No matter how big or small your eCommerce store is, shipping is something every store owner has to deal with. While there’s no doubt incentivising shipping has a tangible impact on driving conversions and repeat business, it comes at a cost to the business. With shipping and handling costs being one of the main reasons for cart abandonment, online retailers are facing a growing challenge to balance costs with conversions. Because online retail giants offer free shipping and returns, the million dollar question for many online retailers is how to compete without skyrocketing costs. Here are some ways you can trim shipping costs and keep your profits healthy:


1. Manage Multiple Carriers

Depending on what you’re shipping and where it’s going, different shipping companies offer distinct advantages. While Fastway may be unbeatable for same day deliveries in Sydney, sending a small item to regional Victoria via Australia Post may make more sense. Plugging into a platform like Shippit gives you access to multiple carriers and multiple options, which helps you make better shipping decisions. While it’s generally the case that shipping companies give better rates based on volume, there may be a faster, cheaper way to send specific items using a different carrier. Remember – the more you ship, the more you save, so always compare rates and negotiate for better rates.


2. Do Your Research

There have been many studies into whether free shipping works, and the answer is a resounding ‘yes.’ Not only does it reduce the path to purchase, but it’s also been proven to build loyalty and reduce cart abandonment. So how do you know if it’s going to work for you? Simple – research. What works for one retailer may not work for you and your customer base, so before you start making grand gestures, test the waters with some of these strategies:

  • Blanket free shipping policy. No matter the size of the order, it gets shipped for free.
  • Free shipping to members only. If you have a VIP or loyalty club, only these members get free shipping.
  • Minimum order free shipping. Offer free shipping for orders over a certain amount.
  • Free shipping on specific products. Protect your margins by offering free shipping on certain high-value or high-profit products.
  • Promotional free shipping. Drive sales during holidays like Christmas and Black Friday. Having a time-limited offer can help instil a sense of urgency.

When reviewing your strategy, look out for changes in conversion rates, as well as average order value. Measure online sales during periods when you offered free shipping, compared to when you didn’t. Compare cart abandonment rates to see whether providing free shipping has an effect. While shipping may be free to the customer, it still comes at a cost to your business, so make sure you measure your overall profit to ensure all strategies are working in your favour.

With so much data at our disposal, online retailers have a tremendous opportunity to test and refine campaigns in real time. A/B testing different offers, incentives and messages, you can be more reactive and proactive about how and when to offer free shipping.


3. Power to The People

Fact: consumers love choice. And it’s no different when it comes to online shopping. You have the option of offering free shipping on standard service while giving your customers the option of paying more for express or faster delivery if they need the goods sooner. Giving consumers the option to upgrade doesn’t negate the perception of value – it’s quite the opposite. There’s enormous value in choice, so put the power in your customers’ hands and give them options.


4. Dig Into The Data

When it comes to keeping an eye on costs, transparency is everything. Without reporting, we make assumptions, and assumptions don’t help businesses save money. Shippit’s platform gives you access to all your shipping analytics in real time, so you can see what you’re spending and how your freight choices affect your bottom line. But, it’s not just about cost, our online reporting gives you clear insights into how quickly your parcels are being delivered and whether your customers were satisfied. With access to the right information at the right time, you can work towards improving your customer experience, streamlining your shipping, and keeping your costs under control.


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