Using the right courier service to get your items shipped locally should be a priority. You control your customer's experience for the most part. You write the ads, you approve the images, you tweak your website and you write the emails. However once your product leaves your hands to be shipped to your customer you have now handed over your brand to the hands of a stranger.
Shipping can make or break your business in multiple ways. Choose the wrong shipping partner and your customers may suffer a poor experience. Don’t plan out your shipping strategy and you could end up unprofitable.
Many new e-commerce entrepreneurs either don’t give much thought to shipping their products, or rightfully so, don’t understand the confusing and complex world of shipping and fulfillment especially for local and same day deliveries.
In this post we will go over some of the basics to shipping your products and help de-mystify this complicated topic. We will talk about packaging, provide resources and couriers, look at tracking and reliability, shipping and handling.
As the world of e-commerce develops so do the expectations of customers buying online. Years ago packaging and shipping was simply a way to receive a product purchased online, however, more and more, people are looking for local shipping, packaging and presentation to all be part of the shopping experience.
This expectation means that for many businesses, outside of selling commodities, competing effectively means going above and beyond to impress customers and exceed their expectations by delivering more than just a product, but also an experience.
Packaging & Branding
Your packaging and presentation can be an effective way to set yourself apart. Consider $1 Shave Club. $1 Shave Club is a monthly subscription service that sends men a custom curated selection of men’s clothes and accessories each month. You can see from their packaging below that their customer un-boxing experience is very central to their overall brand experience.
In a world where sealed factory bags and a black and white order receipt are considered standard, it’s the small details like this that go a long way in making an exceptional impression on customers.
Today, some of the most successful and interesting brands are those that are using packaging to delivery an experience on top of the product. Consider how you can provide a better customer experience through your packaging and how you can use packaging as an extension of your brand.
Before you can ship your products, you will most likely need to package them for safe transport. So what options do you have? There are a few common options for packaging including boxes or envelopes (padded or un-padded). For most businesses and products, you’ll likely need to use some size of box to package your products for shipping as well as some form of stuffing or product cushioning.
You may also want to try thinking outside of the box (no pun intended) and look at other packaging material. An an example, for my new e-commerce business, Finch Goods Co. I opted to go with the unconventional packaging option of coffee bags to ship some of my orders because many of my products don't require protective padding.
Coffee bags offered an inexpensive, but high quality option that also helps to showcase my brand by selecting matte black/silver lining bags, complimenting my brand colors. A huge additional benefit to the coffee bags was that they keep my orders thin, affording me much cheaper shipping rates vs. the bulkier box counterparts.
Keep It Light And Small
Because most shipping couriers and shipping options are charged based on size and weight, you want to do your best to keep your packaging as small as possible. This will help you save not only on shipping costs incurred by you and your customer but to also keep packaging costs from eating away your profit margin.
Depending on your business and your product line, you may want to consider carrying a few strategically selected sizes of packaging materials, like a small, medium and large size boxes. Most people would consider the packaging for the product above to be excessive. This is exactly what you’re trying to avoid as it inflates shipping costs dramatically.
Customer Shipping Options
Before you can ship products, you’ll first need to decide your strategy for charging your customers. There are several common methods highlighted below, however, I would suggest you read the full Shopify post on choosing a shipping strategy for your online store.
Offer Free Shipping
Offering your customers free shipping is becoming a increasingly popular option and has shown a lot of promise in reducing shopping cart abandonment. However, as you might suspect, shipping is never free. Someone always has to pay. In this case, again, you have a few options.
1. Increase product prices to cover costs for shipping (customer pays)
2. You pay the full price of shipping out of your margins (you pay)
3. Increase prices of products slightly to cover partial costs of shipping (you and your customer pays)
Additionally, you can also try offering free shipping on a minimum order amount. This strategy can help offset the costs of shipping by helping to increase your average order size, however you're still the one paying for it out of your margins.
Charge Real Time Carrier Rates or Flat Rates
Another effective shipping strategy is to charge real time carrier rates for shipping or contract with a go to courier service for local Flat rates. This allows for your customers to choose and pay for the exact service they want.
Charge a Flat Rate
Finally, the last popular option is to offer flat-rate shipping. The best practice for this option usually is to try and make sure that you don't drastically undercharge or overcharge your customers. Flat rate shipping usually works best when you have a fairly standard product line of similar size and weight products. Flat rate shipping tends to become a little complicated and less effective if you sell a wide variety of products with different sizes and weights.
General Shipping Information & Options
There is no easy way to summarize shipping options. There are a wide variety of factors that come into play, including size and weight of package, departing country, destination country as well as personal and customer preference for tracking information and insurance.
All shipping couriers base shipping rates on a variety of factors including:
- Package Size
- Package Weight
- Departing Country
- Destination Country
It can be difficult to compare services exactly as they all offer slightly different options and every business will have their own unique variables.
One of the best secrets to being successful at e-commerce is to figure out how to ship profitably. Because shipping represents a significant expense for e-commerce merchants, if you don’t do your research, you could end up losing money on shipping.
Before you finalize your pricing and strategy for your e-commerce store you should use a chart, like the one below to map out all your costs associated with getting your products into your customers hands. Many e-commerce entrepreneurs are shocked by how quickly the little charges add up. Don’t get caught in the same trap.
Labeling Your Packages
Once you have figured out your presentation, packaging, courier and costs, you’ll need to determine how you want to label your packages. Many new e-commerce entrepreneurs start off by writing the shipping and return address on the package by hand. Although this can be a great way to start, it tends to be time consuming, tedious and not scalable as your business grows.