Guide to Ecommerce Shipping: Strategy, Tips and Best Practices
Experts say that ecommerce will facilitate 95% of all purchases by 20401. If you’re an online store or retailer want to keep up with the competition, it’s essential to have a rock-solid ecommerce shipping strategy in place.
Needless to say, there’s much more to ecommerce shipping than simply packaging goods and taking them to the post office. As your online store grows, things can get complicated. You’ll need to balance customer expectations with back-end efficiency — mastering everything from order processing to logistics.
In this article, we’re going to share some ecommerce shipping best practices to help you nail the process from start to finish.
In this ecommerce shipping guide:
- What is ecommerce shipping and fulfilment?
- The ecommerce shipping process
- Differences between B2B and B2C shipping
- Ecommerce shipping best practices
- How to get started with ecommerce shipping
- Frequently asked questions
What is ecommerce shipping and fulfilment?
Ecommerce shipping and fulfilment covers the receipt, processing, and delivery of online orders. It ties to together websites, warehouses, stock, supply chains, and many steps in between. It’s a complex operation involving many moving parts — and getting it right is essential.
Why? Because if your ecommerce shipping is too slow or expensive, customers head elsewhere. Increasingly, shoppers are demanding more from their favorite online stores — expecting their goods to arrive faster, for less.
In fact, free and fast shipping is the main driver of online sales2:
- 39% of shoppers say same day shipping would make them more likely to shop online2.
- 22% of shoppers abandon their carts because delivery is too slow3.
- 48% abandon their carts because extra costs like shipping and tax are too high3.
Creating a fulfilment operation that provides both competitive pricing and business efficiency isn’t easy — but knowing the end-to-end process can help.
How does ecommerce shipping work?
The ecommerce shipping and fulfilment process begins as soon as a customer hits ‘Buy now’.
It covers three stages.
Stage one: Receiving an order.
When you receive an order, you’ll need to make sure you have the stock to fulfil it. This involves keeping close tabs on inventory levels. For some businesses, particularly ones who operate across different channels and platforms or have multiple warehouse premises, this can be especially challenging. But even a small startup with a backroom stock supply could hit trouble.
Many inventory and order management systems can do a lot of the heavy lifting here. On a basic level, these systems coordinate the back and front end of your operation — ensuring customers don’t purchase products from your website that are not in stock in your warehouse.
Scalable systems like Adobe Commerce, powered by Magento, can help you manage orders, inventory, and fulfilment on a global scale.
Stage two: Processing the order.
Next, you’ll need to verify shipping details and update order statuses accordingly. As you do so, you’ll need to ensure that your inventory is updated too.
Many ecommerce retailers might choose an automated system here — which eliminate human errors and ensure a smoother process.
Stage three: Fulfilment.
The fulfilment stage is all preparing the items for shipping and getting it out the door. This can involve everything from generating picking lists and shipping forms to choosing the right packaging. Finally, your logistics team or partners will need to deliver your products to the customer in one piece.
You should customers in the loop at this stage with tracking details and check-ins. Once the product arrives with your customer, the ecommerce shipping process is complete — though returns can add a further stage to some orders.
Learn more about store fulfillment with Adobe Commerce
The differences between B2B and B2C shipping.
There are several key differences between B2B (business to business) and B2C (business to consumer) shipping and fulfilment.
B2B
- Depending on the complexity of the order, shipping can take longer and cost more. The products may be more specialist, in higher quantities and of a higher cost.
- Relationships are important in B2B. One-to-one interactions with sales reps have traditionally facilitated sales.
- B2B returns can take far longer, owing to the complexity and size of orders. With high-value items, some B2B suppliers may require insurance to mitigate the risk of returns and client dissatisfaction with their product.
- Businesses may purchase items on credit. This might involve invoicing, rather than processing sales directly.
B2C
- B2C orders can often be fulfilled in one or a few days — and at far lower costs.
- B2C sales rely on quicker, less complicated purchases. Retailers often build brand loyalty with discounts and customer service, rather than personal relationships.
- Returns are straightforward — and are often handled by 3PL suppliers.
- B2C sales are likely to be processed and paid for instantly.
But the lines between B2B and B2C are becoming increasingly blurred. Today, a new generation of B2B decisionmakers are likely to expect a similar level of convenience in their ecommerce purchases as they get from their favorite B2C platforms4.
As a result, regardless of your industry, you need to keep your customers on side.
Ecommerce shipping best practices and tips.
With the saturation of online retailers, it is important to make your business stand out among your competitors or at the very least, stay current with the needs of your consumer.
In this case, having desirable shipping and returning options can be highly beneficial.
The 2018 Pitney Bowes Global ecommerce study noted that 56 percent5 of consumers were disappointed by the previous holiday season due to difficulties with shipping. Of that 56%, consumers listed the following issues as the direct reason for their disappointment:
- late shipment
- expensive shipping costs
- unfulfilled orders
- wrong product shipped
- unclear return policies
- poor packaging
Clearly, well-executed shipping can greatly impact the success of your ecommerce business. But before you start thinking about shipping partners, couriers, and packaging suppliers, it’s important to iron out your overall plan.
Get your strategy straight.
Whether you’re a seasoned ecommerce business or just getting started, it’s essential to have a shipping strategy in place — covering the why as well as the how.
For example, are you looking to increase conversions, or expand your market, or just looking to tweak and existing strategy to decrease costs?
Whatever your objectives, set them out in advance. Then, create benchmarks and build a team to help you implement it. You’ll need to get sign off and support at all levels of your business.
Find the right couriers.
It’s likely that you’ll need to partner with couriers to handle your deliveries. Before you start your search, it’s important to know your exact requirements and priorities.
Choose your couriers based on their delivery speed, range, costs, and specializations. Many offer dedicated support, discounts, and useful business solutions.
But don’t forget you can also utilize live shipping costs to choose the right courier for each individual job. You don’t need to be tied down to a single shipping partner.
Consider dropshipping.
Dropshipping is when you work with an external service provider who handles both your inventory and shipping. You manage the website, while orders and fulfilment are handled elsewhere.
This means you don’t need to keep hold of stock, or worry about logistics yourself. It’s a useful method for growing businesses as you can operate from anywhere, without being tied down with the overheads of premises or stock.
While managing your ecommerce business from a beach might sound idyllic, it has a few practicalities to consider.
You’ll need to:
- assemble a reliable team who you trust to handle your logistics.
- be wary of profit margins and competition.
- have total confidence in your product range — even if you’re not there to check it personally.
Choose the right integrations.
Adobe Commerce integrates easily with third-party apps and suppliers. For example, Easyship shipping integration can help you access over 250 shipping solutions from couriers around the world from a single platform, whereas Adobe Commerce Services can help you manage payments, maximize sales, and optimize your operations.
Check out Marketplace to see how your favorite apps can integrate with Adobe Commerce.
Be clear with your order fulfillment and return policies.
Your shipping and returns policies can be the difference between having a customer purchase your product or abandoning their shopping cart.
But your shipping can be utilized as a powerful marketing tool too. This strategy begins on your website and it’s the first step of an ecommerce transaction. Your order fulfillment policies and information should be front and center on your website to attract the most attention.
If you’re considering offering free shipping, that should be one of the first things the buyer sees when landing on your ecommerce site. This can greatly influence their decision to make the purchase or not.
The essence of an ecommerce business is its convenience. Consumers are forgoing leaving their personal space to find goods online. Capitalize on convenience and create a site that is easy to navigate with an amazing user experience. Make sure the information is easy to find and clearly stated. If the flow of the website is compromised, it could increase the bounce rate and ultimately impact sales.
Let’s get down to the shipping options you can offer. The key to every shipping strategy is flexibility. You might need a few tries to get the right option going for your business. You might also need to adapt shipping strategies as your business grows and evolves.
This could mean having more than one shipping option available to your consumer. You can use the strategy of mixed shipping options to best serve your consumers and produce additional revenue. Below are some top ecommerce shipping solutions to consider.
Free shipping.
Baymard note that 48% of shoppers abandon their carts due to high extra costs3. What’s more, a 2021 study by Jungle Scout noted that 66 percent of customers expect free shipping on all orders6.
Most businesses realize that free shipping can be utilized not only for delivery, but for marketing too.
To offer free shipping, you must understand how it affects your profit margin. Even if the option of free shipping is bringing in more sales, the cost of covering shipping expenses for each sale may not equal beneficial results.
To strategically utilize free shipping, you can try a variety of options. One option could be to include free shipping over a certain price threshold. 80 percent of customers expect free shipping when making purchases at a certain amount6.
You can also use free shipping as a promotional offer or apply it to special products.
Companies can also offer free shipping for standard delivery times and expedited shipping at an additional cost. There are myriad ways to use free shipping, just make sure it doesn’t affect your bottom line.
“We are starting to see shipping transform from a 'loss leader' into a revenue-generator in B2C and B2B commerce. These merchants are early adopters; successful in amalgamating the rising consumer/buyer expectations with best-of-breed shipping and fulfillment technology to create an agile, efficient, and process-automated last-mile experience.
The future will see Customer Experience (CX) drive cross-discipline organizational collaboration to orchestrate a seamless customer journey that includes shipping.”
– Matthew Mullen, Senior Vice President of Temando, a Neopost Shipping company
Flat rate shipping.
The term “flat rate shipping” is pretty self-explanatory. It is when one cost for shipping is assigned to any product purchase. Using this option means that the weight, size, and value of the product do not factor into the total cost of the shipping.
This gives customers an upfront look at what they can expect for the final total. Since you can dictate the cost of flat rate, you can create a shipping total that will help you cover shipping or even help with the packaging costs.
Although not as popular as free shipping, a lot of consumers can see the benefits of this option if they plan to spend more or buy bigger items.
Table rate shipping.
Table rate shipping is almost the opposite of flat rate shipping. This type of shipping allows companies to customize their shipping solutions. For table rate shipping, you can dictate different shipping costs based on a variety of factors.
Most often, factors such as delivery destination, product size and weight, and number of items ordered are considered when setting the shipping costs.
An example of table rate shipping is if your business charges a cost for deliveries within a certain radius of their location and a different cost for shipping to locations outside of that radius.
Companies can also choose to charge one shipping cost for the order of one item and a different cost if two or more items are purchased. There are a variety of different shipping cost options ecommerce sites can set when using table rate shipping.
Live shipping rates.
This option gives exact shipping rates to your consumer directly from shipping carriers such as UPS, DHL, or FEDEX.
Although not traditionally used as a promotional item, live shipping rates do show the consumer exactly what they are paying for when choosing their shipping options. Live shipping rates are a great strategy for B2B shipments where rates are calculated by precise factors such as quantity, size, weight, or shipping distance.
With live shipping rates, you can still cover your costs in packaging or order fulfillment with added surcharges to the shipping rate that the consumer ultimately chooses. By having live rates, you can pick and choose the best carrier for your product by current shipping rate.
Utilize shipping tools.
Once you have a basic plan for order fulfillment and returns completed, you can then look into all the tools available. With B2C and B2B transactions, we are no longer looking at the one package at a time being taken to your local post office process. In a working ecommerce business, every process has to be streamlined to be as effective as possible.
Starting with the basics, postal services such as FedEx or UPS offer business accounts that help companies keep track of shipments, easily order packaging supplies, and schedule pick ups. This allows consumers to easily track their orders.
Along with attractive options such as free and fast shipping, consumers want accurate shipping. They also want to know when they can expect their goods and they want to be able see where it is each step of the way.
Having a business account with postal services can have the added advantage of discount shipping or free shipping supplies. It’s a good idea to look into what benefits you like and what works best with your shipping fulfillment objectives.
Some more in-depth tools are also available to help with your shipping needs. These options provide shipping software that integrates with your ecommerce site to offer the best solutions for your shipping needs. These systems may also offer consultations to glean additional expert advice.
You can also take advantage of the shipping solutions that are offered with your ecommerce site.
Find the right packaging.
Now that you have a good understanding of shipping options, you can then move on to prepping your goods before sending it out. Before placing your product in the mail, consider how this item will be introduced to your consumer.
As the world of commerce continues to evolve, packaging has become much more than just a functional object. In many B2C transactions, consumers are looking for an experience when they receive their products. Packaging and branding play a role in the reception of the product.
To stand out among your competitors, you’ll want to take some care when packaging your product. Spend some time creating the right design for your packaging. Consumers really respond to personal touches when they receive their goods, as it essentially replaces the in-person experience they might get in a physical store.
For B2B transactions, designed packaging might be less important, and functionality slightly more so.
When thinking about your product packaging, also keep in mind that the weight and size will all factor into the cost of shipping – so a good compromise must be made between design and functionality. Make use of this aspect of order fulfillment to leave a lasting impression with your consumer. This can help convince a customer to shop with you again.
Widen your radius with international shipping.
Once you have a basic grasp of the type of shipping strategy that might work best for you, you can then consider widening your radius. International shipping may seem like a huge next step, but it’s also a potentially profitable one.
With the increased growth of international sales, it might be a good idea to see if that is a possible avenue for your business. Depending on the country you are planning to expand to, you will have to carefully research the import and export restrictions for that country.
Then there are the considerations of the customs taxes or additional documentation that your goods will need. You will also have to then choose an international carrier to work with.
When considering international sales, it’s best to do your research diligently. Make sure there is a demand for your product in the country or countries that you plan to sell to.
How to get started with ecommerce shipping.
Shipping and fulfillment is a very necessary aspect of a profitable ecommerce business, but it can be challenging. The best shipping strategy will have to be custom tailored to your product and ideal consumer. It may take a few tries and adjustments before you find a solution that works best for you.
Adobe Commerce, powered by Magento, is a user-friendly ecommerce platform offering shipping strategies for both small businesses and larger mid-market online stores. The flexibility of the platform will allow for customization as your business grows and changes.
Ecommerce platforms of this type offer similar benefits as having business accounts with postal services, but it takes it one step further by seamlessly integrating with your site.
There’s also a vast Adobe Commerce community of support when you need it.
“In the (near) future we will see more flexible last-mile solutions, like smart and enhanced delivery platforms (On Demand Delivery), more lockers, in-home deliveries, or deliveries in the trunk of your car. And these flexible delivery solutions will be supported by technologies like A.I. and autonomous vehicles…”
– Leendert van Delft, Vice President Sales Programs Global and Europe, DHL
Ecommerce shipping frequently asked questions.
What is the best shipping method for ecommerce?
There are a wide range of shipping options available for ecommerce retailers across different industries. Some, like flat rate or free shipping help can help incentivize sales. But you may find that options like table rate shipping — which set a cost per order — might be a better option for your customers too. Do some market research before choosing your shipping methods.
How do I calculate shipping costs?
To calculate shipping costs, you’ll need to know the size and weight of your package, as well as the destination country. From there, you can negotiate rates with your courier, which you can integrate into your pricing and shipping fees.
What is the cheapest way to ship?
Shipping rates vary depending on the weight, size, and destination of your packages. It’s worth doing careful research into different couriers to find the right option for your business. You can also use shipping tools and live rates to find the best prices as and when you need to ship.
More ecommerce shipping content.