Choosing the right shipping strategy for your store
Before your first order, you must decide how you want to send your products to customers and how much to charge them for shipping. You can combine several shipping strategies in your Ecwid store in order to cover all of your products and delivery locations.
Different factors can affect the actual cost of sending your products to the buyer, such as:
- Package weight and dimensions. Shipping carriers like USPS, FedEx, and UPS calculate shipping charges based on the actual weight of the package or its dimensional weight.
- Shipping destination. Your shipping costs will be higher if you offer international shipping in your store.
- Value of shipped products. If you sell high-value products you may want to insure their shipment which will increase shipping costs.
- Delivery times. Some buyers prefer to pay for expedited shipping; this cost is based on where the buyer is located.
After you find a shipping service to use, calculate your shipping costs to make sure your margins can stay high.
Here is an example of how much an online order can cost:
Product cost $30.00
Shipping fee $5.00
Packaging cost $0.75
Credit card processing $0.85
Total cost $36.60. To make a profit of roughly 50% for this product, you should sell it at $54.99.
Calculating shipping costs will help you choose a shipping strategy and decide at what price to sell the products. If your margin is high, you may want to absorb the costs of shipping domestic orders and offer free shipping to your local customers. To compensate for shipping expenses, you can slightly increase product prices in your online store.
Alternatively, you can choose to charge your customers the exact amount that you pay for getting their order shipped. You can use online calculators to check how much shipping carriers charge to ship products of different weights and dimensions to different destinations from your location:
UPS rates calculator,
USPS rates calculator,
FedEx rates calculator, etc.
If you’ve just started your online business and sell locally, you can offer a local pickup, or deliver the ordered goods yourself. You can also use simple packaging for orders and hand-write shipping labels to reduce expenses at the start.
While your business is growing, review your shipping strategy from time to time and make any necessary adjustments.
Now that you’ve calculated the shipping costs for your product line, you will need to set it up and decide whether you, the buyer, or some combination will pay for the shipping expenses. You can add as many shipping methods as you need in order to cover all of your products and destination zones.
There are four popular shipping strategies:
Allow a local pickup for free or for a small fee
If you have an offline store, you can offer a local in-store pickup or a curbside pickup to those customers who prefer to purchase online and then pick up orders themselves. It’s actually a good idea to offer a local pickup even if you do not have an offline store.
You can offer a free pickup, charge a small fee (to compensate for delivering products from your warehouse to the pickup point), or give a discount to customers who have chosen pickup at checkout (for example, you can give them a discount coupon with their order).
Statistically, shipping cost is among the main reasons why shoppers abandon shopping carts. Consider offering free shipping whenever you can to increase conversion in your online store. Usually the cost of shipping is almost negligible for domestic orders, especially if your margin is high and you’re shipping products that do not require extra packing or handling. To compensate for your shipping expenses, you can slightly increase your product prices.
You can also offer free shipping on orders over a certain subtotal amount to encourage customers to buy more. Or you can offer free shipping to certain customers by giving them a discount coupon code that they can redeem at checkout.
Charging exact shipping cost
If you use a popular service like USPS, Fedex, UPS, etc. to ship your products, you can charge your customers the exact rate that you are paying these carriers for each order. For this, you can set up your store to receive automatic online shipping rates from carriers (USPS, FedEx, etc.) at checkout.
If you are using the service of a carrier that is not integrated with Ecwid for live rates (for example, Sendle or Mondial Relay), you can manually add this carrier’s shipping rates for various order weight ranges.
Flat rate shipping
If you deliver products yourself or your products have a similar weight and size, you can offer flat rate shipping for delivering your products to the customer’s location. For example, you can charge $5 for the local delivery of any order in your store.
If you need a more complex shipping cost calculation than flat rates, consider using tiered rates that you can base off order subtotals or different order weights. You can use flexible tiered rates to charge different shipping costs for different order subtotals, to charge for shipping large products by freight, or to charge for any other shipping setup you may want to have in your store.
Regardless of which shipping options you choose, you should first go through the initial shipping setup in the product editing pages:
- Mark products as shippable. For this, tick the Requires shipping or pickup setting for the products that you are going to ship (you can set it in bulk.)
- Enter products' weight. You can choose the necessary weight unit for your store in the general store settings.
If you’ve decided what shipping strategy to use, you can go ahead and add shipping options in your store. You can set up shipping either globally in the Shipping and Pickup section in your Ecwid admin (e.g. live rates, flat fee, free shipping or custom tables based on subtotals or weights) or you can add product-specific shipping options in the "Tax and Shipping" tab in your product editing pages.
You can provide better customer experience by connecting specific payment methods with particular shipping options in your store. That way, your customers will see only the payment methods you choose for the certain shipping/delivery. That can be useful if you deliver yourself and want to receive cash payments directly from the customer, saving on online payment fees.
To offer a payment method for certain shipping methods only:
- From your Ecwid admin, go to Payment.
- Select the method you want to set up and click Edit.
- Scroll down to Payment method availability based on shipping choice and click Limit availability by shipping method.
- Click Select Methods and check boxes for all the shipping methods you want this payment to be available to. Then click Select.
- Click Save.
Now your customers will only see this payment method if they choose the shipping methods you picked up for this payment option. For example, if you set up the cash payment method to be visible only for the Free delivery in Michigan and Self-pickup, it will be disabled for other shipping methods like UPS Worldwide Express.
If you don’t specify the shipping method for the payment, it will be available for all shipping and delivery methods in your store.
Undercharging your customers for shipping can eat into your profit if you absorb the costs yourself while overcharging customers for shipping can lead to abandoned carts and lost sales. Here are some tips on how you can optimize your shipping costs and in turn, charge your customers accurate or even lower rates when possible:
Pack as small & as light as possible. Shipping companies usually charge by size and weight (unless you’ve opted for flat-rate shipping). To reduce shipping costs, it’s important to use as little packaging material as is safe for your items. When possible, switch from boxes to poly mailers if you sell small non-fragile items like clothes or use bubble mailers if your products need some protection.
Find discounted supplies. Many shipping carriers offer free packaging materials to use with their specific shipping methods: USPS supplies, UPS supplies (you will need to open an account with the carrier so they send you the packing supplies free of charge). Besides saving money on packaging, you can thus avoid additional dimensional fees if your own packages exceed size regulations set by carriers.
Get discounted shipping rates. If you ship often or expect high-volume shipments, you can negotiate lower rates with carriers. Discuss the possible discounted pricing with your carrier to make sure you’re getting the best pricing for your online business. Stick to fewer carriers to have a good volume of shipments with them and thus maximize your bargaining power.
Pay for shipping online. You can have additional cost savings by simply paying for shipping online. If you ship domestically with USPS, you can purchase and print shipping labels right from your Ecwid admin.
Get third-party insurance. If you sell high-value items, you are likely to need shipping insurance to get reimbursed for shipments that are lost, stolen or damaged in transit with a courier. Third-party insurers usually charge less than carriers and this can bring you significant savings if you frequently ship expensive items.
Factor in all shipping fees. Carriers have lots of special charges like Saturday delivery fee or a fee for requiring a signature from the recipient to name a few. Be sure to include all the extra costs in customer bills so you don't end up absorbing them yourself. In Ecwid, you can charge your customers extra by using a handling fee on all orders, a hidden shipping markup on live rates, besides you can cover the shipping expenses just for certain products (e.g. for fragile or large items in your product line) by adding a hidden fee as a fixed rate per item on top of your regular shipping costs. Be careful when adding extra fees as you want to keep your prices competitive on the market.
In case you need to update the shipping options and their costs in your store, you can adjust shipping options in the places where you've set them up in your Ecwid admin — it is either globally in the Shipping and Pickup section or individually per product in product editing pages (in the Tax and Shipping tab).