eCommerce and Shipping Fees
Est. Reading Time: 5 minutes
As a project manager at Beacon, I’m frequently involved in eCommerce implementation projects. We use the highly popular .NET shopping cart engine AspDotNetStorefront for most of these jobs, due to it ease of use and flexibility. In the case of shipping fees, though, maybe the software makes it just a bit too easy – since this decision can seriously affect the profitability of your business and requires serious thought and consideration.
AspDotNetStorefront makes setting up shipping fees for a store super simple. There are a wide variety of “out of the box” choices for shipping fees (of course, with the source code, we can customized these even more as needed):
- Calculate Shipping by Weight– This method uses a simple table based on the total weight of the order to calculate shipping costs. You specify a low-end and high-end for each range, and can specify different costs for each shipping method.
- Calculate Shipping by Total– This calculation method lets you base your shipping rates on the total dollar amount of the customer’s order. This method can easily be used to give certain dollar ranges free shipping.
- Use Fixed Prices– This is the simplest shipping calculation method to set up. Each shipping method has one price, regardless of the order contents.
- All Orders Have Free Shipping– As the name states, all orders – regardless of contents – will receive free shipping.
- Use Fixed Percentage of Total– This method charges a percentage of the order total for shipping.
- Use Individual Item Shipping Costs– This calculation method allows you to set a shipping cost on each product variant. The shipping costs will be added together to generate your customers’ shipping total.
- Use Real-Time Rates– With realtime shipping, your website connects to one or more of the major shipping carriers (UPS, USPS, FedEx, and DHL) and gets the price that the carrier would charge to ship that order based on the weight and/or size of the products ordered, and the origin and destination of the package. This requires an account with one or more of the 3rd-party carriers, and incurs additional monthly fees through those companies. More than one carrier can be used at the same time, to give your customers a wider array of shipping choices.
- Calculate Shipping By Weight & Zone– This method allows you to charge different amounts based on the destination zip code (or zip code range) and the order weight.
- Calculate Shipping By Total & Zone– This method allows you to charge different amounts based on the destination zip code (or zip code range) and the order total.
- Calculate Shipping By Total & Percent– This is the most complicated of the fixed shipping rates to set up, but allows for greater flexibility in pricing than the other methods. The Base Charge is the base shipping dollar amount. The software then adds to that charge a percentage of the order total, based on the Shipping Charge As % of Total that you enter. The Minimum Charge field is optional, but allows you to set a minimum value for each range that will override the calculated price if it’s below that minimum.
So which one of these choices is right for YOUR business? Unfortunately, the short but discouraging answer is that every business is different– in many markets and industries, an extremely large percentage of customers (over 50% according to some estimates) cite shipping fees as the number one reason they abandon their cart. In other cases, a fairly substantial fee is expected by the consumer, especially when you sell large, fragile or oddly-shaped items. In any event, not charging the customer adequate shipping fees will impact your bottom line and your business will need to understand and manage the impact.
That being said, here are some basic rules of thumb:
- Set your shipping fees high enough to cover your anticipated annual expenses, with a small amount of overage to cover unanticipated returns, back-orders, etc
- Carefully monitor what your direct competitors are doing
- Be transparent about shipping fees. Make this information readily available on the site at all times.
With all of this contradictory advice, you need a partner that can analyze you business and provide good recommendations. Beacon prides itself on its customer service and will work with you to determine which choice is the right one for you! In the meantime though, I’ve put together a list of resources that you might want to consider when selecting how your eComm store will charge for shipping. I hope that you will find these resources useful when considering your specific needs!