10 Sales-Boosting Ecommerce Shipping Best Practices
Thinking of starting an eCommerce business, or just wanting to brush up on some shipping best practices? You’ve come to the right place. You can have a great product, but the delivery of it can make all the difference. In fact, your shipping policies can attract new buyers, build brand loyalty, and increase customer satisfaction! So here are six eCommerce shipping best practices you should follow.
1. Assemble a "Shipping Team"
When it comes to shipping, there are many stakeholders within your organization that should be involved. This includes members from the following teams:
- Marketing. They are responsible for communicating shipping procedures and promotions to customers. They should also be able to answer questions like "how often can a promotion run while maintaining margins?"; "How should we promote a particular product?"; and "Which products are best sellers vs. which products have the highest abandoned cart rates?"
- Web Design. This team often works closely with marketing (or is part of the marketing team). They are responsible for making sure shipping options are clearly laid out on your website and that they see them at the right time. They should have insight into which web pages visitors spend the most time on; at which point a customer is likely to abandon their cart; and which offers convert the best, using A/B testing.
- Fulfillment. Whether this team is in-house or a third-party logistics (3PL) company, they work to ensure orders are picked, packed, labeled, and shipped accurately and on time; they're also responsible for returns management. They need to be able to answer questions such as, "Will this promotional idea cause operational slowdowns?" and "which products are being returned most frequently?"
- Customer Service. This is the one team that will be in direct communication with your customers, so their involvement is critical. They need to understand how different shipping options work, what promotions are currently running, and company policies for customers that have a bad experience.
2. Create Your Shipping Strategy
What are you hoping to achieve with your shipping strategy? What are your goals? That may determine what type of shipping you offer. Think about some of the following goals:
- Increasing conversions. If you want more people to purchase your product, you can't hit them with a huge shipping fee at checkout, or they're likely to abandon their carts. So, provide multiple shipping options and be upfront about costs to increase conversions.
- Increase order values. Are you wanting customers to buy more from you? Then your strategy may be to encourage this through free shipping thresholds, expedited shipping, or free or expedited shipping at a certain spend (more on all these later).
- Grow Your Audience. Looking to gain more customers? Perhaps you'll want to expand into international markets (check out some eye-opening stats here), offer alternate shipping options like in-store pickup or local delivery, or look at need methods of promoting your product and brand.
- Decrease Costs. Simply looking to decrease your costs? You may want to consider looking at different fulfillment providers, or if you're doing shipping on your own, considering one. This can reduce your operational costs, and you can often acquire better shipping rates through a fulfillment center due to their relationships with carriers. If they have multiple locations, they can also ship from the location closest to your customers, so the product crosses fewer shipping zones (thus reducing shipping costs further).
3. Understand Carrier Options
Which carrier is going to deliver your product to your customer the quickest? What are their policies for overnight and holiday delivery? We've compiled information about delivery times and service for "the big three" (FedEx, UPS, and USPS) so you don't have to go seeking out the information from multiple sources. Check it out here: Delivery Times for Top Shipping Carriers: FedEx vs UPS vs USPS.
4. Consider a Multi-Carrier Strategy
Often, busy shippers will simply choose a single carrier strategy and negotiate a reasonable rate. This streamlines decision-making, as there’s no need to research rates online or request a spot quote. While a single carrier strategy is a time-saver, using multiple shipping carriers offers a number of benefits of its own.
- More Negotiation Power. Using only one carrier places you at their mercy and can leave business owners a bit complacent if service is "generally acceptable." Without an exclusive arrangement, business owners are more likely to keep up with the types of services that other carriers offer. In addition, carriers may not offer existing customers their most competitive service options or rates, similar to cable companies.
- The Right Service for the Right Job. When it comes to handling different types of shipments, some carriers are just better than others. Following a multi-carrier shipping approach, you would choose the carrier that’s best suited for each particular shipment (for example, domestic vs. international shipping, oversized shipments, etc.).
- Risk Mitigation. When service goes bad with one carrier, you could be scrambling to find another. For example, a carrier may change service levels or discontinue service to certain areas; you may find that your carrier is becoming sloppy, losing more and more packages in transit; or, poor weather could halt a carrier's service, which impacts your delivery times.
5. Consider Offering Free Shipping
The idea of offering free shipping can make small businesses cringe because it can be a big expense. However, with Amazon and other retail giants popularizing it, most customers expect it—in fact, 9 out of 10 consumers say free shipping is their biggest incentive to shop online.
On top of that, today’s consumer has many options, so unless you’re selling a very niche product that they can’t get elsewhere, they’re more likely to pass you by in favor of a seller who’s offering to ship for free. This means you’ll need to accept lower profit margins on your product or increase the price of the product to make up the difference. Learn how to easily calculate your free shipping threshold.
Of course, you may want to limit free shipping to the 48 contiguous United States, certain days of the week or certain times of year, or use it as a promotional tool.
6. Consider Expedited Shipping
Studies show that 90% of consumers are willing to wait a bit longer for an item if shipping is free. However, since many smaller eCommerce companies can’t afford to offer free shipping, expedited shipping is a good alternative (because if people can’t get it free, they want it fast).
Even better news? Most of the respondents in a survey of 2,815 U.S consumers have reasonable expectations for what's considered "fast," especially when they’re ordering from small and medium-sized eCommerce retailers. In fact, the majority stated that 3-5 days was an acceptable wait time. So, another strategy is to offer free shipping, and then surcharge for expedited shipping to offset the cost!
7. Be Transparent About Shipping Costs
Simply can’t afford to offer free shipping? The next best option then is to be transparent about eCommerce shipping costs. One of the biggest frustrations for buyers is to only learn the cost of shipping at the end of their transaction, in which case they may abandon their cart and look elsewhere (estimates reveal that 55% of abandoned carts are due to shipping costs).
Rather than blindsiding them with shipping fees, you can adopt a flat-rate shipping system that provides the fee upfront, or allow them to enter their zip code before they’ve progressed to the checkout so that the eCommerce shipping costs can be calculated earlier in the transaction.
8. Ship Products Appropriately
As a small business, you may not be able to provide personalized packaging like some of the big guys, but that doesn’t mean you should just drop your product in a box and ship it off, either. You should still make sure that your product is shipping in an appropriately-sized box and wrapped securely if it’s fragile. This will also help to ensure fewer returns due to breakage.
9. Send Shipping Notifications
Customers like to know the status of their delivery. In a survey, 82% of consumers said it was important that retailers proactively communicate every fulfillment and delivery stage, with 45% saying they track order status by text and 85% using email to stay updated.
By implementing a system of communication that notifies your customers of their product’s whereabouts every step of the way, you can create more trust and provide a more positive experience. This is especially important when your delivery times are lengthier and your customers are likely to become more anxious.
10. Take Responsibility for Shipping Problems
A lot can happen to your package once it leaves your hands. It can be delayed in transit, delivered to the wrong destination, arrive damage, or be lost completely. While none of these may be your fault, your customer won’t see it this way, and they will want you to make things right.
As soon as you’re made aware of a problem, you should contact the carrier to try to resolve the situation. Making good on the problem could come down to offering a discount on the next order for delays, or replacing the item if it’s damaged or lost.
Get Into “Ship Shape” with The Fulfillment Lab
While these ten eCommerce shipping best practices should help startups and small businesses succeed, you may eventually decide you no longer want to be responsible for shipping. Outsourcing to a fulfillment center is a great solution!
At The Fulfillment Lab, we can help you to save money on eCommerce shipping costs and much more. Check out our blog 10 Reasons to Use a Fulfillment Center for Your Ecommerce Shipping and then contact us to learn more about how we can boost your business and your bottom line!