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OWT Newsletter #13 - Setting Your Shipping Costs

May 26, 2004

In This Issue:

1. Setting Your Shipping Costs
2. In the News - Are All Search Engines the Same?
3. More News Headlines
4. This Week's Q&A - Finding Related Words in Google
5. Wrapping It Up

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Setting Your Shipping Costs

One of the hurdles we always seem to face when developing a commerce site for a client is how to handle shipping costs. When a business decides to start selling widgets online, orders can come in from anywhere in the world and the web site has to be able to tell the shopper what it will cost to ship that widget. (Hiding shipping costs, you may know, is a great way to make sure customers DON'T buy from your web site.)

It's easy enough to look at your company's blue widget and determine what it will cost to ship one to California, or Texas, or New York. But what about when someone orders three blue widgets? Or six? What about when they order three blue widgets and two green widgets? Suddenly it's not so easy to know what it will cost to ship that order to California, Texas, or New York. Say, for example, that your company sells souvenir baseball caps with your company logo on the front. You decide that it'll cost about $5 to ship one anywhere in the U.S. But, if someone orders three caps, are you going to charge $15 for shipping? You'll lose a lot of customers that way; we all know caps are light enough that shipping three will barely cost more than shipping one.

If you have an unlimited budget, you might consider some of the automated options available via shipping databases. You can purchase databases of all the zip codes in the U.S. and tie it in with zone-based and weight-based shipping information from UPS, for example, and develop an extremely accurate system for estimating shipping costs on your web site. We're of the opinion that most of our clients don't need to go to such extremes, and spend that much money to solve an issue that can be handled more cost-effectively.

What we suggest to our clients -- and what we'd suggest to you, no matter who hosts and develops your commerce web site -- is this:

1. Determine what will be your primary shipping method -- USPS, UPS, FedEx, etc. (I'll use USPS for this example.)

2. Determine a "base shipping rate" based on the minimum you can expect to spend to ship one item ordered from your web site. USPS Priority Mail, for example, has a minimum charge of $3.85. If you use USPS, your base shipping rate might be $4 ... or $5 if you know most of your items weigh more than is allowed under that $3.85 rate.

3. Determine a per item shipping charge for each product you plan to sell. For example, those baseball caps may have a $1 per item shipping cost.

4. On your web site, when an order is placed, start with the base shipping charge and then add in the per item price of every item ordered. The sum is what you charge for shipping.

So, to continue the example above, if you start with a base shipping charge of $4 and add in $1 for each cap ordered, someone who orders one cap will be charged $5 for shipping, someone who orders two caps will be charged $6, etc. It's not a perfect method for setting shipping costs, but for most types of products, it should be the most cost-effective method. In the end, you should expect to make money on some orders (when you charge more for shipping than the actual cost) and lose money on others (when it costs more than what you charged). Hopefully, those two instances will balance out over the long haul.

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In The News

You can imagine how quickly the news spread this past week when a study of Internet users suggested that Google isn't much different from other search engines. What?! Google's just another search engine??!! That was the reaction at a lot of Internet news sites.

The study was conducted by a California company, Vividence Corp., and it involved 2,000 adult web users. Based on their study, Vividence concluded that search engines like Yahoo, Ask Jeeves, MSN, etc., return "correct or useful results" almost as often as Google. Quoting from CNN/Money's report, "when asked to find the leading cause of death for 25-34 year olds, Google users found the correct answer 55 percent of the time, compared with 52-54 percent of the time for its competitors."

That's all fine and good, but here's the problem:

The vast majority of Internet searches are far less specific than "what's the leading cause of death for 25-34 year olds". According to the most recent statistics I've seen, nearly two out of every three searches are three words or less. People go to search engines and type things like "digital cameras" or "los angeles hotels"; they don't type "what's the leading cause of death for 25-34 year olds". When you use a detailed search query like that, you limit the amount of possible pages that can be returned for the search, so it makes sense that Google's SERPs will be similar to Yahoo, Ask Jeeves, and the others.

On the other hand, when you do a real world search that's only a couple words long, you most definitely do get different results. Remember the Google vs. Yahoo comparison tool from Newsletter #5? When you use that to compare Google's and Yahoo's SERPs for the phrase "digital camera", it's pretty obvious how different the results are: Only three sites appear in the Top 10 listings on both search engines. What's more, four of Google's Top 10 don't appear in Yahoo's Top 100 (and vice versa).

I'm not trying to suggest that Google is necessarily better than Yahoo, Ask Jeeves, or the others. On some kinds of searches it is, and for other kinds of searches, the others may be better. But this "news" that they're all pretty much the same just isn't accurate.

News - Survey: Google's power overstated

Yahoo vs. Google: "digital camera"

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More News Headlines

Here are a few news headlines worth your time to read. These are just some of the headlines we've posted to OWTweb.com in recent days.

Search engine user attitudes
May 25, 2004 - Search Engine Watch

Interesting article details recent surveys about how people use search engines.

E-Commerce sales fell in first quarter
May 21, 2004 - Reuters

U.S. retail sales over the Internet fell 11.4 percent in the first quarter of 2004, but rose 28.1 percent over the same period a year earlier.

'Future of search will make you dizzy'
May 21, 2004 - InternetNews.com

"Think about how the Web has changed your life in the last 10 years. Now, try to extrapolate 10 years forward and you should feel dizzy."

More headlines: http://www.owtweb.com/news/

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This Week's Q&A

Hi Matt,

You mentioned a couple weeks ago the need to use related words on our pages in order to rank well with Google. It was when you were discussing that GoRank study about Google. [Ed. note: This was in Newsletter #11.] The example you used was that a web page about carpeting should also include "rug" and "flooring" because those are two words that Google considers to be related to "carpeting". How do we find out what Google thinks the related words are for our web site and pages? Chris

Hi Chris -- I probably should've answered this one back in the original article, huh? Sorry about that. It's not that difficult to find out -- you just have to know a little bit about how to use that search box Google offers. Let me start with my previous carpeting example, which used the following as my search term:

~carpet -carpet

The first part of that, ~carpet, tells Google that you want to search for "like carpet". The tilde means "similar to". The second part of that search, -carpet, tells Google that you want to search for "minus carpet." In other words, you've just searched for "like carpet, but not including carpet."

Now type that into Google's search box and look through the results. You'll start to see a few words in bold here and there -- "flooring," "rug," and a couple other similar words. Bingo! Those are the words Google views as similar to "carpet." You can do the same thing for the important words and phrases on your site. But one important note: this trick is most effective on single words. It doesn't work as well for multi-word phrases.

(Have a question? Email questions@owtweb.com)

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Wrapping it Up

Those of you who write content for a web site, or for some other purpose, may want to check out this wonderful article by Pat Holt, Ten Mistakes Writers Don't See (But Can Easily Fix When They Do). You may recognize some of the discussion in your own work; I sure recognize some in mine. And if you want to know who Pat Holt is and that she knows what she's talking about, click the "About" link in the upper left.

See you next week!

Thanks for reading,
Matt McGee

 

The OWT Newsletter is a weekly service offered free to anyone interested in learning more about web development, search engine optimization/marketing, and just about anything else related to running a business web site. You don't need to be an OWT client to subscribe to our newsletter!

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