Thinking of building an eCommerce store? Don’t forget to factor in freight costs

eCommerce stores and freight costs:

As with everything in the world of eCommerce web design you need to make sure you have planned properly and researched thoroughly, as a wrong decision in the planning stage can cost you thousands of dollars.

And not planning, reviewing options and getting multiple quotes from carriers prior to developing an online store is a disaster waiting to happen.

Determine freight & postage fees early on

You need to research the fees and costs involved in shipping across Australia and  potentially overseas too. There are various shipping options available, live shipping rates may work via Australia Post, or a flat fee rate might work for many stores.

When setting your freight fees consider these:

  • How long does it take to pack each item? If packaging and handling takes an hour (such as goods easily damaged) then this needs to be factored in
  • How urgent do your customers need their product?
  • How much does your competition charge to freight similar items?
  • Can you use various carriers in different situations? For example you would use Australia Post for Australia-wide delivery, and a courier company for local delivery
  • Will you selling overseas?
  • Are your margins high enough to absorb the full freight costs?

Here are some freight options:

  • Live Shipping Rates: Many eCommerce stores have a live shipping rate ie. the customer types in their postcode and the online store calculates the shipping rate based on what they have purchased and their location.  Australia Post has a reliable, free live shipping rate program you can use.
    • Issues: Customers don’t know the full cost of a purchase until the last minute in a sales process
    • Benefits: You can accurately keep on top of your shipping costs
  • Free shipping: If you know how much shipping will cost, you can factor freight costs into your cost margins. This approach suits larger dollar sales.
  • Free Shipping for orders above $100: This is an incentive for customers to increase purchases.
  • Flat Shipping Rate: One fee for all orders no matter how big or small.
    • Issues: You need to be mindful that you may have customers purchasing items who live along way from a city which will increase the cot of dispatch greatly.
    • Benefits: Customers know immediately how much shipping costs will be.
  • 2 Different Rates: For example you could have one rate for a standard 3-4 day delivery but you could have a second price for next day delivery.
  • Insurance: If you are selling high end items does the freight company provide insurance if items are damaged?

There are lots of different options when it comes to shipping rates but the most important thing is to plan and budget properly.