We live in a time where convenience is essential, and features such as same-day shipping have transformed from an added luxury to a necessity in the world of eCommerce shipping and operations.
The days of anxiously waiting for something to arrive in the mail for weeks at a time are long gone, and consumers today want access to their products and services cheaper and faster.
Compared to physical retail, long customer wait times in the reception of their ordered products have always been a handicap within eCommerce and digital retail.
Today, logistics and supply chain technology has expanded in such a way where consumers aren’t just looking for fast and cheap delivery, they’re expecting it, too. 80% of shoppers already expect same-day shipping, and 61% want their packages within 1-3 hours of placing their order.
Same-day shipping is already an expectation today, but many digital retailers and eCommerce stores are unable to satisfy their customers’ needs while still ensuring that their business remains profitable.
Today, we’re going to go over the key elements of executing a shipping strategy that’s ready for success.
eCommerce Shipping Strategy – 4 Elements to Consider
Establishing a shipping strategy is arguably the most critical element of any eCommerce business.
While investing in your eCommerce website and marketing is also essential, it’s the shipping step where your customer first comes into contact with your physical product.
Depending on your particular method, eCommerce shipping could also be one of the prime areas bleeding your business dry – especially if this specific role is performed through an expensive third-party fulfillment service.
One of the best places to start is gaining a comprehensive understanding of the key decisions surrounding how to upgrade your eCommerce shipping strategy, which we will outline below.
Shipping Rates and Methods
Before you even send off your product to the client themselves, you must first decide, as a business owner, what your particular pricing strategy is for your eCommerce shipping services. The ultimate influencing factor for this decision boils down to your specific business’s basic financial capabilities.
A popular route utilized by 46.5% of small to mid-sized businesses is to offer free shipping. Who doesn’t love free? Offering free shipping is also one of the most effective ways to reduce shopping cart abandonment.
That said, it’s not entirely that simple.
The cost of shipping falls on someone and, if it’s not the customer, it’s on your business. However, there are ways to supplement the cost to allow your business to offer free shipping.
- Increasing product prices, so the customer indirectly pays.
- Subtracting the total price of shipping from your margins, so your business pays.
- Increasing product prices only slightly to cover partial shipping costs so that both you and the customer pay a smaller amount.
- Providing discount codes for specific customers to access free shipping services.
Alternatively, you could also offer flat-rate shipping. This method works best for businesses with an uncomplicated product line consisting of items of a similar size and weight proportion.
This approach becomes more complicated if you have a variety of different products of various sizes and weights. It’s also essential to ensure that you do not over or undercharge customers for this particular eCommerce shipping service.
Finally, depending on your business’s scope and range, local delivery can also be an excellent option.
This approach is ideal for businesses looking for a reliable and straightforward delivery method to transport products to local customers. To set this up efficiently, most companies create a specific area on their site where customers can fill out their specific zip/postal code.
If they land within your defined local delivery area, they will have the option to select that service at checkout. This technique is advantageous for businesses looking to decrease eCommerce shipping costs while increasing the number of local customers by offering free or lower-cost delivery orders over a certain amount.
According to the Baynard Institute, eCommerce sites can gain a 35% increase in conversion rates with an optimized checkout process, which includes affordable shipping costs and shorter delivery times.
Local delivery services are also a fantastic method for exploring the potentials of same-day delivery services. This particular approach is likely to entice customers looking for that instant gratification and those who require last-minute deliveries for personal or professional reasons.
Having the added convenience of making an order and receiving it the same day is enough to attract a wide range of customers and create a unique value proposition that the community can use and trust.
All eCommerce shipping providers base their rates and costs on several criteria, including:
- Package size
- Package weight
- Origin address
- Destination address
Some will also consider additional shipping services, such as tracking and package insurance. These specific indicators will be unique to every business’s circumstances and abilities.
However, if you’re looking for a method for gauging standard shipping rates to help give you a better idea of what you could/should charge, viewing the costs of well-known couriers is an excellent place to start.
For example, Canadian businesses could benefit from researching the following:
The best way to find the most affordable option is to pay close attention to your profit margins. Shipping accounts for one of the most significant expenses for eCommerce businesses, so it’s best to do your research.
Before locking in your personalized pricing and shipping strategy for your eCommerce store, you should clearly outline all of the associated costs of transporting your product from your business to the customer.
An essential rule of thumb to remember is that small amounts can add up very quickly, both as a customer and a business owner. It would be best if you went through a full rundown from the cost of manufacturing to packaging and delivery to help you settle on a shipping cost that will post a profit.
As time has progressed and eCommerce has come into its own as a recognizable retail industry, customers’ expectations regarding packaging have increased substantially. What this means is that packaging has become yet another avenue for competition between businesses.
Big online eCommerce sites, such as Amazon, have let this aspect of their service fall to the side in many ways. Customers don’t expect a lot outside of sealed factory bags with the receipt enclosed. That said, 59% of Millennials will go to Amazon first when shopping online.
In this way, Amazon is arguably the biggest competition for eCommerce businesses. So, exploring methods to set your business apart and show its superiority is critical, and one of the best ways to do that is to use its sheer size against it.
Amazon is such a massive online retailer that personalization falls on the backburner. Thus, the packaging realm poses a significant opportunity for smaller businesses to add a personal touch that shows they went the extra mile.
Along these lines, package customization and presentation have become an active method for which businesses choose to express their individuality and create a meaningful connection with their customers.
Of course, the ultimate objective of effective packaging is to ensure that the package makes it to the customer safely and without damage. With this fact in mind, choosing how your business goes about packaging these deliveries is fundamental.
Since the cost of shipping is primarily based on size and weight, the most practical approach is to keep packages as small as possible. Depending on the fragility of the specific item, this may not always be an achievable feat.
That said, keeping packaging as small as possible, within reason, is one of the most effective methods for reducing eCommerce shipping costs while also protecting your business’s profit margin.
eCommerce fulfillment services are one of the most effective shipping solutions for businesses that have either outgrown their existing warehouse space or who don’t want to deal with shipping at all, choosing to outsource it instead.
Fulfillment services are essentially a third-party warehouse that prepares and ships your business’s orders for you.
Each fulfillment service will operate slightly differently, but they all have the collective objective of serving as the comprehensive hub for all your package prep, shipping and delivery needs. These spaces most commonly charge for their services either by the hour or per unit/pallet of product.
There are multiple advantages for businesses using these third-party fulfillment services, including avoiding long-term leases on warehouses, utilizing knowledgeable staff, optimizing your time for other business areas, and providing faster, more reliable shipping solutions for your customers.
Since they ship larger quantities for multiple vendors, fulfillment warehouses provide easier access to a wide range of shipping rates and solutions, including, in some instances, shorter shipping times.
If the fulfillment warehouse is closer to the majority of your customer base, then you are in a position to offer more flexible shipping options, including same-day delivery.
eCommerce Shipping Doesn’t Have to be Difficult
There’s a lot to consider when implementing a successful eCommerce shipping strategy. On top of maintaining the business’ budget, supply lines, and marketing efforts, actually implementing an eCommerce shipping strategy seems nearly impossible, which is why so many SMBs and eCommerce entrepreneurs pay big-box retailers to use their same-day fulfillment services.
However, having access to a powerful eCommerce shipping solution doesn’t have to cut into your bottom line.
With Cantec Couriers, you can provide transparently priced same-day shipping to all of your customers on your own.
Cantec Couriers connects with all major eCommerce store platforms and CMS for seamless integration, allows you to use your store or office as a fulfillment center, and lets you have your own logistics network accessible anywhere and anytime on your phone or desktop. Give your customers the convenience they want and give yourself the cost savings and profits you need.