There are two basic ways to think about eCommerce shipping; one is the shipping process, and the other is the order fulfillment. In general, who delivers the order from the warehouse to the customer? How do you handle the storage, picking, and packing part of the shipping process?
Effective strategies in eCommerce shipping, including assembling a productive team and funding and financing, are more critical than many realize. Customers expect easy, affordable, and fast shipping, and providing so much will give you a competitive edge against other online sellers.
Fast and dependable order fulfillment is crucial to the success of your business. But eCommerce shipping isn't just about a great team and fast delivery. Your top priorities include getting orders to consumers quickly and accurately while also maintaining cost-effective methods.
Ecommerce Shipping Methods
There are various ways an eCommerce seller can ship depending on the item being shipped, the size, the value, and the speed needed. Although these factors can all be automated with AI, you still need to ensure an appropriate shipping method.
1. In House Order Fulfillment
This involves self-shipping, where you do order fulfillment yourself. This is the best eCom shipping method for online sellers starting out, especially those who don't have good order volume to qualify for an outsourced order fulfillment company.
In some cases, an online seller may have customizable items which they need to handle on their end before sending out, and they would find it challenging to find an order fulfillment company that can effectively satisfy their needs. This method is also widespread for large companies with consistent order volume where they don't need to worry about fixed costs.
2. Drop Shipping
Drop-shipping describes shipping products directly from suppliers. It is a good option when you want to try out a new item without having to purchase a whole package and likely warehouse it yourself. You just have to find a supplier willing to ship orders with products as the orders are placed.
The potential con of drop shipping is its speed, which is slow in most cases. Shipping products yourself can be faster than having suppliers produce the products as orders come through.
In addition, it may be more expensive as the manufacturer has to pick, pack and ship part of the product. You may also have to work with multiple locations depending on where the customer wants the items delivered.
3. Outsourcing Order Fulfillment
Another option is to outsource a fulfillment company such as:
- Shopify ensures that eCommerce delivery is simple and enables you to control your shipping data and business branding.
- Fulfillment by Amazon (FBA)- a popular third-party order fulfillment network that integrates with large eCommerce platforms like Shopify.
- Easyship- another leading eCommerce fulfillment service that integrates with other large eCom platforms. They have a free starter plan for orders up to 100 per month.
Most companies don't like handling order fulfillment or being tied to that aspect of the business. They may have limited resources, or they want to free up some time for other things. Others may have high warehousing fees, resulting in increased costs, especially if they have low order volume. In these cases, outsourcing to an order fulfillment company offers a cost-effective solution.
These fulfillment services will store your shipping inventory in reliable, strategic locations and then package and ship it to your customer whenever you get an order. The benefit of using these services is that they often offer more affordable rates because they can capitalize on and leverage economies of scale. Furthermore, their shipping time is likely faster since they store products in various warehouses around the country.
If you are not dealing with high minimums or any type of fixed cost, and if priced right, an outsourced provider can help you work with a variable cost model. And if you still have low or inconsistent order volume, the fulfillment company can offer you a price per order to scale up and down throughout the month or year.
Seven eCommerce Shipping Best Practices
For most companies, eCommerce shipping is among the most challenging aspects of managing an online business, especially compared to product development, branding, and sales. However, you should never underestimate the value of a successful eCom delivery.
It requires a solid strategy and solutions for success. Customers will drop you if your shipping process results in damaged packages, late deliveries, or wrong items. So without an effective strategy, your business could face numerous struggles.
Offer Free Shipping
Free shipping cannot be over-emphasized. It is almost considered the holy grail of eCom shipping.
Free shipping is not actually free since someone has to cover the cost. That may mean higher prices for customers or lower margins for you.
This practice often makes small companies cringe because of the significant expense. However, with large companies like Amazon popularizing the concept, most customers shopping online expect it.
Even as far back as 2014, before free shipping was such an essential expectation, 28% of consumers would abandon their shopping cart if the company didn't offer free shipping, while 90% say that free shipping is their biggest incentive when shopping online.
To make free shipping successful, you can either;
- Ensure your customer covers the shipping cost by increasing the order prices.
- Pay the total shipping price out of your margins.
- Share the cost with your customers by increasing the prices of items slightly to cover partial shipping costs.
- Offer free shipping on orders exceeding a specific dollar value, for a limited period, or a particular number of buyers.
These can help you mind your margin as well as make customers feel appreciated.
Besides, today's consumers have various options, so unless you are offering a particular niche product that isn't available elsewhere, they are more likely to cancel and choose a seller offering free shipping. Statista reported that 63% of consumers admitted having abandoned shopping carts due to shipping costs.
Ensure Shipping Costs are Obvious & Transparent at Checkout
Your customers are most likely to abandon their digital shopping carts if they can't see costs when they checkout. It's always frustrating to customers to only learn of their shipping cost at the end of a transaction. Survey estimates reveal that up to 55% of abandoned carts result from shipping costs.
Even if you can't afford free shipping or can only afford free shipping on orders that reach a specific value, it's ideal to make shipping costs clear at checkout.
You can achieve this by adding some functionality to your cart. When a customer enters a ZIP code, the fees are automatically added to the subtotal, visible in the order summary.
Don't leave the costs as a surprise, appearing late in the checkout process. You can indicate your shipping cost in the customer's basket or offer immediately after receiving the customer's delivery address. You can also adopt a flat-rate shipping system that indicates the fee upfront so that customers can calculate the shipping cost earlier in the transaction. This can help customers know what to expect.
Show Customers Expected Delivery Times or Date
Every customer wants to know when their order will arrive. Otherwise, they may be hesitant and less likely to buy. In 2016, 89% of consumers reported that shipping time was one of the key factors influencing their buying decision. Generally, if consumers don't know how long their shipment will take, they may not buy.
Being clear about the expected delivery times helps you develop trust with your clients. If the ad showed 2-day shipping, but the time is expected to take five days due to various factors, you must make it clear. You can send the delay notifications to customers via emails, create a notice on the website's homepage, and put the expected delivery time in the checkout.
While it's generally not complicated, this functionality can be more successful with a good inventory management system and order tracking service.
Offer Good Returns Process
95% of customers satisfied with a retailer's returns process report that they'll shop with the same company again. However, shoppers dissatisfied with a company's returns process are almost three times more likely to avoid shopping with the same retailer again. Therefore, your returns service should be efficient, straightforward, and friendly.
- You can offer to cover the returns shipping cost for orders above a particular dollar value. For example, HELM Boots does this for all US item orders above $50.
- Create a returns portal for easy and friendly online returns. This returns portal will save you time, but it will also be easier and faster for your customers.
- Include printable pre-paid return labels in every order or from your returns portal.
Luckily, it turns out that what saves your customer service team time also makes customers happy. So, create a returns process that mutually benefits you and your consumers.
Keep Customers in the Loop During Shipping
Once a customer orders an item and you've sent them a confirmation email, it shouldn't be the last communication they hear from you.
Customers like to be kept in the loop about the delivery status. It's good to develop a communication system with your customers during shipping. In a 2015 research survey, 82% of consumers reported that it's vital for retailers to proactively communicate every shipping fulfillment and delivery stage.
You can keep customers updated during shipping via text or email.
By implementing a communication system that notifies customers of their item's whereabouts at every stage of the process, you can build more trust and enhance a positive customer experience.
You should send an order confirmation after placement as well as a shipment confirmation once the order has been transferred to the delivery service. You can also take it a step further and include a tracking code. This is especially crucial when your delivery period is lengthy and customers are likely to be anxious.
Go for Expedited Shipping
Although free shipping is considered an effective eCom shipping practice, with 90% of potential customers admitting, in a survey, that they are always willing to wait a little longer for an order if shipping is free, some smaller companies still can't afford it. The expedited shipping method is an excellent alternative for such companies since people always want their orders fast.
Most participants in the above survey have reasonable expectations for fast delivery, and the majority stated that they could accept a 3-5 days wait time for an item. So the best practice is to offer free shipping and then add extra charges for expedited shipping to cover the cost.
Accept Responsibility for Shipping Problems and Take Action
While lost and damaged packages by a carrier may not be your fault, your customers will still complain about a lack of fulfillment or satisfaction for what they paid you for.
You may not have caused the shipment problem. However, you chose the carrier that either lost, delayed in transit, or damaged the shipment. Thus, you must be on the hook to resolve the problem.
As soon as the shipping problem is reported, you have to take action quickly.
- Immediately check the shipment details and see what updates are recorded, including where the order is.
- Check if the recipient's address and contact details were recorded correctly.
- Contact the carrier and find out if the shipment has been delivered or inquire about the status. Follow up with the carrier until the issue is resolved.
- If necessary, send a replacement shipment to your affected customer as soon as possible.
- Offer a discount on the next shipment order.
Shipment problems can be easy to solve, making your customers satisfied and impressed that you accept responsibility and take the initiative to resolve the issue as quickly as possible. Ensure your customers are satisfied by shipping new items before the lost one is recovered.
Ensure you Meet Customer Expectations
Ecommerce online stores need to implement proper shipping practices to meet and exceed consumer expectations. If you are experiencing low conversion rates, increased shopping cart abandonment, or poor reviews, it may be good to think about incorporating these tips into your business. An effective shipping eCom solution is essential for every online shopping business, especially as customers increasingly demand dependable, cost-effective, or free shipping.
While the above eCom shipping best practices should enhance success for various businesses, you may have to source funds for increased success. Get cash now or learn how we can boost your eCommerce business.