Everything You Need To Know About Shipping
A guide for eCommerce sellers on shipping. Shipping is an essential part of any eCommerce business and this article covers everything you need to know.As we all know, there are many components to a successful eCommerce business. Whether you are just starting on your eCommerce business or you’re well on your way, shipping is one of the most difficult things to figure out.
If you’ve already taken a stab at shipping, you might have tried to take it all on by yourself. Lots of new eCommerce store owners try to take things into their own hands and quickly realize that it is going to outgrow itself eventually.
In order to create a successful, booming eCommerce business, an effective, streamlined, scalable shipping strategy is essential. You can put in the work to sell the most incredible products, invest in the greatest marketing geniuses in your industry to reach your audiences, design a gorgeous website, and even still, it doesn’t matter if you can’t get your products to your customers.
A delightful, efficient, and fast post-production experience is something that builds customer loyalty. It is your first direct contact with your customers and at the same time, it’s what leaves the lingering impression. Making sure that your shipping strategy is not only complete and effective but also consistent and reliable is what creates the ideal post-purchase experience.
As you begin, you may think that shipping is inconsequential. You might think of it more as an afterthought. You may even be able to manage it all on your own for the time being. The thing to consider is that those kinds of processes are not sustainable as your business continues to grow.
That leaves us with a simple conclusion–it’s time for a better shipping strategy. This guide is going to tell you everything you need to know about shipping for your eCommerce business.
Shipping Strategy for eCommerce: What You Need To Know
Before we dive into the details, there are a few things we need to go over to set a solid foundation for how to ship products. You can always come back to the drawing board at a later date and make changes as more information comes to light, but putting a foundation in place is important to make up your shipping strategy.
More questions come in with deciding on your shipping methods and rates than you would initially suspect. You have to decide if your customers are going to pay the full cost of shipping, or will you absorb some of the cost in order to provide a flat-rate or even free shipping? The situation gets even more complicated when you consider how you’re going to get products to your local customers. At the end of this guide, you’re going to have more of the information you need to make these decisions.
Product packaging is increasingly becoming an important factor in the eCommerce sphere. The post-purchase experience is something that more and more companies are capitalizing on in order to stand out from the competition. You can go in many directions with your packaging, including just finding the most streamlined option that gets your products into the hands of your customers specifically or a fully-fledged customized system.
Here’s something you’re going to want to do sooner rather than later. One of the main factors in determining shipping costs and rates is the weight of your products. If you want to streamline the process of your eCommerce shipping strategy, measuring and updating the weights of the products you’re selling will help you communicate the most accurate pricing to your customers.
Order management system
Running an eCommerce business is stressful, to say the least. There are so many things to manage and keep in your head, and using an order management system (OMS) can take away the headache. The shipping process alone can be largely streamlined by using and maximizing an OMS in your business.
Which shipping carrier should I use?
Now, this is a big question. A shipping carrier is an entity that is responsible for getting your products in the hands of your customers. The business or individual that is physically delivering your products will charge a rate for the delivery. That rate is decided based on a few factors, such as speed, weight, and distance that the package is going to be traveling.
In the United States, there are three main shipping carriers. USPS, FedEx, and UPS are going to be the carriers you’ll want to research to figure out which is going to be the best fit for you.
There are many things to consider when picking a shipping carrier and in figuring out your shipping strategy, nothing could be more important than finding the right fit for your eCommerce store.
- Shipping rates. As we’ve talked about, you are going to have to decide if you’re going to pass along the shipping costs to your customers or add them to your own expenses, so of course, this is going to be one of the most important things to consider. As you look into these carriers, be aware of what they are going to charge based on the types of shipping boxes, shipping packaging, and other factors you’re going to use in your process.
- Package weights. Once again, this cannot be stressed enough–know your product weights and how you can choose the shipping carrier that best fits your specific needs.
- International shipping. If you’re planning to ship your products internationally, that needs to be a specific consideration. Shipping domestically and internationally is often two separate things to tackle, and finding the right carrier to support that endeavor is essential in making things flow smoothly.
- Overall experience. Every carrier does things differently, and some of them may have specific elements that you may or may not want as a part of your brand’s post-purchase experience. Finding out what else is offered can get you a long way in deciding what the best carrier for you is.
For several reasons, the best carrier for your eCommerce store might be a combination of carriers. If you’re a merchant who sells multiple types of products that each have different considerations, that should be factored into your thought process. You may find that one carrier is better suited for your heavy items, and one is better for everything else. You might want to use different carriers for regular and expedited shipping.
Now that you’ve got an idea of how to choose the best shipping carrier for your business, you can consider the types of shipping that are a good fit.
Now, if you’ve been doing your research on this topic, there is a high probability that you’ve read about drop shipping. For many reasons, it is a fantastic option to consider in your shipping strategy.
- Zero inventory. For this model of shipping, you as the merchant will hold no inventory. You’re opting to outsource the entire shipping process, including packaging and shipping itself. Your store will not own inventory. Instead, when a customer places an order, you’ll forward that order to a distributor who will then ship the product to your customer directly.
- No stressing about fulfillment. Drop shipping makes things a breeze and does level the playing field. It frees up your precious time to focus on other important things in the building of your business. Of course, there are limitations.
- Expensive. In a word, the biggest bottleneck when it comes to drop shipping is the price. Drop shipping as a shipping model means paying higher whole prices to the distributor. As you’d expect, this will definitely eat away at your profit margin. There are two options if you still want to make it work, though. You either have to deal with lower profit margins or invest in making your brand different enough that you can get away with charging higher prices. The one issue here, though, is that that’s difficult to do when you’re simply reselling products. Do your research and find a supplier who does white-labeling. This means the distributor will put your business’s branding on their labeling instead of their own.
- Potential logistical nightmare. This is the reality of going with a drop shipping model–you have very little control over your post-purchase experience compared to online stores with total control. If you have several different suppliers, this gets even messier. They might be shipping from different locations, which means they have different shipping times, and your customers will be receiving their items at different intervals. Even if that is not the case and you only have one supplier, you’re still relying on your suppliers for a huge part of your customer experience.
Here’s a statistic that will make you pause. 84% of consumers say that free shipping makes them more likely to shop.
When you dive into the research on eCommerce websites and free shipping, the numbers are pretty hard to believe. It is an undeniable fact that offering free shipping to your customers is an enticing, and border lining on expected, benefit.
So the question is: do you have to offer free shipping for your eCommerce store?
The short answer is: yes if it is going to result in an increase in sales and the AOV overly justifies the lower profit margins. That’s going to be the key thing to consider.
Free shipping also allows you to be more creative with your offers. You can create all kinds of free shipping-specific offers to incentivize your customers.
If you’re going to offer free shipping, consider showing your customers how much they’re saving rather than them just assuming and taking it for granted.
You can also offer free shipping on a minimum purchase amount. If you’re going to go that route, ensure that you find a good balance between that minimum purchase amount the customer makes before they receive the free shipping offer.
If you’re not going to go with the drop shipping model, then you’re going to have to fulfill your orders. There are two options here: you can either work with an order fulfillment center, or you can fulfill orders in-house. There are pros and cons to both.
Order fulfillment centers
There is a lot of convenience to working with an order fulfillment center. Without working with a fulfillment center, you are going to have to pay for long-term leases on a warehouse. That is a substantial cost that could easily sink a business in the early days.
Instead, you can pay month-to-month for the exact amount of space that you’re going to occupy in an order fulfillment center. It also keeps your employment costs down, and overall saves a lot of money.
In-house order fulfillment
Working with an order fulfillment center has many advantages, but it might not be the best option for your company.
Unless you are far into the process of building your eCommerce business, then it will likely be more effective to fulfill your orders in-house.
Fulfilling orders in-house gives you the most amount of control over the entire shipping process. The ability to make sure that your customer is getting the post-purchase experience that you’re trying to provide is extremely important for some brands.
Of course, there is the responsibility factor. If anything happens in shipping, it’s going to be your responsibility to fix the situation and repair the relationship with the customer.
Shipping in eCommerce is a difficult process, and figuring out the perfect system for your business is a process you have to be patient with. There are many factors to consider, and the best advice anyone can give you is to continue to research and figure out what the best moves are for your business.
There are three main important factors in shipping, and those are speed, cost, and tracking. It’s going to be impossible to achieve all three, but the best thing you can do for your business is to determine what the most important factors are. From there, you can build a solid foundation.
SmartShyp is an order management software that comes with a full suite of tools to make managing your orders and shipping processes simple, effective, and straightforward. To take the guesswork out of the eCommerce shipping process, consider using SmartShyp as your order management software.