Did you know that over 50% of users abandon the shopping cart from online shops due to the increase in price once the shipping cost is added? It is a very interesting and important issue to address because shipping costs are a common obstacle that gets in the way of sales for many online shops. Not long ago I wrote about how to choose the best shipping company for your online shop. So, following this concept, I would like to talk about 10 ways to develop the best shipping cost strategy for your online shop.

I'm going to show you how to reduce shipping costs in your online shop. This way you'll eliminate the obstacle and stop scaring away potential buyers. To get started, I'd like to tell you about a friend of mine who has an online shop selling specialty coffee. They roast really high quality coffee and this is what they sell through their online shop. One day my friend came to our office and explained how things were going with the online shop. He told me that most of the visitors who visited the online shop would abandon the shopping cart once they saw the shipping cost. And it makes sense. For a 250gr bag of their freshly roasted, high quality coffee you'll pay €8 to €10. The shipping cost, however, is over half the price of the coffee itself (almost €6 for regular shipping). This means that shoppers see the total price shoot up when they go to checkout. This makes the shopper think twice before completing their order.

After speaking with him about this issue I felt concerned for my friend. So I decided to write this post to help him and anyone having similar issues with their shipping cost strategy. Below I have detailed 10 ways to develop the best shipping cost strategy for your online shop.

From my experience, one of the biggest mistakes made by online shops is not developing an effective shipping cost strategy from the beginning. It's an integral part of a solid business model for an online shop. Your goal should be to offer the best user experience possible. You'll do this through user-friendly design, mobile optimisation, etc, but the shipping cost is key. Information about the shipping cost should be visible to the user from the homepage and throughout the site. Visitors should be able to see not only the cost(s), but alternative shipping solutions and shipping times as well. If the visitor is interested in buying from you, they'll find out anyway. So, by not wasting their time you're already giving them a better user experience. Now let's talk about 10 ways to develop the best shipping cost strategy for your online shop.

Having said all this, here are some ways you can lower the shipping cost and encourage more purchases from your visitors.

10 ways to develop the best shipping cost strategy for your online shop

1. Free shipping for first purchases

Free shipping had to be the first of 10 ways to develop the best shipping cost strategy for your online shop. Customers love things that are free. Make sure they know they are getting it for free. If you sell products that shoppers tend to buy more than once, such as my friend's coffee, you'll need to boost customer loyalty. The best way to do this is usually by offering free shipping for the first order. For this incentive to work smoothly, you should consider the technical aspects you'll need to prepare. You'll need a way for the shopper to register in your online shop so that they have a purchase history. This way your system will know to charge them shipping after their first purchase.

2. Yearly subscription price

If you have your shoppers' purchase history, you can offer them a fixed yearly price that includes shipping. Calculate how many purchases your shopper tends to make a year. Then offer them an attractive price for the subscription. Not only is this a great way to avoid abandoned shopping carts, you'll also boost customer loyalty and offer a better user experience.

3. Free shipping for purchases over a certain amount

Offering free shipping on purchases that exceed a certain amount is a very popular concept for big online shops. First, calculate the minimum shipping price for purchases of X amount of products. Then make sure to calculate your margins; it should be enough to support the shipping cost.

By informing shoppers the minimum amount they should spend to get free shipping you'll increase your average sales. You may notice that many online shops put a message, such as "Free shipping from €X" very visibly at the top centre of the page.

4. Free shipping cross-selling

If you want to go even further, you could show the shopper exactly how much they need to buy to enjoy free shipping. You can do this by cross-selling. So how would this work? Imagine, for example, that you're going to buy a motorcycle helmet and when you reach the shopping cart the online shop shows you this message, "if you add these gloves to your purchase you can enjoy free shipping". This is also a great way to increase the sales value of all purchases.

5. Share shipping costs

This idea depends on the profit or margin you receive from selling your products. Sharing shipping costs is an alternative solution that is becoming more common. The way it works is you take care of a reasonable percentage of the cost of shipping and the shopper pays the rest. This way you can offer a much more competitive price and effectively remove the shipping cost barrier that prevents the sale.

6. Offer in-store pickup

This option is worth it and appreciated by customers if you have a physical shop, office or collection point. It gives them the option to pick up their order and save the cost of shipping.

7. Offer shipping alternatives (express or economic)

All these ideas I've mentioned are intended to offer your shoppers a range of options that may suit their needs. Offering shipping alternatives lets the shopper decide what works best for them. They may choose to spend a bit more for 24 hour delivery or decide to save money and wait a bit longer.

8. Renegotiate with your shipping company

The higher the volume, the lower the cost of shipping. It's normal that in the beginning you won't have much bargaining power, because you'll start from a lower level of sales. However, as the sales volume increases it's a good idea to renegotiate better tariffs with your shipping company. Many companies offer you a pricing scale where you can clearly see how the shipping price varies depending on the number of monthly deliveries.

9. Weekly shipping

This idea is about saving on shipping costs. Depending on the type of products you sell, it may or may not be a good option. For example, my friend roasts coffee on the same days every week. Therefore, it could be convenient to ship it on the same day every week. And when speaking of freshly roasted coffee, it's good to let it rest a few days before brewing. This means that by waiting a couple days after roasting, customers will receive the coffee in perfect brewing conditions.

Since many shipping companies charge a fee for pickups, only having one pickup day could lower your costs. It could let you offer a more competitive shipping cost or even offer free shipping. And if you get a lot of local purchases you could do all your deliveries on one day by car or bike.

10. Messenger alternatives

Speaking of cycling, if you have a local business you could use an alternative service, such as a bike messenger service. These services are perfect for urgent deliveries that take as little as 30 minutes to reach your customer. Or you could go for a more economic service that takes 3 to 7 hours for deliveries.

I hope you have a clear idea of what to next after reading 10 ways to develop the best shipping cost strategy for your online shop. The most important first step is to make the shipping information visible and clear from the very beginning. Now you're ready to boost your sales.