A common point of conjecture in the dropshipping Australia community is which type of shipping should be used on your dropshipping store. Optimizing your shipping method can be a great way to improve your conversion rate, which ultimately means more money in your pocket. There are three main methods you can use; charging separately for the item and shipping costs, making the item free but charging for shipping costs, and charging for the item but offering free shipping.
Each of the successful dropshipping stores that I’ve run have used the same method. That said, I’ll walk you through the pros and cons of each of these shipping methods in this article, allowing you to choose one that is right for you.
Item + Shipping
This is probably the most common method you come across when purchasing items online. A company charges you one fee for the product and then another fee for shipping. An advantage of this method is that the product appears cheaper to purchase when users are browsing your store, likely increasing the number that will add it to their cart.
On the other hand, a major disadvantage is that you’re adding an extra cost to customers when they’re checking out. This dramatically decreases your conversion rate as many customers will abandon their cart at the sight of this extra cost. For this reason, I have to advise against using this shipping method on your store.
Free + Shipping
Whilst you don’t see this method all that often anymore, many dropshippers had immense success with this early on. Essentially, it involves selling your product for free and charging customers for shipping on the back-end. This only really works on low-ticket items where shipping can be had for $10 or less.
On one hand, this method will likely attract more customers to your store as they see the free price tag. However, you will see an incredibly high number of abandoned carts once customers see that they need to pay shipping on top. Given the relative lack of products to sell with it and the low conversion rates, I have to advise against using this shipping method.
Item + Free Shipping
I said at the start of this article that I’d had immense success with one of these shipping methods and it is most definitely this one. If you’re starting a dropshipping store today and not using this method, you’re simply leaving money on the table.
This is essentially the method used by all stores where you enjoy free shipping. You pay just one price at checkout that encompasses both shipping and the item cost. This doesn’t eat into your margins either, you simply factor the shipping cost into your pricing model.
It creates a psychological advantage in the eyes of consumers as they now only have to incur one cost. This dramatically increases your conversion rate and will decrease the prevalence of abandoned carts. As such, I have to recommend this shipping method over the other two.