We added a $20 tumbler to the shopping cart and hit the checkout button to find that shipping amounts to $8.95. That equates to nearly half the cost of the product itself.
The calculation was for the standard 5-7 business days. If you want to receive it Priority, within 3-4 days, it jumps to $14.95. Worse, it will cost you $24.95 — more than the price of the tumbler — to expedite and receive in 2 days.
There are shoppers who don't mind adding items to meet a minimum threshold for free shipping. Well, in this particular case, they'd be $130 away from that qualification. Are they really going to spend six times more than originally planned?
And for those shoppers not enticed by that minimum spend tactic, is an $8.95 shipping fee worth a $20 item? Some won't mind, as they reason it's the price for the perfect find. Others will balk at the principle, and say "no thanks."
In any of these hypothetical cases, there will be a number of people who don't go through with the purchase. If we follow Baymard Institute research results, it would be 69.82% — the average cart abandonment rate
That's a lot of lost sales. The main reason for not checking out, per 48% of shoppers, is because of high shipping costs and fees. Research supports that lower shipping fees correlate with higher checkout rates
If cart abandonment is traditionally high, now mix in woes about the economy. The addition of just a couple bucks to shipping costs could deter budget-conscious shoppers. Consider that two-thirds of Americans say price spikes for goods and services is forcing them to dip into their savings
It's a good time for all D2C businesses to take a look at their shipping strategies.