When you talk about shipment, the first question you need to answer is whether your business wants to drop-ship or not. If yes, then follow the link vide ante to read about drop-shipping. If no, then this blog is for you so keep reading!
After all that trouble you go through with creating a fabulous product, designing and marketing it superbly, and finally cinching the sale on it, you don’t want to bugger it all up with the shipping. But the problem with shipping is that you don’t have any direct control over it. It’s like trusting a stranger to deliver all your hard work. But you do need to ship your products, and shipping forms a significant part of your business expenses, so you need to find some measure of control in the process. Now how do you do that? With a shipping strategy.
With a little planning and a basic shipping strategy in place, you will be able to deliver a product to your customer’s satisfaction without denting your profit.
- Basics: There are certain basics that you need to figure out first. Have you weighed your products to get a sense of what cost to expect for the shipping? Secondly, what packaging are you using and do you source it free from a supplier or does that cost additionally? Thirdly, are you offering free shipping to all customers, free shipping to customers who buy over a certain amount, have a standard subsidised shipping rate for everyone, or include the full shipping cost in their bill?
- Shipping rates: Many online retailers try to offer free shipping as an incentive to reduce abandoned carts. However, for that to work, either you need to pay for the full shipping amount out of your margins, or adjust it into the pricing of the product itself (i.e. include shipping into the selling price by increasing the cost of the product). This can include the full or partial shipping cost. Yet another method to adopt is to offer free or subsidised shipping for a bill value above a certain minimum amount. You can offer a flat-rate shipping price if the products you sell are priced within a similar range and have similar weights and sizes. This also increases your AOV. Or just offer discount coupons for shipping only to certain customers as an incentive or gift.
- Shipping costs: The basic shipping rates are set by taking into account the size and weight of the parcel, and the destination country. Tracking and insurance come at an additional cost, although most shipping companies nowadays offer basic tracking services. You should take shipping costs into consideration so they don’t eat up your profit. Under shipping, don’t forget to include packaging costs, shipping costs, custom or duties and credit card fee. So include them in the planning before setting your profit margin. Once you’ve decided your carriers, consider setting up a business account to benefit not just from having all your shipping expenses and invoices in one place or for better management of your shipping expenses, but to also gain from online management tools of the shipping aspects, and discounts, too.
- Packaging: Your packaging has to be secure so that customers receive their goods undamaged. However, packaging is an additional cost and its size and weight parlays into your overall shipping costs. Cardboard boxes, wooden crates, insulated shippers, padded envelopes, package cushioning etc. are different types of packaging material suited to different purposes. They come in different lengths and depths and must be used according to the product. You don’t want to be using an insulated shipper to pack a pair of stockings when you can use a poly mailer instead. It’s lighter and can accommodate less space without being excessive.
- The unboxing experience: With the kind of competition in e-commerce, every last detail matters immensely. And that includes packaging. Standard boxes and bubble wrap won’t necessarily cut it. The unboxing of the parcel has now turned into an exciting affair, sometimes worthy of its own YouTube video (something that in turn markets the product for you). You’re deliver an experience. While trying to keep packaging costs at a minimum, you should try to come up with simple but enjoyable packaging that makes the customer feel they have received a very special gift, not an order. This way you are encouraging them to post pictures or videos of the product online and you are creating indirect marketing opportunities for your brand.
- Address labelling: As your e-commerce store grows, it becomes impractical to be hand-writing the to and from addresses. What you could do instead is to print them (either on plain paper or on self-adhesive labels). From the list of orders ready to go out, print out the addresses and then have them stuck on the respective parcels. This may seem like a small and insignificant task, but just take a moment to understand how important it is, and the domino effect if anything goes wrong here. It’s a good idea to also have a code for each parcel to avoid any confusion.
- Package security: The security of the package is of utmost importance. It has to firstly reach customers, and secondly reach them safely so they don’t send it back for being a damaged piece. Tracking options usually come standard with any courier or shipping service. But if you want to provide customers with a more detailed tracking experience – updating them in real time on which part of the world it is in, whether it has cleared customs, if it’s out of the post and on its way to them etc. – then you may need to hire slightly more expensive services. As for shipping insurance, this is a good option if you are sending out something valuable, so that if on the off chance it gets lost you are still covered. At the very least it offers security so you don’t have any extra headaches about lost parcels. Insurance is usually inexpensive, and sometimes is covered under the shipping cost itself.
- Customs, tariffs and duties: Your county’s postal service or sometimes the shipping office would be able to tell you which customs forms you should use on your packages. Be transparent with the information you provide here so the package doesn’t get withheld at customs. Any customs or import duties are usually charged when the parcel reaches its destination country, and the customer is responsible for it. Make sure they are aware of this. Include this bit of information under the shipping or pricing page of your website.
- Fulfilment warehouses: If you aren’t particular about the branding of your packaging, you could consider using a fulfilment warehouse to handle the shipping for you. It is a little different from drop-shipping because they only handle the delivery. When an order comes in, it gets forwarded to the fulfilment partner to be picked up, packed and shipped off. Fulfilment warehouses deal in very large quantities of inventory and ship parcels for multiple vendors, so they have a tie with shipping companies and can offer cheaper shipping rates and wide range of shipping options. Although you have to consider the extra cost for the pick-and-pack fees and warehouse storage fees, a fulfilment warehouse can relive you of the stress of dealing with the shipments yourself.
Shipping can seem to be a daunting task staring you in the face at the end of a hard day’s work, but it is imperative, nonetheless, to your business. With these 9 tips and pointers, you will understand the fundamentals of it, and can get started on planning an efficient shipping strategy. Like your business, once you get started you will understand it better, and can start making the required adjustments as you go along. Once you get into the groove of it, don’t sit back, but continue to evaluate every 6 months or so to ensure your shipping strategy is being scaled with the growth of the rest of your company, and giving you the best results.