We’ve previously given you some tips for setting eCommerce shipping methods, but today we’ll take some of them a step further. Here are some examples of how to create eCommerce shipping methods based on your WordPress eCommerce plugin.
Since 56% of customers abandon cart due to unexpected costs like shipping (Source: Statista), it’s important that you’re using effective shipping methods for your store.
Here are some of the tips you can use to set eCommerce shipping methods based on your plugin of choice.
Offering free shipping may seem like you’re succumbing to some weird eCommerce peer pressure — everyone does it, so you should, too. However, there are real benefits to offering free shipping. These statistics from IMRG show that shipping and delivery costs are an influential part of purchasing decisions:
- 77% have abandoned their basket in the past year
- 53% cited delivery costs being too high as the main reason
- 26% placed an item in their basket just “to check delivery costs”
A Deloitte study supports these statistics as well, citing that 71% of shoppers look for free shipping while completing purchases.
One of the major keys to successful shipping policies is using this to your advantage. Build part of order shipping into your operational costs in order to avoid customers that leave your store for high shipping costs.
Free shipping can also help you increase your average order value if you offer it for orders of a certain amount. This is one of the major reasons to offer free shipping to customers. “Free” also provides a no-risk option that will be irrationally chosen more than a value option, so customers tend to add items to the cart just to get free shipping.
While free shipping may give you a competitive advantage, there are always cons to any marketing strategy. Free shipping can eat into your profit margins, especially for larger products. This list of pros and cons of free shipping from PropelAd provides a good overview of benefits and concerns.
Most major eCommerce plugins will allow you to set free shipping based on the order total. WooCommerce will also allow you to give out free shipping coupons if desired:
|Plugin||Free w/ min order value?||Free w/ coupon?|
*Must set up as “Order Amount Tier” method as explained here.
**Enable “Simple Shipping” module to do per-product shipping, which can be set to free shipping for a product but not an order total (no order-based shipping).
Using real-time rates is a good strategy if you can’t offer free shipping when setting up your eCommerce shipping methods. This is very handy for oversized items, as customers can see that they’re getting the exact shipping rate, not an inflated one from your store.
If your profit margins are small and you can’t eat the cost of free shipping, using a real-time rate is the best way to try to break even on shipping costs, as you pass the exact cost onto the customer (except your packing materials).
The biggest con to using real-time rates is that customers can sometimes get sticker-shock when viewing a rate they’re not used to. Many people aren’t aware that it costs $10-12 just to ship small parcels, as they’re used to seeing flat rates from $0 to $5 from many stores. Testing a flat rate vs calculated rate is a worthwhile use of time and resources for many eCommerce shops.
Here are some options for getting real-time rates depending on your eCommerce plugin.
There are several real-time rate integrations available for WooCommerce in the official marketplace:
- USPS Shipping method – $79 – gets real-time rates from USPS
- FedEx Rates – $79 – gets real-time rates from FedEx for US / Canada
- UPS Shipping – $79 – gets real-time rates from UPS (no freight)
- Royal Mail – $79 – gets rates for UK from Royal Mail
- Canada Post – $79 – gets rates for Canada from Canada Post
- Australia Post – $79 gets rates for Australia from Australia Post
- New Zealand Post – $79 – get NZ Post real-time rates
- Shipwire – $129 – includes inventory management via Shipwire and real-time rates
- OrderCup – Free, but requires OrderCup account at $20 / mo – gets rates from several providers based on location
WP eCommerce includes integrations for Australia Post, UPS, and USPS in the core plugin. If you get real-time rates with these services, you can enable them under the store settings. It also integrates with Shipwire for managed inventory and rates.
The core team has developed a premium FedEx integration for FedEx real-time rates, which is available for $79.
You can also purchase a third party Canada Post extension for $50 from Bartic.
Shopp doesn’t include real-time rates in the core plugin, but does have several integrations available from their core team:
- USPS Rates – $45
- FedEx Rates – $45
- UPS Rates – $45
- Australia Post – $45
- New Zealand Post – $45
- Canada Post – $45
- Shipwire – $45 (for inventory and rates)
No real-time integrations are available.
If you don’t want to, or are unable to, offer real-time rates, flat rate shipping is probably your next best option in terms of eCommerce shipping methods. This will require you to find out your average shipping cost per order, then set this as your flat rate. The goal is to even out shipping costs, as you’ll be over / under on each order.
Flat rate shipping may also allow you to accept a certain margin of loss on shipping for each order. If your average shipping cost is $6.12 per order, you may be able to get away with offering a flat rate of $4.99 per order to make shipping costs more palatable for customers while still avoiding a huge hit to your profit margins.
This also works really well if you sell small items. As these can typically be shipping in small envelopes or parcels, they have the lowest shipping costs, which you can pass on to customers in the form of a low flat rate. This is great for shops that sell jewelry or accessories.
|Plugin||Flat Rate?||> 1 Flat Rate?||Available by location?||Add Int’l Flat Rate?|
*Only per-product, not per order
**Requires a paid add-on
One of the largest risks to doing your own fulfillment is maintaining inventory. You’ll have to stock your products for fulfillment, then send them when ordered. This means that you run the risk of (a) investing money in stock up-front that may not sell, and (b) running out of stock and losing sales while re-stocking or taking backorders.
Dropshipping can mitigate these risks, as you send products to customers directly from the supplier. Rather than maintaining your own inventory, you simply forward orders on to the supplier to be fulfilled when placed, and customers are sent product directly from the supplier. You act essentially as a middleman and buy your stock after the sale rather than before it.
The downside to dropshipping is the loss of control – you’re no longer in-charge of our inventory, so you must trust that your suppliers are reliable in terms of fulfilling orders on schedule. Customer returns may also pose a problem, as you’ve essentially bought the stock from the supplier, and now must refund the customer, then get your money back from the supplier. Some suppliers do not accept returns, so you run the risk of eating this cost.
In order to dropship, you’ll have to set your own shipping rates, then pay the rates to your supplier when the order is fulfilled. You’ll have to determine whether to build shipping into your item cost, or offer flat / real-time rates. However, real-time rates may not be as accurate since you’ll have to base them on your supplier’s location and available materials, not your own.
Your eCommerce plugin must also be able to export orders to the supplier. Here are some options to do so with each eCommerce plugin.
- WooCommerce: Use Order CSV Export ($79) or Order XML Export ($99)
- WPeC: There’s a free Store exporter or a premium Dashboard & Exporter for $35
- Shopp: Includes built in TXT, CSV, XLS, or QuickBooks export
- Exchange: No order exports
- Jigoshop: Order CSV Export ($49)
Our friends over at Prospress have an excellent introduction guide to dropshipping with more information (especially related to WooCommerce integrations), and Shopify has a detailed dropshipping guide that’s helpful as well.
If you’re fulfilling orders yourself, you’ll have to determine if and when to offer free shipping, and whether you want to use flat rates or calculated rates for your order shipping. You may be limited by what’s available from your eCommerce plugin, and should also test which approach is best for your store.
If you instead choose to dropship, you lower your risk in terms of keeping inventory on-hand, but will need to guess at shipping rates from your supplier and determine how to build them into your order costs. Real-time rates may not be as accurate since your supplier is in a different location, so flat rates or giving away shipping for free may be your only way to go.
Cover image credit: Icons used from DesignContest.com per CC BY 4.0 license.