Shipping is one of the last pieces of the ecommerce fulfillment cycle, but some would argue the most important. Shipping ranks as one of the number one complaints sellers receive from customers. And if online retailers aren’t careful, the cost to ship products can eat into profits in no time. While there is no clear cut solution when it comes to shipping carriers and pricing, there are strategies to consider in order to optimize your shipping process.
1. Clearly Define The Difference in Shipping & Delivery
Once you have a package ready for shipment, you’ve done most of the hard work – you updated inventory to reflect the purchase, you created pick lists, packing slips and labels (or an ecommerce shipping software did this for you), and now you’re ready for the item to go on its merry way.
Sometimes though, the process is a little less ‘merry’ and a bit crummier. Packages can get lost and damaged en route, or buyers can have high expectations of delivery time-frames that aren’t met. All the while, the package has been out of your hands, and thereby out of your control. Even though you aren’t the one who accidentally drops a package from a delivery truck and damages it, marketplaces will still hold you liable. It may not feel fair – but that’s the business of selling online. You have to take the bad with the (much bigger) good. Fortunately, there are a couple of actions you can take to hedge your bets and prevent any painful and unnecessary outcomes that can damage your seller rating, sales and reputation.
For starters, make sure your buyer is very clear on the difference between shipping and delivery. Some shoppers may see that an item “ships in 1-2 days” and think that means it will be on their doorstep within 48 hours (that is, without paying for overnight or expedited shipping). Here’s how to prevent this:
On Your Website
- Have a landing page dedicated to shipping timetables. This will help buyers determine which postage will work best for them (standard vs. express, etc.), and is an excellent place to explain the shipping vs. delivery difference.
- Write it out in plain English that they must anticipate the package in their possession after shipping + delivery. You may feel like you’re ‘dumbing it down’ or stating the obvious, but it’s not uncommon for buyers to confuse these two. Shipping issues are the most common reasons a buyer leaves feedback, so make sure it’s not a negative response out of a misunderstanding.
On Your Marketplace
- Wherever you can edit information about your seller profile, make sure you include shipping and delivery specifics. Again, don’t worry about being redundant. Better safe than sorry with bad feedback.
- If your sales channel allows, send this information along with each buyer’s order confirmation email. I recently ordered a book from barnesandnoble.com, and was sent the following bullet points along with my tracking number:
The difference between when my purchase left their warehouse vs. landed on my doorstep was laid out clearly for me, and gave me an accurate set of expectations regarding my order. Hard to be disappointed in delivery time if I am presented with honest and accurate information.
2. Continually evaluate carriers
If there’s one constant in the world of ecommerce it’s that things are always changing. That includes shipping options and strategies. In order to get the best prices and services, it’s important to continually evaluate the right mix of shipping carriers. Rates and plans change often, so the weight and size that was most cost effective one month could change the next. In fact, UPS and FedEx both plan on changing how they charge for ground shipped packages by the end of this year. The carriers will soon begin to charge based on size, not just weight, what they call ‘dimensional pricing’.
3. Test shipping options
Testing different shipping options allows you to measure which option converts more buyers at the point-of-sale and which approach results in a higher profit margin. Testing should be run independently and for the same amount of time. Options can include:
- Free shipping – You’ll need to decide whether you will absorb the costs and bank on volume or increase the price of your product.
- Free shipping on a minimum order amount – Can help you offset the cost of offering free shipping.
- Flat Rate – Provides the benefit of known costs and is easy to set up.
- Real time carrier rates – All carriers base shipping rates on a variety of factors. Check out the shipping calculators offered by three of the main carriers to help determine the best option.
4. Keep Customers Informed
Shipping and handling rates are often ranked as the number one reason for cart abandonment. Throughout every step of the shopping and purchasing process, keep your customers informed on the status of the order and the price of shipping. Surveys show keeping buyers in the loop once the product is shipped translates to higher customer satisfaction. If you can, provide tracking information and links for your customers to see exactly where there package is and it’s estimated delivery time.
5. Develop a Relationship With Local Postal Workers
Though it may feel kind of funny setting up time to get to know your post master, it’s smart, and can only positively impact your business. These are the people who will be sorting, scanning and delivering your goods – you want them on your side.
One Amazon seller suggested in a forum that their peers set up an appointment with their local post master, like they did. They brought their laptop to explain Amazon metrics (and why fast shipping was so vital to a successful online business), and tax returns to show how much money would be spent at that post office. The result? Because of the relationship the seller formed, the post master assigned a USPS business rep to help that seller, and has all of their packages picked up early every day and taken directly to the distribution center, instead of riding around all day in the back of the truck. So, while you may not have considered establishing a good relationship with your post office, it can definitely pay off.
It’s not easy, but finding out how to ship profitably often determines the success of ecommerce companies. So do your research and remember, even when you think you have it figured out, it’s always a good idea to tweak and re-evaluate along the way. If your buyers are educated and aware of true shipping expectations and you have your local post office working to help get your packages out as fast as they can, you can rock the shipping process. The happier your buyers are with shipping, the more likely you’ll receive positive endorsements, which leads to more sales and better business. Happy shipping!