Shipping 101 For Ecommerce Platforms
The ecommerce sales are set to touch 6.5 billion USD in 2021. With the ever-expanding ecommerce industry, the shipping industry is also set for an explosion. Coupled with the changes brought about by technology and dynamic user preferences impacting the ecommerce shipping field, how do you prepare to excel, then? This article will work as a beginner’s guide to tell you all about ecommerce shipping. The world of shipping will no longer be a difficult mystery.
Here is how you can map out your shipping plan to streamline and organize:
1. Shipping Strategy
Creating a shipping strategy is the first step. Here are the key points you need to consider:
Shipping rates: Will you charge flat shipping rates for all your orders or will they differ from destination to destination? A customer might abandon the cart if the shipping rate is too high, and you might incur a loss if it is too low. Decide on the shipping-rate policy first. You can also increase product prices slightly and offer free shipping.
Inventory/order management: Will you manually update every order and maintain the inventory or will you automate it? Automation is recommended as it minimises the errors.
Global or local? Will you ship across the globe? Or will you ship only in your country? This question is important to answer as it will determine how much you spend on shipping, the carrier you use, the time taken for delivery, etc.
Shipping methods: What mode will you ship through? Air, sea, or land? There might be higher risk and lower shipping cost when you choose sea over land and air, but shipping by air will afford you to deliver faster. Make a list of the pros and cons of all methods to decide.
Shipping insurance: Shipping carriers offer insurance, and this can give you a great deal of security. Get the coverage, especially if you have large volumes.
2. Shipping Costs
While calculating shipping costs, these are the four points you need to keep in mind:
Shipping carrier: Shipping carriers like FedX, Aramex, DHL, UPS are popular with ecommerce companies. But if you are only going to ship locally, ask for quotes from your local carriers, the rates might be much much cheaper. Use the shipping carrier’s calculator to compare.
Source and destination countries: The distance between the source and the destination and whether both the points are in the same country will play a huge role in determining the shipping costs.
Product dimensions and weight: It is advisable to measure all your products before you list them online – every shipping carrier charges depending upon the weight and dimensions of your package.
Margin-wise: Be margin wise. Are the shipping costs too heavy on the pocket? How much profit margin do you want to keep? Shipping is a major expense, and you should never ignore the small charges.
3. Packaging and labelling
You can either source the packaging from your shipping carrier, or use it as a way for branding. With increasing awareness, sustainable packaging is much in demand, but it is also expensive. You can also offer personalised packaging or special packaging for gift orders.
Another important part is the labelling. Each order must be labelled with the order number, the addresses among other details. Doing this incorrectly might result in a mix-up.
Many countries have laws that require multiple copies of invoices to be sent with the package. One for you, one for the customer, one for the shipping carrier, one for taxation purposes etc. Invoicing can be automated too. Just invest in good virtual infrastructure.
5. Communication and tracking
Once the order is shipped, most automation software solutions send an e-mail to the customer with the tracking link. This is a very important part of the shipping process. If the customer doesn’t receive communication from your end, it not only looks bad on your company but also might result in complaints.
6. Auditing Shipments
This is the part which most ecommerce companies fail to do. And even if they audit their shipments, they do it manually. Auditing your shipments allows you to claim for refunds from your shipping carrier. There might be duplicate or incorrect charges on your shipping invoice, or the carrier might have damaged or lost your package. You can get reimbursed for it and save on shipping costs.
If you are shipping globally, be well-aware of prohibited items that differ from country to country. Also, the documentation should be spick and span for the package to clear the customs zone. Know about the customs fees and don’t forget to add it to your ecommerce platform, so the customer is not kept in the dark. Most shipping carriers offer information about customs declaration on their websites.
Questions to Ask Yourself Before Making a Shipping Plan
-What is your shipping budget? Will you charge real-time carrier rates for all your orders?
-Will you offer next-day or same-day delivery?
-What packaging will you use?
-Where will you ship and where will you not?
-Will there be a minimum order cost for free shipping?
-How will you communicate regarding the orders with your customers?
-Will you opt for third-party logistics?
-Will you choose automation software solutions when it comes to shipping management?
-Focus on creating a great customer experience when you package and ship the product.
-Premium packaging can encourage repeat customers.
-If your shipping strategy doesn’t work, always have plan B.
Know the rules and regulations of all the states and countries you are shipping to. Some products might be banned.
Remember to one order might have multiple shipments. That’s double-triple the work.
Outsourcing the logistics and the auditing might save a lot of work, and you can let the experts handle it for you.
There are multiple variables when it comes to ecommerce shipping. Understand, plan and then execute. While shipping might seem like a not-so-important aspect of your ecommerce business as sales, it is actually a driving factor – one that can help you achieve success.
Ana Shan is a product evangelist at AuditShipment.com, an AI-driven audit service that automatically captures more than 20 carrier errors and helps businesses save up to
16% of their shipping costs.
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