Samiksha Hiwase | 9 min read | October 08, 2020
If you want to know everything about e-commerce shipping and fulfillment particularly for your starting organizations then this blog will help you. But always keep in mind that transport and handling price are your topmost priority to avoid cart abandonment. According to a study, 44% of clients did not complete their transactions due to excessive shipping and handling prices.
Hence, learning the basic rules for a successful shipping strategy is the first step towards your e-commerce success, in particular for startups and small businesses. In this article, you will learn about Shipping rates, pricing, packaging, Labelling, Insurance, and Shopify Shipping.
2. Understand Fulfillment Methods
The first step to build a good shipping strategy is to understand the common fulfillment strategies. This allows you to keep away from unnecessary costs specifically caused by misunderstandings with shipping vendors.
Self-Fulfillment: is when you store, manage, and deliver products to customers on your own. This technique that many startups use at the starting of their business launch.
3PL (Third Party Logistics): is a 3rd party eCommerce in which you use an outsourced provider of logistics services to store your stock for you and fulfill orders. But they do not own your products.
Dropshipping: is a fulfillment approach in which you don’t truly keep stock onsite. The client’s requests will be satisfied directly from the maker or distributor. You don’t store or purchase products upfront with this dropping shipment strategy. Rather, you possibly pay for the items when you get orders from clients
3. Shipping Rates and Pricing
Before you deliver products, first determine your pricing methods for shipping. The right pricing approach performs an important role to make your business successful.
The free delivery methodology works best if your distribution center and client are situated in one country since international shipping costs are too high.
Offer free shipping brings you some great benefits:
- Customers LOVE it!
- Reduces cart abandonment
- You get extra (loyal) clients and possibly greater sales.
However, understand that free shipping may deeply affect your profit margins.
To diminish this negative impact, you can think about the following choices:
Increase product prices to partially or wholly cover shipping costs. You have to do market research to ensure you do not set your prices too high.
Or, offer to give free delivery with conditions:
- Offer free delivery on a minimum order amount: this covers part of the transport prices
- Provide free shipping on specific products: encourage your clients to buy extra merchandise.
- Offer free delivery for certain places: another approach to increase sales, as an example, in a brand new local marketplace.
- Offer free shipping for a limited time: a powerful campaign to boom income and reduce pick-up cost within a period.
- Give loyal client free delivery: upgrade client commitment and increment their long-lasting value.
- Free in-store pickup: numerous clients love this, significantly more than home conveyance.
Flat Rate Shipping
Flat rate shipping is an eCommerce shipping method that permits you to pay or charge a predetermined fee for a product, including variations like in weight or size. This implies you have to work out the average price of delivery for your all products.
This approach works best if you have a product line of the same sizes and weights. Remember that flat charge delivery can discourage small orders while the charge is high compared to the order value.
Live rates/ real-time rates from a carrier
Another powerful transportation procedure is real-time carrier rates for delivery. Ecommerce platforms like Shopify integrate in real-time with various carriers like USPS and Canada Post to develop shipping alternatives and live pricing from various carriers. This permits your clients to pick and pay for the specific assistance/ exact service.
Online shopping has increased the importance of packaging because of higher customer’s expectations. The best package not only ensures your products reach customers safe and sound but also delivers your brand’s message.
Package for safe transport
No one wants to receive a broken package. Hence, your product’s safe delivery should be the first priority.
- Pack it tight: there are many styles of packing (consisting of air pillows, foam packing peanuts, colored crinkle paper, newspaper/tissue paper, or bubble wrap) to enhance the protection of your products. After putting the padding in, shake the package lightly to make sure the goods don’t move inside the package
- Maintain the uprightness of your package: the package’s edges will avoid damages to your products when there is extra weight on top of the package. Hence, select a box that fits your products and will avoid all bends in the edges when it gets folds.
- Secure your package deal with tape: Use plastic or reinforced paper tape designed (generally 2 inches/ 5.08 cm extensive). Follow the easy “H-shape approach” by taping along all of the open seams while you seal it. Reinforce the bottom of the box in the same method as well as any seams. Tape over the shipping label on the top, side, and lower part of the package.
Package for optimized shipping costs
We all understand that a package’s shipping value depends on its size and weight. Hence, make sure it’s big enough to contain your products but not too big as it unnecessarily inflates your shipping costs. Attempt various sizes of packaging until you find the most suitable one for each order.
Package for marketing & branding
Packages also help your advertising strategies. You can include a small thank-you card for buying, free samples of products, a participation card, or a discount for the next purchase. You can’t underestimate the impact of the best surprise!
A package, if performed in a smart way, not simplest promotes your brand, but is also an effective approach to get rid of deadstock. If you aren’t aware, deadstock is among the top inventory issues that kill small companies. All shops recognize the conflict of stock control, so any action may help ease the pain.
Once you find out your presentation, packaging, provider, and prices, you’ll need to determine how you want to label your packages. Many new e-commerce marketers mention the deliver-to and return addresses on the package. Although this can be a great way to start, it tends to be time-consuming, tedious, and not scalable as your business grows.
That’s why your Shopify Shipping is available. You can print and pay for a couple of transport labels without delay in Shopify.
Here’s the way it works.
- From your orders listing, pick out all the orders you’re ready to ship.
- Preview every shipment, such as the carrier, shipping provider, and package. Alter or fill in any missing information
- Buy all your shipping labels in one click on, then print them as one PDF.
You can print your marks on plain paper utilizing any printer, or save time. You may utilize a thermal label printer to print on self-stick labels.
6. Insurance and Tracking
Depending on what you’re selling and its value, transport insurance, and monitoring can provide an extremely good deal of security. The insurance and tracking are not a costly service and it takes responsibility if any of your products get damaged or lost. Some delivery services like UPS and USPS Priority Mail offer complimentary coverage for up to $100, and that coverage can be as much as $200 in a few cases.
The maximum customers want to know about their package shipping details. Most shipping offerings also can offer this information through their shipping journey. A simple email format will be a great idea to inform your clients regarding their normal receipt date after they’ve submitted their order. Simultaneously, a shipping acknowledgment email is the best strategy.
Think about buying protection on expensive things so that, in the uncommon situations when a package gets lost, you will be secured. Keep in mind that a few shipping services have insurance already constructed into the cost, so recollect this when you are evaluating various courier costs.
7. Custom & Duties
If you’re shipping internationally, pay attention to taxes and duties as they differ from nation to nation and product to product. So make sure you do enough studies on this matter.
Pay Duties & Taxes
Duties and taxes are imposed to generate revenue and protect local companies from foreign competition. The quantity you need to pay is based totally on product cost, trade agreements, the nation of manufacture, use of the product, and the product’s harmonized system code.
Know each country’s rules and regulation
Every nation has its own guidelines and rules when it comes to:
- Which products are imported and exported
- What threshold to start charging customs responsibility
- The price of customs duty.
Go to the particular country’s official site to get familiar with the customs duty rate for your products. You can also pay attention to the Harmonized Tariff Code too. This is a code that describes your product in a particular country. Unable to input the correct code on your product may cause delay, misdelivery, or a higher tax charge to pay.
8. Business Accounts
Once you have decided on the carriers you want to use, consider setting up business accounts. Business accounts offer advantages including discounts, better management of your orders, free delivery supplies, and many more.
Every service may have various kinds of business account programs, so check with them before making an agreement.
Here are some business account programs from basic transportation services for your reference:
- USPS Business Gateway
- FedEx Business Center
- DHL Business Account
- Canada Post Venture One
- UK Royal Mail Online Business Account
- Australia Post Business Credit Account
Choosing what to charge for shipping, and get out of how to get it to your client. There are endless choices to make the best way for shipping just like we get with Shopify Shipping.
Businesses in North America automatically get access to pre-negotiated shipping rates with all the delivery carriers—UPS, USPS, DHL Express, and Canada Post. Normally you will get your own account with each of those providers and you can arrange your discount rates (often based on your previous shipping volume).
Dealing with a stack of orders is each a blessing and a curse. Instead of ordering an Uber, driving through traffic, and waiting in line, you could now e-book a pickup for UPS or DHL Express shipments directly in Shopify.
Simply go in and plan when you want a driver to arrive at your door, including same-day pickups. Pickups are free for DHL Express shipments and $4 level for UPS (retail costs start at $5.80 and can include additional charges).
Shipping is virtually a challenging issue for any e-commerce business. Each business will have its own exceptional difficulties they should work through and defeat to build up the best and most proficient delivery methodology. Hence, there are many factors required to build your new business so, it takes time to decide which shipping services work best for you.
You have to understand all the shipping strategies to develop your business that is important to its long term success. Re-evaluate within every six months that you are handling the absolute good service provider and providing the best possible cost to your customers.