{"id":2543,"date":"2018-04-03T08:40:36","date_gmt":"2018-04-03T08:40:36","guid":{"rendered":"https:\/\/brightpearl20.wpengine.com\/what-online-retailers-should-know-about-flat-rate-shipping\/"},"modified":"2024-12-04T19:23:33","modified_gmt":"2024-12-04T19:23:33","slug":"what-online-retailers-should-know-about-flat-rate-shipping","status":"publish","type":"post","link":"https:\/\/www.brightpearl.com\/blog\/what-online-retailers-should-know-about-flat-rate-shipping","title":{"rendered":"What Online Retailers Should Know About Flat-Rate Shipping"},"content":{"rendered":"<p><span style=\"background-color: transparent; letter-spacing: 0px;\">Online retailers can claim a few advantages over brick and mortar merchants. To be more specific, brands who sell online \u2026<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Can reach a wider audience<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Don\u2019t have to maintain a physical storefront<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Have the ability to conduct business from virtually anywhere<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">But e-retailers also have one major challenge most brick and mortar companies don\u2019t: shipping.<!--more--><\/span><\/p>\n<p><span style=\"font-weight: 400;\">When a shopper goes to a store, he or she walks out of the door with their purchase that day. No waiting, no extra fees beyond sales tax. Only an itty-bitty, teeny-tiny number of online retailers can provide that same experience. The vast majority have to figure out a way to make the added step of shipping\u00a0<\/span><span style=\"font-weight: 400;\">so painless, shoppers are willing to wait for their purchase.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, the easiest way to do this is to offer free shipping. Unfortunately, free shipping simply isn\u2019t an option for every retailer. But a close runner-up is flat-rate shipping. Take a look at the ins and outs of flat-rate shipping and see if this approach makes sense for you.<\/span><\/p>\n<h3><strong>Flat-Rate Shipping Fundamentals<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Unlike variable rate shipping which uses order weight, dimensions, or destination to determine shipping charges, in a flat-rate shipping model, you charge the same amount to ship every purchase \u2014 regardless of an order\u2019s contents.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Keep in mind that because you\u2019re charging the same fee for every order, there will be times where what the customer pays will be less than <\/span><a href=\"https:\/\/www.shipstation.com\/blog\/2018-ups-rate-change\/\"><span style=\"font-weight: 400;\">what you pay the carrier<\/span><\/a><span style=\"font-weight: 400;\">. However, as long as you\u2019ve accurately calculated the best rate for your brand, you\u2019ll make up that lost revenue on smaller shipments and your shipping costs will balance out.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Don\u2019t feel as if you\u2019re stuck with one rate indefinitely. If for some reason your shipping costs go up, you can certainly adjust the rate to account for the increase. Just be sure that any mention of your shipping fees on your website, social media, or marketing communications is up-to-date. A consumer will be irritated if he or she sees \u201c\u00a35.00 Shipping on All Orders\u201d in a Facebook ad but then is charged \u00a36.50 for shipping once they get to checkout.<\/span><\/p>\n<h3><strong>Flat-Rate Shipping: The Good<\/strong><\/h3>\n<p><span style=\"color: #0a308e;\"><strong><i>Larger orders<\/i><\/strong><\/span><span style=\"font-weight: 400;\"><span style=\"color: #0a308e;\"><strong>.<\/strong> <\/span>If adding more to the shopping cart increases the cost of shipping, a shopper may decide to keep their purchase smaller. But if they know the shipping fees remain the same no matter how many products they buy, they\u2019ll likely feel more comfortable with making a larger purchase.<\/span><\/p>\n<p><span style=\"color: #0a308e;\"><strong><i>No unpleasant surprises. <\/i><\/strong><\/span><span style=\"font-weight: 400;\">Online user experience research firm, <\/span><a href=\"https:\/\/baymard.com\/lists\/cart-abandonment-rate\"><span style=\"font-weight: 400;\">Baymard Institute<\/span><\/a><span style=\"font-weight: 400;\">, found that the average worldwide cart abandonment rate is nearly 70%. And according to a <\/span><a href=\"https:\/\/www.marketingtechnews.net\/news\/five-ways-combat-shopping-cart-abandonment\/\"><span style=\"font-weight: 400;\">study by Statista<\/span><\/a><span style=\"font-weight: 400;\">, more than half of all U.S. consumers say the reason they abandoned their cart is unexpected costs. With flat-rate shipping, however, shoppers won\u2019t be shocked by their order total.<\/span><\/p>\n<p><span style=\"color: #0a308e;\"><strong><i>Attractive value proposition. <\/i><\/strong><\/span><span style=\"font-weight: 400;\">While free shipping may not be on the cards, the ability to offer flat-rate shipping can still be a big draw for shoppers. U.S. online retailer Overstock.com has advertised its flat-rate shipping for years. And considering the company reported $1.8 billion USD in revenue in 2016, the approach seems to be working.<\/span><\/p>\n<h3><strong>Flat-Rate Shipping: The Not-So-Good<\/strong><\/h3>\n<p><span style=\"color: #0a308e;\"><strong><i>Discourages smaller orders<\/i><\/strong><\/span><span style=\"font-weight: 400;\"><span style=\"color: #0a308e;\"><strong>.<\/strong><\/span> Just as flat-rate shipping can persuade some consumers to spend more, it can also have the opposite effect on shoppers looking to make a smaller purchase. If a customer\u2019s order totals \u00a325.00 and shipping is \u00a35.00, they\u2019ll likely abandon their cart instead of paying the additional 20%.<\/span><\/p>\n<p><span style=\"color: #0a308e;\"><strong><i>Requires considerable research and analysis.<\/i><\/strong><\/span><span style=\"font-weight: 400;\"> Your shipping rate can\u2019t be chosen arbitrarily. It must be calculated based on the average shipping costs for previous orders. If you don\u2019t do your research, your shipping rate may be too low (which impacts your profit margins) or too high (which discourages shoppers).<\/span><\/p>\n<p><span style=\"color: #0a308e;\"><strong><i>Not ideal for every brand.<\/i><\/strong><\/span><span style=\"font-weight: 400;\"> Since flat-rate shipping is based on <\/span><i><span style=\"font-weight: 400;\">average<\/span><\/i><span style=\"font-weight: 400;\"> shipping costs, it may not be appropriate for a retailer whose products have substantially different weights and\/or dimensions. For example, if you sell electronics, you\u2019ll end up charging shoppers the same price to ship a tablet or a TV &#8212; even though what you pay to ship the latter is quite a bit more.<\/span><\/p>\n<h3><strong>Free Shipping and Flat-Rate Shipping Hybrid<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">If you have your heart set on offering free shipping, we understand. <\/span><span style=\"font-weight: 400;\">It\u2019s a huge motivator for shoppers. When asked what would make them shop online more, nine out of ten participants in the <\/span><a href=\"https:\/\/martech.org\/e-commerce-report-9-10-consumers-say-free-shipping-no-1-incentive-shop-online\/\"><span style=\"font-weight: 400;\">Walker Sands\u2019 2016 Future of Retail Study<\/span><\/a><span style=\"font-weight: 400;\"> said free shipping was their number one motivator. And <\/span><a href=\"https:\/\/www.statista.com\/statistics\/705994\/influence-of-shipping-costs-on-purchase-decision-in-the-us\/\"><span style=\"font-weight: 400;\">nearly half of all U.S. consumers<\/span><\/a><span style=\"font-weight: 400;\"> say they prefer to shop with brands that provide free shipping.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You may not be able to offer free shipping for every order but you can create a free\/flat-rate hybrid shipping strategy. For example \u2026<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Treat your first-time customers to free shipping, and then apply a flat-rate to future purchases.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Pick a few of your most popular products and provide free shipping on only those items.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Give free shipping to shoppers in your country but charge a flat rate for international orders. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Offer free shipping to customers after they\u2019ve reached a fixed dollar amount \u2014 for example, \u201cSpend Over <\/span><span style=\"font-weight: 400;\">\u00a3<\/span><span style=\"font-weight: 400;\">50 and Receive Free Shipping\u201d.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Include free shipping as part of a customer loyalty program.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In a perfect world, online retailers would have all the resources they need to provide same-day shipping at no cost. But alas, we just aren\u2019t there yet. On the plus side, as long as <a href=\"https:\/\/www.brightpearl.com\/\">you can offer a <\/a><\/span><a href=\"https:\/\/www.brightpearl.com\/\"><span style=\"font-weight: 400;\">positive experience<\/span><\/a><span style=\"font-weight: 400;\"> not only while the customer shops but also after they click \u201cPlace Order\u201d, you can make them forget <a href=\"https:\/\/www.brightpearl.com\/best-amazon-inventory-management-software\">Amazon<\/a> even exists. (OK, that might be a bit of an exaggeration. But at the very least, you\u2019ll encourage them to shop with you again).<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Online retailers can claim a few advantages over brick and mortar merchants. To be more specific, brands who sell online \u2026 Can reach a wider audience Don\u2019t have to maintain a physical storefront Have the ability to conduct business from virtually anywhere But e-retailers also have one major challenge most brick and mortar companies don\u2019t: [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":2795,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[111],"tags":[],"class_list":["post-2543","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecommerce-best-practices"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.6.1 (Yoast SEO v27.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What Online Retailers Should Know About Flat-Rate Shipping - Brightpearl<\/title>\n<meta name=\"description\" content=\"Take a look at the ins and outs of flat-rate shipping and see if this approach makes sense for you. 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