosmetics, and other small items may have high-profit margins and low shipping cost.

Regardless, customers don’t like shipping costs. If your products cost a little more but have free shipping, some customers won’t care or even notice the price increase.

According to the Walker Sands Future of Retail Study, Free shipping is what online shoppers want most and it would make them shop online more often.

If your business plan doesn’t allow for the offering of free shipping at all times, you can explore different options.

2. Offer Free Shipping Sometimes 

If you can’t afford to blindly offer free shipping on any transaction, you could instead offer it in certain circumstances.

Having a paid membership to your e-commerce website can be a great way to keep customers and encourage them to order from your website continuously. Try offering free shipping for members of your site so your customers are happy and are more likely to come back and order from your website.

You could also try offering free shipping on certain products. If you have products that aren’t selling as well as other items in your inventory, it could be beneficial to offer free shipping to boost sales and product awareness.

Another technique you could use is to offer free shipping on orders over a certain dollar amount. Calculate what the minimum order cost would be for you to provide free shipping and still make a profit. This is a win-win situation because your customers will get lower shipping costs and you will get a higher order total.

From there you can decide on a price you are comfortable with and offer free shipping for orders over that set cost. This will encourage your customers to add more items to their shopping carts because they will want to avoid any shipping costs. This could be helpful because 93% of shoppers will take action to qualify for free shipping.

This will be especially helpful if another business is ordering from you to restock their inventory. If they are looking to buy products so they have extra in stock, they will be more willing to add a little more to their cart if it means they get free shipping.

3. Flat Rates

Flat rates can calm down customer’s concerns about paying for shipping and may make them more willing to pay for shipping.

However, it’s important to think ahead and carefully plan out what your flat rate for shipping should be. You need to make sure you don’t undercharge or overcharge your customers.

You will need to figure out which flat rate works best for you. Take into account all of your products and their size and weight, where most of your customers are located, and where you will be shipping from.

4. Let Your Customers Ship Collect (B2B Tip!)

Instead of billing your customers for shipping costs, you could let your customers use their UPS or FedEx collect accounts. This is especially beneficial when selling business to business, as those customers are much more likely to have collect accounts.

 Collect accounts charge the recipient of the package to be charged for shipping instead. This will also allow the customer to have a sense of control over how their package is shipped and they can choose their preferences based on price.

In addition, some of your business customers may already have negotiated good rates with delivery options like FedEx or UPS. If so, it would be beneficial for them to take advantage of those rates rather than to unnecessarily pay more for their product. The option to choose their own carrier could be a deal-breaker on if they use your business or not.

Shipping Problem #2 – Shipping and Handling Costs Were Presented Too Late in the Checkout Process

ecommerce shipping optimization

Getting the products into the shopper’s cart isn’t the problem, but e-commerce owners must keep those items in the cart through the checkout process.

Customers won’t like that their subtotal is much higher than the cost of the item they are getting. It is better to be upfront and transparent with the total price as early in the shopping process as possible.

While adding items to the shopping cart, you should do your best to calculate the total cost of the order with every item that is added; this includes the taxes and shipping costs. If these costs vary depending on the item and the location the item will be shipped, you may want to incorporate a shipping estimator to your customer’s shopping experience.

Have the shopper enter their location before shopping and do your best to calculate the price based on the items they are viewing and the things they already have in their cart. An example can be found on our website’s product page. Putting this information on the product page rather than the checkout page will make your customers more aware of the current price and more likely to finish their shopping.

ecommerce shipping optimization

In addition to displaying all the shipping pricing on your website, make sure that it is easy for your shoppers to access your shipping policy. This way they can look at your policies and won’t be surprised at any fees that may come their way. The less hidden fees, the more likely a customer is to finish their order.

Shipping Problem #3 – Delivery Time

ecommerce shipping optimization

Your e-commerce website will find more success if you give your customers more options.

Make sure when you are looking for carriers, you don’t just go with the big names like FedEx. Explore your options for a lower shipping price and delivery time. There are several delivery companies out there that aren’t as well known as FedEx and UPS, but they may offer the same quality service at a lower price. Explore prices from Aramex, Blue Dart, Delhivery, and more.

You could base your available options on where your customer is located by using GEO locating. GEO locating allows you to look at a user’s IP address to get an idea of where they live. With this information, you could display real-time rates, more accurate delivery estimations, and more customized options to a user on your product page based on where they are located.

GEO locating can also be helpful in letting customers know when a product will get to them if they order on your website.

Not only should your customers be able to see when an order will get to them, but they should be able to select more shipping options than the typical ground shipping.

Each customer has their own wants and needs. For some customers, time may be an essential factor. Offering overnight or two-day delivery could be a dealbreaker for people who want their products faster. If the week is coming to an end, the option for a Saturday delivery could be relevant to a customer so they don’t have to wait until the next week to receive their order.

However, time may not be important to some customers. You should offer the option for a slower, but cheaper, delivery for customers who don’t care when they receive their order as long as it costs them less money. According to UPS, 90% of consumers are willing to wait additional days if it means they get free shipping.

For example, Amazon currently offers a No-Rush Shipping Program. Customers will get a discount if they select this no-rush option. Although their package may get there at a later date without an exact delivery time frame, some people may choose this option so they can get a discount or pay less for shipping.

Shipping Problem #4 – No Tracking Available

ecommerce shipping optimization

Online shoppers don’t like to pay for shipping, especially when they don’t know precisely when their package will arrive. They may be ordering a time-sensitive item or may just be impatient.

It is crucial to give your customers the most specific delivery date possible. If a customer is ordering for an anniversary, birthday, or holiday, a delivery date will be their number one priority.

If another business is buying from you, it is critical for them to know when their products will arrive because their daily operations could depend on it. If they can’t get a guarantee or estimated delivery date, it is unlikely they will want to place an order.

Another option that will win over customers is the choice to track their purchase during the delivery process.

Allowing customers to track their packages is the most wanted online shopping feature. Because this is a preference for a large number of shoppers, it’s essential your e-commerce business offers the option. Not only is it important for consumers, but if a business is buying something from you, they may have customers of their own that are waiting on an order. If you can provide a delivery tracking option, other businesses will be more comfortable buying from you so they can pass the information along to anyone waiting on them.

If you are using carriers like FedEx or UPS, you can utilize their tracking system and present the data to your customers. Make sure to visibly provide the tracking number or any information the customer may need to track their package. It’s also a good idea to make the customer aware of your site’s package tracking features before they get to the checkout section.

Customers want their purchased products as soon as possible, and it will be more appealing for them to buy if they knew their item was going to be shipped on the same day as the purchase.

Offer a timer on your website that will let your customer know how much time they have to order so their order will ship on the same day. This should be extremely visible and will push the customer to make their order sooner rather than later – this can help combat shopping cart abandonment.

How to Reduce Shipping Costs

ecommerce shipping optimization

Shipping can be expensive, and unfortunately, shipping rates will continue to rise. From 2017 to today, it is estimated that freight rates have increased on average 8 to 15% in the United States.

With freight rates on the rise and a current shortage of truck drivers, it is important to save money wherever you can.

There are several different options you can explore while looking to reduce your shipping costs.

1.

Shipping can be expensive. There are a few different types of shipping, including ground shipping and less than truckload (LTL) shipping.

LTL shipping combines shipments from multiple customers and is more affordable for small businesses because you can share the transportation costs with whoever else is using the truck for shipping. You will only pay for the portion of the truck you use and for how long your shipping takes.

To reduce shipping costs, try upselling your customers from ground shipments to LTL shipments.

Upselling will be most beneficial to the customer while selling business to business due to the shipping of larger orders. At Smith Corona, we notify the customer of what they need to do to save money and give them the option to do so along with providing all the information they need to make an informed decision.

ecommerce shipping optimization

For example, take a shipment from Cleveland, Ohio to Los Angeles, California. If you order 10 boxes of 4×6 direct thermal labels, shipping costs can exceed $400. However, if you add 5 boxes to that order, the shipping costs are cut in half and will only be $200.

Although this technique may not be as beneficial for some e-commerce websites, it can offer huge savings when fulfilling a large order or selling business to business.

2.

Another technique you could use is to offer free shipping on orders over a certain amount. Calculate what the minimum order cost would be for you to provide free shipping and still make a profit. This is a win-win situation because your customers will get lower shipping costs and you will get a higher order total.

From there you can decide on a price you are comfortable with and offer free shipping for orders over that set cost. This will encourage your customers to add more items to their shopping carts because they will want to avoid any shipping costs. This could be helpful because 93% of shoppers will take action to qualify for free shipping.

This will be especially helpful if another business is ordering from you to restock their inventory. If they are looking to buy products so they have extra in stock, they will be more willing to add a little more to their cart if it means they get free shipping.

3.

Instead of handling shipping costs yourself, you could let your customers use their UPS or FedEx collect accounts.

Collect accounts charge the recipient of the package to be charged for shipping instead. By utilizing this option, you will be able to get real-time rates directly from the carrier of choice and your shipping costs will be more reliable. This will also allow the customer to have a sense of control over how their package is shipped and they can choose their preferences based on price.

In addition, some of your business customers may already have negotiated good rates with delivery options like FedEx or UPS. If so, it would be beneficial for them to take advantage of those rates rather than to unnecessarily pay more for their product. The option to choose their own carrier could be a deal-breaker on if they use your business or not.

4.

Take a look at your packaging size and weight.

Make sure you are using the smallest materials possible to ship your items, like using a poly mailer instead of a box. Cardboard is heavy, and if you can use something else, the weight of your package will go down.

Sometimes you can get free shipping supplies from companies like UPS and FedEx. Explore all of your options before deciding on a final size and try to make that size as small as possible. By using the carrier’s packaging, you may be able to avoid extra fees by not exceeding the carrier’s size regulations.

Some products may require protection while shipping, but make sure you are only paying for protective packaging when you need it.

In conclusion, there are lots of different types of online shoppers, and it is important your business accommodates every one of them and their needs. Some customers may have time-based needs while others may just want the cheapest option possible.

By exploring different options and offering a wide range of choices, your e-commerce website will stand out and customers will be more likely to return for another purchase.

This guest post was submitted by James Philbrick. James is a Marketing Associate at Smith Corona, a SearchSpring customer. Smith Corona is a thermal label manufacturer that manages an in-house supply chain to drive down prices for customers.