Three Shipping Strategies To Benefit Both Merchants And Customers

Long Luc
Published in
3 min readMar 10, 2021

36% of online consumers abandon an item due to the shipping fee. The solution to that is free shipping for them, but you yourself will be the person who pays for that.

To avoid that prospect, we will here suggest three strategies that are win-win for everyone. Check it below!

Free Shipping

In this strategy, you still need to pay for the shipping. However, there are several tips to minimize the cost for you, such as…

Tip 1: Optimize The Packaging

Packaging affects your shipping cost a lot, and you can directly control this factor. For example, you must use heavy packages like cardboard for fragile items, but products like clothing just need a poly mailer to be safe during the delivery. It is lighter, and of course, charges you less money.

Tip 2: Provide Temporary Free Shipping

If you can’t afford year-round free shipping, consider it for some special occasions to boost sales. For instance, summer is approaching but you still have lots of warm clothes in the inventory. In that situation, you can offer shipping promotions while clearing them out at the full price.

Tip 3: Set Requirements For Free Shipping

First of all, you need to calculate your average order value (AOV). After that, offer free shipping for orders which are greater than AOV.

For example, you have five orders costing $79, $64, $105, $83, and $59 respectively. Add them up and divide by 5 (the total number of orders), you will get $78 — thing we call AOV.

In this situation, you should give free shipping for orders over $90. This will increase the average order size for you, therefore partially making up for the shipping cost you need to cover.

Tip 4: Include Shipping Fee Into Product Prices

This is the most beneficial strategy for sellers, but it can apply only when you are selling luxury or unique handmade items. For a highly competitive market, it is very easy for customers to notice the increased cost. Therefore, you need to consider other solutions, like the two we will mention below.

Real-Time Shipping

Real-time shipping means that customers will be directly charged by the carrier, with the number exact to the penny (such as $9.14). By this strategy, you have given customers the right to choose what shipping cost is the most suitable for them.

Take Queen Majesty Hot Sauce for example. Once customers go to the checkout, they will see all of the shipping options like this:

Real-time shipping shows that you are being honest with your customers, that you don’t inflate the shipping fee or add it into the item prices. Besides, it is an ideal solution for heavy shipments (like a sofa) when you can’t cover the shipping fee.

Flat-Rate Shipping

This is the easiest and most straightforward system — you offer a rate for every package or a rate based on the size or volume. Here is how TheSill, a houseplant company, decides a flat rate shipping:

The most difficult part is finding out the most suitable flat rate. At first, you might overcharge or undercharge customers, but it’ll balance in the end, after you have done some testing and experiments.

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