Ecommerce shipping — solutions, benefits, and methods
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 ecommerce shipping is
- Ecommerce shipping process
- The importance of ecommerce shipping
- Best practices
- Ecommerce shipping costs
- Ecommerce shipping rates
- Tracking shipments and returns
- Shipping carriers
- Ecommerce packaging
- How to get started today
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:
- Selling various sizes and types of products
- Shipping from a storage area (likely a warehouse) to the customer
- Shipping to multiple regions nationally or internationally
- Providing different delivery options
- Providing different shipping speed options
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:
Order receiving, in which you verify that items are in stock to fulfill the order.
Order processing, in which you review order data, such as shipping address, and ensure it’s accurate.
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
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.
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.
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.
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.
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:
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.
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.
These are the labor costs of packing, picking up, and shipping your shop’s items for delivery.
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:
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.
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 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.
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:
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.
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:
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.
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.
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.
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.
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:
- The size and weight of your product
- The durability or fragility of your product
- The shape of your product
- Whether your business will utilize branded or non-branded 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.
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.
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:
The efficiency and reliability of your ecommerce shipping systems can be crucial for your business.
Following the best practices involved in ecommerce shipping can set your business up for success by bolstering your reputation and turning new customers into repeat customers. Best practices include displaying shipping rates upfront, sharing delivery timeframes, enabling package tracking, and providing easy returns.
There are many different approaches you can take to shipping rates, carriers, and packaging, depending on the needs of your customers and business.
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.
Adobe Commerce is the world’s leading digital commerce solution for merchants and brands. With Commerce, you can build engaging shopping experiences for every type of customer — from B2B and B2C to B2B2C. It’s built for enterprise on a scalable, open-source platform with unparalleled security, premium performance, and a low total cost of ownership. Businesses of all sizes can use it to reach customers wherever they are, across devices and marketplaces.
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