The internet has changed the way we interact with each other and how businesses gear up for success. More and more people are taking the leap and starting their own eCommerce store with minimal overhead. As an eCommerce store you should know that shipping is one element of your business that can contribute to your success or create major headaches. Finding the right shipping partner is a huge deciding factor in contributing to a good customer experience while maintaining your margins. Whether you’re just starting your business and don’t know where to begin with shipping, or you just want to make the process of shipping more efficient, here are the most important things eCommerce businesses need to know about the process.
We have all at some point experienced the horrors of poor shipping and handling practices. The following are some elements to consider:
- Reduce internal movement: Putting a layer of padding or filler in and around the item and then (gently!) shaking the box to ensure NO MOVEMENT is the best possible way to start your product on its shipping journey.
- Maintaining the structural integrity of your package: Choosing the right size box and paying careful attention to the edges when folding will ensure that each corner acts as a support for the inevitable weight dropped on top of it.
- Considering dimensional weight: When selecting the packaging for your shipment, try to reduce the amount of “Air” that you are shipping inside the box. Almost all couriers use dimensional weight to calculate shipping costs and the “Air” that you ship can be quite costly.
Offer Free Shipping
Free shipping is a rising trend. The catch here is that shipping is never free because someone always has to pay. Here are some common strategies for dealing with the free shipping conundrum:
- Increase product prices to cover the cost of shipping (customer pays) – this could result in non-competitive prices leading to a reduction in overall sales.
- You pay the full price of shipping out of your margins (you pay) – depending on what your acceptable level of margin is on average, this could be a viable option.
- Increase price of products to cover part of the cost of shipping (you and your customer pay) – this is a common strategy for many online stores.
- Additionally, you can try offering free shipping on a minimum order amount. This strategy can help offset the costs of shipping while increasing your average order size.
- Provide free shipping on select products that may be more profitable then others.
- Offer free shipping for a limited time to increase the number of packages you are shipping on a specific day reducing initial pick-up costs.
- Give long-standing customers free shipping. In this case you are not looking at singular profit-to-cost trade offs. You are now considering the Life Time Value of your customer (LTV).
- Offer free shipping for certain geographical locations only. This will depend on the geographical concentration of your sales and the proximity to your business or shipping centers.
Charge a Flat Rate
Another option is to offer flat rate shipping.
- The best practice for this option is to try and make sure that you don’t drastically undercharge or overcharge your customers by analyzing the geographical concentration of your sales.
- Flat rate shipping works best when you have a fairly standard product line of similar size and weight.
- Flat rate shipping tends to become a little complicated and less effective if you sell a wide variety of products with different sizes and weights.
Use Real Time Carrier Rates
Another effective shipping strategy is to get real time carrier rates for shipping.
- Shipping comparison sites like ShipGooder.com are designed to save you time and money by finding and comparing shipping quotes from multiple carriers.
- ShipGooder.com is integrated in real-time with various couriers like USPS and DHL (amongst others), to get shipping options and live pricing from a number of carriers.
This allows you to choose and pay for the exact service you want.
Understanding Shipping Rates
By understanding how shipping rates are calculated, eCommerce store owners can optimize their packaging and shipping process. Shipping rates are mostly based on factors such as:
- Package Size
- Package Weight
- Ship from (Origin)
- Ship to (Destination)
- Insurance and other add on services
Since every business has its own unique variables and requirements for shipping, we recommend using ShipGooder.com so that you can compare pricing and options simultaneously.
Insurance & Tracking
Insurance and tracking can offer a sense of security based on what you sell and its value. In most cases insurance and tracking are relatively inexpensive and provide you recourse should one of your packages get lost or damaged. ShipGooder.com facilitates the insurance components on behalf of the courier or third-party insurance providers.
- You can enter insurance amounts from $0 to $1000.
- Consider insurance on big-ticket items so that in rare cases, when a package does get lost or damaged, you will be covered.
- Ensure you have your original receipts for any item that has insurance as these will be required by the courier’s claim department.
Understanding Shipping Restrictions
Shipping internationally? Each country has specific customs requirements. Do your research before you ship your products to understand the duties and taxes at the destination, certificate requirements to prove your products’ country of origin, and other regulatory forms for product declaration. Pay attention to details, and never assume anything when it comes to international shipping as it could lead to holding costs or denial of delivery.
You have now looked at some basic elements that can help you in your eCommerce business on the shipping side. There is no right solution here- its customer and business specific. With shipping knowledge and the right partner, you can achieve what you need for your eCommerce store. Shipping is pretty interesting, and it should be a big part of your online strategy. Remember though: it’s your cart, your shipping and your rules. Be agile, learn, improve and perform.