As an ecommerce merchant, you are in control of many aspects of your operation. You manage how your website is setup. You decide what images of products best represent your available inventory, and you determine what advertising campaign will be in place to attract customers to your storefront.
Once your packages are shipped, what happens next is entirely beyond your control.
The ecommerce shipping method that you choose is the very backbone of your entire operation. If you utilize a shoddy shipping option, customers can become easily disgruntled with package delivery delays, receipt of damaged items, lack of tracking information, shipping errors and other hindrances.
With plenty of technologically enhanced options available to you for hosting your own ecommerce store these days, just about anyone with a computer and the desire to sell products online can hop on the e-retailer bandwagon.
Most people don’t give too much thought about what happens to their packages after they ship them out to their customers. And plenty fail to understand or appreciate the complexities that are involved in ecommerce shipping, and the relationship it has between you and your customer.
Make sure you are apprised of the ins and outs of ecommerce shipping and fulfillment so you can provide exceptional service to your customers, from order to delivery. This definitive guide can serve as the starting point to your future e-retailing successes.
Marketable Packaging
In the early ages of the ecommerce world, consumers didn’t really think much of the packaging that safely housed their ordered goods. Most people were just eager to receive their parcel so they could make use of their purchase.
These days, how you package something can mean the difference between your store standing out or blending in with the rest. A wise approach is to consider packaging like a customer-facing advertising option. It should be part of your marketing plan.
Several prominent e-retailers have embraced this concept, and it’s something everyone can borrow a page from. Take for example an online retailer like Trunk Club, which sells designer menswear under the auspices that a professional fashion designer will select the outfits, which are then sent to you via your monthly subscription for clothing; an ever-growing online fashion trend.
As you can tell from the picture provided above, the package arriving in the mail is an experience in itself. It puts the brand name center stage, luring shoppers into the cadence of an appealing, affluent and unique design, one that’s augmented by the profundity of branded packaging.
In fact, Trunk Club has become rather famous for their packaging/branding endeavors, prompting satisfied and wowed customers to actually film themselves opening their orders. The uploaded YouTube videos, like the one we’ve included below, can help you better understand how effective that such custom-branded packaging can be, and why it should be a part of your ecommerce shipping system.
Various Options for Packaging Goods
You’re going to need options with different packages, and of all sizes and shapes. As an e-retailer, your packaging needs will wager on what products you are selling. It’s therefore advisable that you get connected with a packaging supplier as soon as possible.
Getting the best rates on shipping with your elected packaging provider can be tricky business, if you don’t know what the shipping rates are in advance. A supplier called TrueShip Supply offers a wide assortment of boxes, bubbler mailers, scales, printers, scanners, shipping labels and even software to meet your ecommerce shipping needs.
What is interesting about TrueShip Supply is that you are able to see what the shipping rate will be for each box, and before you buy it. These rates coincide with the special shipping rates offered to their customers via their exclusive Flat Rate Select – an easier, more affordable way to ship via USPS.
Less is More
When considering which packaging option is best for your ecommerce shipping and fulfillment needs, it’s best to think outside of the box – quite literally. The adage of less is more makes perfect sense here. Using less packaging will reduce your bottom line and help cut down on your carbon footprint, too.
What’s more, many times you may not need a box to send a smaller item. For example, if you are shipping smaller, lighter items that don’t need protective padding or a box, you can use bubbler mailers or coffee bags, to reduce your packaging cost substantially.
You can also still pursue a strong brand approach, one that’s truly customer-facing, with bubble mailers and coffee bags by simply adding a personal touch. Things like custom printed labels and stickers of your brand can be eloquently affixed to really make your packaged goods stand out.
A company called Sticker Mule offers custom ecommerce stickers that are perfect for doing this. They are available in all sorts of different shapes, sizes and colors, and can make for the perfect addition to any ecommerce mailer or small box that’s unbranded.
Ecommerce Shipping Options
Choosing the carrier (or carriers) that you want to use for your ecommerce shipping needs can be tough. Each has its own prescribed rates, rules, regulations and fees that can make it a difficult choice for you. The rates fluctuate a lot, too, as was seen in the recent announcements by FedEx and UPS regarding 2015 rate increases, piggybacked by the USPS announcing late 2014 rate decreases.
You do have plenty of options, however. We’ll cover what these entail so you can make the most advantageous choice. The shipping prices that you charge will have a direct impact on the sales that your ecommerce store generates. To get a better idea of how this correlates, have a look at this infographic we created below.
Offer Free or Cheap Shipping
One of the surest ways that you can increase sales at your online store is by offering free shipping. As the above infographic demonstrates, 87% of customers have stated that they’ve abandoned a shopping cart due to the high cost of shipping. Furthermore, 76% of shoppers polled have stated that free shipping was the most important reason for them not abandoning a shopping cart (read our blog about How Shipping Prices & Online Sales Go Hand-in-Hand).
You might be wondering how you can possibly ever offer free shipping and afford to do it without breaking the bank. The good news is that you do have several viable options that you can consider here, options which can offset the cost that you encumber by offering free shipping to your customers.
Adjust your listed product prices to accommodate for offering free shipping.
Incorporate the cost of shipping into your profit margins to always factor them in.
Offset the cost of shipping by adding a portion of that to the product price and absorb the rest.
Think of free shipping just like you would an advertising budget – it takes money to make money.
Consider mandating a minimum order amount for customers to get free shipping.
Get connected to a discount rate on shipping via providers like Flat Rate Select, which connects you to low-cost and instant shipping discounts via USPS Priority Mail on packages up to 20-pounds.
A study that was conducted by E-tailing Group found that customers are far more responsive to free shipping being offered than a discount on a product being offered. Another related study compared customers being offered a $10 product discount to them being offered $6.95 in free shipping, noting that the offer of free shipping was still more effective.
Use Real-Time Rates from Carriers
You can also look into real-time carrier rates from the major shipping providers. Some shopping carts offer direct integration with the major carriers, which means that you can stream shipping options and prices for your customers. This not only allows you to offer more shipping options, but it also enables your customers to decide which shipping option they want to use.
Offer Flat Rate Shipping
One of the most popular ecommerce shipping options is the flat rate option. According to recent polls, 78% of all shoppers select the standard economy ground shipping option as their preferred choice, which has an average of a 10-day delivery time. Utilizing carrier flat rate discounts, you can offer affordable shipping.
Overview of Ecommerce Shipping Options
You’ve got quite a few ecommerce shipping options that you can consider offering at your online store. As stated above, unless you can always offer free shipping, it’s best to present customers with a wide array of choices, so they can choose which option best fits their needs and their budget.
Several options are available to you that can help you decide which ones you should prominently feature at your online store.
USPS Mailing and Shipping Guidelines
UPS – Shipping Guide
FedEx – Service Guide
Flat Rate Select
Determining Your Rates
Shipping rates are based upon a number of related factors, which can and do vary between the major shipping carriers.
Some of these factors include:
Package Size
Package Weight
Departing Country
Destination Country
Tracking
Insurance
Expedited Options
Some shipping carriers in the U.S. are limited to where they can deliver, too. For example, FedEx and UPS can’t deliver to P.O. boxes or U.S. military installations, whereas the USPS can. You should take these factors into consideration when comparing which ecommerce shipping option is the best for your online store.
Generally speaking, FedEx and UPS are ideal choices for shipping larger, heavier packages because of the dimension-based shipping discounts they offer. But the USPS is ideal for shipping smaller, heavier packages, especially via Priority Mail, due to the less expensive and zone-based shipping options and speedy delivery.
Padding Profits with Shipping
It is not an uncommon practice for ecommerce businesses to pad their profits with the shipping prices they charge. Even though studies show that most customers want free or cheap shipping, there is some wiggle room in this for you to examine whether or not padding your profits makes any sense.
If you are interested in earmarking profit windfalls on the shipping prices that you plan on charging, it’s best to chart it all out before you set your prices. By doing so, you can assure that there won’t be any surprises in the future.
Use this chart that is provided below to figure out what your actual profit margins on shipping could potentially be. This way, you can factor in what you stand to make versus the cost of delivering the goods, thus avoiding any prospective financial setbacks from padding your profits by inflating shipping cost.
Shipping Insurance
Things can sometimes get damaged when they are shipped. So you need to also factor this element into your game plan. According to recent studies, 20% of all products are returned from online purchases due to the fact that they arrive damaged.
You’ve got a number of options that you can consider with shipping insurance. This should be something that you especially look into for your larger priced items – and can be something that you choose to offer to customers as an added amenity to help secure the sale.
A company called Shipsurance offers shipping insurance at a discount that can cover all your ecommerce shipping needs. They offer single and multiple package options with discounts for large volume shippers. This should be something that you integrate into your ecommerce game plan to help protect the integrity of your brand.
Tracking Numbers
You will also want an integrated system for managing your tracking numbers. There are a number of software solutions that you can explore that can let you track packages in real-time and provide customers with updates. ReadyShipper shipping software, for example, lets you send instant updates to customers that include the tracking number, comments and ship status.
Customs Forms and Declarations
If you plan on offering international shipping, you will want to make sure you are prepared to manage the facilitation of the required forms and documents. You can find these online or at the nearest post office. The forms advise the officers at customs about what is in the package, what it is worth, and whether or not it was a gift or an outright purchase.
You will want to check with your shipping carrier to ensure that you include the proper forms and documentation. If you ship a package internationally that does not include these, it could be held up in customs or even shipped back. You will want to make certain that your shoppers are well aware of this fact. Be sure to inform them that you have no control over how long customs can hold packages.
Tariffs, Taxes and Duties
Some countries will charge tariffs, taxes and duties. This is a fee that the shopper will have to encumber when they go to pick-up their package. Make sure you alert customers that your online store does not tender these fees, and that they may have to pay them when picking up their packages. You can get an idea of different customs fees by checking out this handy Customs Duty Calculator.
Information About Customs Declaration
International shipping can be tricky, as each country has its own limitations, restrictions and mandates. Since there are so many different countries that you can prospectively ship to, it’s advisable that you familiarize yourself with the most popular international shipping destinations.
These resources can help you get a head start with your customs familiarization:
USPS Customs Information
Canada Post Customs Information
UK Royal Mail Customs Information
Australia Post Customs Information
Lowering International Shipping Costs
There is a service that can help you reduce your international shipping costs while streamlining the process of getting your packages cleared through customs. APC Postal Logistics connects users to the lowest international ecommerce shipping rates.
Their parcelConnect service uses the post office that your shoppers will receive packages at to speed up delivery and reduce shipping cost. They also help you tackle any documentation along the way, while connecting you to advantageous discounts on shipping in the process.
Shipping Labels
To add a true personal touch to your packages, you will want to assure that you use professional shipping labels. You will also want to make certain that the labels that you consider using are compatible with all major U.S. carriers (FedEx, UPS, USPS). This also means that you will need labels that work with your chosen shopping cart, too.
A product called ReadyLabels is compatible with all U.S. carriers. The labels come in reams that contain 200 sheets. They are made on die-cut 8.5”x11” sheets of paper with a perforated comment card and packing list, and a 4”x6” peel-out shipping label.
These labels can give you an advantage because they can be printed from any standard laser or inkjet printer; no thermal printer is needed. They also save you time with fulfillment because you won’t have to print a packing list from one system and a shipping label from another, and then spend time matching them up to fulfill orders.
Warehouses and Fulfillment: Pros and Cons
You can also, alternatively, consider using a fulfillment warehouse to get your ecommerce orders shipped to your customers. Warehouses can automate the shipping process for you. But they are not without their associated pros and cons, either.
Pros of Fulfillment Warehouses
You can gain some advantages by using a fulfillment warehouse to ship your ecommerce goods.
Reduced ecommerce shipping cost: Since warehouses provide fulfillment for lots of stores, they can sometimes connect you to discount shipping rates. Many are directly integrated with the major shipping carriers, which can also result in you getting lower ecommerce shipping rates.
Faster shipping time: Regionally and strategically located fulfillment warehouses can enable you to assure faster delivery to your customers for less. But these are typically only a viable option for larger ecommerce stores.
Cons of Fulfillment Warehouses
Fulfillment warehouses are not without their associated cons.
Branding denigration: A fulfillment warehouse will not typically go to the same lengths to assure branding with your packaging as an in-house fulfillment center would. If you are trying to make a name for yourself with packaging that wows, this is not a veritable option.
Added operational cost: Fulfillment warehouses will charge you a monthly fee, and a laundry list of other fees, to provide their services. When you factor all of these fees into the big picture, it could denigrate your bottom line too much to be feasible.
Managing Product Returns
Another element of ecommerce shipping that you will have to factor in are online product returns. According to recent studies, over one-third of all products that are ordered online will be returned by the consumer. In about 65% of all instances, the returns are not the fault of the consumer, either.
One study about online product return rates found that 81% of shoppers want hassle-free, no-questions asked returns to be offered (like Zappos offers). Another related study found that over 80% of shoppers want an easy and convenient method of making returns.
Make sure that your online store clearly states your returns policy upfront, including the date that products can be returned from purchase and any associated fees.
Offer low-cost online product returns to increase sales and pad your profits.
Make returns easy by enabling customers to initiate them online at your website.
Add the incentive of an in-store credit versus refunds to reduce the cost of returns.
Have a look at this helpful infographic about how you can better manage online product returns and actually earmark lucrative profits by doing so.
The Big Conclusion
Managing your ecommerce shipping operation will not be without its challenges, that’s assured. The smartest approach is to take your time when creating your plan-of-action to assess the specific needs of your business. Bear in mind that this is a trial and error scenario that has no perfect solution from the get-go.
By identifying your ecommerce shipping goals and forming your strategy early on, you can prevent many missteps along the way. Make sure that you reevaluate your process every few months, so you can amend, update and improve it along the way.
As your business needs change, your shipping strategy will also need to evolve. By utilizing this type of critical preplanning in advance, you can be as best prepared as possible for the future successes – and pitfalls – that you are sure to encounter along the way.
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