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How to Communicate Shipping Costs Effectively

Yitz Lieblich
February 8, 2019

As many as 75 percent of e-commerce orders are abandoned while they're in the cart. With this much of your business at stake, it's worthwhile to examine the top reasons and to take steps to address them in your e-commerce storefront.

Reasons Customers Abandon Their Carts (Shipping-Related)

The top reasons customers abandon orders in their shopping cart, according to Statista, are unexpected shipping costs (25%) and having to create a user account (22%). Online shoppers also sometimes walk away because no express shipping is offered (4%). The take away here is if you do nothing else, explain your shipping costs clearly, so customers understand what they're being asked to pay.

It Costs You More Not to Fix This

Transparency is important to digital shoppers, so it's vital for your store's success. Break out costs clearly so that buyers aren't surprised at checkout. Better yet, where possible, bundle this cost in with the price and offer free shipping. Shoppers almost universally value free shipping above all other factors. 

This problem is definitely worth taking the time and effort to fix. While free shipping can be problematic, you may be able to offer free shipping over a certain amount per order. That also increases your overall revenue and shipping additional items can help you earn discounts with your shipping provider.

Some sites provide exact details on how the shipping cost is calculated by region as well as the final amount based on the items in the cart. If you are really ambitious, you might want to put together a YouTube video explaining the ordering process, including how you calculate the shipping. To start with, a shipping FAQ on the order pages would provide the basic information as well. 

Explain the Shipping Processing Openly

In addition to providing free, fast shipping, you can educate shoppers on how shipping and fulfillment work. Here's what others in the industry are doing that works. 

Make a Shipping Video

Many businesses already have explainer videos for their business on YouTube. Consider a brief video that educates consumers on your shipping process. Here’s a prime example of a shipping video produced by VAT19. People seem to love it because it's been viewed nearly 270,000 times. Creating a similar video could help make your fulfillment process more transparent, which customers will appreciate.

Explain the Reasons for Shipping Costs

Whether you offer free shipping or not, it's useful to explain what the costs are. For example, if you source products from abroad, have a complex production process, or have a product that needs special handling, let your customers know so that the costs aren't a mystery to them.

Verdant Tea does a great job explaining the price of importing and exporting goods in their brand story, “Transparency in the Tea Industry.”

Honesty imbues a sense of customer loyalty. One way to point this in front of customers at the right time is adding a popup entitled, “Understanding Our Shipping Costs,” or something similar. After customers watch the video, send them back to the checkout link to decrease the likelihood of an abandoned cart.

Offer a Shipping FAQ Page 

There's a really easy way to keep the number of customer service calls down. Shipping FAQs should be informative and entertaining, with videos where they add value. You should clearly explain when and how you offer free shipping. If geography is the prime factor, consider giving customers a choice of which fulfillment center to use. This can keep costs down and get the item in the customers' hands more quickly.

Ways to Reduce Shipping Costs

If you want to help customers without blowing your bottom line, pair free shipping to a minimum order value, say $100. Effective order management systems let you program automatic discounts based on this minimum. There's still an additional expense to your business, but you may be able to make up for that with a greater likelihood of repeat orders.

Fixed Rates

You can offer fixed rate shipping to customers as well. Overstock.com is known for its $2.99 flat rate all products. Charging a low flat fee helps your customers but still subsidizes the cost of shipping to help you protect your margins.

Charge Real-Time Rates

Since shipping rates can vary based on a number of factors, it might make sense to make the entire process accessible to the person placing the order. This lets the consumer decide whether to pay extra to get a product faster or pay less if they are willing to wait in order to save some cash. 

Coupons, Discounts and Promotions

Make sure your discounts or promotions have a value that resonates with your consumers. The promotions should be connected to products that go together naturally, like a broom and mop, for example.

Put Power in Their Hands

In an age where a whole generation of kids has grown up in a digital world, it's important to put the power in their hands with a digital tracking system. Customers want to know when their packages are coming and track them. At a minimum, you need:

  • expected delivery date
  • tracking number and link

This helps customers build trust in your page and can reduce the number of abandoned carts. Communicating your shipping costs is vital if you want to prevent confused customers from taking their business elsewhere.

If you take anything from this article, let it be that going the extra mile matters when it comes to how and when your product is shipped to the customer. The only way to ensure that your company has the ability to accomplish such goals is to have a foundation of exceptional inventory management and shipping procedures. 

A software such as SkuNexus can be that foundation. You can count on SkuNexus to help you deliver orders faster by using the most efficient shipping service on each order. Our order management tools also ensure that merchants get the lowest shipping rates available, among many more benefits.

Visit www.skunexus.com and schedule a demo of the SkuNexus platform to see how we can revolutionize your shipping and order management processes.

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