Shipping tends to be one of the most confusing aspects of setting up an e-commerce site. Pre-configured shopping carts and content management systems designed specifically for e-commerce make uploading pictures and listing items pretty straightforward. But shipping is more complicated. There are options. What’s more, those options tend to change from time to time. So the best way to approach it might be a flat rate approach.
Flat rate shipping assesses the same shipping charge on each product or order. It is the simplest way for consumers to pay for shipping without getting bogged down in too many variables. It’s simple, easy to understand, and quite attractive as a marketing tool.
On the other hand, there are downsides to flat rate shipping. According to Preferred Shipping, a Houston-area company that specializes in international e-commerce shipping, the devil of the flat rate model is in the details. And because each carrier’s details are different, it takes time to figure out which service makes the most sense.
Flat Rate Benefits Customers
Flat rate shipping generally benefits customers through its simplicity. They can do their shopping, view the cart, and instantly know the total cost before checking out. That gives them the option to instantly make a decision if they believe shipping costs are too high. Things are different when shipping is calculated based on parameters like weight and destination ZIP Code.
Individually calculated shipping generally means the customer has to input delivery address and choose a shipping method. Only then will the shopping cart calculate shipping charges. Furthermore, some low-end shopping carts don’t even display shipping costs until the final screen. Abandoning the cart forces customers to back out with two or three clicks.
Depending on where a customer lives, the flat rate model might also save money. That leads us to the big danger of flat rate shipping for e-commerce operators.
A Gamble for Retailers
As attractive as flat rate shipping is to customers, it is a gamble for retailers. One would expect to be able to come up with an average shipping rate with the swing of only a few dollars in either direction. And that being the case, a merchant should break even over the long haul. But if that merchant isn’t centrally located to most of its customer base, he could end up over- or under-charging customers substantially.
The risk is heightened for international shipping. Why? Because taxes and duties have to be included in shipping costs. They are not necessarily static. Taxes and duties can change on a whim. So there’s always the risk that they will go up far enough to make flat rate shipping a losing proposition.
Consumers Expect It
In the end, flat rate shipping is the most common model in e-commerce because consumers expect it. And if a merchant doesn’t offer a flat rate, consumers expect free shipping. So it’s a gamble either way.
E-commerce operators should consider Jakob’s Law of User Experience when trying to decide on a shipping model. That law says website visitors spend most of their online time at other websites. They expect to see consistency. So if all the other sites are offering flat rate shipping and you do not, you are the odd one out. That could be harmful to your sales.
Flat rate shipping keeps the whole shipping paradigm simple. It is simple for you and your customers. But it does come with some risk. Is that risk worth taking? Probably. As long as your flat rate price is an average price for most of your customers, you should come out okay.