Checklist for Developing an E-Commerce Shipping Strategy
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Hundreds of online businesses launch each month. Many don’t make it past six months. One of the biggest reasons e-commerce businesses fail is because they don’t have well-developed shipping strategies. Understanding shipping costs and how deliveries impact your business is crucial. Consumers expect fast delivery at a reasonable price. Research shows that a negative shipping experience leads to revenue losses and a tarnished reputation.
Express Courier helps e-commerce stores with customized delivery options across the southeast. We’ve developed an easy to follow 5-step checklist to help ensure your shipping strategy is solid, cost-effective and flexible when it needs to be. Whether you are just starting to explore the world of online sales, have started building an e-commerce platform, or want to improve your order fulfillment, it’s important to get your shipping strategy right.
Navigating through the variables of shipping may seem daunting, but this checklist will make sure you don’t miss anything. See below for explanations about each checklist item.
- Pick a packing plan
- Calculate your average order specs
- Identify your shipping zones
- Choose delivery partners
- Create shipping rates
Pick a Packing Plan
There are two basic options when it comes to packing your orders for shipping – boxes or envelopes. Start there based on what you’re shipping and the experience you want customers to have when they open your package. There are a lot of options when it comes to boxes and envelopes but keep in mind that more than half of online shoppers don’t really care what the packaging looks like as long as their items are safe inside. You may want to include a note, coupon for future purchases or samples of other products you hope a customer will buy. All of that will increase the weight of your package, something to consider in the next step, but could help establish your brand.
You’ll need to decide if you want your branding on your boxes or envelopes and if you want those in a certain color or want to go eco-friendly by using recycled or biodegradable materials. The more customized your packing gets the more costly it becomes, but a better unboxing experience could help generate more positive reviews of your products. You can find pretty good deals when you purchase 1,000 or more boxes.
Calculate Your Average Order Specs
Now that you’ve picked out packaging materials it’s time to determine the average size and weight of your orders. Most carriers charge based on how much space a package is going to take up and how heavy that package is. Of course, the larger the parcels the more expensive shipping will be, so experiment a little with packaging materials to see how much space you can save. A standard-size parcel is under 10 pounds and 864 cubic inches. To determine volume simply multiply a parcel’s length, width and height. Here’s a video from the US Postal Service if you need help.
Identify Shipping Zones
The other big cost factor when it comes to shipping is distance. The longer a package travels the more expensive it is to ship. So it makes sense to set shipping zones based on where your deliveries originate. Think of setting your zones by the time your packages would be in transit. Zone 1 would be the most inexpensive zone and typically the fastest shipping option. Zone 2 could be two-day shipping, while higher zones might take three or more days.
Choose Delivery Partners
Once you have a packing plan, average package specs and shipping zones, you can look for delivery partners and finalize your shipping costs. While some businesses turn to national carriers, many discover cost savings and expedited shipping options offered through regional carriers. Express Courier, for example, can provide one- and two-day shipping across most of the southeast.
It’s not uncommon for businesses to use multiple carriers depending on what zone a package is being delivered to. Always start regionally with your first zone before expanding to a national carrier. You’ll likely save money and cut down on transit time to your customers. It’s best to reach out to multiple carriers. Look not only for the best prices but for the best service and tailored logistics that suit your needs.
Create Shipping Rates
With your carriers selected, you can now determine what to charge for shipping. Some online sellers offer free shipping when a minimum purchase is reached. Others set flat rates for standard shipping, knowing some deliveries will cost more and others will cost less. There’s also the “table rate” strategy that determines shipping fees based on where the delivery will be made.
Many companies use “live rates” from a carrier. This ensures you’re charging the customer exactly what you’re paying a carrier for delivery. You may want to add a surcharge to cover packaging and fulfillment.
However you structure shipping rates, be sure they cover the cost of packaging and delivery. Otherwise, your delivery expenses will be eating into your profits. Most consumers expect to pay for shipping if their order is under $50.
With a fully developed shipping strategy, you’re ready to sell online. You’ll have the confidence that your shipping rates are what they should be and that your customers will experience the service they expect.
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