Understand Magento Shipping Methods (And Which Ones Are Right For You)
Posted on: November 6, 2023
In ecommerce, the way a business handles shipping and delivery has an incredible impact on their bottom line. Do you know the top reason online shoppers abandon their shopping carts? Shipping costs and policies. If you’re a Magento user, by understanding the different Magento shipping methods available to you can help you better manage cart abandonment rates.
This article will help explain the different shipping methods Magento 2 users can select from, the advantages and disadvantages of each method, how to determine which one(s) are best for your business, and discuss the importance of having a reliable shipping partner to bolster your shipping strategy.
Why Shipping Methods Matter to e-Commerce Success
As mentioned above, the shipping methods you offer your customers can have a significant impact on their decision to complete the purchase or abandon their cart. Customers want shipping costs to be as low as possible (or free) and they want their purchase delivered to them as fast as possible.
But that’s not all. Today’s customers also want an online shopping cart experience that’s easy to navigate, have multiple shipping methods to choose from, and complete their purchase with as few steps as possible.
As Greg Woo, Director at Ship Expert says, “Many companies aren’t aware how integral shipping methods are to their customers' overall experience with their brand. The cheaper, faster, transparent, and streamlined you can make it, the better it is for your bottom line.”
Fortunately for Magento 2 users, the platform offers multiple shipping methods so they can give customers everything they’re looking for in an online shipping and experience.
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With the flat rate shipping method, customers pay a single shipping fee regardless of the size, weight, volume, or quantity of products they’re buying.
For instance, let’s say two different customers are shopping for clothes from the same online store. It uses a flat rate shipping method. Customer one decides to purchase pajamas, socks, and mittens for five members of their family. Customer two, on the other hand, purchases one sweater.
At checkout, both customers pay the same shipping fees, even though customer one bought a number of items that will require more shipping resources than customer two’s purchase of a single sweater. This is because with the flat rate shipping method, the same fee is applied to all purchases.
Table Rate Shipping
With the table rate shipping method, how much a customer will pay for shipping depends on the products they purchase and the distance they are from the where the product is stored, whether it’s a store or a warehouse. Those costs are determined based on the weight, size, dimensions, travel distance, and other factors that affect shipping costs.
Table rate shipping uses a data table that considers the following factors in the shipping calculations:
Weight vs destination
Price vs destination
Quantity vs destination
Now, let’s revisit our two clothing shoppers from above and consider what would happen if the store offered table rate shipping instead of flat rate shipping.
In this scenario, the customer who purchased multiple items for their family members would now pay more for shipping than the customer who bought a single sweater. This is because shipping rates are based on weight, volume, and package size measurements instead of a single, standard fee that’s paid by every customer, regardless of how much they order.
Customers love free shipping. Not only does enabling free shipping increase conversion rates at checkout, it also entices customers to buy more than they had initially planned. A few stats about free shipping you might like to know are:
45.6% of customers are more likely to buy from a retailer that offers free shipping.
1 in 20 people will spend more in order to qualify for free shipping.
The offer of free shipping converts more shoppers than coupons, brand reputation, and page speed.
Magento 2 users can easily leverage free shipping benefits. The platform allows businesses to offer free shipping to their customers. It also gives businesses the ability to apply qualifying rules–such as minimum order amounts– for customers to earn free shipping.
For instance, if the clothing retailer we discussed earlier wanted to move an overstock of sweaters, they may consider offering a “Buy 2 sweaters and get free shipping” promotion. If that’s the case, they could set up these rules and conditions in the back end of their Magento store.
Learn key ecommerce shipping and warehousing tips from our blog:
Advantages and Disadvantages of Each Shipping Method
Each shipping method in Magento is best suited for different companies, needs, circumstances, and customer expectations. In Magento, you can easily edit your store's shipping method based as you see fit.
The trickier part is determining which shipping method will meet your needs and your customers expectations. Let’s look at the advantages and disadvantages of each method.
Flat Rate Shipping
Simplicity. Flat rate shipping is easy to understand and communicate to customers. There's no ambiguity about how much a customer will be charged.
Predictability. Retailers can easily forecast shipping costs and integrate them into their pricing strategy.
Strategic. Retailers can offer flat rate shipping promotions, such as "Ship for only $5!" which can be an attractive proposition for customers.
Ease of setup. It's straightforward to set up in e-commerce platforms like Magento 2 without requiring complex configurations.
Profit margin variability. For some orders, the actual shipping cost might be much lower or much higher than the flat rate, leading to either lost profits or potential customer dissatisfaction.
Not suitable for a diverse product range. If the product range varies significantly in size and weight, a flat rate might not be the most cost-effective method.
Competitiveness. If competitors offer more flexible or cheaper shipping options, a flat rate might not be as appealing to customers.
Table Rate Shipping
Flexibility. Allows retailers to set varied rates based on different conditions, catering to a diverse product range.
Cost efficiency. Retailers can ensure that they charge appropriately based on the actual costs associated with shipping to different destinations or for products of varying weights or sizes.
Tailored promotions. Retailers can offer promotions for specific destinations or product categories based on table rates.
Complexity. Requires more effort to set up and maintain, especially if the retailer operates in multiple regions or has a vast product range.
Potential customer confusion. Customers might find it challenging to predict their shipping costs without going through the checkout process.
Management overhead. Any changes in shipping costs or business strategy might require updates to the table rates, which can be time-consuming.
Increased sales. Offering free shipping can incentivize customers to complete their purchase, reducing cart abandonment rates.
Competitive edge. Free shipping can give retailers an advantage over competitors who charge for shipping.
Simplicity for customers. Customers love clarity, and "free" is as clear as it gets. It can enhance the overall shopping experience.
Reduced profitability. If not factored into the product price, an offer of free shipping can quickly eat into profit margins.
Not always feasible. For heavy or bulky items, or for destinations that are expensive to ship to, offering free shipping might not be financially viable.
How to Determine Which Type of Magento Shipping Method to Use
Shipping methods should be incorporated into your overall customer experience and marketing strategy. This means you may want to change shipping methods based on sales cycles, revenue goals, and other considerations.
Below is a table that can help you assess what shipping methods are best for your business and marketing strategy.
10 Tips to Assess Your Magento 2 Shipping Method Needs
Understand Your Audience
Cater to demographics and shopping behavior. Millennials might expect faster shipping, while older generations may prioritize savings.
Evaluate Your Product
Consider size, weight, and value. Uniform products might suit flat rate, while diverse ranges could benefit from table rate.
Analyze Your Margins
Ensure shipping offers don't harm profitability. Balance incentives with costs.
Check competitors' offers. Match or better their shipping options to stay competitive.
Account for international customers. Region-specific promotions might be beneficial.
Test and Iterate
A/B test methods. For example, see if free shipping boosts average order value.
Listen to Feedback
Use customer feedback for insights on shipping preferences and pain points.
Offer special rates during peak seasons. Ensure logistics can handle demand.
Technology and Integration
Ensure seamless integration between Magento 2 and your shipping provider.
Adjust strategy as market conditions, costs, and customer expectations change.
Supercharge Your Magento 2 Shipping Method Game With a Reliable Shipping Carrier
The shipping provider you choose can significantly influence your success and enhance your shipping method. If you partner with the right shipping provider you can easily meet your customers needs better.
For instance, when customers can track their orders in real-time and receive their packages promptly, their trust in your brand solidifies, leading to repeat business and glowing reviews.
But it's not just about keeping the customer happy. The flexibility a shipping provider offers can ease business operations overall. Whether you're dealing with bulk shipments during peak seasons or individual orders, a flexible provider ensures consistent, timely deliveries, adapting to your business's ever-changing needs.
For Magento 2 users, it’s crucial your shipping provider can integrate with your Magento 2 ecommerce store. By integrating your shipping methods and services directly with your store, you can better manage your shipping services and keep information about your store and shipping logistics together in a central location.
Choose Ship Expert as Your Magento 2 Shipping Partner
In the dynamic world of e-commerce, your shipping strategy plays a pivotal role in customer satisfaction and business growth. Magento 2 offers versatile shipping methods, but the true potential of your shipping strategy can be unlocked by using a reliable shipping partner.
Trust Ship Expert for seamless integration, unmatched reliability, and enhanced customer experiences. Our clients save up to 70% on their ecommerce shipping needs – without getting locked into long-term contracts or volume minimums – and you can too.
Greg Woo is a seasoned expert in the logistics and distribution industry, with a career spanning over two decades. He has a comprehensive understanding of shipping and distribution needs, and has extensive experience integrating with e-commerce stores as well as customer specific WMS (warehouse management systems) and ERP’s (enterprise resource planning software). His tenure in the industry and established courier and LTL partnerships have allowed clients to benefit from reduced shipping expenses, as well as improved operations through software and specialized integrations.
Greg is currently the Director at Ship Expert Inc., a role he has held since February 2015. Prior to his role at Ship Expert, Greg held significant positions at Juxto, a telecommunications and managed internet service provider.
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