Shipping might come last in the e-commerce process, however, it serves as an important factor whether customers will push through or abandon their orders. In fact, unexpected sea forwarding costs are often the reason why customers abandon their carts, according to Statista.
As a starting entrepreneur, developing a sensible shipping policy is vital to your business’ success. And as neophyte in the business, you might be wondering how distribution strategies are developed in a successful company in the Philippines.
The truth is there is no guaranteed formula for a consignment success. There is no one-size-fits-all when it comes to sea movement policies. Instead, there are many factors contribute to its success (or failure) that a greenhorn entrepreneur should determine. One of the most important factors is the transport charges.
Admit it: since your business is still in its early stage, you don’t want to incur many costs that will hurt your margin, and that includes shouldering the transportation fee. Perhaps, you might even perceive this distribution strategy as an opportunity to make more profits.
While the above-mentioned ideas are perfectly understandable, you have to bear in mind that you are in the early stage of starting a business. Hence, you should concern yourself more in establishing a solid customer base than making meager profits from a sea transport.
According to Ramon Ray, founder of a New York-based business and technology consulting firm, customers find padded shipment charges a major turn off. It might give you a little profit at first, but it can hurt your business in the long run.
Since many customers do not fully understand how transportation fees are charged, unexpected costs may scare them and affect conversions. With that being the case, starting entrepreneurs are advised to offer free or low-cost shipping for their customers.
If your margin won’t allow it, however, Ray suggests posting the transportation costs alongside the item. This will prevent customers from having last-minute sticker shocks. In addition, it is recommended to charge by the item’s weight instead of its cost.
On the other hand, while making profit for beginning entrepreneurs is a no-no, losing money because of shouldering the expenses should also not be the case. Offering free shipment might be good to establish a loyal following, but you should not do it at the expense of your own margin.
With that said, you can check out the most popular strategies on how to charge shipping for your company in the Philippines. Each strategy is unique and has its own advantage over the other. However, deciding which to take still depends on your business’ needs and capacity.
- Free Shipping Offers – free shipment is already a proven way to increase conversions. In this strategy, you may either shoulder the costs or slightly increase the price of your items to cover the fees. In addition, you may also offer this if the orders reach a certain number of orders or in bulk.
- Exact costs charges – real-time shipping quotes are calculated by connecting your checkout with your chosen shipping company in the Philippines. This strategy helps earn the trust of your customers since they will know you are not inflating your shipping fees.
- Flat Rate Shipping – in this option, flat rate is offered for every package, weight ranges, or order totals.
Developing your distribution strategy is never an easy task. Take the opportunity of making profits and you take the risks of losing your customers. Offer free forwarding beyond your margin and lose a huge amount of the business’ capital. When all these make it hard for you to decide, try to find the balance and go break even.
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