Are you confused with how to set the shipping price of your website? You may have these two confusions in mind.
The first one is free shipping. How do websites offer free shipping?
And the second one is the minimum order value. If you are offering free shipping, what should be your minimum order value? You may also ask, how to find out the minimum order value based on cost calculation and market reach?
Add Part of Shipping cost to the product:
You need to balance price items and shipping costs.
Your shipping cost should not look high. So, include a part of your shipping in the product cost and a part to displayed as shipping price. This makes shipping charges reasonable.
Moreover, on the other side, you may be providing free shipping, but your item price looks too high. That will not work.
Reasonable pricing strategy:
It is better to have a reasonable t-shirt price combined with a manageable shipping cost. If your product price is high that might deter budget-conscious customers.
How to calculate a reasonable shipping charge?
Let’s say you have the following shipping charges for a series of products:
Products 1: $5
Products 2: $7
Products 3: $6
Products 4: $10
Products 5: $8
Sort the shipping rates in ascending order: 5,6,7,8,10
Find the median. So, the median here is $7.
Therefore, the median shipping charge that you may set for all products in this test case is $7. Now, this is just an example. You may use this technique to calculate shipping charges as per your business model.
Suppose, your shipping charge looks much more attractive. Then you can do something that acts positively for your business. Like, using a message at the checkout button -> All orders only $7 shipping, choose as many tees as you like!. It will encourage your customers to make purchases.
What Etsy says about free shipping…
Etsy suggests a free shipping policy as per your business model. Etsy recommends a $35 free shipping threshold for sellers. But it is found to be problematic because it doesn’t consider individual shops’ products and costs.
Etsy’s approach is too generalized and doesn’t fit every business. While some sellers might benefit from this suggestion, it doesn’t suit all. Especially those who are selling different types of products.
Amazon Pricing Influence:
Customers have become used to Amazon’s pricing and shipping rules. So, other ecommerce sellers charge higher prices.
Moreover, offering a lower product price, but charging higher for shipping, may result in abandoned carts when customers see the added shipping cost at checkout.
So, a balancing act is necessary in deciding the price. One of the strategies you can try is promotion and incentives. Use promotions such as temporary free shipping for orders over a certain amount or discounts for repeat customers to encourage purchases.
Final Words:
Set a simple pricing. Do not make it complicated by adding variables like product types and delivery location.
Moreover, shipping services that charge by weight are accurate. It is better for you to print shipping labels that saves money both for you and your customers.