Charging customers when it comes to shipping is one of the main obstacles e-commerce businesses are facing. Offering a 2-day delivery, or even free shipping is not achievable as it may not go with your costs and it may not cover the capital you initially invested, resulting in a loss in your business.
Also, you don’t want your customers to pay a lot. According to Shopify, 80% of stores have high shipping costs if you set the price manually. This can also have a negative impact and lead to high shopping cart abandonment rates.
However, if customers are dispersed all over the country, or all over the world, the cost of delivering an item to Customer A can be significantly different from the cost of delivering the same item to Customer B. These calculations are even more difficult.
So how do you calculate the correct shipping cost for each customer? Well, real-time carrier shipping has been a helpful option for e-commerce companies to take a more accurate approach in terms of carrier fee calculation.
Real-time Carrier Shipping Definition
Real-time Carrier Shipping is the exact shipping rate that couriers companies ask in payment from the customers which is shown upon checking out the specific order they are placing.
These rates will basically depend on the order’s weight, dimensions, and the customer’s shipping destination and will show accurately once they are finished with the order and it is already in the cart, usually seen on the checkout page.
This shipping rate option will help every e-commerce business to prevent overcharging their customers as it will be based on the order and the location of the customer will surely differ per customer.
Advantages of Real-Time Carrier Shipping
Manually determining shipping costs is not always accurate and can be very time-wasting depending on the degree of adjustment (national rules, order weight, total order amount, etc.). Shipping costs calculated in real-time by the carrier can help in several ways.
- Automatically Computes the Shipping Costs
With this option, customers can easily see the real-time rate of the shipping at the checkout page as they put the information of the order as well as the address the order will be shipped, for correct pricing,
- Prevents Customer Overcharging
Unlike flat-rate delivery, real-time delivery means charging the customer the right amount each time, so you don’t have to worry about overcharging the customer for the shipping fee.
- Increases International Sales
Doing research for the cost of international shipping can be a real struggle. And with this real-time shipping, an exact rate based on the location of the customer will be provided, which also includes international destinations.
Things to Consider When Switching to Real-time Shipping Rates
Switching to Real-Time Shipping Rate is not that easy-peasy and you have some relevant things to ensure before doing the move. Sharing with you the following helpful tips for switching.
- To which country you will be shipping the items?
It can be shipped to almost all countries, but not all countries need to be shipped. Different countries have different regulatory, customs, taxes, and inbound requirements, which can result in very high transportation and logistics costs.
- Which carrier you will be choosing?
Each carrier has its own strengths and weaknesses in terms of expertise, speed, cost, and flexibility. It is a must to check on available carriers such as UPS, FedEx, USPS, DHL and compare the costs. The more couriers you work with, the more locations and customers you can reach. However, unless you are using 3PL, you can withhold discounted bulk charges if your company has multiple carriers.
- Incorporating handling costs
With a real-time carrier shipping rate, this means that the full direct shipping fee is handled by customers themselves. Handling fees, covering packing boxes and moving items, are excluded from the mentioned shipping rates. Therefore, be aware of how to offset these costs and remember to consider them when considering margins.
If you don’t have the right strategy, you can set the shipping cost differently than the actual price. There is no one-size-fits-all shipping billing method, but shipping using a real-time rate is one of the best ways to safeguard your margins.
Delivery and fulfillment can take so much time in the e-commerce business. Learn more about how Chicago Shipper can provide you with a time-saving and at the same time, a great focus on your brand’s growth. Reach us at https://chicagoshipper.com and we will be more than happy to assist you with your shipping concerns!