Here are three strategies/options when deciding on your shipping rates:
Offer Free Shipping
Offering your customers free shipping is one of the best ways to reduce shopping cart abandonment. However, as you might suspect, shipping is never free. Someone always has to pay. To make free shipping work, you have a few options.
- Increase product prices to cover costs for shipping (customer pays).
- You pay the full price of shipping out of your margins (you pay).
- Increase prices of products slightly to cover partial costs of shipping (you and your customer pays).
- Offer a discount code to certain customers for free shipping.
Additionally, you can also try offering free shipping on a minimum order amount. This strategy can help offset the costs of shipping by helping to increase your average order size, but you're still the one paying for it out of your margins.
Charge Real-Time Carrier Rates
Another effective shipping strategy is to charge real-time carrier rates for shipping. eCommerce platforms typically integrate in real-time with various carriers like Canada Post (among others) to generate shipping options and live pricing from various carriers. This allows your customers to choose and pay for the exact service they want.
Charge a Flat Rate
A popular option is to offer flat rate shipping. The best practice for this option is to try and make sure that you don't drastically undercharge or overcharge your customers. Flat rate shipping works best when you have a fairly standard product line of items that have similar sizes and weights. Flat rate shipping tends to become complicated and less effective if you sell a wide variety of products with different sizes and weights.