How To Set Up a Profitable Shipping Strategy on Squarespace
Ah, shipping - the apparent bane of every online seller’s existence. It can sometimes feel like you’re being squeezed on shipping at both ends; customers want low/no cost while carriers seem to charge more and more at every turn.
A lot of eCommerce shop owners start looking at shipping extensions as a solution thinking that will magically take care of everything - but they only take care of half the problem. In this post, we’ll look at understanding both sides of the shipping equation and how you can optimize both. Keep reading to also find out which shipping method and shipping extension combo I recommend most!
The Shipping Equation
Shipping is just like any other product you sell in that there are two sides to the equation and both need to be taken into account to determine profitability. On one side we have what you charge your customers for shipping, on the other side what carriers are charging you. The difference between the two (if there is any) is profit.
Despite how obvious it seems, I often see online sellers ignore either one side of the equation or another. Some people set unnecessarily high shipping costs for their customers in an attempt to “recoup” what they are being charged. Others offer free shipping because they know it’s an attractive option but then don’t limit who is eligible for it and end up seeing red because of it. So, you have to take care of both sides, okay? Here’s how:
Taking Care of the Customer Side
The first side of the shipping equation is the customer side, or what you charge your customers. When it comes to setting up shipping rates on Squarespace you have a few options:
Flat Rate Shipping - charging the same cost per order, with the option to increase the cost per each additional item in the order
Rates Based on Weight - charging based on the total weight of all items in the order; requires you to input your own cost tiers
Carrier Calculated Rates - charging based on weight, dimensions, and destination address; cost is calculated automatically from the carrier(s) you choose (FedEx, UPS, or USPS)
Free Shipping (for all orders) - set up in the Shipping section as a shipping option
Free Shipping (for only certain orders) - set up in the Discounts section either as a promo code or an automatic discount based on criteria you set
From a purely cost control point of view, carrier-calculated rates appear to be the best option since you’re getting variable rates directly from the carrier you’re going to ship with. This makes you think that you’re going to be able to charge your customer exactly what you’re going to get charged but variable shipping rates can be super frustrating and off-putting to customers. Since they never know what to expect and are often surprised by what they see when they get to the checkout, this option results in super high cart abandonment rates and discourages higher dollar value orders. If we’re working through a process of elimination, I would rule out Rates Based on Weight for these same reasons.
This leaves us with flat rate shipping or a couple of free shipping options. My recommendation? Go with a combo of both!
Game Plan:
Set a per order flat rate cost that covers some nominal amount of whatever it costs you to ship your average order. Don’t worry about making it cover everything, just make it something easy. Like $5. Or $7. Or something relatively easy to stomach.
Set up an automatic free shipping discount for orders above a certain amount, ideally somewhere just north of your current average order value. You’ll be surprised at how many people choose to add just a little something to their cart in exchange for free shipping! I wouldn’t offer free shipping to just anyone though so be sure to set this up in the discount section, not the shipping section!
Why This Combo Works:
Oprah keeps it real.
People hate feeling nickel-and-dimed and love feeling like they got a deal. Offering a flat rate that will apply to orders under your free shipping threshold feels honest and transparent and ensures that shoppers won’t face any nasty surprises in their cart.
Setting up an automatic free shipping discount encourages people to spend just a little bit more while still making it easy - no coupon code required! This combo is also super easy to promote! Imagine how simple it would be to boil your shipping offerings down to something as easy as: “$5 flat rate shipping. All orders over $45 ship free, no code required!”
The Quick Case for Free Shipping
I go into all the pros and cons of free shipping in this post: eCommerce Strategy 101: Should You Offer Free Shipping? but here are some of the benefits of this for anyone with lingering doubts about how well it works as a strategy. Free shipping:
Reduces cart abandonment rates
Increases conversion rates
Boosts revenue
Increases order volume
Increases average order value
Helps attract new customers
Encourages repeat visitors
Boosts loyalty, and more!
Combined with a minimum order amount requirement and a low flat rate for any orders below that amount, you’ve got a winning combo for the customer side of our shipping equation.
Taking Care of the Merchant Side
Alright, now that we have the customer side under control it’s time to get things in order behind the scenes. Just like on the customer side, you have some options:
Set up an account with the carrier(s) directly and manage shipping on your own. I used to work in shipping and logistics and let me tell you, this is a full-time job in and of itself! If you go this route you’ll need to take care of setting up and maintaining the system that you’ll use to pull in order info, generate and print shipping labels, and then send shipping data like tracking information back to Squarespace. You’ll also be responsible for negotiating your own shipping rates which may be tough if you don’t have the order volume to use as leverage.
Manually process shipments without an account by just showing up at the post office (or FedEx/UPS store) and hoping for the best! 🙃 With this option, you still have to do all the work as the option above (manually creating labels and entering tracking information) with the additional wildcard of having absolutely no negotiating leverage and absolutely no idea of what each shipment will cost.
Use a shipping extension that will automatically pull in order data to an organized system, generate shipping labels for you and send order data back to Squarespace without you needing to lift a finger. With this option, you also get to take advantage of discounted shipping rates that have been negotiated and set up on your behalf.
I think you know what I’m going to recommend here, right? :) Using a shipping extension is a no-brainer because it saves you both time and money, working to trim down the cost of shipping on the merchant side of our shipping equation.
What Are Shipping Extensions & How Do They Work
Shipping extensions are basically apps that use the Commerce API to pull in order data to a third-party platform that takes care of all things shipping for you. Some popular Squarespace shipping extensions are ShipStation, GoShippo, ShipBob, and Easyship - see the section below for my fave!
All of the shipping extensions with native Squarespace shipping integrations work pretty much the same way. You’ll sign up for an account directly with the app you’d like to use, then sign in and connect it to your Squarespace site. When orders are placed, the order information will get automatically pulled into the extension and a shipping label will be created for you to print when you are ready to ship. Once shipped, the tracking information will get sent back to Squarespace and automatically included in a shipping confirmation email to your customer. The rates you receive will be based on whatever discount the app has negotiated with the carriers you’ve selected.
One quick note: a common misconception about shipping extensions is that connecting one to your site somehow “takes over” the shipping options that are displayed to your customers at check out. What you need to remember about shipping extensions is that they only take care of the merchant side of the equation. The time and cost savings they offer still need to be balanced out with a winning customer-facing strategy like above!
My Favorite Shipping Extension: Easyship
Knowing that all shipping extensions work in essentially the same way, how do you go about choosing one over the other? Well, let me save you the agony of starting a bunch of free trials and testing them for yourself :) My fave is Easyship. Here’s why:
As its name implies… it’s easy. Some of the other extensions have complicated user interfaces and offer a bunch of unnecessary options. Easyship has a nice, clean interface and offers just enough options to allow you to customize the experience without feeling bloated.
The discounts are great! You can check them out using their shipping rate calculator here.
They have some of the best zap triggers, including one of my favorite ones: being able to trigger an email once a package is delivered! I love getting an email when orders are delivered so that I know to be on the lookout for my packages. This is just another helpful way to extend the customer service experience beyond the sale.
If you’re interested, you can also check out this post for more on each of the shipping options: A Minimalist’s Guide to Squarespace Shipping Extensions.
Bottom Line
A profitable shipping strategy needs to take into account both sides of the shipping equation: the rates and options you offer to your customers + the service and rates charged to you from carriers. You can’t just work one side or the other, you need to pay attention to both. On the customer side, a combo of flat rate plus free shipping for orders over a strategically set amount will create happy customers and increase orders. On the merchant side, a shipping extension like EasyShip will make sure you have the best rates available and save you time and headaches when it comes to shipping and fulfillment. Win-win!
