Shipping strategy is a headache that almost every online business runs into. Unless your products are flat, light and small you'll likely have to come up with a plan for how to navigate the costs of shipping, and how to pass those costs on to your customers without discouraging them from making an order.
Unfortunately, there is no straight solution for shipping. Every business has different shipping needs due to their product size, shape, weight, variety, shipping zone and location etc. And every business needs to make their own unique shipping strategy based on what is best for them at that time and for their online audience, and it's often a balance.
With so many carriers, shipping options, and fees, it can be difficult to determine the best strategy for your business. In this guide, we’ll break down the basics of shipping to help you make informed decisions and save money.
Calculating shipping costs
Shipping costs can add up quickly, so it’s important to calculate costs before you start shipping. Consider the weight and dimensions of your packages, as well as the destination and shipping speed.
Many carriers offer shipping calculators on their websites that allow you to estimate costs based on these factors. You can use the to estimate shipping costs in Canada, or the USPS Retail Postage Price Calculator to calculate shipping costs in the US.
Flat-rate shipping is a shipping option where a carrier offers a fixed rate for a specific package size or weight, regardless of the destination. This means that the cost of shipping is the same for all packages that meet the size or weight requirements, no matter where they are being shipped.
Flat rates are often the easiest way to get started with shipping, but it comes with some calculated guess work and the risk of over/ under charging. Using flat rates can be a bit of a give and take, some orders you make an extra dollar on the shipping and others end up costing five dollars more than the paid flat rate. While there is a risk of under/overcharging it provides a consistent rate for the customer and covers a solid portion of the shipping for the business owner.
Flat-rate shipping can be a good option for businesses that ship frequently and want to simplify their shipping process. It can also be useful for businesses that want to offer a predictable cost to their customers.
Courier Calculated Rates
On the other hand, carrier-calculated shipping is a shipping option where the carrier calculates the shipping cost based on the package size, weight, and destination.
This option can be more cost effective for businesses that ship less frequently or have packages with varying sizes and weights. It allows for a more accurate shipping cost based on the specific details of each package.
Using a courier, such as Canada Post, is a great option if your platform supports it (for example Shopify integrates with Canada Post.) This strategy only works if you have the weight for all of your products and the dimensions of your packaging and shipping boxes. The shipping is calculated based on the weight, estimated size and destination of the order. This is a fairly accurate way to pass on the shipping to your customers.
USPS is a popular carrier for small businesses because they offer competitive pricing and a variety of shipping options. They also offer discounts for small businesses through their Commercial Plus pricing program. FedEx and UPS are also popular carriers, but they tend to be more expensive than USPS. However, they may be a better fit for businesses with larger packages or international shipping needs.
It's important to compare and contrast these options to determine which is the best fit for your business. Consider factors like the size and weight of your packages, how frequently you ship, and your budget. By understanding the differences between flat-rate and carrier-calculated shipping, you can make an informed decision about which shipping option is best for your business.
To Free Ship or Not to Free Ship?
First of all, free shipping doesn't exist. Someone has to pay for shipping but if it's not your customer then it's you, the business. Free Shipping is very attractive for a customer and a great promotional tool to have up your sleeve, but it really all comes down to your product and what the cost is to you.
If your shipping is only $2-4 for every order of handmade cards than maybe you can afford to eat that cost. But if the shipping cost for your case of jam is $24 and the product is only $30 then offering free shipping doesn't make as much sense.
One way to offer free shipping is to integrate the shipping cost into the product itself so that the shipping cost is covered or partially covered.
Costs beyond shipping price
Beyond the actual stamp price there is also a cost associated with all of the packaging needed to ship products safely. Boxes, envelopes, padding, paper, cards bags and stickers. Consider the cost of these items when you are calculating your shipping strategy and shipping costs.
Investing in sturdy packaging can save you money and time in the long run. Use boxes that are the appropriate size for your items to avoid dimensional weight fees. Add extra padding to fragile items to prevent damage during shipping.
It’s also important to consider eco-friendly packaging options, such as recyclable or biodegradable materials. Many consumers are becoming more environmentally conscious, and using eco-friendly packaging can help you appeal to this market.
Take advantage of discounts
Ship ship hooray!
Understanding shipping can be overwhelming, but taking the time to research carriers and shipping options, calculate costs, consider discounts, invest in packaging, and utilize tracking can save you money and time in the long run. By following these tips, you can make informed decisions and provide a positive shipping experience for your customers.
Remember, shipping is a crucial aspect of your business, and it’s important to prioritize it in your overall strategy. By finding the right carrier, calculating costs, investing in packaging, and utilizing tracking, you can ensure that your products arrive at their destination on time and in good condition.
Contact Grow & Behold if you need assistance in your shipping strategy or any other digital aspect of your business.