Tips for Setting Shipping Fees That Don't Drive Away Customers

When it comes to shipping products through your ecommerce business, this can be a bit of a quandary. Businesses have to charge a shipping and handling fee because it would be difficult to stay in business if you paid for these fees yourself.

The dilemma is charging shipping and handling fees that are not too high because you may lose customers, most likely customers leaving items in a shopping cart. If you price the fees too low then you could be working your way out of business. Below are five tips on how to effectively charge shipping and handling fees that will keep customers and make sure you stay in business.

First, it is not worth it to try to make a profit on the shipping and handling fees. Breaking even is the best avenue to take when determining what and how much to charge. Excessive fees is one of biggest reasons consumers will not purchase from a business, even leaving items in a shopping cart perhaps to never return. The rates should be set that best reflects your shipping costs on an annual basis. This may include adding a little bit to cover the unexpected costs, such as if shipments must be sent separately. However, it is important to not make the 'extra' too much for than you think your costs will be.

Second, you could consider using the product or order weight as the basis for your shipping and handling fees. Some consumers like this better as they do not feel that they are getting the raw end of the deal because if they purchase something heavy, then they will expect the shipping costs to be higher. If the fees are based on purchase amount, then someone purchasing an item that is a fraction of the weight of another item may feel that the company is getting the better end of the deal.

Additionally, offering a variety of shipping options gives the consumer the perception that the lower-cost shipping, which may take longer, is a better deal. These options may include ground, next-day shipping, two-or-three day shipping, or overnight. You may want to include international charges as well. Of course, it is always a good practice to keep a watch on your competitors and see how they charge for shipping and handling fees.

Reducing the shipping fees when a promotion is occurring can be one of the most highly effective marketing tactics out there. People will respond more positively with a reduction in shipping fees such as $1, rather than a dollar off a product.

Last, always look for new ways of attracting customers. One way to do this is to test a variety of special offers with selected customers. Then you will have a good idea of the different special offers that will bring customers in and back to your website. It is also important to clearly identify the shipping and handling costs prior to a customer getting to the checkout point. Some shipping costs are more than the item itself and it not worth it to the customer. An approach to help with this is to rework your website and provide a way for consumers to check how much the cost will be by providing a zip code button. Then consumers will have a good idea of what their shipping costs will be. Also if you offer free shipping, do it for a certain amount, such as orders exceeding $500. You don't want to lose money on the deal by offering free shipping.