Shipping costs : which strategy to adopt?

Are you an e-tailer and are you uncomfortable with the concept of shipping costs for your goods?

According to a study by Byamard, in 60% of cases, shipping costs are too high and are a barrier to purchase. Here are a few tips that we have put together to support you in your logistics strategy without slowing down your customers in their purchasing decision.

Define your shipping costs: 5 elements to take into account

1. the packaging of your parcels

Depending on the nature of your e-commerce, you will need a specific packaging, whether it is clothing, household appliances or industrial equipment, you will need to adapt the container to your goods. The packaging of your products will be part of your strategy.

For example, if you have to send fragile goods, you will have to think about protecting them with certain materials such as bubble wrap, polystyrene, inflatable bags or kraft paper. The purchase of the packaging is also to be considered, because it reflects your brand image. 

Choose a quality and neat container, you can choose it according to the fragility of your products. For example, it can be cardboard, wooden or metal boxes (for your shipments of more than 50 kilos, depending on the carrier chosen). You can also have it personalized, and use reusable containers in the event of a return. 

Not only does packaging protect your products, but it also sends a message to your customers, and is part of the customer experience. 

There are many ways to package your products, so think about this when calculating your shipping costs.

2. packing of your orders

Preparing your shipments requires time and sometimes labour to prepare and pack your packages. If it is necessary to have manpower to prepare your packages, its cost is a cause of high shipping costs. This element will be integrated into the amount of the fees.

3. Define shipping zones

You will agree that shipping a parcel to Spain will not have the same cost as shipping it to Australia, so you will obviously need to take this into account. You can make a simple segmentation:

• Domestic
• Europe
• International

Note that now that the United Kingdom is no longer part of the European Union, shipping costs have been re-evaluated. The other element to take into account is that the Overseas zone, although French, a shipment to the Overseas is considered as made internationally. To have more information on international shipping you can consult our page dedicated to it.

4. shipping costs requested by the carrier

In order to define your shipping costs, you will first have to choose your shipping options. At Upela, there are several delivery modes: standard delivery, relay points, express delivery, etc.

Make sure you choose a delivery solution adapted to the needs of your customers, a too long delay is the cause of 18% of abandoned baskets.

You will be able to estimate in advance the shipping rates requested by the carriers according to the type of goods you sell on your online store. For example, if your goods are more or less voluminous and heavy, you will be able to make a simulation of the shipping costs in our shipping calculator according to the average dimensions of your shipments.

5. the return costs you charge your customers

You can offer the return shipping to your customers or not, depending on how much your company can afford. It is true that a free return is more appreciable for your customers, especially for clothing stores. In the event that a product is not suitable for the customer, you provide them with a return slip so that they can return their product for free. Even if this involves a cost, it can have a very positive impact on your customer relations.

98% of customers who have had a positive delivery experience on a website are willing to place new orders. This is a factor to consider in your customer retention strategy. If you can't afford to offer delivery fees all year round, seasonality could be your ally, take advantage of sales to offer delivery fees over a defined period.

How to offer delivery?

According to a study by Endicia, 4 out of 5 customers consider free delivery as a criterion for making a purchase. In order to ensure that offering free shipping does not have too negative an impact on your online shop, there are one or two tricks you can use:

• Conditional offer:

This process consists of setting a minimum purchase amount to offer free shipping, for example, you can set a minimum purchase amount of $50. This same Endicia study shows that 70% of customers prefer to add an additional product to their cart in order to get free shipping. Only you can define at what amount of purchase this operation becomes profitable.

This method is very common, in order to define at what amount this operation becomes profitable. You must take into account two elements: the amount of your average baskets as well as the amount at which your customers abandon the purchase. This way, you will be able to encourage the passage to the act of purchase.

This is a very common method to define the amount at which this operation becomes profitable. You should take two things into account: the amount of your average shopping baskets and the amount at which your customers abandon the purchase. In this way, you can encourage the purchase.

• Take advantage of seasonality:

For e-tailers, the year is punctuated by several highlights, for example, sales and Black Friday. During these occasions, you can offer your customers free shipping.

If you offer shipping costs, you can propose the most economical shipping services (standard delivery or relay point) so that this offer does not have a very negative impact on your business.

• Offer the return shipping charges

If you can't offer shipping costs, you can always offer your customers to pay for the return shipping (for example, for a certain purchase amount). This will reassure customers, and make their shopping experience flexible.

• Offer free shipping to your most loyal customers

If you have a loyalty program in place, you can choose to offer free shipping only to your customers who are part of this loyalty program. Or you can offer them to those who are registered to your newsletter

In order to calculate how to offer your shipping costs you can make a simple calculation: average basket amount + average cost of a product - cost of shipping.

Example: 50 + 10 - 5 = 55. You can therefore offer the shipping costs from a purchase of $55.