Guide to Shipping
There are pros and cons to any shipping method, which is one of many reasons why offering multiple shipping options to your shoppers is a great idea. There are two main categories of shipping methods: real-time shipping quotes that are automatically calculated by a carrier, and fixed shipping charges that you define. You can also think about offering free shipping or in-store pickup.
This option is one of the more popular, as it allows your customers to pay the exact shipping fees (or potentially a bit more if you include a handling fee to protect your margins).
Real-time quotes are typically calculated by:
- Package size
- Package weight
- Departing address
- Destination address
- Tracking (optional)
- Insurance (optional)
Who is it for:
- Merchants who sell small- to medium-sized products (Parcel Select is a good option to consider if you're just getting started and want to offer real-time quotes)
- Store owners still working to fully understand their profit margins and shipping models — this lets you cover costs while charging reasonable prices
- Store owners wanting to offer a variety of shipping options
- Improved shopper confidence through full transparency into shipping costs
- Increased conversion because shoppers can select options based on price and speed, making them feel more in control
- Less effort — just measure and weigh your products, and the calculator does the rest
- You'll most likely end up breaking even on shipping costs
- Customers won't know the exact final price when considering products (as opposed to offering free of flat-fee shipping)
Another option is to offer a flat shipping rate. It requires a bit of preparation to figure out your average cost of shipping a package. But investing a little time here ensures you won't drastically undercharge (meaning you'd cut into your profit margin) or overcharge your customers (meaning shoppers might not convert).
Fixed shipping methods include:
- Flat rate per item
- Flat rate per order
- Ship by weight
- Ship by order total
- Free shipping (we'll talk about this in more detail)
Who is it for:
- Merchants with a fairly standardized product line of similar sizes and weights
- Store owners who want to ship in flat-rate boxes
- Merchants with strong profit margins who can afford to pay for shipping in order to encourage conversion
- You can include some shipping costs in your pricing
- Improved average order value (AOV), although it does require some trial and error
- The ability to set a default price so you never pay too much
- The flexibility to calculate rates based on a percentage of the order total
- Allows for conversion-boosting marketing like “$5 shipping on any order in the US”
- Doesn't work well If you sell a wide variety of products with differents sizes and weights
- Requires more planning and preparation than other methods
- Often takes some trial and error to get it right
USPS offers a few different sizes of flat rates boxes. If you sell small, heavy objects, you can take advantage of the cost savings of cubic shipping.
- Set up your customer email notifications to let buyers know when to expect an order, how to track, etc.
Offering free shipping (typically only on domestic orders) is a proven tactic to get shoppers' attention and boost conversion. But depending on your margins, it can significantly cut into your profits. Although there are many ways to make free shipping profitable, you need to do your due diligence.
To start, consider offering free shipping only for minimum order totals above your average order value, or for a minimum number of products per order. That should drive up your average order value and help offset shipping costs.
If you're considering offering free shipping in any capacity, you'll need to know how much it actually costs to ship your products, how your competitors handle shipping and your profit margin. That will help you make the right call on whether or not you can offer free shipping.
Who is it for:
- Although you'll need to crunch the numbers, offering free shipping in some capacity is ideal for just about every business
- Lets you remain competitive or undercut your competitors' shipping options
- Improve conversion
- Increase your average order value
- Reduce abandoned carts
- Typically requires you to absorb the cost of shipping, which can impact your bottom line
- Increasing prices to cover costs can impact your competitive edge and conversion rate
If you think free shipping isn't feasible for your business, try these ideas:
- Conduct some market research to see if you can roll some of the cost into your product prices.
- Offer free shipping to encourage customers to sign up for your newsletter, participate in social media contents or enroll in loyalty or referral programs.
- Run store-wide free shipping promotions during low sales periods or offer it during times of increased competition, like the holidays.
- Run free shipping for select products that are extremely popular or on items that you're trying to clear out to make space in your catalog.
- Need even more ideas? Ask the BigCommerce community. Our expert clients, staff and partners can help you make the best decisions possible when it comes to shipping.
A frequently overlooked, powerful fulfillment option is offering local pick-up. If you have a physical location and can allow your customers to forgo paying shipping costs altogether, you should!
Who is it for:
- Any store owner willing/able to have customers come to their physical location
- Especially good for merchants selling perishables or large or oversized items
- Store owners with a strong local presence
- Avoid both shipping and packaging costs
- Develop a face-to-face relationship with your customers
- Potential for additional purchases while customers are at your store
- Limited business hours can sometimes make it difficult to coordinate pickup
- Shoppers who cross state lines or ZIP codes may not know the sales tax rates in your area
The best thing you can do is offer a combination of shipping options. Providing shoppers with a few choices makes it more likely that they'll convert.
If you're looking for an advanced tool to control what shipping options you offer during the checkout process, ShipperHQ might be your solution. It's an app that provides store owners with access to the industry's most sophisticated shipping rate calculator and rules engine.
Who is it for:
- High size variability within your product catalog (e.g. electronics)
- You will be selling perishable items (e.g. ice cream requires different shipping speed options based on destination zone)
- Diverse product catalogs that contains potentially restricted items
- Multiple shipping origins including dropshipping
- Particularly large items and freight requirements
- Those looking to offer custom shipping options to specific customer groups (e.g. wholesale customers, free/reduced shipping for best customers)
- Full control over shipping rates, be able to define preferred carriers and shipping methods, and customize shipping rates with advanced surcharges, discounts and rate structures at a country, state or postcode level.
- Offer shipping rates and methods per product, category, cart quantity, value, weight or dimensions.
- Easily use one or multiple carriers within a single interface, including UPS, FedEx, USPS and other major carriers. Use base rates for each carrier or add your existing carrier accounts to automatically apply negotiated rates.
- Get sophisticated shipping tools like LTL freight, dimensional shipping, multi-origin and dropshipping.
- Manage shipping activity across all carriers, accessing key order information like time in transit, delivery estimates, average weight of products in customer carts and more.
- Depending on your BigCommerce plan, additional shipping functionality can add cost to your business's bottom line. In this case, be sure to calculate your cost savings vs. the cost you're paying so you understand the impact before implementing.