LTL Freight Charges for eCommerce SalesWritten by Neal Willis
Ecommerce that involves LTL freight can be overwhelming and, as a result, some will forego selling certain items altogether, so they don’t have to deal with LTL freight. For those who sell heavier and/or larger items online, they can determine customer freight charges based on 1) Flat Rates, 2) Actual Costs, or offer their customers 3) Free Freight.
No one wants to lose a sale by charging too much for freight or, on the flip side, lose money on a sale by charging too little. So, some take an average cost of freight across the board and apply it to every order sold online. Although not the most exact, besides offering free shipping, this strategy is often viewed as the fastest and least complicated method for getting freight rates into your online shopping cart. The flat rate can even be determined as a flat percentage of the sale price, among other factors.
The key to this strategy is having extensive data. Once the average is calculated, thorough testing should be done to ensure accuracy, to the extent possible. You won’t know an exact cost until the carrier freight bill arrives, which can be weeks after the order was placed, and actual shipping costs billed by the carrier(s) are almost guaranteed not to match what you charged your customers. Inevitably, you will lose money on some orders and make money on others, and rely on the gains and losses evening themselves out in the end.
Although this strategy is certainly not as appealing to a customer as free freight, real-time LTL freight rates at checkout help prevent undercharging and/or overcharging your customers, and they help to ensure customers are getting the best deals possible. With LTL freight rates tied into your ecommerce platform, you are able to bill customers and account for freight charges with a higher degree of accuracy, which minimizes the risk of losing money on freight.
Real-time LTL rates can be integrated into most ecommerce platforms and, while it may seem like it will be costly and require extensive programming, there are some highly customizable solutions in the market that can be rapidly deployed with little to no cost. Freight shipping calculator solutions for LTL ecommerce make the process of displaying online shipping costs highly effective, yet simple and easy.
As a tool for appealing to consumers and increasing sales, free freight is always a good strategy; however, it is important to remember that freight costs can make or break a company, especially when product margins are thin. Every business is different and, when it comes to choosing a strategy for determining LTL freight charges for your ecommerce site, there’s not necessarily a right or wrong choice to be made. It all depends on the particular situation.
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