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The Essential Guide To
Ecommerce Shipping

INTRODUCTION

For your customers, excellent shipping is a service they take for granted. Amazon has set the bar high, and while you don’t need to copy everything they do, there is a lot that goes into building a seamless shipping experience.

Communication is king — it always has been. But with your online business, there are systems, processes, and costs to consider. The success of your e-commerce operation depends on customer loyalty, so you need to create value for them at every opportunity. In this guide, we’re going to explain the ins and outs of e-commerce shipping so that you can achieve the best customer experience possible.

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The success of your e-commerce operation depends on customer loyalty, so you need to create value for them at every opportunity.

 

It would be fair to say that the customer experience depends entirely on the product delivery experience. It includes everything that happens from the moment they click to buy a product, including the shipping options, the cost, the packaging, and of course, an unforgettable unboxing experience.

Each of these elements is completely within your control, and with this introduction to e-commerce shipping, our goal is to give you a comprehensive framework that covers all of the essentials, and more.

We’ll help you understand how to bring it all together with a shipping solution that fully integrates with your inventory management and customer management systems, and how it will ultimately help you grow your business.

QUICK LINKS

SHIPPING RATES & METHODS

In modern day ecommerce there is no such thing as a single strategy for success. One-size-fits-all doesn’t work, and in order to succeed, you need dynamic shipping methods that meet the individual needs of your buyers, your margins, and your budget.

When it comes to choosing the right shipping methods, it’s important to offer a number of affordable and fast shipping options. This factor alone can help you reduce shopping cart abandonment rates while boosting your conversion rates simultaneously. Ultimately, it all comes down to giving your customers a choice. By giving them multiple options, you let them pay the amount they’re happy to pay, but essentially always give them the service they want.

Here are the top shipping methods to consider as part of your ecommerce shipping strategy.

2-DAY SHIPPING

A two-day shipping method involves you sending your packages from the carrier to the recipient within a two-day period. This method was standardized by Amazon offering 2-day shipping to Prime members. Now that it is so commonplace, customers expect it from everyone. Or you risk losing the sale to Amazon!

Two-day shipping begins once the carrier takes possession of the order. Ground shipping and air shipping are the two methods that enable deliveries to take place in a two-day period.

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GROUND SHIPPING

This method utilizes trucks for the transportation of the packages and is much cheaper than shipping by air. If you use ground shipping for your 2-day turnaround, then your orders will most likely need to travel across a shorter distance. The precise number of days in transit will be defined by the destination along with the point of origin. (See section on Zones below)

The vast majority of merchants who provide a two-day shipping option via a ground network will ship their products from warehouses or fulfillment centers in different regions to enable them to cover more ground.

Over 50% of buyers will abandon their cart due to high shipping costs. Ground shipping helps to keep costs low, while still being able to offer a relatively quick delivery time if their are close to your point of origin.

AIR SHIPPING

This method is utilized to quickly send packages to destinations that are usually international or on the other side of the country. As the name suggests, airplanes are used to ship goods, and although it costs more than ground shipping, for some orders it is the only method that can ensure a 2-day delivery time.

THE ADVANTAGES OF OFFERING A
TWO-DAY SHIPPING METHOD

Put yourself in the position of a customer, and compare a retailer offering a 2-day shipping method versus a lead time between 3-7 days. Furthermore, if a customer can find a similar product on Amazon, they can order it from there and receive it quickly.

Here are just a few of the benefits of offering a 2-day shipping method for your ecommerce business.

 

LOWER CART ABANDONMENT RATES

There are plenty of reasons why shoppers abandon their carts and fail to complete the sale. In some cases, you might not always know the reason why. However, research has proven the two most common factors causing people to leave are slow delivery times and higher than expected shipping costs.

Offering a range of options to satisfy the needs of customers who want their products quickly and those who are happy to wait a little longer for a lower price is key. So, in order to help drive conversions up, offering a reasonably priced, expedited delivery option, such as 2-day delivery, is crucial.

IMPROVE CUSTOMER LOYALTY

Once your customers experience an amazing delivery experience that is both quick and on-time, they’re more likely to buy from you again. Delivering on expectations is paramount! You can encourage repeat purchases with your marketing and use tactics such as shipping inserts to help promote these behaviours. (More on this later!)

Offering two-day shipping on your website gives you the option to win your customer and not lose them to a marketplace. Selling through your own site gives you more control over the entire experience.

EXCEED CUSTOMERS’S EXPECTATIONS

The consumer of today expects a quick shipping experience. By offering 2-day delivery, you satisfy their need for instant gratification, which leads to a positive experience, better reviews, and more recommendations.

Offering 2-day shipping can help you secure more orders. Research shows that 25% of shoppers cancel their orders because of slower than expected shipping speeds. However, as an e-commerce store owner, you need to balance this option against your margins.

2-day shipping across the entire country is not always going to be possible, particularly for those in more remote areas or who might be located on the other side of country from your fulfillment centers. Often referred to as dynamic shipping, you can ensure that the option for 2-day shipping is only offered to those who are located in an area that qualifies them for this service and hidden from those who are outside the eligible areas.

USE GROUND SHIPPING & SHIP FROM KEY FULFILLMENT CENTERS

Placing products at different locations across the country will allow you to utilize ground shipping options that are within 2 days of your customer base. You can use third-party logistic providers to increase your coverage. Basically, no matter where a customer orders, you will have product within 2 days of ground shipping service.

Not everyone can afford to operate their own fulfillment centers. You can use third party logistic (3PL) providers that do the order fulfillment for you. They are a great way to scale your operations and increase your coverage across the country. But not every one operates in multiple locations, so be sure to ask.

USE USPS PRIORITY MAIL

Priority Mail offers 2-3 day delivery for packages over 1 pound. You can check their coverage and estimate delivery times here, and it is important to note that most of the country – especially major urban areas – are within 2 days for delivery. This means you can offer a reliable 2-day option at much lower cost than other services.

OVERNIGHT/NEXT DAY SHIPPING

This option is pretty clear: your customers are guaranteed to get their order the next business day. It’s similar to next-day delivery or one-day shipping, but the exact date of delivery to a customer will depend on the time they place their order.

Most shipping carriers will have specific cut-off times and once a certain time has passed, next-day delivery options are no longer guaranteed. In some cases, and depending on the carrier you choose, orders that are taken over the weekend might require an additional day.

WHAT IS THE LOWEST COST OVERNIGHT
SHIPPING OPTION?

The cheapest overnight shipping options will depend on a variety of factors, including the delivery timeframe, parcel weight and dimensions, delivery location, and any discounts you might get with the carriers.

USPS has a long-time reputation for offering the cheapest overnight shipping when a package is below 2lbs. Below are a few quick links to the USPS, FedEx, and UPS price calculators to help you work out the cost of overnight shipping. These are retail prices, however; you should be using shipping software that is connected to commercial pricing to get the best discounts.

QUICK COMPARISON OF
NEXT-DAY SHIPPING SERVICES

The cost of overnight shipping services can vary between carriers, and while it is considered to be expensive, it’s important to shop around for the best deal. In this section, we compare the different next-day delivery options from USPS, FedEx, and UPS.

FedEx Overnight Shipping

FedEx is typically the highest cost of the three we’re looking at. They actually offer three different choices for overnight delivery options. Here’s a summary of each.

FedEx Overnight Standard

This is the lowest cost of FedEx’s overnight options and will guarantee delivery by 3 pm to almost any address in the U.S.

FedEx Overnight Priority

This is in the middle in terms of cost and will deliver to most U.S. addresses by 10:30 am the next day. For those who are considered to be in a remote delivery area, however, they can expect to get their package by 5pm.

FedEx Overnight First

This option is the most expensive, but offers the quickest delivery, which in some cases will be by 8 am the next day. For those in extended or remote locations, they can expect their package by 2pm.

Each of these options will allow a shipper to customize pick-up and delivery options, including adding proof of delivery.

UPS Overnight Shipping

Similar to FedEx, UPS provides three different choices for next day delivery services. They have a reputation for delivering more overnight deliveries on-time than any other carrier.

UPS Next Day Air Saver

This is the least expensive of UPS’s overnight options, offering a guaranteed delivery by 3 pm.

UPS Next Day Air

This is in the middle in terms of cost and will deliver to most U.S. addresses by 10:30 am the next day.

UPS Next Day Air Early

This option is the most expensive but offers the quickest delivery by 8 am the next day.

UPS also provides online tracking with each of these options.

USPS Overnight Shipping

The overnight shipping option offered by USPS is called Priority Mail Express. This is their quickest domestic mail service. They also have options that can guarantee delivery before 10:30 am the following day.

INTERNATIONAL SHIPPING

Selling internationally is no longer as challenging as it once was. While in the past it was reserved for larger corporations, international ecommerce shipping is easier than it’s ever been.

Although taking orders, handling transactions, and security have made it easier to source items from around the globe, the physical logistics still require a little time and attention. However, you can still find reasonably priced international shipping options that can help you get your products from A to B without too much trouble.

 

Getting in front of a global audience is key for the continued success and development of your business.

The internet has made it easier than ever to get in front of more people. With more than 70% of buyers making international purchases, there’s no wonder that over 60% of online merchants are already offering global shipping options.

According to research, ecommerce stores that provide international shipping options grow up to 60% quicker than others who do not.

IS INTERNATIONAL SHIPPING RIGHT FOR YOUR BUSINESS?

If you want to consider whether or not international shipping is right for your business, take a look at these questions:

  • Do you have any language barriers that would require you to change your product or customer support?
  • Which countries are your site visitors from?
  • Have you had any requests from people to ship your products internationally?
  • Do your competitors ship internationally?

Other key factors around the fees and the legalities to consider are listed below.

What type of goods are you shipping?

As you’ll appreciate, there are specific products that you won’t be able to ship internationally. These prohibited items are considered to be dangerous or HAZMAT, but there are also certain weight restrictions as well.

What are the regulations for the different countries you are shipping to?

You should check the regulations in each country you might be asked to send products to, and make sure there are no limitations on the product, or the ingredients/materials used to make them. You might also need to provide the correct documentation so the package can be successfully received.

Which country are you shipping items to?

Whether you use your website analytics or another system, you need to know where there is a demand for your product. You can then undertake research to see if it makes good financial sense for you to ship products to those destinations.

What are your potential profits?

International shipping could be a real money maker for your business, especially when there is a demand for your product overseas. International customers are more likely to pay the cost of shipping, but make sure that you know your cost before charging them!

LEAD TIMES FOR INTERNATIONAL SHIPPING

It can be challenging to calculate the lead times for shipping internationally, particularly for those who do not use expedited shipping options.Generally speaking, the less you pay, the longer the lead time. It is possible to get quicker lead times, but with quicker delivery times, you can expect to pay more money.

It’s not unusual for international deliveries to take weeks to deliver, and if you’re going to offer this service, you must ensure your customers are aware of the maximum lead times before they place their order. As we’ve already mentioned a couple of times in this guide, communication is king. An informed customer is a happy customer.

WHICH COMPANIES TO USE FOR
INTERNATIONAL SHIPPING

The cost of sending packages internationally will typically depend on the country they are being shipped to. There are also other things to consider, such as taxes, tariffs, and other such fees. In order to accurately calculate shipping costs and find out the cheapest way to send products internationally, you’ll need to play around with the different shipping rate calculators, and enter in the different countries you could potentially need to ship to, along with the product weights, etc.

UPS International Shipping

UPS gives you the option to input a range of data, such as the weight, destination, origin, shipping date, and more. Here’s the link to their online price calculator. It will then give you the different rates for all of their international shipping services.

DHL International Shipping

DHL offers a range of international shipping options, from urgent same-day shipping to non-urgent, lower cost choices. Please note that they do not offer all of their quick delivery services to every country. Here’s the link to their online price calculator.

USPS International Shipping

USPS provides a range of options that are based on the destination and overall weight of the shipment. They offer flat-rate pricing for international services as well as other options. Here’s the link to their online price calculator.

FedEx International Shipping

FedEx makes it quick and easy to work out the cost of international shipping by
simply entering the origin, destination, and parcel weight. Here’s the link to their
online price calculator.

WHAT CAN GO WRONG WITH INTERNATIONAL SHIPPING FOR SMALL BUSINESSES?

International shipping isn’t for everyone. There are three major factors that can heavily impact your bottom line and your customer experience. Make sure you carefully consider these points when making the decision of whether or not international shipping is right for your business.

Unknown fees

Every country you might want to ship to could present you with a different cost option. Importation fees and duties are a typical ‘unknown’, and in some cases, these are levied on your customers, who won’t be happy they’re being asked to pay more than they expected.

Documentation

You might encounter issues when you ship parcels across borders, particularly when your goods arrive without a correctly completed commercial invoice or the right certificate of origin. Once you know the rules and requirements for the countries you wish to offer shipping to, this can all be easily put in place. However, it is something that needs due care and attention.

Timeframes for delivery

Global shipping times vary greatly. Again, the destination is an important factor in the timeframe, along with the carrier and the option you choose. However, lead times can vary from 1 week up to 1 month. These times could be extended if there are any errors or missed details from the recipient.

Incorrect Postage

If you get the postage wrong then you might have to deal with a return, or additional charges being requested from your customer. Aside from this, underpaid postage can cause delays to your deliveries. International customers could refuse packages that take too long and request a refund.

If you decide to handle the shipping yourself, then make sure you utilize the correct label and mail class.

TIPS FOR INTERNATIONAL SHIPPING

To help you avoid delays, overpayments, and errors, we have listed a few best practices about how to ship products internationally.

Know your numbers

This specifically relates to the dimensions of your orders. The dimensional weight of your goods can impact the cost of shipping. As such,using both the dimensions and the weight of your products together, you can get a more accurate cost. Best practice dictates that you should always round up to the nearest ounce or pound.

Packaging

We’ll cover packaging more in depth a little later in this guide, but if you are shipping any fragile items, then you need to make sure these are packaged very well. If you consider the length of the journey the package needs to make, along with the factor of differing climates and potentially much higher temperatures than at home, then this will always help to ensure your products arrive in the best condition.

Do comprehensive calculations

All businesses need to turn a profit with the products they sell. Whether you’re shipping in-state or internationally, you need to make sure you factor in all of the costs before making the decision to offershipping to an individual country.

For each, you need to consider the cost of expedited shipping vs. standard shipping, and account for the handling and shipping totals on a country by country basis. This includes:

 

  •  Packaging supplies and materials
  • Shipping costs, incl. taxes and duties
  • Staffing costs
  • Warehouse equipment
  • Rent
  • Warehouse or logistics management software
For instance, if your total monthly costs from all of the above areas come to $40,000, and you ship 2000 orders each month, then your per-order handling and shipping cost is $20.

The amount you charge for international shipping will typically depend on the rates you get, your average order value, and the total handling and shipping costs. It is highly unlikely you will be able to provide free shipping internationally, but you also shouldn’t look to make a profit from your global shipping charges either. If you do, and these charges are unexpectedly high, you could see a decrease in international sales.

Try to be clear about the countries you do and do not ship to, and wherever possible, try to give the customer as much information you can about their expected delivery lead times at the point of purchase. To make sure you cater to as many needs as you possibly can, you should consider adding an express international shipping option alongside your standard choice.

While this may not get selected often, it has a subtle effect on making the cheaper  option seem more palatable from a cost standpoint.

Other choices you should consider offering include shipping insurance and order tracking. Both of these can increase buyer confidence, and for private carriers, such as DHL, UPS, and FedEx, they usually retain control of the package throughout the entire journey, which makes order tracking more dependable.

For government carriers, such as USPS, they will usually change carriers at the point the parcel arrives in the destination country, and this can restrict your order tracking options.

Giving your customers a tracking reference, and the option to track and trace their own orders can also relieve a little pressure on your customer support team as well. This is because they have the information they need to check the delivery status on their own.

FREE SHIPPING

When you put the word ‘free’ in front of a customer, it can significantly impact their decision to buy from you. 9 out of 10 consumers signify free shipping as a major motivation for buying products online more often.

We’ve already mentioned that higher than expected delivery charges are a leading cause of cart abandonment, but there’s more! Over 90% of consumers state that they will take extra actions to make sure they qualify for free shipping. Shoppers often expect free shipping when they spend over a certain amount, and this can also help you sell more products, as customers look to top-up their baskets to make sure they hit that minimum order quantity.

When a business is considering free shipping, the obvious concern is margin and profitability. While there is no one-size-fits-all approach to offering this perk, it is possible to strike a happy medium between delivering better conversions without having to break the bank. In the next section, we look at a few of the key considerations you need to make before adding this to your ecommerce fulfillment strategy.

CONSIDERATIONS BEFORE OFFERING FREE SHIPPING

Unless you sell particularly high-ticket items in your ecommerce store, offering free shipping across your entire portfolio might not always be feasible. However, there are a lot of ways you can offer free shipping and not run yourself out of business.

First, If you’re not currently offering free shipping, then you should post that clearly on your product pages. “Shipping calculated at checkout” is a good disclaimer; online shoppers really hate getting to the end of checkout only to find shipping costs are not included.

No matter what method you employ, clearly stating shipping costs and policies is an absolute MUST for ecommerce companies. Customers hate finding out they are paying for shipping, and when they have questions about returns they want them answered easily.

Set a minimum order threshold

You can raise the average order value (also known as AOV) for your ecommerce store by implementing a minimum spend threshold for your orders. Lots of retailers market free delivery across their site in this way.

Offer bundles or mix-and-match incentives

You can take the base product, and then create a relevant gift set or bundle. While a little more time consuming during the set-up stage, this approach can have a significantly positive impact on the amount of money each customer spends on your site.

This is a great idea to attract sales from new visitors, or to entice returning customers to buy the same bundle they like over and over. Getting free shipping is an extra incentive.

Another successful approach is to group a range of products in a mix-and-match section on your store.

Whatever path you take, offering bundles will help you sell more products, increase your AOV, and optimize your shipping costs.

Raise the cost of the product

When a customer tries to order a single item and realizes the cost of shipping is equal to or more than the product, they’re highly unlikely to buy from you. However, with more moderately priced products, you do have the option to cover the cost of shipping in the price itself.

Consider your own buying behavior: would you pay $20 for an item with $10 in shipping costs, or would you prefer it for $30 with free shipping? What if you offered that item for $25 with free shipping, effectively splitting your shipping cost with the customer?

Consider carefully your abandoned cart rate. You may be worried about losing sales, but you actually may convert more because you don’t have people abandoning their cart due to high shipping costs. It gives the illusion of free shipping, without you having to foot the entire cost of the service yourself.

It’s important to bear in mind that while you might not cover the entire cost of shipping in the increased price, your free shipping offer will help you convert 19 more visitors to buyers, and subsequently, the additional revenue you make will offset any difference.

Considering a sale on your store? Online shoppers find free shipping offers twice as compelling as discounts. The next time you’re thinking about slashing prices, consider offering free shipping instead.

Offer Free Shipping in Limited Locations

Shipping costs are certainly not equal across the board. If you’re running a targeted marketing campaign, trying to get more customers from a specific region, or you just know that shipping is cheap for your business anywhere within 2-days of a particular shipping service, then you should consider limiting free shipping by location.

You can make this noticeable with pop-ups and banners that promote the free shipping in that area. Depending on your website, you can limit those popups with geofencing; either way, this option works best with some of the others outlined above.

For example: Free Shipping to California residents. Not in California? Get Free
Shipping on Any Order Over $55!

Create a Membership Program for Free Shipping

An option that’s gaining in popularity is setting up membership programs. To qualify for free shipping, customers will have to sign up and pay a yearly or monthly fee.

This method is particularly useful if you have other perks or bonuses you can combine with the free shipping offer.

 

 

Offer Multiple Shipping Options at Checkout

Giving customers more than one option will increase their perceived value. When you display rates – including the free option – show the estimated delivery date.

Customers will be able to select a faster option (and choose to pay for shipping themselves) versus selecting the standard, slowest, and low-cost option for your business. Either way, you will have happier customers.

Shipping Software

No matter the cost the customer sees, you need to ensure you’re keeping costs low on your end. Great shipping software will select the cheapest shipping method for the desired level of service automatically.

 

Utilizing multiple carriers ensures you get access to a wide variety of services and lets you take advantage of the strengths (and avoid the weaknesses) of each carrier.

Great shipping software will select the cheapest shipping method for the desired level of service automatically

Returns and Free Shipping

One consideration to highlight with this approach is that some customers might decide to return items. There is some evidence to suggest that free shipping can lead to higher return rates for products. So, while free shipping is a great way to boost your AOV, you may notice a higher return rate.

If you do start to notice a higher return rate, and this is harming your margins, then you might need to alter the terms of your return policy or amend your free shipping offer. Some ecommerce retailers do this by charging for return shipping (or not providing return labels).

Whatever policy you choose, make sure that return and shipping policies are clearly stated and easy to find on your website. A lot of customers will wonder and look for it when considering a purchase, so make sure you’re not losing business because it isn’t clear.

 

 

C A L C U L A T I N G A
MINIMUM ORDER THRESHOLD
FOR FREE SHIPPING

In order for a free shipping strategy to be cost effective, you need to ensure the minimum amount you set is higher than what your customers might typically spend. By encouraging your customers to increase the value in their carts, it can help to offset the cost of logistics for your business. (A platform like Shopify has an easy to view analytics dashboard that shows you AOV over a given time period.)

For instance, if you ask a customer to spend twice as much as they originally intended, it could be setting the bar too high. Similarly, if you set the threshold too low, it could negatively impact your margins. We’re going to dive into how to set this up in the next section.

To work out the right level, a good strategy is to increase your average order value by 25-30%. If the value amount comes out at an odd number, it’s a good idea to round up to the nearest 5 or 10 ($73 becomes $75), making it easier for customers to know what’s expected of them.

There are a lot of useful apps for prompting customers that they are close to earning free shipping. Make sure the threshold is clearly indicated on your site so that customers understand they will be charged for shipping until their order is above that limit.

Know Your Margins

The trick with all of this is knowing your cost and profit on every order. Do you have products with margin high-enough to cover the cost of shipping an average order? Make free shipping available whenever those items are added to the cart (upsell those products too).

Ideally, if you implement a minimum order value approach, the increase in AOV will cover the cost of shipping. If your average order value is $43, and your average margin is 30%, then boosting your AOV to $55 means you added about $4 in margin (30% of the $12 increase). Does that margin make free shipping possible for your business?

Free Shipping Delivered

Sales are great, but repeat loyal customers are the foundation for success. To create these you need to understand consumer expectations: they don’t want to pay for shipping. If you don’t offer it, then state so clearly on the site. If you want a minimum order, or only offer it for certain products, then make that clear as well.

Creating a frictionless checkout experience should always be the goal. Shipping is just another consideration – don’t let it negatively impact your brand. When done correctly, shipping can be a real asset to your business.

WHAT TO CHARGE
SHIPPING RATES

Shipping rates seem complicated at first, and rightfully so. There are a lot of carriers and different services available. Understanding what you’re paying – and why – is the hardest part of shipping, but it can be learned easily with a bit of help. In this section, we review the different ways to charge for shipping and explain a little more about each option.

Charge Real-Time Carrier Rates

Figuring out how much to charge your customers for shipping isn’t always straightforward. With different products having different costs, different weights, sizes, and other variables, offering free shipping or 2-day shipping isn’t always going to work. Similarly, you don’t want to be seen as overcharging on your shipping, as that will adversely affect your brand. However, when your customers are located across all points of the country, or even abroad, the cost of shipping for one client will be remarkably different for another.

Real-time carrier shipping takes a more indicative and precise approach to setting and establishing the right shipping costs. This is when the exact shipping costs that are charged by a carrier are automatically populated at checkout for a customer. It accounts for their location, the weight of the product, and the package dimensions. It is only calculated once a customer has added all of their items to the cart and encompasses their entire order.

Real-time shipping can give your business the ability to charge each customer the exact amount it will be charged for the shipping of an order, and this approach can help you ensure that you never under or overcharge a customer for their shipping.

Combine this by showing different shipping options and the expected delivery for each will give your customers additional information that improves their experience. Setting clear expectations allows you to foster trust with your customers.

THE BENEFITS OF OFFERING REAL-TIME SHIPPING COSTS

If you’ve become accustomed to manually setting the shipping rates on your ecommerce store, or you’ve ever had to do this yourself, then you’ll know that it’s extremely time-consuming and leaves room for human error. Implementing realtime shipping rates can help you in a number of ways and is becoming increasingly popular with ecommerce operations across the globe.

Ensuring your customers are being charged the correct amount

Real-time shipping calculations can make sure your customers do not get under charged or overcharged for their shipping. It leaves you free from having to worry about whether you are charging too much or too little.

Automated shipping cost calculations

Rates are automatically updated and displayed when a customer reaches the checkout and they enter your shipping destinations. It saves you the time and hassle of having to do the calculations manually. Your shipping software will also use the service they selected at that price.

Boost international sell-through rates

As we’ve already discussed in this post, working out international shipping options isn’t easy. When you use real-time shipping calculations, you know the rates are being set correctly to their precise destination.

CONSIDERATIONS BEFORE SWITCHING TO REAL-TIME SHIPPING

If you’re thinking of moving to a real-time shipping rate system, there are a few key considerations you need to make. Here are a few points to review to help you define what your shipping strategy could look like.

Decide which countries you are going to ship products

Earlier in this guide, we covered the complexities of shipping internationally. While real-time shipping will give you the ability to ship almost anywhere in the world, it’s important to make sure you do your homework with regards to the regulations, taxes, and tariffs that are applicable to each region first.

Choose the right carrier to work with

Even if you only ship one product, you will need different carriers and services to reach customers across the country or the globe. A wide product mix means you will be shipping a lot of different size packages, at different weights, and a multicarrier option is absolutely necessary. With carriers like UPS, FedEx, and DHL, however, you get better discounts the higher your volume. A rate analysis is necessary to compare what your costs will be using one carrier or employing a multi-carrier option.

 

Software can solve much of this problem for you by auto-selecting the service that is best for each shipment.

Essential Hub is a technology platform that integrates with a lot of different software partners. Every customer is recommended software based on their need, and Essential Hub implements the business rules and automation on that software for that customer.

Incorporating the cost of handling

When you use real-time shipping rates, your customers pick up 100% of the cost of shipping. However, your handling costs, which include packaging, for example, will not be included in these rates. It’s important to be mindful of this when you review your product mark-up and margins.

While there isn’t a one-size-fits-all option for shipping, real-time shipping comes pretty close to meeting the needs of most. It saves you time and is one of the easiest ways to protect your margins.

Charge a flat rate

The overall sustainability of your business depends on setting the right prices for your shipping. If you aren’t optimizing your shipping costs, then you could be losing money unnecessarily. Flat-rate shipping is another approach that many ecommerce stores take.

Flat-rate shipping is a service offered by the USPS and FedEx. It means whatever fits in the flat rate box ships at a predetermined price. It can be very useful for heavy items, and gives you predictable shipping costs if you are struggling to understand everything that goes into it.

With USPS, Priority flat-rate shipping gives you a single cost for deliveries that take between 1-3 days. Most of the US is within 2 days of Priority Mail service.

The benefits of flat-rate shipping for ecommerce stores

Aside from being easy to manage from a cost perspective, it also means that each product won’t have to be weighed, and this also has obvious time benefits too. The upper limit for this service is 70 lbs. The simplicity of the flat-rate shipping service, and the fact that you get a predictable cost are some of its most appealing factors.

  • Send goods of up to 70 lbs
  • Certificate of mailing included
  • Free insurance to the value of $50 for each package
  • Tracking included as standard

 

 

In some cases, flat rate shipping is also defined as offering a single price for shipping across the board. In this instance, we are referring to the USPS flat-rate shipping service. Essentially, flat-rate shipping means that cost of shipping is not impacted by the shape, size, or weight of the item.

Flat-rate shipping restrictions

With USPS flat-rate priority mail shipping, there are a number of restrictions to the
types of goods you can send via that service. These are:

  • Alcohol
  • Air bags
  • Explosives
  • Firearms or ammunition
  • Gasoline
  • + more

 

Charging Customers Flat Rate

Whether or not you are utilizing flat rate for your packages, you can still charge customers a flat rate on all orders. If you know your average shipping cost on each order you can make that a flat rate to charge on all orders. Some customers will overpay, some will underpay, but it will average out and still cover costs.

You can mark this up a little bit to be safe, or even make it “Shipping & Handling” and include a handling fee to cover the cost of getting the package out the door.

The benefit of charging a flat rate is twofold: customers get some transparency – they know what they will be charged no matter what. You also don’t have to worry about setting up complex shipping rules. As long as you audit your average shipping cost per order each month to make sure you’re covering costs, you’ll be fine.

USPS Priority Mail Cubic

The best-kept secret in shipping is probably the Cubic program offered by the USPS. Packages that are under 20 pounds and with no dimension longer than 18 inches are eligible. Not all software programs offer this pricing competitively, so be sure to check what rates you’re seeing.

The cubic program is based on dimensions, not weight. You multiple the length x width x height and divide the result by 1728. Anything under .5 cubic feet is eligible to ship, and the rates are very competitive, especially for heavier packages and farther zones!

We recommend every ecommerce business to look at cubic pricing. You can compare rates on the USPS website against your shipping software

USPS First Class Shipping

The First Class Package Service from USPS is a cost-effective and fast way to ship goods that are lightweight anywhere in the U.S. It is designed to be used for packages that weigh up to 15.99 ounces. When compared with other services, such as Parcel Post, Parcel Select Ground, and Priority Ground, it is more cost-effective.

Tracking is included free of charge; there are a range of pick-up programs, and it delivers to any U.S address, PO Box, and certain FPO, DPO, and APO locations.

The shipping rates for the USPS First Class Service is calculated by the shipping distance and the parcel weight. Unlike other providers, there is no surcharge for rural or residential deliveries. You also get the option to add extra services, such as insurance and signature confirmations.

Is USPS First Class Shipping Right for You?

For packages lighter than a pound (or 15.99-ounces) it is the lowest-cost option out there. It is the go-to option for lightweight packages delivering to U.S locations.

USPS Priority Mail Shipping

The Priority Mail Shipping Service will ship packages that are up to 70 lbs. in weight within 1-3 days. It includes tracking, and delivery time estimates can be obtained.

by visiting the Priority Mail delivery map. Notice that major metropolitan areas and most of the country is within 2 days of almost any location for shipping.

For a flat rate, you can ship packages to any state for the same price under the Priority Mail Flat Rate service.

Priority Mail has a great program for heavier packages that are still under 20 lbs. called Priority Mail cubic. Packages can’t have a dimension over 18 inches, but it is a very economical option that charges based on size, rather than weight. The prices are extremely competitive compared to UPS and FedEx, especially to farther zones.

You can ship from your home or business using the Click-N-Ship service or from any Post Office location. Regular shipments should schedule a regular pickup service.

The benefits of the USPS Priority Mail shipping service include:

  • Quick Delivery Times – 1-3 days
  • Rural and Residential delivery incur no additional charges
  • USPS tracking is included free of charge
  • Free collections from business or home address
  • Options for region, flat-rate, cubic and prepaid pricing

 

SHIPPING ZONES:
AN INTRODUCTION

In this section, we discuss how distance can impact transit costs and timeframes. We have taken a comprehensive approach to explaining how shipping zones work because they are a fundamental part of the order fulfillment process.

What are Shipping Zones?

A shipping zone is a geographical area that carriers deliver packages in. Zones range from 1-8 for domestic shipping options, and essentially measure the distance a parcel needs to travel. Contrary to popular belief, this is not measured in mileage, but by zip codes. The origin of a parcel is Zone 1, and the destination zone is the shipping address. What’s Zone 3 for one origin address will be different for another. You need tables to determine the Zone your delivery address is in.

Calculating Shipping Zones

Shipping zones are calculated dynamically depending on the location your package is being sent from. This means, that if your packages are coming from different origins but going to the same destination, they might ship to different zones.

There are a number of ways you can establish the shipping zones for your e-commerce order fulfillment.

The cost of shipping your goods is directly impacted by the shipping zone, and while some carriers will offer a flat rate that allows you to pay a fixed price regardless of where you’re shipping to in the U.S, there are others which are known as ‘zoned’.

Using USPS as an example, their Priority Mail, Retail Ground, Priority Mail Express, and Bound Printed Matter services are Zoned. Library Mail, USPS Marketing Mail, First Class Mail, and Media Mail are not zoned.

For zoned services, the higher the zone, the bigger the cost. Or put another way, the farther the package has to travel, the higher the cost.

The Impact of Weight on Shipping Cost by Zone

Aside from destination, origin, the service you use, and the carrier you choose, your shipping rates will depend on the dimensions and weight of your package. Most carriers use a weight-based method to charge you for shipping – meaning you will pay more the heavier the package. The notable exceptions are flat-rate services and the USPS Priority Mail cubic program.

 

The Impact of Shipping Zones on Speed of Delivery

It goes without saying that when you ship a package to a nearby location, for instance in Zone 1 or 2, then it will arrive quicker than shipping to Zone 7 or 8. The lesser time a package spends in transit, the better it is for your customers. It also reduces the risk of loss or damaged parcels.

If you needed any more information to support the benefits of reducing your shipping times, then
research suggests that almost 25% of people will cancel an order if the shipping is slow. So, if you have a single location for your inventory, and your orders are continuously taking 5 days or more to arrive in higher zones, you might find it challenging to justify the higher shipping costs and dissatisfied customers.

 

Example shipping from Virginia

This is an excellent example of why taking a multi-carrier approach makes sense. Using UPS or FedEx ground services to higher zones means transit times of 4-5 days (or more). USPS Priority Mail is often cheaper at higher zones and transit times are 2-3 days.

How to Reduce Shipping Zones and Costs

A solution to reducing shipping times would be to consider outsourcing your fulfillment, as this can offer you a greater degree of flexibility. By analyzing your order history records you can determine a third-party fulfillment location that will help you reduce your costs and speed up delivery times on basic services like ground, because you’re shipping from more locations.

If you choose to use multiple fulfillment centers that are situated closer to your customer clusters, this gives you the option to further reduce your delivery lead times and costs. If you are having to continually use air shipping, which is expensive, then this could present a more appealing and affordable option. For these compelling reasons, distributing your inventory across multiple fulfillment centers can completely transform your logistics and shipping costs.

By understanding how shipping zones work, you can tweak your fulfillment strategy to provide more affordable and time-efficient deliveries. Aside from becoming a leaner operation, it will improve your customer experience, reduce the risk of lost and damaged packages, and improve your bottom line.

 

SHIPPING COST STRATEGIES

Different ways to approach shipping costs:

Offer free shipping on all orders

Whether or not you offer this will depend solely on your margins and your competitors. If you sell low value products with a tight margin, offering free shipping across the board might not be feasible. However, if you have healthy margins and your competitors also offer free shipping, then you need to consider free shipping as an essential option.

Offer free shipping with a minimum order quantity

If your product margins are tight, you might want to consider setting a minimum order quantity before unlocking the free shipping option. Not only can this raise your average order value over time, it will also encourage people to try out more of your products – especially if you’re upselling products during checkout. This isn’t SHIPPING COST STRATEGIES something that is out of the ordinary, and many of the major ecommerce retailers
offer this.

 

Offer free shipping to certain locations

We have explained in an earlier section how to calculate shipping zones. For those zones that are closest to you, or your distribution centers, you might choose to offer free shipping. You can enable technology on your site to help you determine when this offer is shown or not.

 

Offer free shipping for loyal customers

This is something that you consider for those who order from you on a regular basis. Again, it will depend on your margins, and you would need to work out an appropriate threshold to activate this offer. Incentivizing repeat customers to participate in a loyalty program turns them into brand evangelists: those that promote your brand for you!

Offer free shipping for an annual ‘shipping surcharge’

More ecommerce stores are offering customers the option to pay a one-off fee to get deliveries free for a year. This works like a subscription charge that gives customers a free-delivery card for 12 months. Again, you need to consider the threshold, cost, and whether or not you only offer this to customers in certain zones. However, for those customers who order from you regularly, it can encourage them to order from you more often and give them extra value compared to other companies they consider buying from.

Increase the price of your products to cover all or part of the shipping

Including the price of shipping is a common practice, and it can help you offer free or low shipping costs to your customers. Whether or not this works for you will depend on your margins, and it will also depend on your shipping charges. For many, it strikes a nice balance between offering affordable shipping for customers and a fairly priced product.

Let your customers cover the full cost of shipping

This is by far the easiest option, and it protects the totality of your margins. It means you can stay competitive with your prices, and leaves your customers picking up the full cost of the shipping charges. Protecting profit isn’t always the best way to grow your business, however; experimenting with any of the options above will provide an opportunity to see how customers respond once you’re covering part of the shipping.

PACKAGING AND MARKETING

In the modern-day world of ecommerce, companies need to stand out, make an impression, and find clever ways to entice people back to their store to order products again. Product packaging and inserts is actually a relatively low-cost way to market to your customers, and the ‘unboxing’ experience can have a significant impact on how they feel about your brand.

 

ECOMMERCE PACKAGING

Your goal should always be to stand out from the competition. The most common ways to do this include improving your product, social media marketing, or optimizing your web design.

While these actions are great there’s one aspect of the buying process that you shouldn’t take for granted: the unboxing experience.

Brands are so worried about landing new business that they don’t think about what happens when customers receive their order. Done right, unboxing can be a great way to boost retention and create loyal customers.

What is unboxing?

“Unboxing” is when a customer opens up your order, the same way they’d open up a gift for their birthday or Christmas.

Not only does branded packaging offer an experience to the customer, it’s one of the best ways to promote your brand. Let’s understand why and what you can do to create an incredible unboxing experience.

Why branded packaging matters to ecommerce

With so many brands competing for customers’ attention, branded packaging is the one investment that could make you stand out. Here’s why:

IT BUILDS A GREAT FIRST IMPRESSION

First impressions matter, and it’s no different for ecommerce brands.

One of the biggest obstacles in ecommerce is that you’re not there with the customer face-to-face. A great unboxing experience fills that gap by creating a powerful connection.

Branded packaging shows you value your customers’ satisfaction and will go every step of the way to deliver. As a result, you’ll boost their perception of your brand.

 

IT CREATES LOYAL CUSTOMERS

The best customers are not the ones who only buy once from your store. They’re the ones who repeatedly come back to your store for more and drive repeat purchases. They tell their friends about you too!

 

Brands are so focused on landing new clients that they forget one thing: keeping their current
customers happy. 41% of an ecommerce store’s sales come from only 8% of its customers.

Branded packaging is one of the most effective customer retention tactics. The reason why it
works so well is that it drives emotion and makes the purchase feel unique — customers won’t feel
like they’re just another sale.

IT CREATES EPIC USER-GENERATED CONTENT (UGC)

User-generated content (or UGC) refers to any content created by a brand’s consumers. These can include:

  • Blog posts
  • Reviews & testimonials
  • Pictures on social media
  • And more

UGC is one of the most effective ways you can promote your brand online. 79% of customers believe that UGC influences their buying decisions.

So how does this relate to branded packaging? A memorable unboxing experience can be a goldmine when it comes to UGC. Customers love to publish unique boxes they get from brands. In other words, it’s like getting free publicity for your business.

 

 

 

7 WAYS YOU CAN CREATE INCREDIBLE BRANDED PACKAGING

Now that you know why the unboxing experience matters, it’s time to take action. Here are seven ways that you make your branded packaging stand out. You don’t even need to buy expensive, custom-printed boxes! (Although those are cool too.)

Provide a Handwritten Thank You Note

When it comes to engaging your customers, a simple word of gratitude goes a long way. One unique way to show customers that they matter to you is through personalized thank you cards.

Use Inserts

Include inserts with every order. Tell a story about your brand, your product, or how much you care about the customer for ordering. At the moment of unboxing, the customer will never be more focused on your brand. Reinforce that with a branded insert that enhances their experience.

Give a Free Sample

Another way to surprise and delight customers is to give them more than they expect. You can do this by including free samples in your packaging.

Adding free samples will make customers feel like they got more value for their money. After all, who can say no to free stuff?

Make Your Packaging Eco-Friendly

The modern customer expects brands to be sensible to social issues and adopt sustainable practices. It’s the reason why you should make your package as ecofriendly as possible.

The best way to do this is to use recyclable material in your packaging. We’ll take a look at a great example of what this can look like below.

Include Discount Codes or Special Offers

To make customers feel special, you can add exclusive perks and coupons in your packaging. With redeemable vouchers, you’ll be able to encourage customers to buy more and drive repeat purchases.

Add Branded Stickers Inside and Out

A low-cost way to spice up your packaging is to include various branded stickers on your box. Not only do stickers add a nice personal touch, they can also be useful to seal packages.

Use Colorful Packing Materials

Instead of the same boring packing materials, why don’t you mix it up and get colorful? If you need to protect the contents of a package, don’t just rely on brown craft paper – get creative!

Customize your Cardboard Box

One of the best materials we recommend for branded packaging is cardboard. It’s
low-cost and easy to customize to reflect the look and feel of your brand.

WHERE YOU CAN OBTAIN
FREE PACKAGING SUPPLIES

Most major carriers offer free shipping supplies, and whenever possible you should take advantage of their packaging.

Here are four carriers in the U.S. that could give you free shipping supplies. You will need to have a business account set-up. Most of these companies will give you the option to collect the supplies from a local office, or they will accept an online request and deliver them directly to your address. Keep in mind that free supplies can sometimes take longer than expected to arrive!

Get Free Shipping Supplies from FedEx

The free supplies you get from FedEx cover FedEx Express and FedEx Ground shipping only. They supply: Air Bills, Boxes, Mailers, Pouches, Triangular Boxes, Shipping Labels And Forms.

Get Free Shipping Supplies from DHL

The free supplies on offer from DHL are used mostly for international shipping, since this is their particular area of expertise. They supply: Envelopes, Shipping Labels, Mailers, Boxes, Tube Mailers, Waybill Sleeves, and Padded Pouches.

Get Free Shipping Supplies from UPS

The free shipping supplies from UPS are available across a huge range of their services. They supply: Stickers, Labels, Express envelopes, HAZMAT supplies, and pouches.

Get Free Shipping Supplies from USPS

USPS also provides a wide range of free shipping supplies for business. Ordering online is easy or you can pick up supplies at your nearest USPS location. They supply: USPS Tracking labels, Priority Mail boxes, Registered Mail envelopes, Priority Mail Express boxes, and Global Express Guaranteed envelopes.

Keep in mind that other carriers don’t like shipping the branded boxes of their competitors

SHIPPING CARRIERS

As you define and build your ecommerce shipping strategy, you need to familiarize yourself with the different services and costs provided by the major shipping carriers. In this section, we give you a quick overview of the main shipping carriers used by customers in the U.S.

FedEx

FedEx offers a wide-range of delivery options, but its Small Business Program is something that makes them stand out. It is targeted towards growing companies and has lots of advantages for a range of shipping solutions at different price points. Transit times and shipping costs can be quickly calculated using their handy rate finder tool.

 

 

USPS

Due to the fact that USPS already runs daily domestic routes, it is usually the lowest priced ground shipping service. Many other shipping companies will use USPS for the last part of their delivery, and this is due to their extensive reach and reasonable rates. They aren’t always ideal for overseas deliveries, particularly where order tracking is required. This is because they will outsource their international shipping to in-country carriers. If you want to get a shipping rate with USPS, here’s a link to their online shipping calculator.

 

DHL

DHL is a global powerhouse where shipping is concerned, so if you ship a lot of product internationally, then they should be a key shipping company for you to consider. They make it quick and easy to calculate rates and delivery times using their online calculator.

 

UPS

UPS offers their customers many choices in terms of the different shipping services they provide. Many ecommerce clients enjoy their scheduled collections and their easy customer returns processes. Just like FedEx, UPS has a dedicated program for small businesses, and you can get prices online using their shipping cost calculator.

 

 

 

INSURANCE, TRACKING, AND RETURNS

Have you considered offering shipping insurance to your clients? Have you thought about the additional ways you can offer your customers an outstanding customer experience once the shipment has been collected? What about your returns?

In this section we’ll cover each of these points individually, and share a few best practices that will help you understand what needs to be considered.

Shipping Insurance

Although you can expect most major shipping carriers to offer a reliable service, there is always an exception to the rule, and occasions arise where packages get lost or damaged in transit. As an ecommerce business you need to make sure you are prepared to handle these things when they occur.

During a survey conducted with online shoppers, if a shipment is lost or damaged, then over 50% of people expect you to offer an expedited shipping service with the replacement, and just over 40% of shoppers expect a shipping discount or a complete refund of the costs. What these figures translate to is that your business needs to cover the costs of any undelivered items, and in most cases, this results in out-of-pocket expenses that can completely erode your margins.

What is shipping insurance, and how much does it cost?

Shipping insurance protects shippers against stolen, lost, or damaged packages. If a package is insured and it does not reach its intended destination, or if it arrives damaged, then the shipper will receive a reimbursement that is equal to the declared value of the item(s).

The cost of shipping insurance varies between carriers, and it will always depend on the value of the items you are shipping. The higher in value your goods are, the higher the cost of the shipping insurance. To give you a rough idea of typical shipping insurance costs in the U.S., we have taken the latest figures from the UPS, FedEx and USPS websites.

UPS Shipping Insurance Costs 2020

UPS Package Protection covers parcels up to the value of $100 for free. They take on this liability for damage or loss at no additional cost to the shipper. So, if you ship low value items and UPS offers reasonable shipping costs for your needs, this could be a great option.

For goods of a higher value, UPS offers a range of insurance options via their flexible parcel insurance, known as UPS Capital. They provide ad-hoc quotes for small packages, LTL, FTL, Ocean and Air Freight options. If you visit their site you can get a tailored quote that can cover single, select, or all of your shipments.

Based on the latest information, this could be as low as $1 per $100 of value, but they do insist you speak with them directly to obtain the most accurate and up-todate shipping insurance prices.

You will need to call their team and speak with a licensed insurance specialist. They will assess your individual level of risk and give you a structure that meets your individual needs.

 

 

FedEx Shipping Insurance Costs 2020

As with all shipping companies, the cost of your insurance depends on a range of factors. With FedEx, this is based on the type of service you select, as well as the items you are shipping. There are always going to be limitations to their coverage, and for this reason, it’s important to verify that the specific items you will be shipping are not excluded or limited from their shipping insurance.Just like with UPS, items valued at $100 or less are given coverage for free. So, if you ship low-value items that are under this price point, then you won’t need to factor in any additional cost for insurance.

 

U.S. Express Package Service, International Ground Service, and U.S. Ground Services

The cost of shipping insurance is $3 for shipments valued between $101-$300. For anything above $300 they charge $1 per $100 in value. If your goods are valued at over $500, then Direct Signature Confirmation will be included at no additional cost.

FedEx Same Day City and FedEx Same Day

The cost of shipping insurance is $3 for shipments valued between $101-$300. For anything above $300, they charge $1 per $100 in value. The maximum declared value of any shipment is $2,000.

USPS Shipping Insurance Costs 2020

Unlike FedEx and UPS, USPS does not offer free shipping insurance for goods that are under $100 in value. If you are looking to get shipping insurance options for lowvalue items they might not be the most cost-effective choice.

USPS has a table that is particularly easy to use. However, always check directly to make sure you are using their most up-to-date shipping insurance rates.

Value of Goods Cost of Insurance
Up to $50 $1.70
$50.01 - $100 $2. 10
$100.01 - $200 $2.50
$200.01 - $300 $4.70
Per $100 in value > $300 to a max of $5,000 $0.90 per $100, plus a base of $4.70
Magazzini Alimentari Riuniti Giovanni Rovelli

There are many moving parts to consider. If you ship low-value goods or highend products, you need to size up the additional cost of shipping insurance and consider if it’s something your clients would be happy to pay an additional premium for or if it’s something you can afford to add.

Although the chances of a package getting lost is slim, particularly with tracking, in the event you ship high-volume or high-value items, then you will need to understand the costs of not buying insurance.

As an ecommerce operation, shipping high volume means that lost or damaged items are inevitable. Similarly, if you ship high-value items, the cost of replacing just a single one of these could make shipping insurance an obvious choice.

The rule of thumb is that if you are in any doubt, buy insurance. It’s often low-cost and worth the additional investment if something goes wrong with an order.

Your delivery experience is part of the overall customer experience. In fact, according to a survey, up to 70% of customers fail to re-order from a store if they have a poor delivery experience. Items that get damaged or lost in transit might not always be in your control. However, you can still impress your customers by responding quickly and effectively should an incident occur. Shipping insurance lets you do this, at little or no cost to your business.

ORDER TRACKING

In terms of your tracking options, you will find that all of the major shipping companies will give you tracking information with your orders. However, you’d be surprised to learn just how many companies don’t pass on this information to their customers.

Not only is this going to create more inbound inquiries for your business, it could also be a missed opportunity in terms of delivering great customer service. As we’ve already mentioned on more than one occasion, the customer experience is EVERYTHING.

Order management and setting clear delivery timeframes and expectations is paramount to this experience, and when done incorrectly, it reflects poorly on your business.

So, if you want to optimize your processes to deliver great customer service as a standard, then you need to provide your customers with accurate delivery dates, tracking information, and wherever possible, delivery notifications. Not only will this ensure they get a great impression of your organization, but it will negate the issue of your team having to deal with customers calling or emailing wondering about the status of an order or asking about expected delivery dates.

Should you provide Ecommerce Order Tracking?

Ecommerce tracking will provide you with estimated delivery dates, the ability to track and trace any order at any time, along with getting periodic updates on the progress or status of an order. Because so many people already utilize tracking with their shipments, customers increasingly expect to receive this service as standard. There are plenty of other compelling reasons why you should provide order tracking to your customers. They are:

1. It’s expected by customers

People expect to be able to monitor their own orders, and they’re accustomed to having visibility on the progress of their shipments. If you fail to provide tracking, you might not meet their expectations, and be viewed as a less-than professional organization.

2. Reduce operational costs

As you already know the time and cost of dealing with client’s inquiries can quickly add up. If you don’t reply promptly to their questions, this can have a detrimental ORDER TRACKING effect on your customer service and your reputation. Providing tracking is a great way to reduce some of those inbound queries and you can automate the process; saving you both time and money.

3. More control and better visibility

Once you’ve picked, packed, and shipped the order, you hand over a certain amount of control to the shipping company. With order tracking, you’re able to address any issues as soon as they arise. A good fulfillment strategy can help you reduce issues and maximize your ability to provide a great service from order through to delivery. Some software systems will provide you greater insight into any issues before your customer will even be aware.

In an age when visibility and trust are two fundamental factors, providing tracking to your customers is now considered to be an expected and essential service.

 

ECOMMERCE RETURNS

There’s no doubt that returns are a major headache for ecommerce operations. However, having the right policy in place for your returns can make a huge difference. Returns are a part of business, and if you don’t have a process in place then you risk alienating the customer from future sales. If a customer needs to make a return, and they deem the process to be inefficient, they are 3x less likely to buy from you again.

Ecommerce Return Statistics

In the U.S alone, online merchants had to deal with more than $350 billion in returns in 2018. So, while it might seem like a minor element, developing a robust returns policy for your customers is essential.

  • 6 out of 10 people will review a return policy before they decide to buy
  • Almost 50% of online retailers offer free shipping on returns
  • Around 80% of shoppers expect free return shipping
  • Over 90% of people say a simple returns process means they will buy again

Creating your Ecommerce Returns Policy

In the same way you create a shipping policy that’s easy to understand, your returns policy needs to be transparent and straightforward. Make sure there are no hidden fees, and if you expect your customers to contribute towards the cost of a return, you must ensure this is presented clearly when they place the order.

Similarly, if a customer is waiting on an exchange or refund, they will want to know the progress of their return. Similar to tracking packages, you should also give your customers access to tracking for any returns.

The ultimate goal is to create an
informative, hassle-free, transparent
return policy with no surprises

The ultimate goal is to create an informative, hassle-free, transparent returns policy – with no surprises! Do this, and your customers will keep coming back.

CUSTOMS DOCUMENTATION

When you ship products internationally you will be required to complete documentation. The specific documents you need to complete will depend on the individual details of your shipment.

Here’s some more information on the different types of documents that might be required.

Certificate of Origin

This is an official document that authenticates the origin of a shipment. It is usually prepared by the exporter.

Export Declaration

This declaration provides data on the nature, amount, and value of the goods that are being shipped. This is given to the statistical office and is used for the purpose of compiling data on foreign trades. It is also used as an export control document.

Commercial Invoice

A commercial invoice will detail the true value of the goods that are being shipped, and it is primarily used in the calculation of taxes and duties. This is also completed by the exporter and is needed to prove ownership and for the purchaser to arrange any payments.

 

DUTIES & TAXES

Any taxes or duties are levied by the country that is importing the goods in order to protect local industries from foreign competition. If any taxes or duties need to be paid, this will typically be done prior to the goods being released from customs.

The cost will depend on any trade agreements, the intended use of the product, the value of the goods, the country they were manufactured in, and the products’ harmonized system code.

There are a number of these fees that can be paid ahead of time, and it’s important that you decide which you will choose to pay before you make a shipment. If you don’t, you might have a very unhappy customer if they are asked to pay additional fees in order to take delivery of the goods they’ve ordered.

Delivery Duty Paid (DDP)

This is where the fees are paid for by the merchant. With this option, as the merchant, you are accountable for paying all taxes, duties, including all of the warehousing costs, including customs clearance, handling expenses, and transportation. Usually, the carrier pays the bill and this is forwarded to you. If you can do this, it provides a much better experience for your customer.

Delivery Duty Unpaid (DDU)

This is where the fees are paid for by the customer. As the merchant, you will still need to pay for all of the transportation costs, but any local taxes or duties will need to be paid for by the customer. If you fail to make your customers aware of this then it can often lead to a difficult delivery process, and disputes. None of these are good for your business, your reputation, or your customers.

Once again, setting clear expectations is extremely important!

Labelling your Packages

Shipping labels is another area to consider. While they might seem insignificant, they are crucial to your store’s success. Your shipping labels share vital data with those in your supply chain, and they make it easy for the technology and the people you deal with to be clear about the destination and origin of your shipment.

If your shipping labels aren’t clear, you could find your orders being mishandled or even lost. In turn, this could impact your customer experience, and potentially result in lost sales.

WHAT MAKES A GOOD SHIPPING LABEL?

Essentially, your shipping label will differ from one carrier to the next, but they all contain essential data, such as: the origin and destination address, the weight of the package, shipping class, tracking number, and the shipping barcode.

For the most part, having good shipping software will take care of this all for you.

Creating Shipping Labels

Creating labels should be a simple and seamless part of your fulfillment process. If you are fulfilling your own orders, there are plenty of apps and websites that will do this for you. For instance, UPS and USPS offer the ability to pay and print labels directly on their site (be warned: these are retail rates and are significantly higher than what you would get with a business account).

There are also a range of platforms that will automate the process for you. Similarly, the platform you use for your e-commerce store might also provide label generation as an additional option.

Some popular shipping software includes:

– Shipstation
– ShipKey Pro
– ShippingEasy
– Pirateship

Shipping labels are usually free to print, but you need to make sure the postage is paid for before you can actually ship your goods.

All you need to get a shipping label printed are the dimensions, weight, shipping class, and address details for the destination.

Keep in mind that there are a number of considerations when evaluating shipping software.

Want help finding the right one? Check out this resource.

E COMMERCE SHIPPING
BEST PRACTICES SUMMARY

As you well know there are a lot of moving parts to developing an ecommerce shipping strategy. Using the best practices covered in this guide is essential if you want to get a comprehensive, cost-effective, customer-centric shipping strategy that supports your business, your customers, and allows you to scale.

OUR TOP FIVE TAKEAWAYS

International shipping isn’t for everyone. There are three major factors that can heavily impact your bottom line and your customer experience. Make sure you carefully consider these points when making the decision of whether or not international shipping is right for your business.

 

  • Make sure you work through all the grueling calculations to establish healthy thresholds for free shipping.
  • Always give customers clear options for shipping choices, offering more than one choice wherever possible.
  • Develop a return policy that is transparent and fair – and make sure it can be easily found by customers.
  • Use technology to automate as much of your shipping process as possible.
  • Always include shipping inserts to maximize your repeat business and marketing opportunities.

Be prepared to experiment, fine-tune, and change your policies, carriers, and processes as your business grows.

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