Starting a new ecommerce business, or just looking to optimize delivery for better sales and more profitability? Whatever the case may be, the first thing you should know is that there is no one-size-fits-all business model that works for all merchants, just as there isn't one shipping method that fits all customers. As your business scales, it is an excellent strategy to look into a variety of shipping options and allow your customers to choose from what suits them the best at the time of checkout.
Offering shoppers more than one shipping method gives them a sense of control. Moreover, it also makes it easier for you to afford priority shipping. Customers for whom shipping costs are not much of concern will gladly choose priority shipping, even if it costs a little more than regular shipping. Likewise, the customers who aren't in a hurry to get their order delivered will appreciate the lower shipping rates for standard delivery. At the end of the day, the goal is to develop a shipping strategy that increases sales without reducing the profitability of each individual sale.
Factors That Affect Delivery
Coming up with the perfect delivery strategy for your business requires knowledge of some shipping factors like shipping methods, packaging, insurance, and tracking. These are some of the things that can affect your shipping costs as well as shipping times. Before offering your customers a simplified shipping plan, you must take these things into account, do a cost-benefit analysis of each factor and figure out whether or not you will be able to deliver what you promise.
Shipping methods
What delivery options are preferred by your customers and your ability to offer them will decide the shipping methods. Though your customers may jump at the opportunity of free same-delivery, you cannot provide it to them without making a feasibility plan. We'll discuss more details below.
Shipping packaging
The packaging is no longer just a way to receive an online purchase. Instead, it has become a way to make an impact on the customer. And with more and more small businesses and big online retailers realizing the importance of excellent packaging, it is becoming increasingly challenging to meet customer expectations regarding packaging.
Insurance and tracking
Insurance can cover damages during both domestic and international shipping. It is especially crucial when dealing with fragile items. Providing the tracking information to your customers will give them full visibility of the order fulfillment process and keep them from getting frustrated.
International considerations
If your company operates from one country, say Brazil, and you want to ship to another, for example, Germany, you must be familiar with that country's shipping laws. Moreover, you must also account for custom duties and possible delays in international transit, calculate your shipping costs and promise a realistic delivery time.
Shipping Methods
Whether your company is handling the logistics itself or using one provided by ecommerce shipping solutions, you must consider your customers' expectations and take into account your own resources to decide on a shipping method. How you will absorb the shipping cost, which carriers will you use for shipping, and what policies you will have for different shipping destinations are some questions that you will need to consider while finalizing one or more shipping methods.
Will you offer free shipping?
One of the main reasons for cart abandonment is a high shipping cost. Providing free-shipping to customers will solve this problem and encourages sales. However, it is crucial to decide how you will manage to absorb the shipping cost without charging any fee.
How will you absorb the cost?
If you want high-profit margins while providing free shipping, one way to do that is by compensating for free shipping by hiding it in the products' price. This will work better if you are selling products that are generally expensive, and adding the cost of shipping to the price of the product won't raise the price to an unreasonable level. However, if you are selling low-cost items, you will have to find some other solution.
Instead of providing free shipping on every item, you can offer free shipping for a specific minimum order value. This method will not only encourage more sales generally per client, but it will also reduce the shipping cost per product, thus making it easier for your business to afford the provision of free shipping service.
Real-time carrier rates
Customers love to feel in control. If you are using the services of multiple courier services or shipping carriers like USPS, DHL, and FedEx at once, it is a good idea to provide your customers with real-time shipping carrier rates to choose the one that works the best for them. Shipping companies like Shopify shipping give their clients the option to do so as well.
Whether you are an ecommerce business that handles order fulfillment yourself, or you have outsourced it to a B2B third-party logistics service, you can still choose to give your customers a variety of options to choose from.
Flat-rate shipping
Flat-rate shipping is when you provide the same shipping rate for all your products. Ecommerce sellers that deal only with items belonging to a specific niche without much variation in the prices are the ones that mostly offer a flat-rate of shipping to their customers. This happens because each product's value is almost the same, and it is easier to calculate a shipping fee that is neither too low for the business nor too high for the customers. We'd recommend against flat-rate shipping if you are an ecommerce platform that sells products with high variation in value.
Local delivery and pickup
You can set up unique shipping methods for customers that are close to your business. These methods can include the option of low-cost and fast local delivery and the possibility of pickup. As reduced distance lowers transit costs, it is easier for businesses to provide free or low-cost local delivery service. If your regular clients wait 3-4 days for their parcel, you can give special treatment to the local clients by providing them next-day delivery. This can be a great way to boost local sales.
If you also have your inventory in a brick-and-mortar store, you can give your online customers the option for local pickup. Having a pickup option will provide your customers with the convenience to pick up the order according to their own time and to pay at the time of pickup. Cash on delivery might be a more convenient option for some customers, but pickup allows a greater degree of control.
Shipping Packaging
Packaging has become a crucial step in shipping for more than one reason. Customer expectations are changing, and more and more businesses realize the importance of packing to impress. The most basic reason why packing is essential to the protection of the product. For this reason, the shipping policies of postal services have special packaging rules and requirements. Another reason why packaging is important is that customers' preferences have changed concerning packaging. Presentation matters, and customers are likely to choose a nicely packed product over a poorly packed one. Also, eco-awareness has increased the demand for eco-efficient packing. Therefore, it is imperative to know your customers' preferences and make the packing choices that fit with your brand's image.
Branded vs. non-branded
Branded packaging is more than putting your company's label on a standard shipping box. If you are a B2C business that handles the packing itself, it will be easier for you to control the cost of packing and its quality. However, if you are using a third-party fulfillment center for inventory management and the filling of your products, you may have limited options.
Some third-party fulfillment centers do not charge you any extra money for the packing of the orders. However, if you want your packaging to be branded, you will have to pay extra money for custom packing requirements. Many companies provide easy and affordable ways to customize your packaging; the challenge is to find the right one for you.
Finding a fulfillment center for branded packaging
Suppose you really want to give your customers a memorable unboxing experience, and you are not handling the packaging and fulfillment yourself. In that case, it is vital to find a fulfillment center that can take care of the packaging for you. When selecting a fulfillment center, one of the foremost things to consider is what kind of packaging options they provide. Corrugated boxes are the most famous and widely used packaging option that fulfillment centers offer as part of their standard shipping service. You can add the element of branding to the necessary corrugated boxes by doing things as simple as adding stickers, or you can choose to get a completely customized branded pack.
Having considered the different packing options, the next thing to consider is the packing rates the fulfillment center provides for different types of branded packaging. Our advice is to do a cost-benefit analysis of the packing offers supplied by at least three shortlisted fulfillment centers and then choose the one that is most in line with your business goals.
Environmental considerations
Over the years, along with the rise in technology, the world has seen a devastating rise in pollution. But on the plus side, the problems caused by the increase in population have forced many people to wake up to the problem and devise ways to solve it. People who care about the environment are demanding businesses adopt the approach of eco-effectiveness.
One way by which companies are adopting eco-effectiveness is by providing sustainable packaging. Choosing a packing option that is eco-friendly will promote sales in the customers that care about the environment and make your brand stand out as a forward-looking brand with something meaningful to offer.
Insurance And Tracking
Insurance can save both the seller and the buyers from losses and provide a sense of safety to each. Buying insurance may seem like an unwelcome investment at first. Still, if you experience product loss or damage during the shipping process, having insurance will prove to be a blessing. There is no denying that customers become anxious to receive their orders as soon as they are done filling their online shopping cart. This anxiousness can turn into frustration if the product takes too long to deliver. One thing that can keep a customer calm in times like this is tracking their order. Thus to ensure customer loyalty and satisfaction, it is crucial to keep them informed every step of the way.
Buying seller insurance for high-value items
Buying seller insurance is crucial if you want to save yourself against unforeseen losses. If you are a seller of high-value items, the need for insurance increases even more. The insurance covers your product during transit, and any losses or damage that happens during transit is covered by insurance. The shipping companies that providing insurance also have some rules for packaging and dispatch of the items. If any of those rules are not followed, the companies can refuse to cover losses.
When buying insurance for high-value items, make sure that the insurance policy rules are easily implementable and that you follow all of them while packing and handing over the order to the shipping company.
Offering shipping insurance to the customer
Just like you need security, so do your customers, and offering shipping insurance to your customers is one way of doing them. When you tell your customers that you will be responsible for the damages that happen during shipping and they will be wholly protected, your customers will feel safer while shopping with you, and this will ultimately boost your sales.
Investing in shipment tracking software
As we have already discussed the importance of tracking and its role in creating a good customer experience, shipment tracking software for your company is a good investment. Suppose you are using the services of a fulfillment center for shipping. In that case, you can integrate your CRM and ecommerce store with them so that the tracking information is immediately forwarded to you and, from there, it's delivered to the customer.
Elevate shipment tracking with Malomo
On average, buyers check shipment tracking emails 4.6 times for each purchase. Leveraging this high engagement rate is a breeze, Malomo, which helps you turn your shipment tracking into proactive, beautiful, custom-branded landing pages that boost sales.
International considerations
Are you based in the United States but want to deliver to Australia, Canada, or Asia? You need to consider international deliveries more than there is to think for local deliveries. Every country has separate rules for the import of items from other countries. To make international deliveries seamless, you need to make yourself familiar with the international considerations.
Customs and declaration forms
Customs declaration forms are documents that list the details of products that are being imported to a country. Filling the customs declaration form the wrong way or missing out on some critical information can cause delays in international delivery and drive your customers to lose trust in you. When offering international delivery, you must take care of the fine details and the process' intricacies.
Tariffs, taxes, duties
Tariffs, taxes, and duties in international deliveries can vary from country to country and can have a significant impact on shipping costs. When offering international delivery, it is essential to take these factors into account and charge the shipping fee accordingly. You may need to set a different amount of payment for various shipping destinations.
International fulfillment partners
To streamline the process of international deliveries, choose a fulfillment partner with the right capabilities. The most important thing to look for in a fulfillment partner is its reliability and also its credibility in the country where it is operating. One way to check credibility is by checking its popularity in the land of operation and seeing how other businesses have reviewed it. Once you have found a reliable fulfillment partner, the only thing left to do is ensure a right channel of communication and a partnership on clear terms. Even if you are handling the fulfillment yourself in the country where you are based, outsourcing the job to a fulfillment partner in an international destination is a great way to optimize shipping efficiency.
Conclusion
Order fulfillment in the right way is crucial to effective supply chain management; therefore, creating the right shipping policy for your company can go a long way in terms of running a successful business. If managed effectively, shipping and packaging can be used as tools to encourage sales.
The most effective shipping policy is the one that is created by taking into account the preferences of customers, the resources of the business itself, and external factors like the services of fulfillment providers and the procedures involved in international shipping. Considering all the elements together can help you develop a shipping policy that is optimized for efficiency and provides the best return on investment.
