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5 Costly Shipping Mistakes (And How to Avoid Them)

Online retailers have a lot of tasks on their plate. From ensuring optimal stock levels to auditing expenses, it's easy to lose sight of things. But how you handle shipping isn't something retailers can neglect. In fact, shipping plays one of the most significant roles in ecommerce success. Shipping costs and delivery speed impact customer experience and therefore, your sales, as well as your bottom line.

1. Believing the Free Shipping Myth

Online retailers are quick to jump the free shipping bandwagon, thinking that free shipping promotions will immediately win them customers. While most customers expect free shipping, it will only result in more disappointment if you don’t have the right systems in place to fulfill orders efficiently.

Poorly implementing free shipping leads to many problems. Not everything you sell can be easily shipped for free. For instance, large and heavy items should be excluded from free shipping, as they could be rather costly and pose logistical challenges.

Many ecommerce businesses also make the mistake of providing free shipping throughout the year, or applying free shipping to all purchases regardless of price. If you’re not smart about it, you could see a significant drop in your profit margins, even if your conversion rate increases.

Free shipping isn’t always the highest value for most shoppers. On average, consumers pay for shipping on about every 2 in 5 online orders. According to a study by UPS, 60% of shoppers paid for shipping when free shipping was not available and they wanted the product. Similarly, 30% of consumers chose premium shipping when they needed the item faster than free shipping service offered.

Retailers need to be wary about the free shipping hype. Instead of free shipping, you could offer 20% discounts or faster and reliable shipping. In other words, free shipping shouldn’t be your most compelling offer; it should be the quality of your products and the added value you can give to your customers.

2. Not Being Transparent on Shipping Costs

Shoppers consider price as the main driving factor for purchasing decisions. Not showing them the shipping cost up front - or showing the true cost only until asked for their credit card information - is considered sneaky by many shoppers.

Consumers want to be able to compare prices from other retailers, and shipping costs need to be factored in. Showing the cost too late in the shopping process will lead to abandoned carts. According to the same study, 56% of shoppers abandoned a cart when shipping costs made the total purchase cost more than expected.

Shoppers want to feel confident that they are making the right purchasing decisions, and that includes shipping options. Ideally, retailers should give them the ability to select carrier options. This lets shoppers optimize shipping costs on their own, enabling them to see which option can save them the most money.

3. Not Giving Customers Enough Control Over Delivery

While many consumers today expect fast delivery, most consumers just want more control over when and how their packages get delivered. In fact, shoppers are turning to alternative delivery options to know exactly when and where they’ll receive their package. These options include Buy Online Pick Up In Store (BOPIS) and other shipping vendors.

According to Internet Retailer, new shipping vendors are emerging beyond the big three carriers of UPS, FedEx and USPS. These vendors offer more control and insight over the delivery process, and may be viable options to partner with.

Amazon raised the bar when it comes to shipping expectations. With its speedy, trackable shipments and delivery alert mechanisms, Amazon offers the predictability and convenience many shoppers want. For this reason, many sellers choose to fulfill orders using Amazon FBA.

Retailers need to give their customers more control over their delivery. This includes giving them better tracking capabilities, exploring BOPIS strategies and alternative couriers, and expanding delivery options. For instance, if you limit delivery options to a standard 5-7 day free shipping, consumers who want the product faster may shop somewhere else.

4. Forgetting to Audit Shipping Expenses

Many online retailers may be entitled to shipping refunds if packages were not delivered successfully. According to Practical eCommerce, this could amount to 10% of total shipping costs, but many retailers don’t bother to audit their shipping.

Failing to properly monitor and track shipping expenses is costly. Retailers must develop a process to follow up with shipping carriers on how their packages are delivered. Auditing shipments will ensure correct billing and refund claims whenever applicable.

5. Making Poor Carrier and Packaging Choices

Carriers vary in strengths, service levels and requirements. As a retailer, you need to pay attention to which carrier is best for each order. This can save you a lot of time and money.

For instance, if your business primarily ships small packages, USPS is probably the most affordable shipping option, especially if your parcels weigh less than 2 pounds. FedEx is generally the cheaper option for packages exceeding 3 pounds. On the other hand, you can negotiate lower rates with UPS if you ship a large volume of packages.

Similarly, poor packaging choices can lead to increased shipping costs. You need to be careful when entering product specifications, as this affects box and mail class selection. Optimizing packing means savings.

Investing in a shipping software like Jazva can automate and optimize these processes for you, so you wouldn’t have to calculate which carrier, class and box to use for each order every time. Jazva’s carrier-rate shopping system calculates the lowest rates in real time when shipping out your products. This ensures accuracy and limits human error.

Jazva is also a certified Endicia partner, which lets our customers ship through USPS at discounted rates.

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Albert Ong

Albert Ong

Albert Ong is the marketing manager at Jazva, an all-in-one ecommerce platform for multi-channel sellers. When not leading content strategy, Albert spends his time listening to audiobooks, writing science fiction, and binge-watching Netflix.