Worse still, you can still occasionally stumble across an e-commerce site that doesn't reveal the postage costs even when checking out. You might not know how much the full transaction will be until the retailer sends a confirmation email of your order with the final shipping calculations added. To the customer, the instant gratification of the purchase is lost, often prompting them to go elsewhere.
Shopping cart abandonment is a major challenge for any online retailer. In fact, Baymard Institute reviewed 37 different studies, concluding that the average abandonment rate is as high as 69.23 per cent.
Their separate research into why customers abandon their shopping carts revealed that most common reason given for abandonment (61 per cent) is ‘Extra costs too high (shipping, tax, fees.)’. However, 24 per cent of respondents left without completing the transaction because they couldn’t see or calculate the full transaction cost up front.
Customer expectations are set by the major e-commerce websites, such as eBay and Amazon, which commonly calculate and display the postage and packing fees automatically, depending on your location, the product (weight, size etc.) and even offer different postage options depending on how fast you want to receive it.
So, integrating automatic postage and packaging costs into your online store can give your customers much greater confidence, increasing the chances of a completed sale with the instant gratification they crave.
Yet boosting sales is only half of the story. If your website can automatically calculate and charge postage on every possible combination of products or customer scenario, it means you don’t have to.
Tip: Ensure accurate postage and packaging costs are clear and right up front in the purchasing process.
Setting up a shipping matrix
This technical wizardry might seem daunting and out of reach for small businesses like yours, but it can be surprisingly simple to set up.
If you already have an e-commerce platform powering your website much of the functionality may already be available. After all, shipping is a key part of e-commerce.
Many e-commerce platforms allow you to assign values to criteria such as: shipping zones (geographic regions); product categories (default, fragile or dangerous goods); choice of shipping method or carrier; and so on. Don’t forget to also add any fees for packaging and handling. The postage fee is only part of the cost.
Even if you're not comfortable setting this up yourself, there is usually plenty of help available on the platform or app developer's website.
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Integrating with eParcel and other carriers
Depending on your chosen carrier, your e-commerce platform may also have a dedicated plug-in or add-on, allowing you to integrate and synchronise with their systems. This could potentially save you the task of researching and entering all of the rates yourself, as well as updating when rates or conditions change.
Perhaps best of all, a digital postage workflow also gives you actionable records. While we all wish our customers were 100 per cent honest and postal services were 100 per cent infallible, if there's a complaint about a shipment not received, you'll have an electronic paper trail of when it was sent, where it went and - if received - who signed for it. This also makes it easier to claim any compensation for transit loss or damage, if eligible.
In Australia, integrating with a carrier will usually mean Australia Post’s eParcel service. Available to businesses sending more than 1,000 parcels per year (approximately four per business day), eParcel can streamline your postage and fulfilment workflows even further, with additional consignment, tracking and reporting tools. It can also make it easier to offer your customers more options, such as Express Post or StarTrack Courier services.
For the less technical among us, who might be intimidated by the idea of complex shipping matrices and API plug-ins, eParcel also has a dedicated team of technicians and customer service people to advise you throughout the whole process.
Tip: The more you automate, the more money you could save.
Competitive rates and promotions
Setting up a business account with your preferred carrier can also give you access to volume discounts as your sales grow. Send a comparatively large number of items per period and you might be eligible for a better overall postage rate than if you put stamps on everything and dropped it all in a post-box. And if you pass on your discounted shipping rates to your customers, your combined prices may become more competitive and attractive to more people.
Another benefit of dynamic postage calculation is how it can encourage customers to add to their order to take advantage of combined postage rates or promotional offers.
Your bigger competitors may buy stock in such bulk they can offer value-adds like free postage of orders over a certain amount. Even if you aren't at that stage, take advantage of whatever volume or shipping efficiency systems offer to pass on to the customer.
If, for example, you have a free postage offer on orders over $50, customers who might have only ordered $45 worth of stock will be searching for one more purchase to add to take advantage of the promotion. Plus, if they’ve saved money or enjoyed a highly convenient experience, they'll be more likely to return to your site next time.
Not sure whether to offer free shipping promotions or how to use them effectively? Find out if free shipping is right for your business.
Different postage options
One of the major advantages of courier services used to be that they'd pick up from your premises. Today, many other services, including eParcel, offer the same convenience (they can even supply you with the big post-office sacks to pack everything in). Like couriers, you simply print your manifest and hand over your shipments without even having to walk outside your door.
Meanwhile, courier services provide an edge for some online businesses because they're often faster — particularly for remote areas that aren't well serviced, even by premium postage services. If you sell time-sensitive goods like event tickets, livestock or flora, it can be well worth the satisfaction of knowing it will be in your customers' hands when promised.
Using a courier rather than a postal service might increase your overall packaging and shipping costs by two or three times, but the premium delivery you offer can be a market statement in itself — particularly if you give customers the option, so they can decide how fast they want their item or how much they’re willing to pay.
Whether you sell electronics, books or furniture, you're really in the business of customer satisfaction, and there's no better way to assure customer satisfaction than complete transparency. A good portion of that is in extra charges, like taxes and shipping, which makes online postage calculation an investment you can't afford to leave out.
Prices quoted were accurate at the time of writing. Check with the providers for up to date info.