Ecommerce shipping, it’s super important, right? If you have an ecommerce store and ship orders, you already know that it’s the lifeblood of your operation.
While most companies are well aware of shipping, we always find it surprising that more companies are not focus on their shipping strategy and ultimately optimizing it to be efficient.
Your ecommerce shipping strategy is key to the success of your online stores and the ecommerce industry is showing no signs of slowing down.
- 61% of online consumers in the United States have made a purchase based on recommendations from a blog. (Content Marketing Institute)
- 55% of online shoppers tell friends and family when dissatisfied with a product or company. (UPS)
- The ecommerce industry is growing 23% year-over-year, yet 46% of American small businesses still don’t have a website. (BigCommerce)
- Only 2.86% of eCommerce website visits convert into a purchase. (Invesp)
- The #1 reason people shop online is that they’re able to shop at all hours of the day. (KPMG)
Let’s dive into a few key ecommerce shipping metrics credit to the good folks over at Visible SCM.
(1) Free shipping entices 79% of US consumers to shop online.
Consumers don’t want surprise fees to appear in their shopping carts, and they include shipping costs in that category. They don’t assign value to shipping because they are not getting anything tangible by paying for it. This is easy for e-tailers to get around—simply build shipping costs into the price of the product or set a minimum spending threshold to access free shipping.
(2) Consumers under 25 are driven by same-day shipping.
Specifically, 54% said it is their number one purchase driver. Because Gen Z has grown up in the age of instant gratification, it should come as no surprise that they value same-day shipping so highly.
(3) More than three-quarters (83%) of shoppers expect regular communication about their orders.
It is safe to say that most shoppers want to be updated about their purchases, and this is easy to accomplish. Be transparent about any changes or shipping delays (due to coronavirus or otherwise) and provide tracking information so the customers can get an on-demand look at where their orders are.
(4) Retailers are concerned about shipping time and cost expectations.
Specifically, 38% of retailers have concerns about how quickly consumers expect orders to be delivered. Additionally, 36% are concerned about the expectations surrounding free and low-cost shipping.
Should you better be focusing on your ecommerce shipping strategy? OF COURSE!!!
An ecommerce shipping strategy is about more than just free shipping and fast delivery, though those two and others can play a big role in your ecommerce shipping plan. This guide will point you to all of the resources you need to plan your ecommerce shipping strategy.Your ecommerce shipping strategy is key to your online store’s success.
You can also check out this infographic by https://www.emarketer.com – 62 percent of respondents say fast shipping speed matters!
Nobody can deny this, consumers now have high expectations. This was research from 2019, it’s about to strike 2022 now so you know these metrics are likely higher now.
With services like Amazon Prime offering same-day or next-day delivery for no additional cost, many consumers have come to expect lightning-fast deliveries for free.
According to Statista, a whopping 63% of respondents said they’d abandoned online shopping carts due to the cost of shipping, and 36% abandoned shopping carts because the order would take too long to ship.
Also, research by Deloitte found that 72% of consumers cite “free shipping” as one of their top reasons to shop online in the first place.
If ecommerce shipping is not a priority in your company, at the very least, we want you to walk away today with the thought that it will be a priority tomorrow.
Let’s get to the obvious.
What Is Ecommerce Shipping?
Ecommerce shipping encompasses all services required to transport products purchased online from a retailer to the customer’s delivery destination. With the right partner, ecommerce shipping can be manageable, affordable, and fast.
Ecommerce Shipping Methods And Strategies
There’s no such thing as a one-size-fits-all ecommerce shipping strategy. The right ecommerce shipping strategy for your business will depend on your audience, budget, margins, product, and a variety of other factors.
As a rule of thumb, offering a combination of fast and affordable shipping methods can help reduce shopping cart abandonment and increase conversions. Here are 6 shipping methods to consider making part of your ecommerce shipping strategy.
(1) Same-Day Delivery
Just as it suggest, same-day delivery is a guarantee that your order will be delivered on the same day it’s purchased. Does shipping speed matter? Absolutely! In fact, 6 out of 10 consumers are willing to pay more to get their package faster. If you can offer same-day delivery, that’s a huge competitive advantage over your competition. Implementing this ecommerce delivery service can be a challenge, it takes a full team effort across many facets to make it work.
(2) Overnight Shipping
Before two-day shipping became “normal,” many ecommerce companies and brands needed a way to stand out in the crowd? This is when overnight shipping began to grow in popularity. As the name would suggest, this shipping method guarantees customers will receive their order on the next business day. Most of the major shipping carriers offer overnight shipping, pricing will vary depending on the carrier you use.
(3) 2-Day Shipping
Before Amazon Prime was launched, most retailers felt it was impossible to offer a 2-day shipping option, profitably that is. Today, if you mention Prime, most people know exactly what that means. Even though this shipping option may feel like it’s better suited for big ecommerce companies, we see businesses of all levels being able to offer 2-day shipping to customers. And yes, they do it profitably, you just need to right strategy and guidance for your specific scenario.
(4) Expedited Shipping
Expedited shipping is going to refer to any shipping method that would be faster than standard ground. Now, turnaround times for expedited orders can vary a lot, dependent on the shipping carrier you use and specific shipping services as well. It’s another option you can give your customers, expedited shipping can help your online store reduce shopping cart abandonment, meet customer expectations, and build customer loyalty. Never a bad thing.
(5) Local Shipping
Is local shipping an option for your business?
Shipping locally is great if you aren’t able or simply don’t want to enter the international market. You can set up the delivery border which is especially useful for small companies in big cities. If you can hardly cover the whole city of Los Angeles, you can specify select areas where deliveries would be made. Due to this, customers that are in the delivery area would be able to choose a local delivery option.
(6) International Shipping
Whether you’re based in the US and looking to expand globally or located overseas and want to begin shipping within the US, international shipping can be challenging and expensive for any business.
Different countries have different regulations, tariffs and taxes, and requirements for incoming shipments, so it’s important to find experienced fulfillment partners who can not only help you navigate the Universal Postal Union agreement and international shipping but also provide affordable shipping rates.
(7) Eco-Friendly Shipping
For eco-friendly brands and customers, eco-friendly shipping is also an option. Eco-friendly shipping includes the use of biodegradable material that can easily be recycled, used for other purposes, and don’t take as long to decompose for packaging and shipping products. There are many eco-friendly packaging solutions available for online brands, such as compostable mailer bags and biodegradable packaging peanuts.
(8) Hybrid Shipping
Hybrid shipping services like UPS SurePost and FedEx SmartPost pick up your orders and then work with other carriers like USPS to transport your packages to a sorting facility or post office location, where it is then shipped to its final, residential destination. Choosing a hybrid shipping method has the ability to cut down on shipping costs as much as 50% in some cases. However, the tradeoff is often a slower delivery.
(9) Freight Shipping
At its most basic, freight shipping is the transportation of cargo across the globe via air, land, or sea. Any shipment that is larger than 30 in x 30 in x 30 in or weighs over 150 pounds is considered freight.Ecommerce businesses use freight shipping to receive inventory from their manufacturer and send product to fulfillment centers or distributors.
Ecommerce Shipping Rates
Different ecommerce businesses use differently rate structures to charge customers for shipping. Here are two popular ecommerce shipping rate options.
(1) Flat Rate Shipping
Flat rate shipping would give your customers a fixed shipping rate, this could be applied to all orders or select categories, which could include weight, value, or another class. Now, with flat rate shipping, you’d want to make sure you’re averaging in both shipping and handling cost. There’s a lot of companies that use this type of ecommerce shipping.
(2) Free Shipping
Free shipping, who doesn’t love the sound of that, right? While it can definitely be used as a marketing hook, offering free shipping has a wide range of helpful benefits as well. For starters, offering free shipping can help you conversions and lower your shopping cart abandonment rates. It’s also a powerful way to get customers talking about your brand, hey, company X offers free shipping! While some companies may not be able to use the free shipping model, others can use it in a profitable manner, just make sure;
- Including the shipping cost in the product price
- Give products a markup in price to offer the free shipping
- Taking a recurring fee in the form of a loyalty program in exchange for free shipping on all orders, such as Amazon Prime
(3) 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.
This allows you to charge customers the exact amount that it costs your business to ship the order. Shopify’s Advanced plan offers this option, as do shipping APIs.
Ecommerce Shipping Costs
More than 70 percent of shoppers expect affordable, fast deliveries whenever they shop online, but that doesn’t mean you need to lose money to offer competitive shipping rates. You need to find a middle ground, that way it’s beneficial to customers and you. Ecommerce shipping and logistics costs can get complex, so make sure you’re taking notes on everything you need to know about ecommerce shipping solutions.
(1) Calculating Shipping Costs
One thing many ecommerce merchants and business owners are aware of is shipping costs, mainly because it’s likely one of the biggest expenses the business has. Shipping costs can vary depending on a variety of factors, from custom packaging and dimensions to the shipping carrier you use and weight; among many other things. The good news, there is shipping strategies you can use to lower your shipping costs, we’ll discuss these below to help you find a cost-effective shipping solution.
(2) Reducing Shipping Costs
For growing businesses looking to lower shipping costs, working with a third-party logistics (3PL) provider can make a big difference. Outsourcing shipping services to a 3PL can help ecommerce businesses scale operationally and leverage shipping discounts.
A 3PL’s network of fulfillment centers can also help ecommerce stores save on shipping costs while reducing transit times.
Many ecommerce shipping companies and fulfillment services do charge handling fees. These fees cover the costs of picking and packing your orders, making shipping labels, and moving packages between different modes of transportation.
Remember, the longer the distance the package must travel, the more handling fees you’re likely to incur.
(3) Shipping Zones
Shipping zones measure the distance between a package’s origin and its destination. In the continental US, these can range from Zone 1 to Zone 8. Carriers use shipping zones to calculate shipping rates. Shipping zones are calculated based on where your package is shipped from.
This means that two different points of origin shipping to the same destination may be shipping to completely different zones. As a rule of thumb, the higher the shipping zone, the more expensive a package will be to ship.
(4) Shipping Internationally
If you’re shipping internationally, shipping costs can quickly add up. Just like shipping within your own country, once you begin shipping to another country, there’s a lot of different touch points that can cost you additional expenses.
(5) Shipping And Handling
Shipping costs refer to the cost of getting the package from the shipping carrier to the end consumer. Handling fees cover everything else, including the labor associated with retrieving items on picking lists, moving inventory, packing shipments, generating a shipping label, loading the shipment onto a truck, and any other fulfillment center operations.
(6) Dimensional Weight
All major shipping carriers use a pricing technique called dimensional (DIM) weight to calculate shipping costs. Dimensional weight takes into account the size of a package to determine the shipping cost.
Shipping carriers like USPS, FedEx, and UPS calculate shipping charges based on whichever is greater: the weight of the package or its DIM weight. Whichever is higher becomes the billable weight for which your business will be charged.
Speaking of shipping carriers, the big 4 shipping carriers that are responsible for most orders around the world include USPS, FedEx, UPS, and DHL.
Here’s what you should know about each.
Shipping Carriers
To build your ecommerce shipping strategy, you’ll want to be familiar with the different shipping carriers and the shipping services they offer. Don’t worry though, if you have plans to outsource ecommerce fulfillment to a 3PL like Thill Inc., you don’t need to get fully familiar with carriers. Now, if you’re doing your own fulfillment, get familiar with them now.
1. USPS
USPS is king when it comes to last-mile delivery. Because USPS already runs postal services for local residential routes daily, it’s often the cheapest option for ground shipping. Other shipping carriers often pass shipments off to USPS for the last leg of an order’s journey. To calculate USPS shipping costs, click here.
2. FedEx
FedEx offers a wide variety of delivery options at several different price points. FedEx also offers a program called FedEx Small Business geared toward growing companies in need of shipping solutions. Calculate FedEx shipping costs and transit times by entering package details using their Rate Finder tool.
3. UPS
UPS offers several shipping services across a variety of shipping destinations and transit times, as well as the ability to schedule pickups and manage customer returns. Like FedEx, the UPS Small Business program also provides resources for small business owners. You can receive shipping rate estimates through UPS’s Estimate Shipping Cost calculator.
4. DHL
DHL is known for its global reach and international shipping capabilities. Calculate export and import rates and transit times with DHL’s Rate Quote and Transit Time tool.
Ecommerce Packaging
While there’s always mixed feelings as it pertains to ecommerce packaging, most agree first impressions matter. In fact, they matter a lot. Ecommerce packaging is the closest your business will come to giving your customers a personal experience. The top ecommerce packaging for the best unboxing experience involves a mix of the right box and the right infill. These small details take packaging your product from an everyday delivery to a truly custom package.
The ecommerce packaging you use to ship orders directly affects your shipping costs and customer experience. Packaging is often the first in-person interaction your customers have with your brand — here’s how to make sure it’s a great first impression.
(1) Choosing Your Packaging
While it may sound easy in concept, choosing your packaging can be a big challenge. After all, it’s important – every interaction with your customers are important. Now, you’re going to have a ton of different packaging options with your ecommerce shipping, so you have to be selective. Here’s a few things to consider to help you choose your packaging. Here’s what you should be asking;
- What type of product do you have?
- What type of share does your product create?
- Is your product light weight or heavy?
- How is your product sized?
- Is your packaging branded or plain?
- Is your product fragile or durable?
- Does the manufacturer include any type of packaging?
(2) Custom Packaging
In the competitive ecommerce landscape, high-quality custom packaging can help your brand stand out. Custom packaging is more than just a container for your product — it can create a better customer experience. Branded packaging helps you make a great first impression, stay memorable, generate buzz, and build brand loyalty.
(3) Eco-Friendly Packaging
The Environmental Protection Agency estimates that packaging makes up one-third of all household waste. As ecommerce sales continue to rise, so, unfortunately, will the waste they produce. Your business can help reverse this effect by choosing ecommerce shipping solutions and packaging options that are good for the planet and for business. your business.
Shipping Labels And Insurance
Shipping labels and shipping insurance are the nitty-gritty of ecommerce shipping — they’re not glamorous, but they’re definitely important to ensure that your customers have the best customer experience possible.
(1) Shipping Labels
Shipping labels provide shipping carriers with important information about the origin and destination of your package. Without clear shipping labels, your customers’ orders could be lost, delayed, or mishandled. In turn, this can create a negative customer experience, damaging brand loyalty, and ultimately losing sales.
Shipping labels often include the return address, destination address, package weight, shipping class, and tracking number.
(2) Shipping insurance
Shipping insurance offers reimbursement to senders whose parcels are lost, stolen, and/or damaged in transit. If you’re shipping fragile items or very expensive products, you may want to look into shipping insurance, which can significantly increase your shipping cost.
Tracking Shipments And Returns
The shipping process doesn’t end once the carrier picks up an order. You need to continue to offer a great customer experience during and after the order’s journey, from sharing tracking numbers to creating a seamless ecommerce returns process.
(1) Order Management
Order management refers to the process of receiving, keeping track of, and fulfilling customer orders. Having the right order management strategy and shipping software in place can help reduce stockouts or backordered products, and ultimately unhappy customers.
Order management software centralizes all of your critical data to streamline the retail fulfillment process and help you make better business decisions.
(2) Tracking Ecommerce Shipments
When you ship an order, whether in-house or through a 3PL, make sure to pass the tracking number on to the customer. An order management system allows you to track the shipment each step of the way — and your customers can do the same. Though rare, you must also have a good system in place for split shipments.
(3) Managing Ecommerce Returns
Returns can be a huge headache for ecommerce businesses, but having the right ecommerce returns process in place pays off: 95% of shoppers who are happy with the returns process said they’ll purchase from the same retailer again. That said, shoppers who are unhappy with the returns process are 3x more likely to never purchase from that retailer again.
Working with a 3PL can help you leverage years of industry experience, knowledge, and best practices to manage returns at scale.
Ecommerce Shipping Integrations And APIs
Your ecommerce tech stack can have a huge impact on your shipping strategy, from your shopping cart software to any shipping APIs you use. Making sure that these systems integrate seamlessly with one another is crucial.
(1) Shopify Shipping
Shopify is one of the most commonly used ecommerce platforms on the market. If you have a Shopify store, that means you have a wide range of different ecommerce shipping options you can choose from. With a 3PL like Thill Inc. you can leverage our technology because it easily integrates with Shopify to automatically fulfill orders as customers place them.
If you own a Shopify store and want to learn more about our Shopify fulfillment, technology and program, be sure to reach out.
(2) WooCommerce Shipping
Like Shopify, WooCommerce is another popular choice for ecommerce stores. For WooCommerce, Thill Inc. has a wide variety of ecommerce shipping options to choose from — including the opportunity to partner with a 3PL. With Thill, merchants can connect their WooCommerce store with just a few clicks, you’ll be able to access store inventory and ship orders from our different fulfillment centers across the U.S. Also, you’ll have the ability to automate shipping, and make sure your customers have access to order tracking.
3. Amazon
Amazon is one of the biggest ecommerce platforms in the world. Partnering with a 3PL to fulfill and ship Amazon orders can be a huge benefit to your company. While different 3PL companies have different capabilities, Thill Inc. offers a full suite of fulfillment and warehousing services, including returns management, branded custom packaging, access to cheaper shipping rates, ability to split inventory across fulfillment centers, customer service, and much more.
4. Walmart
If you’re selling products using WalMart, a fulfillment company can give you a big competitive advantage over your competition. Thill Inc. and Walmart can easily integrate to automate shipping. You can link Walmart Marketplace to Thill, sync your inventory, and import your orders in just a few clicks. When you get your integration complete, you’ll have the ability to send orders automatically to Thill Inc. and we’ll be able to utilize the closest fulfillment center to send out your orders.
5. BigCommerce Shipping
While BigCommerce is not as widely used as Shopify, Amazon, and other ecommerce platforms, there’s still a lot of companies and merchants that use it. Thill Inc. offers a direct integration with BigCommerce, allowing you to easily outsource fulfillment on auto pilot – which will send your placed orders to one of our many fulfillment center locations. When it arrives, Thill will pick, pack, and ship your orders for you.
6. Wix Shipping
Wix is another platform Thill Inc. technology can integrate with, in fact, we have many ecommerce integrations and apps to choose from. Our state-of-the-art technology was specifically built to help enhance your Wix store and create a custom full ecommerce solution for your business. Thill Inc. can give you a direct integration with Wix and is a great option for any of you that are using the Wix platform.
By syncing your Wix store with Thill Inc., you’re able to streamline the retail fulfillment process by automatically sending orders placed on your Wix store to one or more of Thill’s fulfillment center locations (and we have several to choose from.) Once it arrives, Thill will pick, pack, and ship your orders for you. You can learn more about pick and pack here.
Ecommerce Shipping Solutions From Thill Inc.
We’re proud of the ecommerce integrations we provide here at Thill. We’ve always listened to our customers and implemented features that help them grow their business and make fulfillment super easy. Thill’s software integrates with ecommerce platforms and marketplaces to automate ecommerce fulfillment for ecommerce business owners. With a network of fulfillment centers across the US, Thill allows you to split inventory across locations to help you reduce ecommerce shipping costs and time in transit.
As a business owner, you have a lot on your plate operating the day to day, let Thill Inc. handle all of your fulfillment and ecommerce shipping needs.
If you’re ready to get started, have a question, or want to get a pricing quote, or want to learn more about how we help ecommerce businesses scale, give us a call today. You can reach our team at 1-920-967-9201 – or you can reach out online by clicking here.
You can reach us by calling 1-920-967-9201 or by using our contact form here.
