January 24, 2023
Now that you’ve created the perfect user experience on your website and mobile app, you’re probably still asking yourself, “how do I ship my products both efficiently and in a cost effective way?”.
In 2023, customers have high expectations for ecommerce shipping. :Most online shoppers expect items to be shipped quickly and for free. Packages must be shipped securely and arrive in perfect condition. In addition, customers expect companies to be transparent about shipping costs and delivery times, with tracking information easily accessible.
Most online shoppers expect items to be shipped quickly and for free. Packages must be shipped securely and arrive in perfect condition. In addition, customers expect companies to be transparent about shipping costs and delivery times, with tracking information easily accessible.
If you're running an ecommerce business, shipping is essential to get right. It is a must to provide quick and inexpensive shipping choices. Your customers expect to receive their orders promptly and in good condition, so it's important to choose a shipping method that meets their needs. There are a variety of shipping options available, and the best one for your business will depend on factors like your budget, shipping volume, fulfillment costs, weight and the types of products you sell.
If you sell products online, you've probably wondered what the optimal free shipping threshold is for your business. The optimal shipping threshold is the point at which the total cost of shipping your products is equal to the total revenue you generate from selling those products. In other words, it's the point at which you're neither losing money nor making money on shipping.
There are a few different ways to calculate your optimal shipping threshold. Here are some manual options, but remember that there is some incredible tech that will help you determine your optimal shipping thresholds in an efficient and cost effective way. To manually calculate your free shipping threshold, the most accurate way is to track your shipping costs and your sales revenue over time. This gives you a clear picture of the relationship between the two. You can also use a shipping calculator to estimate your optimal shipping threshold. Shipping calculators take into account the average cost of shipping your products and the average selling price of your products. They then use this information to estimate the point at which you'll break even on shipping. Lastly, you could use this general rule of thumb to estimate your optimal shipping threshold. A common rule of thumb is that your shipping costs should be no more than 10% of your sales price. So, if you're selling a product for $100, your shipping costs should be no more than $10.
If you’re a Shopify merchant and want to avoid unnecessary guess work, download ShipScout to help you split test your shipping rates. A/B testing shipping rates and free shipping thresholds is the best way to find the sweet spot between conversion rates and average order value. Harness the power of data and leverage sophisticated split testing to determine your optimal free shipping threshold and rates.
Shipping is critical to get right for your ecommerce business because it is the last step in the process of getting your product to the customer. If shipping is not done properly, it leads to unhappy customers and high return rates. Understanding your customer base and tailoring your shipping rates and thresholds accordingly will lead to a sharp increase in conversion rates, average order value and even profit per visitor. Efficient shipping can help increase your conversion rate by reducing customer abandoned shopping carts due to high shipping costs. Fast and reliable shipping leads to customer loyalty and repeat purchases.
References:
Cambridge Dictionary
Shopify Blog
Elex
ShipScout
Medium
A/B test shipping rates and thresholds on Shopify