How to give free shipping in 2017 without losing your mind and profit

TL;DR — At the beginning of every year the major shipment carriers revise their pricing. Here are the major changes for 2017
  •  USPS – 4.1% increase for domestic First Class, 3.9% for domestic Priority Mail 3.4% for domestic Priority Mail Express
  • FedEx – 3.8% increase for domestic & international FedEx Express rates
  • Canada Post Shipping Labels on Etsy – 3% increase in shipments to the US, 4% in domestic shipping rates, 3% in international rates
Wondering how to beat the increasing prices and still keep up with your free shipping? Read on.

Every year is a new beginning and a new chance to embrace the ever changing world. Here is a change that is coming by in the beginning of the new year 2017. In January the United States Postal Service (USPS), Canada Post and FedEx are making a few alterations to their shipping rates and service offerings. Here is the list of all the changes and what it means for you and your customers.

Most of the Etsy sellers in USA and Canada use one of the three shipments labels.

  • United States Postal Service
  • FedEx
  • Canada Post

Do you use one of these services? We have some news for you.

United States Postal Service:

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As of January 22nd  2017, the United Stated Postal service is revising the rates for its USPS mail classes. The good news is no changes have been made to the international shipping costs. This provides a great window as this means it’s a whole year of unchanged prices. Let us take a deeper look into the changes that have been made this year.

Flat rate 2017

One of the most preferred shipping methods for e-commerce sellers from USPS is the USPS Priority Mail Flat Rate boxes and envelopes. A lot of sellers prefer this particular shipping method for its simplicity and hassle free solution. Here are the changes to the costing in 2017.

flat-rate-changes-2016-vs-2017  Source:http://shippingeasy.com/

Priority Mail Rate Changes 2017

One of the primary parcel service for the USPS is the priority mail. Here are the changes for the cost in 2017.

priority-mail-2016-vs-2017  Source:http://shippingeasy.com/

First Class Package 2017

One of the cheapest parcel service available for products under 1 lb is the First class package. Here are the changes to the pricing of the first class package.first-class-2016-rates-vs-2017-1  Source:http://shippingeasy.com/

If you are an Etsy seller the changes will also reflect in the Etsy Shipping labels as well from the same date.f you are using Etsy shipping labels, here is a comparison table by Etsy that gives you a comprehensive idea about the rate increases to help you prepare your shop.

inv_959xn-1109239516_7ozkeglf  Source:https://www.etsy.com/help/article/5975

Canada Posts

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Canada Post tariffs are also set for a change. These changes take effect on January 16th, 2017. All the Canada Post services including the Premium, Standard, and Per Item will increase by a weighted average of 3.1%.

canada post  Source:https://www.etsy.com/help/article/5975

FedEX

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As in the beginning of every calendar year, FedEx is also altering their pricing. The changes in the pricing of FedEx comes into effect on 2nd January 2017. If you use Etsy shipping labels here is the comparison sheet that can help you be prepared.

FedEx prices  Source:https://www.etsy.com/help/article/5975

Apart from these Tariff changes, there is some additional increase in the FedEx’s fee and surcharge. Do you use Etsy shipping labels? well then here is a list that will let you know what change you can expect. To know more about Fedex fees and surcharges click here.

Fedex fees and surhcharge  Source:https://www.etsy.com/help/article/5975

So what does all this mean to you as an e-Commerce seller?

Let us understand what these changes mean to you and your sales.

USPS postage users

  • Purchasers of postage through the USPS can expect to see a 4.1% increase on average for domestic First Class packages, 3.9% for domestic Priority Mail packages, and 3.4% for domestic Priority Mail Express packages.
  • The cost of Signature Confirmation for USPS labels purchased through Etsy has increased to $2.45.

FedEx shipping users

  • Those who purchase FedEx shipping services can expect to see a 3.8% increase on average for domestic and international FedEx Express rates
  • The formula by which dimensional rate is calculated is changing, which means that some large, but lightweight packages may experience a price increase
  • Domestic FedEx Ground service will increase by an average of 4.9%.

Canada Post users

  • Sellers who purchase Canada Post Shipping Labels on Etsy should expect to see an average increase of 3% in shipments to the US, 4% in domestic shipping rates, 3% in international rates.
  • Priority is no longer available for shipments to air stage offices.
  • Signature confirmation is now required on shipments for which $200 or more of liability coverage is purchased. There is no additional charge for Priority, but the standard Signature Confirmation charge will apply for Xpresspost and Expedited Parcel (or, Regular Parcel if purchased at a retail counter).

Some simple tips to overcome the increasing prices

According to a study, 9 out of 10 consumers think Free shipping is one of the best incentives to shop online. In the age of increasing prices, it is definitely a struggle for every online seller to keep giving free or minimal shipping charge. Here are some ways in which you can cope with this obstacle.

Determine your shipping cost

The first and the fundamental step to reduce the shipping cost is to first calculate the accurate shipping cost. The moment you accurately pinpoint the cost that’s involved in shipping a particular product, you can take a well-informed decision on the shipping options for it. There are a number of good shipping cost calculators, here is a list that you should bookmark.

There is no “one size fits all” solution when it comes to shipping. Each carrier gives you different rates for different packages. Use the shipping calculators to determine which one fits you perfectly. Carefully invest your time to select the deal that really suits your needs.

Now that you know the cost. Optimize it

Determining the shipping cost is the first step. Once you determine the cost, the next step is to optimize it. The cost of shipping is one of the most important hurdles in the buyer journey. Several studies, statistics and our personal experience always shows one consistent result

Customers hate shipping charges Click To Tweet

Once you learn to confront the fact then you will be able to take an unbiased look at the various ways of optimizing the cost.

There are four methods used by e-commerce sellers all over the globe

  • Free shipping: Conditions apply
  • Flat rate shipping price
  • Flat rate shipping price for return customers
  • Charge the full cost of the shipping

Free shipping

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One of the most popular strategies used by e-commerce sellers. Like all great deals of the world free shipping needs to be carefully handled. Providing completely free shipping for all products is not financially viable. Thus judiciously use this to reward customers who fulfill certain criteria. Determine and clearly spell out the conditions for which you are willing to provide free shipping. For example, you can provide free shipping for certain conditions like:

  • Free domestic shipping
  • Free shipping for orders above a certain limit
  • Free shipping for returning customers.

Flat rate shipping price

Another offer that is fairly successful in attracting the customer is a flat rate shipping price. The key to success in flat shipping rate is the promotion. Focus all your promotional activities on highlighting the fact that the shipping price remains the same irrespective of the size of the order. This encourages the customers to increase the quantity of the order.

The increase in order size is a win-win situation for both the buyer and seller. The buyer feels good about paying lesser shipping charge per product. You, the seller, have an increased order size.

Free shipping for orders above a certain limit

Another common offer that has proven effective for several e-commerce sellers is the free shipping for orders above a certain limit. This approach allows the user to save shipping charges by increasing the value of their order. Several e-commerce sellers have leveraged this technique to increase the average order limit.

Flat rate shipping for returning customers

Customer loyalty is a soon-to-be extinct trait. Unless you are a company like Apple that enjoys a cult following the chances of retaining a loyal customer base just based on your brand name is difficult. Flat rate shipping rate for returning customers is a simple yet very effective way of retaining your customers.This technique has proved particularly effective as it provides the customer with a feeling of entitlement and encourages repeated shopping from your shop.

Charge the full cost of shipping

For obvious reasons, this is one of the most unpopular technique. Nevertheless, several successful e-commerce sellers have followed this technique yet made enough sales. One of the most important factors in following this technique is to inform the customer about the complete shipping cost upfront. Additional/hidden shopping cost that the customer did not expect is a huge demotivating factor and has proved to be one of the major contributors for cart abandonment.

Use Shipping label

The Etsy shipping label is a simple procedure that allows you to get a discount of up to 30% on all the three major shipping services namely USPS, Canada Post, FedEx. Since Etsy receives discounts from most shipping services your rates will be considerably cheaper than the retail counter rates.

Cut down on package material

Any experienced e-commerce seller will tell you that packaging material is another major factor that adds to the shipping cost. There are several methods used to cut down package material cost. Here are some of the methods commonly used by e-commerce sellers.

Leverage free material

Several of the major shipping companies provide free packaging material that can be leveraged for packaging your products. To get your free packaging material from USPS and FedEx, all you have to do is to create an account with them, go through their variety of free packaging material and order what you need. Please ensure you provide the correct address for shipping your free products.

Avail discounts by joining the local community/chamber of commerce

A lot of small e-commerce sellers underestimate the power of the local community. Whether you have a customer base from your locality or not, joining the local community of sellers would help you avail several benefits. Members from local bodies often get several discounts from major carriers. You can leverage these discounts to further reduce your shipping costs.

Plan and purchase the packaging material in bulk

Bulk purchase always gets you the best discount. This rule applies to all aspects of business including shipping material. Always plan upfront and buy your packaging material in bulk. Choose to buy material from discount sellers such as Uline, Value mailers, Ebay.

Reuse and recycle

Whether you are an environmental enthusiast or not, recycling and reusing makes business sense for all e-commerce sellers. Utilize the packaging material that you receive from your online orders and from your raw material purchases.

Consider using warehousers for international shipping

There are several third-party companies generally called warehousers to which you can outsource your shipping process. These companies can effectively reduce your shipping costs by about 35-40%. One hurdle that several e-commerce sellers face is that these warehousers generally work with large sellers with a relatively high volume shipments. There are some companies such as Shipwire that work with small and mid-size companies.

Conclusion

Free shipping is an important factor in buyer journey. It has become practical knowledge that customers hate paying for shipping. Increasing shipping costs makes it more and more difficult to provide free shipping. Follow the simple steps in the article to reduce the cost of shipping. Have any suggestions? Add it to the comments and we will discuss.

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