Ecommerce shipping — solutions, benefits, and methods

A professional investigating ecommerce shipping

If you’re starting or scaling an ecommerce business, there are probably many things you’re trying to sort out. It might be easy to overlook one of the most important aspects of your strategy — ecommerce shipping.

But that piece is extremely important. Customers won’t stick around to make a repeat purchase if the ecommerce shipping and delivery is a mess.

In this article, we’ll give you a refresher on the basics of ecommerce shipping so that you can get started using the most effective methods for your business. We’ll also cover the benefits of different strategies and how to calculate the costs of shipping.

After reading this, you will have learned:

What is ecommerce shipping?

Ecommerce shipping is the entire process of transporting products sold online to a customer’s delivery destination. It starts when a customer places an order and ends either when that order is delivered or when the customer makes a return.

While it seems like this process might be simple enough, it can easily become more complicated by calculating shipping costs and rates. Other factors that make the ecommerce shipping process more complex include:

While the ecommerce shipping process can become complex, it can be broken down into a few basic steps.

Ecommerce shipping process

The ecommerce shipping process involves shipping items from storage to a customer.

There are three primary stages of shipping an item. Each of these stages is important to ensure that customers are receiving the right product at the right address:

  1. Order receiving, in which you verify that items are in stock to fulfill the order.

  2. Order processing, in which you review order data, such as shipping address, and ensure it’s accurate.

  3. Order fulfillment, in which a picking list is generated, and then items are found in storage, packed for delivery, and prepared to be shipped.

You’ll want to create processes to make these stages go as quickly as possible, since more and more customers are beginning to expect inexpensive, same-day shipping.

The importance of ecommerce shipping

15% of ecommerce consumers say shipping options meet their expectations

Thanks in part to standards set by sites like Amazon, customer expectations are that shipping is lightning fast. Even as ecommerce shipping becomes faster and faster, only 15% of consumers in the US say that shipping options meet their expectations for speed of delivery. Consumers expect fast shipping, and they prefer it to cost nothing. Free shipping is what 66% of consumers expect when shopping online.

66% of ecommerce consumers expect free shipping

If you are not providing excellent shipping service to potential customers, they will look to buy products elsewhere. In fact, 63% of customers say they have abandoned their shopping cart because of high shipping prices, and 36% have abandoned it because of slow shipping.

63% of ecommerce consumers have abandoned shopping carts due to high shipping prices

Thankfully, you don’t have to lose customers because of shipping. You can make your shipping prices transparent from the beginning or incorporate the average delivery price into the product price. You can also let customers have options for shipping speed. It may be worth it to them to pay more to have your product faster.

36% of ecommerce consumers have abandoned shopping carts due to slow shipping

It’s a difficult time to be in ecommerce, in part because of global market competition. Customers can get products for the best prices from anywhere in the world. For ecommerce businesses, competition is stiffer than ever.

Supply chain issues are also causing difficulties for companies. Partially due to the pandemic, issues like labor shortages and port congestion have slowed the global supply chain — resulting in increased costs and delayed production.

The opportunity for ecommerce businesses is as ripe as ever, but expectations are higher than ever too. There are those complex supply chains and pesky competitors. Your business will be more successful if you can rise to increasing customer demands for convenience. In other words, it’s smart to have an ecommerce shipping strategy in place if you want your business to shine.

Best practices of ecommerce shipping

While ecommerce shipping has become more difficult, having best practices outlined will set you up for success.

Your best practices for ecommerce shipping could look something like this:

Be honest and upfront about shipping costs

Make sure your shipping costs are visible on the web pages where customers shop. If you aren’t doing flat-rate or free shipping, offer a calculator on the same page as the products so that customers see the shipping price well before checkout. Unexpected shipping costs can cause your customers to quickly abandon their carts. If you’re upfront about shipping, customers won’t be caught off guard on price.

Display delivery times

Shoppers enjoy knowing their delivery window. Take advantage of this by displaying the expected delivery time at the time of purchase (or even earlier). If you can, give shoppers options for delivery speed at checkout. That way, they have the opportunity to pay for faster delivery if they need or want it.

Enable package tracking

Provide an easy way for customers to track their package so they can anticipate shipping delays and feel assured and excited when their package is out for delivery. Each notification that signals your customer’s package is closer is a positive interaction with your brand. Additionally, customers also like to know when delivery happens so that they can prevent theft.

Provide easy returns

Create a shipping system that allows for easy customer returns to ensure that customers keep coming back. Easy returns are especially important if your products include sizing or color options that a customer might prefer to see in person. If possible, make sure customers don’t have to pay shipping for returns.

Provide an easy way for customers to track their package so they can anticipate shipping delays and feel assured and excited when their package is out for delivery. Each notification that signals your customer’s package is closer is a positive interaction with your brand.

With customer expectations and best practices in mind, you may be wondering how you’ll know the cost of shipping your products.

Ecommerce shipping costs

There are many costs associated with ecommerce shipping.

Shipping costs and shipping rates are actually distinct metrics. Shipping rates are set by postal services or by your shop. Shipping costs are all of the many costs incurred by your company to ship ecommerce items. Some of the different costs include:

Carrier costs
The carrier cost is probably the first cost you think of when you think about shipping costs. It is also referred to as a “shipping label,” and it is the amount the carrier charges for postage to transport the package from the point of origin to its delivery destination.

Packaging costs
These costs include the cost of items that you will use to keep products safe during shipment, including tape and boxes. These are somewhat flexible depending on how you choose to package your products.

Fulfillment costs
These are the labor costs of packing, picking up, and shipping your shop’s items for delivery.

Overhead costs
Not all ecommerce businesses have overhead costs. However, as an example, if you operate a warehouse for your products’ storage, the costs of operating that warehouse will be a part of the shipping costs.

Other miscellaneous costs
These include items like insurance or the cost of having a “signature required.”

Now that you understand shipping costs, it’s important to learn about shipping rates.

Ecommerce shipping rates

Unlike shipping costs, which comprise all the costs listed in the last section, shipping rates are charges associated with shipping. They may be the rates you’re charged, as determined by postal services (also known as carrier rates). They may also be the rates that you charge your customers.

Here are some different ways you could choose to charge your customers for shipping:

Flat-rate shipping
This shipping type charges all customers the same fixed shipping rate, either across all orders or for all orders that fit a specific weight range, order value, or other classification. If you’re charging customers a flat rate for shipping, make sure it’s the average shipping price to avoid losing money. Flat-rate shipping can be a good option because it makes it easy to be upfront and transparent.

Real-time carrier rates
Some ecommerce stores display real-time carrier rates at checkout. The exact shipping rates are automatically pulled from the carriers based on the customer’s location and delivery preferences. Customers may prefer if you give them an estimate of a carrier shipping rate earlier in the buying process than at checkout. If carrier rates include options for different carriers, it lets your customers choose exactly the service they want — for the price they want.

Free shipping
Offering free shipping is a great way to entice customers and prevent them from abandoning their carts. Some companies will wrap the cost of shipping into the price of an item. Some have a minimum threshold that must be met before free shipping kicks in. An advantage of this approach is that customers are often willing to spend more on products to get free shipping. You can also take a recurring fee from customers in exchange for free delivery. These fees often offer other perks, such as subscriptions or faster shipping.

Local delivery
Local delivery is a great out-of-the-box option for small businesses. Offering free local deliveries entices local customers and helps your brand build rapport in a community. You might build the costs of your free local delivery into your product price. Today’s customers are becoming more willing to spend more on local products.

Ecommerce shipping rate factors

Each of these shipping rate options can be presented upfront to customers so that they know what to expect. Another important way to be transparent with customers is to allow them to track their shipments and returns.

Tracking shipments and returns

The shipping process is not complete until your customer receives their delivery. Even then, the product could still be returned, prolonging the process. This is why it is crucial to have exemplary tracking and returns processes. Here are some methods to consider as you’re trying to make shipping and returns as smooth as possible:

Managing orders
This is the process of receiving, tracking, and fulfilling customer orders. Having a proper order management system, with or without software, will make it easier to minimize errors, reduce inventory issues, and ensure that orders are fulfilled in a timely manner. Using software can make orders much simpler to manage.

Tracking ecommerce shipments
Provide a tracking number for customers so they can receive updates on delivery times and track their packages. This helps set expectations and is valuable for customers for many reasons. It will help them feel that your ecommerce store is reliable.

Determine your customer return policy
Customer returns are ultimately unavoidable for ecommerce sites. Keep in mind that the return process should be simple for customers — otherwise, it will be more difficult to retain them. If you sell a product that includes sizing or colors, returns and exchanges will be even more important. The main pain points for customers making returns are paying for return shipping, bringing the return package to the mail carrier, and feeling that there isn’t an easy way to do returns online. You can choose if and how to ease these pain points for customers. Make sure it is very clear for customers from the beginning if returns aren’t available or if they will have to pay return shipping.

A key part of having all of these shipping and returns systems in place is working with shipping carriers.

Shipping carriers

There are several different mail carriers available to deliver packages in the US. Here’s a quick review of what you should know about each carrier:

USPS
This carrier makes deliveries daily, so it’s an affordable option for ground deliveries. Some shipping services pass their shipments to USPS for a package’s final delivery.

FedEx
This carrier has many options for different types of deliveries. FedEx has a program for small businesses called FedEx Small Business, which includes reduced shipping rates and access to resources for learning about ecommerce shipping.

UPS
This carrier has many options for different types of deliveries. UPS also has a program for small businesses, with 40–50% off shipping for those with an account.

DHL
This carrier is especially known for its international shipping options.

Shipping through certain carriers could change the way you want to package your products. Let’s take a look at how to package products for shipping.

Ecommerce packaging

There are many different ways you can approach packaging your products. While the selections available for ecommerce packaging seem endless, what you choose will make a difference in the experience your customer has when they receive your product.

There are many different types of shipping boxes, including corrugated, chipboard, and paperboard.

Some considerations to keep in mind when selecting your packaging materials include:

Ecommerce packaging

Most importantly, make sure that your packaging will protect your product from damage as it’s being shipped. It would not leave a good impression for a customer to receive a damaged product. It would also be a waste of product.

Here are a couple of ways to leave a better impression on your customers.

Custom packaging
This is a popular approach, and many ecommerce brands use well-made, customized packaging to improve the customer’s experience. Custom packaging can make shoppers more likely to buy from your business again.

Eco-friendly packaging
As ecommerce grows, so does the waste it produces. Eco-friendly options can benefit your business and the planet. Make sure to let customers know when you’re making your packaging eco-friendly. Taking a more sustainable approach will improve the overall impression they have of your brand. Customers also don’t want to have to figure out what to do with the packaging after they’ve received your product, so you could include instructions for recycling or reusing your packaging.

Get started with ecommerce shipping solutions

Getting started with or scaling an ecommerce business can be overwhelming, and shipping is no small part of that. As you get off the ground, keep in mind:

For a simple way to manage all the aspects of your ecommerce business shipping needs, check outAdobe Commerce. It can streamline how you manage your business, from setting up your website to tracking packages and delivering your product to customers. Managing orders becomes much easier when you use Commerce.

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