Friday, August 31, 2012

Building Your Sales with Flat Rate and Free Shipping Offers

Building Your Sales with Flat Rate and Free Shipping Offers
Part 2 - (continued from last week)

Forecasts say that online sales will grow by 15% or more this year, even in the current economy. What are the best ways for you to get your share? Reducing cart abandonment as much as possible will definitely help, as will encouraging shoppers to fill their carts. As you plan for your busy season, your shipping system can provide invaluable information to you can make your final price right for your customers. The idea is to make them click "Buy" instead of "Bye".

Shipping cost “sticker shock” is a huge contributor to abandoned shopping carts. For the same order, do you charge different amounts for shipping depending on the package destination? That makes your price different according to where your customer lives. If you visit the local outlet of a national store, they don’t ask for your ZIP code before you get the price - all customers pay the same amount. Maybe that’s a little different situation from a web store, but the point is clear - no one likes to know they are paying more than someone else for the same item. And unexpected, unanticipated shipping costs are a key factor that creates abandoned shopping carts.

“Flat rate” shipping offers, strategically mixed with "free" shipping offers, combat this problem. A number of experts and Internet entrepreneurs have found that it is very important to display shipping charges before “check out” to avoid shopping cart abandonment. So how can this be implemented?

Free shipping is very easy to calculate. Figuring out the right amount for flat-rate shipping takes a little more effort. If you are lucky enough to have your company’s actual carrier rates in your shipping system, this, combined with historical reporting directly from the shipping system, puts you on your way. Some shipping systems go a step further. As an example, the CPS Shipping Software can use actual carrier rates, including contract specific rates that even reflect the fuel surcharge, to provide the most accurate rate shopping and reporting. The CPS Flat Rate Shipping Charge Calculator report shows average shipping cost per package and average shipping cost per pound. These costs are also then reported by next day, 2 day, 3 day, ground and international services. With just a few mouse clicks you can keep tabs on your shipping costs for any period of time, by carrier and service, to accurately manage your flat rate shipping offer. This data also lets you know your costs to provide free shipping offers, too. You could crunch the numbers out of your carrier bills, but who has the time? To just "Click" and see them is so much easier. Monitor your costs at least monthly and make adjustments for changes you see in average charges.

When you look at customer satisfaction and shopping cart abandonment issues, the conclusion might be that free shipping is the only way to go. But this may not be the best approach for a couple of reasons, especially for the bottom line. Using flat rate shipping charges for low volume orders, then using free shipping as an incentive to increase the order amount are effective ways to increase sales, decrease shopping cart abandonment and increase your return customer rate. You can also offer free shipping for special times of the year like the holidays when competition is hot for consumer dollars. When implemented strategically, shipping offers lead to increased sales and profits.

Use a shipping history reporting tool like CPS Flat Rate Shipping Charge Calculator to monitor your average shipping costs and you can successfully implement and maintain flat-rate and/or free shipping offers. Quick, easily available reporting from the CPS multi-carrier shipping system lets you make sure you are accurately consider the shipping cost when using either offer.

For more information about CPS, visit

1 comment:

Shipping Mauritius said...

Hi, sometimes rates for shipping are higher than the actual product price.