In a study conducted by Forter and OnePoll, insights were shared on different reasons behind the high ecommerce shopping cart abandonment rate in the ecommerce ecosystem. In the graph shown below, we can observe the top five reasons behind why shoppers abandon their cart. The top five reasons were – need to re-enter shipping info, need to re-enter payment information, delayed shipping, broken discount code feature, and high shipping rates.
With many digital shoppers abandoning their shopping carts due to different reasons associated with shipping, it becomes a necessity for an online business to provide flexibility to the buyer in the way he or she chooses the shipping option. In this blog post, we will share information on different types of ecommerce shipping options and rates in ecommerce that will add value to your fulfillment process.
Table of Contents
- Ecommerce Shipping Options
- Types of Ecommerce Shipping Rates
- Benefits of using Shipping API
- Shipping API Functionalities
- Shipping API Providers
Ecommerce Shipping Options
Before an order is placed, the buyer is shown different ecommerce shipping options. As per the buyer’s preference, a shipping option is selected. Here is a brief explanation of different shipping options in digital commerce for your better understanding.
Free in-store Pickup
If you have a brick and mortar store, this option will do. For entrepreneurs selling on ecommerce marketplaces such as Amazon and Alibaba, the in-store pickup option can be optional but not limited to your brick and mortar store. By leveraging this option, you can offer related products to the buyer through upselling.
LTL Shipping Carriers
The Less Than Truckload (LTL) shipping option is suitable for those companies that are primarily involved in conducting business-to-business (B2B) transactions. Ideally, the LTL shipping option is applicable where the quality ordered is very high. Furthermore, when ordering in bulk, the weight factor also comes into play.
The same-day delivery option can add value for a regular buyer and improve the conversion rates. If you are planning to sell perishable items such as groceries, then you must provide the same-day delivery option to your buyers. You can charge an additional fee from those buyers who select the same-day delivery option.
Types of Ecommerce Shipping Rates
One can call the free shipping option as an innovation that was perfected by Amazon. To satisfy the changing customer expectation, retailers and sellers on ecommerce marketplaces can free shipping. This step was welcomed, and sellers and retailers alike observed improvement in the conversion rates.
However, free shipping is not free for a retailer as there is cost associated with each phase of the supply chain. To know whether you can offer free shipping or the order value above which you can offer free shipping, we suggest you read the information on the free shipping threshold.
Flat Rate Ecommerce Shipping
Flat rate shipping adds value to digital commerce by simplifying the calculation for both the buyer and seller on an ecommerce marketplace or an online retailer. When a buyer places an order, the different aspects of a product, such as weight, dimensions, and more, are not taken into consideration.
Furthermore, irrespective of the order value, the shipping cost remains the same. However, there is one use case, where flat rate shipping can be a warning sign for the seller. If a buyer places an order for a heavy item, you may end up paying more. Always double-check before offering flat rate shipping.
Table Rate Ecommerce Shipping
Table rate shipping is used to calculate the cost of shipping in which multiple aspects of the product are considered before an order is placed. While product dimensions and weight are found, additional factors include location, distance, and more. If you plan to use WooCommerce, Shopify, BigCommerce, and more to start your ecommerce store, then we suggest using a table rate shipping plugin.
Alternatively, for enterprise users such as large retail brands or other B2B ecommerce businesses, a custom feature can be developed in the ecommerce solution that considers specific points to suit your unique requirements.
Live Shipping Rates
To precision in the calculation of shipping rates, you can integrate your ecommerce store with a third-party shipping service provider using an application programming interface (API). When an order is placed, data such as dimensions, weight, location, and more are shared with the shipping service provider via the API. The end-user sees the live shipping rate shared by the shipping company.
Benefits of using Shipping API
Address and Delivery Validation
Verify addresses to ensure that the order can be delivered correctly and speedily. You can also check that you deliver at the given addresses. If you don’t, you can decline the order.
Select a Relevant Carrier
Select the best carrier for the particular order. Carriers differ in the delivery locations they service, speed of delivery, shipping rates and the supporting services such as tracking the package. By enabling you to select a particular carrier, you will be better able to meet customer expectations.
Almost Real Time Tracking
Provide tracking information that can dramatically increase the level of comfort customers feel about online ordering. The one major advantage of brick-and-mortar stores is the opportunity they provide for customers to see the product and carry it with them. By providing full product details and also shipment tracking information, ecommerce sites can offset this advantage to some extent.
Shipping API Functionalities
The following list of API’s from UPS will give an indication of API functionalities you can expect:
- Address Validation – City, State, ZIP: Verify the city, state, and ZIP or postal code information is valid.
- Address Validation – Street Level: Verify the street address, city, state, and ZIP or postal code information is valid.
- Dangerous Goods – Validate Air, Ground, and International Dangerous Goods (hazardous materials) shipments are acceptable to UPS.
- Locator – Global: Find a UPS Access Point, UPS location or The UPS Store nearest to you.
- Pickup – Request a pickup for you or for one of your customers.
- Pre-Notification – Notify UPS of Dangerous Goods shipments after shipment processing.
- Rating – Compare delivery services and shipping rates to determine the best option for your customers.
- Shipping – Validate addresses, compare rates, and print labels for your internal business processes.
- Time in Transit – Compare shipping transit times of UPS services.
Shipping API Providers
Major couriers such as FedEx provide shipping API’s to integrate their services to your systems. For example, FedEx Web Services is a shipping API for integrating software applications with FedEx Systems to create shipping labels, facilitate returns, track shipments, obtain rate quotes and generate reports. Other major players like UPS and DHL also provide shipping API’s.
Other API developers provide APIs that allow selection of your own carrier (instead of just FedEx or UPS or DHL). For example, ecommerce platforms such as Shopify and Bigcommerce provide shipping APIs with multicarrier options. So do many other specialist developers.
Online retailers and sellers on ecommerce marketplaces suffer from low conversion rates due to inappropriate ecommerce shipping and fulfillment strategy. In this blog post, we discussed information on different ecommerce shipping rates and fulfillment options for retailers and sellers on ecommerce marketplaces to make an informed decision.