There are a number of factors to consider when deciding which delivery option to offer to your customers, especially if you are running an online web shop where you don’t typically get to speak to your customer before they place an order.
- The item(s) being shipped
- Weight
- Dimensions
- Fragility
- Contents
- Worth
- Shipping location
- Speed required for delivery
- Proof of delivery
It may be that you need to offer a tailored solution based on individual transactions (especially if you are shipping items that are very costly, heavy, or are going outside of the country), but there are other options to explore if you would prefer to give customers a set choice.
Free shipping
This is a great incentive for customers, but you will need to factor the true shipping cost into your item price or service charge. It may be that you can offer free delivery if someone spends over a certain amount or if they want a slower service than same or next day only. Quicker options would then be subject to an extra charge.
You may find you get more interest with a free delivery option, but make smaller sales in terms of quantity, or that users drop out at the checkout because they don’t want to spend a minimum amount or need the order quickly.
Flat rate shipping
You can offer shipping at a flat rate for all transactions regardless of cost, quantity and items ordered. Insurance may be an optional extra, as may be expeditated shipping for an extra cost. Again, you need to weigh up whether this option will lose money as shipping a large order is likely to cost more than the flat rate being charged, so giving this option is often based on a minimum order charge or only on certain, lower cost or weight items.
Flat rate shipping is often seen as a bonus by a customer as they will be able to calculate their shipping cost into their order total from the start, so keeps them on your website longer. They may buy more to get the most they can out of paying just the one fee and again, you can charge extra for a next day or same day delivery option if required.
Shipping based on item price
More of a tailored solution, this shipping option works well if you are selling expensive items like fine art, jewellery, gadgets, car parts etc, as you can charge higher shipping costs per item to cover extra insurance in case something happens to the order in transit. It gives extra peace of mind for both the business and the customer.
This option works well for customer service but can put people off if the shipping cost seems very high as well as the cost of the item. This does then negate being able to charge extra for a quicker shipping option, and indeed, many businesses who offer this tend to send as next day as standard.
Weight / dimension-based shipping
You can calculate shipping based on item weight and/or dimension and charge accordingly. To offer this option you would need to know the weight and dimensions of every item you sell, so that your shipping calculator could work out how much shipping would be based on both the combined weight of multiple items, and which items would fit together in your chosen shipping container.
This type of shipping option works well for industries such as automotive or engineering, with pieces differing in weight and no two orders the same. It offers a flexible way to manage shipping without losing out on the shipping cost, but it’s worth setting a minimum weight limit for orders with combined items, or a flat rate if they do not meet this.
Whichever option you choose, it is important to monitor the needs of the business as time moves on, and also don’t be afraid to change the shipping options you offer if you find you are losing profit on shipping or that what you offer isn’t working for your customer base (maybe they want their items quicker or with extra insurance). In addition, offering a service like click and collect alongside shipping options may entice customers who wish to place smaller orders.
One thing we would add to finish is that you need to be careful to not overwhelm your customers. If you can offer more than one shipping option then that’s great but try to keep it as simple as possible to check out. Shopping carts and checkout processes often have high exit rates, largely down to shopper confusion or unexpected costs, so be transparent and keep things clear!
