Offering a range of shipping options at checkout for your online store not only increases cart conversion it can also increase repeat purchases and improve customer experience.
There are different options for rates at checkout, and deciding which is best for you as a retailer might take a bit of experimentation and looking at the data available in your online store to see what helps to increase cart conversion.
Its also important to listen to what your customers want, for example if you sell gift hampers offering a same day or next day service will likely appeal to your customer base, the same can be said for retailers selling alcohol. In other examples customer may be happy to wait a little longer for their items and select a standard delivery option at checkout which is likely the cheapest.
What's the difference between live rates, table rates and flat rates?
Live rates
Live rates are the contracted rates that you have negotiated with your courier, which are pushed to your checkout via an API. For most eCommerce platforms, live rates are based on the total order weight and the destination.
If you are using fulfilment automation, like Starshipit, you can integrate your courier account into Starshipit, this will allow you to display your negotiated rates at checkout.
Flat rates
Flat rates are most common amongst Starshipit customers. Merchants can determine a set price for shipping and are able to set this up in their eCommerce platform.
For example, you may have a flat rate of $10 for Standard Shipping, $15 for Express, and $30 for International, regardless of what the customer has purchased/where they are in the world.
Table rates
Table rates work as a matrix of location and weight. Instead of the couriers’ contracted rates displaying at checkout, you set the pricing for different weight and location combinations.
You can set these up within your eCommerce or shipping automation platform, like Starshipit.
Will offering differing shipping rates at checkout increase my cart conversion rates?
Customers’ delivery expectations have never been so high, leading eCommerce retailers such as Amazon and The Iconic have set the bar high with free same or next day delivery.
In order to remain competitive its important to offer your customers a choice of delivery options at checkout. This can be facilitated by adopting a multi courier shipping strategy.
Statista reported high shipping costs accounted for 63% of cart abandonment rates in 2018.
But don’t underestimate the power of choice, it is clear that paying more for a quality delivery experience is not for everyone but by giving your customers a choice, you put the ball into their court and this may be the reason they choose to purchase from you over a competitor.
How can retailers offer free shipping?
Generally to offer free shipping retailers absorb shipping costs into the overall cost of the products that are for sale.
A retailer might have to foot the bill for part of it, but in reality, a customer pays for a lot, if not all.
In order to remain competitive and profitable, though, it’s essential that you don’t take on the majority of the cost of shipping.
Here are some ways to offer free shipping in a way that drives profitability:
- Increase your product price to include delivery 🚚. For example, a dress might cost $15 + $5 shipping, or $20 including shipping.
- Offer free shipping when a customer spends a minimum spend 💰. The cost of shipping is more efficient if an order includes multiple products so if a customer is close to that limit, they’ll be more likely to buy something else so they can qualify for free shipping.
- Sell bundles 👕+👟. For example, if you sell fitness gear you could group a range of similar or complementary products together which will save on shipping and get more products into your customers’ homes.
- Offer limited-time 🕐 promotions, like ‘buy 2 or more and get free shipping.
- Clear your shelves of the old stock by using a 🆓 free shipping promotion.
- Increase your customer lifetime value (LTV) by implementing a loyalty scheme ⭐ to keep customers engaged. Some retailers will be happy to cover shipping for a first purchase if they know they’ll see that customer in the future.
How to calculate live rates at checkout with Starshipit
Shipping and Fulfilment platforms like Starshipit, work as a central dashboard that integrates with any courier account. Starshipit would push your contract rates to your eCommerce platforms checkout using an API.
Your customer's order information, destination and order weight, will be sent to your courier via API. Your courier will then return a rate to show at checkout.
Add a margin to the live rates that display at checkout
You can add custom margins. For example, to indicate the dollar amount, or percentage of the shipping quote. If you're wanting to discount the rate, you can add a negative margin.
Deliver better shipping experiences
Starshipit’s plug and play solution integrates with your eCommerce, inventory management software, and over 40 couriers.
Whether it’s dispatch, checkout, or post-purchase customer engagement, Starshipit’s feature-set automates every step of the fulfilment process.
Book a call with our Success Team to help you ship the smart way, so you can grow faster.
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