Acing your e-commerce shipping and setting up the right strategies for all your shipping needs are among the crucial factors that impact your store’s profitability. Though free shipping and quick delivery are essential for a successful delivery experience for your customers, a shipping strategy involves many more things apart from just these two elements.
Since shipping is ideally the first bridge of communication between you and your customers after the product is bought, you put your business’s reputation on the line. Hence, you have to make sure that you don’t put all the responsibilities on someone else’s shoulders for such a crucial step.
Before going into detail about everything related to e-commerce shipping, let us go through some stats that show why an e-commerce shipping strategy is crucial to your online business’s success.
- 50% of customers abandon their carts due to high shipping costs, taxes, and other fees
- 74% of shoppers find free shipping very important while checking out
- 38% of shoppers do not shop from the same brand again due to a negative delivery experience
- 93% of online buyers are motivated to buy more products if free shipping options are available
- 58% of consumers add more items to their cart to make themselves eligible for free shipping
What is e-commerce shipping?
E-commerce shipping includes all services that are required to transport the goods that are purchased online from one place to another.
When customers pay for the desired products without having the physical sense of it, providing shipping services is an effective way of making yourself reliable and helps in adding value to your business.
The main components of e-commerce shipping are:
It is the initial step in shipping wherein your order has been assigned with a specific ID, enabling the production and logistics team to updates the inventory, and assign the order ID to the delivery team.
E-commerce order packaging is one of the crucial aspects that can make or break the relation between you and the customer. We live in an era where social media trends of “unboxing” packages go viral, so you have to make sure that your packaging helps your product stand out from your competitors.
Custom packaging of products helps in limiting any damages, and it also helps in creating brand value. Another advantage is that it allows you to portray your brand logo on the box, which acts as a silent marketing/promotional tool for your business.
Logistics and delivery
Perhaps the most important step in the overall shipping process, logistics deals with the delivery of the products on your behalf, Some companies have their division for logistics and delivery, but for businesses that cannot afford their own logistics team, they have to partner up with other third party entities and courier companies.
Lastly, when an order is processed for delivery, there is a high chance of it being returned to the seller. Incomplete addresses, damaged goods, lack of payment options, and misinformation are the primary reasons why sellers have to think long and hard about any possible returns.
Shoppers buy online products without any physical contact, so it’s no surprise that a lot of people return the same after receiving them. Conducting quality checks, creating appropriate product descriptions, and identifying the trends of returned products are some of the crucial elements for decreasing the rate of returns.
E-commerce shipping strategies
Since e-commerce has a host of businesses that have their niche products, you can’t set a universal strategy for all. Thus, we have listed out the strategies that can be adapted to a variety of businesses.
Reduce shipping costs
Shipping costs refer to the expenses incurred while transporting the package from the shipping carrier to the customer. The fee usually includes fuel charges, surcharges, and other expenses depending on the weight of the package and the distance travelled during delivery.
Since upcoming e-commerce businesses cannot afford to indulge in heavy shipping costs, they can reduce the costs incurred by working with a third-party logistics provider. This helps in saving shipping expenses, reduces the duration of the package being in transit, and can enable you to leverage huge discounts as well.
Monitor your shipping zones
Shipping zones is a term used to measure the distance between the package’s origin to its end destination. These are the geographical areas that carriers ship packages to, and are usually marked in a zonal format (the number of zones varies from place to place).
Carriers use shipping zones as a referral for rates, and you have to remember that the larger the shipping zone (area wise), the more expensive an order will be to ship.
Offer same-day delivery
One of the primary factors through which you can get customer satisfaction is by offering same-day-delivery to your customers. Successful delivery of the order on the same day ensures that your business is very efficient and reliable, removes the feeling of anxiety regarding the delivery, and can also help increase the chances of repeat purchases too.
Offer overnight shipping
Almost every online business offers two-day delivery to their potential customers. You can stand out and change the norm by offering overnight delivery. It is a type of delivery that ensures that customers will receive their orders on the very next business day.
Again, this type of delivery removes any hurdle of misinformation, increases customer satisfaction, and ultimately helps in upscaling your business.
Make use of expedited delivery
Expedited delivery is a way of shipping that ensures that goods are delivered at a quicker rate than normal delivery. To make the delivery fast, there aren’t many breaks/halts taken during transit, and these types of shipments move directly from the pickup point to the location of delivery.
Offering expedited shipping can help your online store reduce cart abandonment, meet customer expectations, and build customer loyalty for your business.
Offer order tracking for online purchases
E-commerce order tracking is among the primary reasons why potential customers visit and make purchases on your site. It gives them the ability to get real-time updates about their orders and removes any barrier of misinformation.
Talking about the customer’s experience, letting the individual track his/her order from the confirmation of the order to its delivery is an effective way to retain and enhance their shopping experience. Make sure to provide order tracking information so that you can have an edge over your competitors and stay ahead of them as well.
Provide international shipping
Though international shipping is expensive, it is an effective strategy if you want to expand your business globally. Since you have to deal with countries that have different regulations, tariffs, and taxes, you have to ensure that you have tied up with the right fulfillment partners who can provide affordable shipping rates and can guide you in navigating the desired goods meant to be shipped.
Prepay extra charges for seamless shipping
To make the customs clearance process faster for order destinations that require tax and duty charges, you can ask your customers to clear out the mentioned charges by prepaying them during check-out itself.
Though this method of shipping can be expensive for some, it’s an effective way to reduce the chances of your packages getting stuck in customs. Reducing such unwanted delays decreases the chances of people abandoning their carts at the last minute, hereby limiting your expenses with regards to return to origin orders.
Decide your shipping rates
Depending on the size and capabilities of your e-commerce business, you have to decide your shipping rates, take a call on your pricing slabs, and how you want to transport your products.
The primary factors that affect shipping rates irrespective of the order being shipped domestically or internationally are the package’s size, weight, destination, origin, customs charges (if any), and other charges (if any).
Take a note of the dimensional weight of orders
Dimensional weight or dim weight is the space that the package occupies in relation to its original weight. For any shipment, the greater amount between the actual weight and the dimensional weight of a package is taken into account.
If you learn how to pack your orders efficiently, dim weight pricing is an effective way to reduce shipping costs. It also helps in decreasing the density of the package and reduces the space taken that allows you to add more packages to your mode of delivery.
Make the most of free shipping
We all know how big a hassle-free shipping experience has on all our purchase decisions. Free shipping can increase conversions, customer satisfaction, your reliability as a brand, and can play a big role in reducing cart abandonment.
If you aren’t in a position to offer free shipping, you can integrate the cost into the price of your product by increasing the price of products and pay the price of shipping out of your margins for instance.
You can also try offering free shipping on a minimum order amount. This strategy can limit the costs of shipping by helping you increase your average order size.
Protect your shipments through insurance
No business is safe from fraud and damages incurred to their products. You can try your best in limiting these unnecessary expenses by making use of insurance as a source of security. Though insurance, the losses from shipping and other incurred losses are considerably limited.
Depending on the size of your business, you can set up a coverage plan that allows you to have a hassle-free shipping experience domestically or internationally. If you do not want to cover all your products through insurance, there is always the option of purchasing insurance on big-ticket items so that when a package gets lost, you’ll be covered for it.
E-commerce shipping best practices
Now that you have an idea of what to implement in your shipping strategy, let’s have a look at some of the practices that you can follow to match/exceed the expectations of your customers.
Take responsibility for your actions
Every individual is bound to make a mistake here or there. In case there are any damages seen on orders, irrespective of it being through your actions or not is a deal-breaker for your potential buyers. The way you deal with the situation is what separates you from other businesses.
You want to keep your customers satisfied, and since making them wait or presenting a faulty order to them is unacceptable, take it upon yourself to resolve this unfortunate scenario.
By doing so, you show that you are highly motivated in making things right between all parties involved, and stabilize the trust between you and your customers too.
Assemble the right team
Picking the right individuals to make decisions for your business is the primary factor for it to thrive. The efficiency of the people working around you can make or break your business.
It requires good planning, communication, and goes all the way from your marketers, web designers, fulfillment team, and your customer service team to name a few to stick to their goals and tasks to upscale your business.
Set your goals and strategize accordingly
Having a clear vision of what you intend to achieve always motivates you to do more and better. There are several things you have to keep in mind while framing a set strategy for your business.
You need to find ways to increase conversions, expand your target audience, increase your order value, decrease unnecessary costs, manage customer relations, and improve the overall efficiency of your business to stand out among the competition in the industry.
It’s time to strategize!
Shipping is a tough part of the overall selling process, and each business will have its issues in shipping that they need to overcome. To determine the right shipping strategy for your business, like any other aspect of your business, will take time to understand what works best for your needs.
Comprehending the right strategy and implementing it is crucial for your business’s success and long term health. If there is an instance where you have used the right shipping strategy, don’t hesitate to change it occasionally because you may lose your margins in a jiffy due to how volatile the e-commerce industry has become after the surge of covid-19.
Speaking about incurring shipping costs, people tend to forget that these costs lead to huge cancellations in orders as well. These cancelled orders amount to huge RTO losses for online businesses. Not only do you have to bear the costs of double logistics, but it’s also likely that you won’t be able to resell the returned item.
At Razorpay Thirdwatch, we help businesses reduce RTO rates and detect impulse purchases and fraudulent orders using AI. Also, you can identify complete and incomplete addresses, detect risky orders based on various data points collected, get RTO insights, get information about reasons behind your RTO orders, and so much more!