Shipping is the physical moving of good from one point to another, such as the moving of merchandise from the warehouse to the customer. The shipping process follows the manufacture and the packing of goods and will be controlled by a shipping or logistics company.
When starting out an ecommerce business, you may like to cut costs by handling your shipping yourself; however, as your business venture grows it will no longer be viable to handle the shipping of your goods yourself. In this instance, you will employ a shipping and logistics company.
Shipping can take several forms depending on the distance covered and the speed of delivery necessary. The most cost effective type of shipping is ground shipping, although it is also the slowest form. Basic discounted ground shipping could take up to 10 days or longer at peak holiday shipping times. For quick deliveries air freight would be used, however this is also more expensive. In the case of international shipments freight can be sent via ocean shipping, and while this is very cost effective, it is also extremely slow, taking up to 6 weeks or longer in some cases. While air freight gets around this, international air freight can also be very expensive.
Shipping costs also tend to decline with larger volumes. While a single package may cost $5 to ship, you could see a massive discount if you were shipping 100 packages. Companies like Amazon can provide free shipping to select customers because of their massive shipping volumes and the discounts they enjoy. Ecommerce retailers always need to consider the costs of shipping and how these will be incorporated into pricing, or passed along to customers.
By definition, shipping is literary the physical movement of goods from one point to another, such as the moving of merchandise from the warehouse to the customer.
To understand how shipping works, we need to give thought to the logistics strategy a manufacturer uses to make a product reach the end consumer.
For that to take effect, the shipper needs to work with a shipping company that has cost-effective shipping rates and the capacity to meet the scheduled delivery date.
Shipping works in so many dimensions.
It’s not limited to large businesses that transport cargo containers. While that may be the basic frame of reference, another definition of shipping could also fit in ecommerce transactions.
If for instance, you run a dropshipping website and you receive an order, the next step would be to contact your supplier who then ships an item from their warehouse to your customer’s delivery address. In that context, we can define the whole process as shipping.
An effective shipping strategy is significant to your business since you need to fulfill customers’ orders in time, build a reputation for your brand, and increase the rate of repeat business.
International Shipping Process Explained
The immense growth of ecommerce, in particular, has led to a multifold of shipping options that are designed to work for different business structures.
But before we go deep to some of the technical aspects involved, let’s break down how the conventional way of shipping goods globally works.
Most of the time, quite a number of players are involved in the international shipping process. If your goods are bulky and have to be carried in a container, you’ll need to work with a shipping line, freight forwarding company, and customs clearance brokers.
In any event where you need your goods urgently or perhaps they’re perishable commodities, then you might need to consult a shipping company that offers air freight services. The shipping company removes all complexities for the owner of the goods by handling these essential documents:
A commercial invoice is at all times issued by the seller who dispatches the goods. For export shipments, the document helps to serve quite a number of priorities.
First, the destination country needs to authenticate the details in the invoice before goods are released from the customs department. It works as a support document in the event of an insurance claim.
The buyer also needs a commercial invoice in order to send money to the seller. A banking institution also inspects the document before issuing a letter of credit.
This document is a policy to cover any damage and keep the shipping company and freight forwarder from any possible liability. Your cargo insurance certificate indicates the value of the goods and the due process in case of any unforeseen situation.
Bill of Lading
A bill of lading is a legal document that captures concise details of the goods being carried by the shipper. The B/L or otherwise referred to as the master bill of lading operates as a shipping receipt since it points out the nature, quantity, and destination of the goods.
The common practice is that the shipping line issues this document to the freight forwarding company which then uses it to transfer the goods to the destination warehouse.
Other relevant documents that may apply include the forwarder’s cargo receipt, seaway bill, and the house bill of lading.
A Practical Example of How International Shipping Works
The main players in this transaction are the seller/ shipper, consignee/ buyer, shipping company, and the freight forwarder.
First, both parties need to enter a binding contract to agree on liability and build a romantic relationship for future transactions, so to speak. As soon as all papers are signed, the next step to work on is export haulage. This is simply the process of moving goods from the shipper’s warehouse to the forwarder’s place of operation.
At this point, a local logistics company will be contracted to offer transport services. Where the consignee is responsible for moving the purchased goods from the seller’s warehouse, it’s far-reaching to use a forwarding company with export haulage services.
Haulage services include unloading the goods from the truck when they’re delivered at the forwarder’s premises. The next formality you’ll need to take part in is export customs clearance. There are noticeable variations when it comes to customs rules since countries have different policies.
A clearance transaction involves the submission of all the required documents to the relevant authorities so that the goods can be released from the country of origin. This part needs deeper insights to understand all the applicable regulations. If this feels too complicated, a better alternative is to work with a licensed clearing agent.
The subsequent step is referred to as origin handling. To put it simply, and as the name suggests, origin handling is the physical inspection of the consignment by the freight forwarder or the appointed agent before it’s loaded into a ship.
Right after origin handling, is ocean freight. The freight forwarder picks a shipping line which carries the container to the destination specified on the bill of lading. Not only is the timeline a crucial component while choosing a shipping company but also the shipping lanes.
A shipping lane is more like a sea road or route which vessels use to sail through. The consignee will be responsible for all the pertinent ocean freight charges. The consignee will then have to work on the import customs clearance part.
This process can begin while the goods are in transit. Customs clearance is largely meant for tax obligations. Your goods will be temporarily held in the customs area. To expedite this process, the buyer might have to work with a local clearing and forwarding agent.
Destination handling is yet another essential step in the shipping process. It includes unloading the container from the ship and transporting it to the forwarder’s warehouse. The buyer can finally collect their shipment from that point and pay the agreed fees.
Ecommerce Shipping Methods
Each ecommerce business runs on its own blueprint.
To find a hands-on shipping strategy, you need to look at indicators such as your customers’ location, nature of products, shipping costs, estimated delivery date, among many other dynamics.
On the other hand, it’s significant to include a couple of shipping options on your store’s checkout. It’s been proven that this strategy helps counter cart abandonment quite immensely.
There has to be a balance between fast delivery and cost-effective options; which might sound like a daunting task to deal with. To make the shopping experience a little more convenient, these are some of the shipping options you need to focus on:
If you include this option in your store’s checkout, customers tend to garner more confidence to make a purchase. In fact, accredited data shows that 56% of consumers aged between 18-34 years expect their orders to get delivered on the same day.
But the deficit with this option is it only works perfectly for online retailers that sell products locally. Same-day delivery would operate realistically if the merchant outsources local courier services.
This might seem like a premium option that’s only limited to big retailers like Amazon Prime. The fact of the matter is, there are carrier companies that offer flexible rates for next-day shipping. We'll talk more about some of these solutions late in this guide.
An e-commerce retailer should consider setting this option on their store if they plan to sell products to local customers.
Expedited shipping is simply a premium version of the standard delivery option. If you have a customer base that doesn’t mind spending a few more bucks on express shipping, then this could be a firm strategy to boost your brand’s authority in the market.
If you’re planning to scale your store exponentially, then you might have to consider selling your products across borders. International shipping is a significant step in business since you get to tap into newer markets and max out your online store’s revenue potential.
But easier said than done, you’ll need to figure out the key strategies to sell and ship your products globally. Other indicators to consider include the demand, shipping fees, and applicable regulations in the destination countries.
Ecommerce shipping rates
Free shipping is one of those marketing gimmicks online retailers use to convert more customers. Online shoppers always want to catch up to speed with any perks a retailer has on offer.
Even so, this might not work in all ecommerce setups.
If you’re in a niche market where the price of the product is a competition factor, free shipping will significantly lower your profit margin. The seller must consider underlying attributes such as the cost of making the product, taxes, packaging, and handling fees by the carrier.
While the free shipping model has a responsive reception from customers, you need to check if your profit margin is enough to keep a tight rein on the corresponding expenses.
The overall benefit of letting your customers off the hook on all shipping charges is you get to bank on a noticeably higher conversion rate. But if this route isn’t well assessed, that might be a bit costly on the part of the online seller.
While 90% of consumers have an impulse to purchase from a store with a free shipping incentive, the merchant needs to take into account, any operational costs attached to a product.
You can use this model for clients who meet a fixed condition. Most online stores offer free shipping if a customer purchases a couple of products that are above a specified amount.
Some of the e-commerce retailers use cross-selling and up-selling strategies to make customers want to shop more products. If the sales are slacking off, you can also opt to use free shipping as an incentive in your store.
For drop shippers, free shipping is more of a marketing technique that seems to win over customers' attention.
Flat Rate Shipping
With flat-rate shipping, there are a bunch of basics that the merchant needs to factor in. A fixed shipping price happens to pull out some of the barriers which free shipping imposes mostly on customers.
Flat-rate shipping, to be precise, is where the store owner charges the same shipping fee on all orders without regard to the value of the product. The rates are often tiered based on the weight and dimensions of the customer’s shipment.
For a single flat-rate, I’d recommend the USPS Priority package. With this option at checkout, the buyer no longer needs to calculate the shipping cost. The catch is, an ordered package has to weigh under 70lbs. USPS claims to offer 1-3 days shipping service for a flat rate order.
So why is flat-rate shipping perfect for ecommerce?
Most SMBs merchants opt for flat-rate shipping over other options since it’s, to a large measure, cost-effective.
Customers need a fulfillment service that’s fast, reliable, and enhances the ease of online shopping. To put it in perspective, consider the earned leverage by working with a low-rate shipping strategy. A fixed-rate, in other words, comes at no extra costs.
Another pivotal point to consider is checkout page optimization. Using the flat-rate formula is key to refining your customers’ shopping experience.
Real-time Carrier Rates
Real-time carrier shipping is one of the most accurate methods an e-commerce retailer can use to fulfill orders.
All calculations are automated and the customer gets to see the rates as soon as they add products to the cart. To make this take effect, you need to integrate your online store to a logistics company with carriers that have real-time shipping rates.
Ecommerce merchants who run their businesses in the United States can accurately estimate shipping rates from third-party carriers like USPS, Canada Post, DHL Express, or UPS. A shopping cart platform such as Shopify has a high-toned integration capacity to help customers get real-time carrier rates at checkout.
ShipBob, an in-demand shipping company for e-commerce merchants, connects to Shopify via the Advanced plan. That’s an overly simplified channel especially if the seller plans to outsource order fulfillment services.
Shipping by 3rd Party Logistics and Fulfillment Services
If you’re looking to start an eCommerce business, you might want to consider working with third-party logistics and fulfillment companies.
It's no secret that making insane sales is one of the most thrilling parts of an e-commerce retailer. But to make a constant revenue stream, you need to give thought to warehousing, a flexible shipping strategy, and use the right fulfillment company.
Whichever e-commerce business model, you’ll probably need a fulfill orders to customers in the most convenient and cost-effective way.
Take dropshipping for instance. This business model allows the merchant to sell products without owning any inventory. When a customer makes an order, the drop shipper contacts the supplier to ship the product and keeps the marked up price.
With third-party fulfillment, the merchant outsources packing and shipping services. The fulfillment company usually has a massive volume capacity to pick and sort and ship orders to customers.
But not all fulfillment companies have an advanced and wide-reaching infrastructure. If you plan to sell products globally, you want to choose a fulfillment company with quite a number of centralized warehouses.
To effectively grow your ecommerce business, you might need to fast track the expected shipping times. This is key to creating a steady customer relationship. Starting out as a small business would also require you to cut down on fulfillment expenses.
Benefits of third-party logistics companies
The fringe benefit of leaving the fulfillment process to a third-party logistics service is that you no longer need to worry about the backend delivery process. Besides this uptake, there are other correlative extras to bank on.
So let’s find out.
Faster shipping times
As an e-commerce seller, you need time to optimize your store, run and manage campaigns, respond to customers’ concerns, over and over again. It’s not easy to micro-manage every part of your business (think packing every single order) especially if it’s on an enterprise level.
That might stunt your business’s growth. To straighten out the delivery process, you might need to outsource a company that’s dedicated to order fulfillment. To gain better ground on the shipping process, you can integrate your online store with a third-party ecommerce fulfillment company.
This helps automate the order delivery process and update the inventory levels in real-time.
No long-term warehouse leasing
If you run a small online store and are strapped for cash, leasing a fulfillment center might not be the right approach to fulfilling orders. Most logistics companies have a workable pricing structure.
This allows you to pay for storage space only when you need it and skip the overhead costs of maintaining a physical warehouse. Some don’t cap the seller to a minimum number of orders. Thereby, a merchant can fulfill a single order without any constraints.
Capacity to scale
There are robust third-party companies in the market with a network of warehouses all over the world.
That is to say, the seller has a towering potential to increase their online store’s average order value. A 3PL has the capacity to store your inventory in any of their fulfillment warehouses and ship an order as soon as the customer successfully completes the checkout process.
A third-party logistics company is the ultimate solution to a merchant who wants to sell and ship products internationally. The service takes care of all the operations and files documents to relevant authorities on your behalf.
Saves You Money
Since 3PL companies handle large volumes of shipments, it’s much easier to spread the operational costs across all orders. You don’t have to pay for recurring expenses such as warehouse rent, equipment, labor, utilities, insurance, packing materials, software, and shipping.
All that is included in the warehousing and fulfillment fees. For this reason, online businesses have the leverage to increase their profit margins since they can bank on lower shipping rates.
You don’t need to own a warehouse to ship products globally. So long as you have orders rolling in, it’s cheaper to work with a 3PL service.
You Can Track Customers’ Orders
There’s nothing more convincing to customers than order tracking. It offers a significant sense of security and confidence in your store’s fulfillment process. Most carrier companies including USPS, DHL, and FedEx offer tracking services for all package deliveries.
You can share the tracking number with the customers to keep them on the same page as soon as the orders are in transit.
Shipment tracking is essential to reaching the overall customers’ expectations. Most retailers fail to notice the unforeseen downside of not attending to order management with rigor precision. To some extent, order tracking helps mitigate any future cost implications.
As you may have experienced this firsthand, customers will be quick to file a chargeback claim if they don’t receive their paid item. Not to count the bad reviews, persistent customer complaints, and loss of returning shoppers.
And that gives a descriptive explanation as to why 97% of online customers wish to shop from a store whose shipping process includes a top to bottom order tracking service.
At times, handling returns becomes an off-putting exercise for most retailers. With carriers such as DHL and USPS, the seller makes the best use of their return shipment solutions anytime a customer is dissatisfied with a purchase.
Ecommerce Shipping Expenses
There are a couple of driving bits and pieces that affect the end shipping cost in any e-commerce business.
While this majorly depends on the scale of the merchant’s online store, a convenient delivery option should always come out on top. Data shows that about 45% of online customers abandon the shopping cart due to disappointing delivery options.
As far as the above fact stands, 73% of customers also expect the shipping costs to be fast, while at the same time, cost-effective. That’s a crunch moment for the ecommerce merchant since there are a couple of underlying expenses to consider.
With or without a third-party fulfillment service, the store owner has to factor in elements such as weight, package dimensions, and shipping destination.
Other linked variables include the location of your business(save for drop shipping), whether orders are being shipped locally or internationally, and order tracking if needed.
To put these insights in context let’s presume that your business needs to outsource fulfillment service. It’s certain that the shipping rates will differ due to factors like location and weight.
For starters, calculating all the cost implications might seem like an overwhelming exercise. A fast and easy solution is to get an estimate using international carrier calculators from companies such as FedEx and UPS.
The two prime cost components include:
The price for packaging depends on quite a number of features. While there exists a relentless depth of competition in online retailing, merchants need to punch their branding techniques a little harder.
That would include labeling the packaging materials to create a flaring impression for the brand. Custom packaging, which comes at an extra cost, is at the same time, such a thoughtful step. This allows you to create a remarkable brand persona and customer experience.
You also can’t overlook other add-on expenses on items like promotional inserts and coupons. Customers are always looking for that incentive which ultimately encourages the next purchase. While this may be true, the seller has to figure out what the packaging costs are, to set logical, and competitive profit margins.
In a real-life scenario, the costs for packaging are never the same on all orders. The seller has to take into account the dimensional weight of a specific order. This, in turn, lays down what formula the seller should use while adding up all the shipping expenses.
Shipping Duties and Taxes
Whenever the seller plans to ship orders internationally, customs documentation has to be duly adhered to without leaving out any tax-related declarations.
Tax obligations differ significantly depending on the location in which a product has to be shipped to. So this calls for further inquiry on the part of the e-commerce retailer. The retailer needs to understand the basic workflow when it comes to tariffs, taxes, and duties.
One easy step for merchants using shopping cart channels is to charge taxes on each sale. I’d propose hiding the taxes in the selling price. That makes the pricing and checkout seem like nothing too puzzling for the customers.
As far as one can tell, tax laws and regulations tend to get off-the-wall mostly for newbie online retailers. But that just comes to an end if the merchant sells products on third-party e-commerce channels.
They all update, in real-time, the tax rates of all regions where merchants are likely to ship their products. As we noted earlier in this guide, taxes have to be paid before the shipment is released from the customs area.
Taxes may be paid either by the buyer or the merchant. When a shipment is marked DDP (delivered duty paid), it implies that the merchant is responsible for all the tax arrears. A seller must be clued up on the fact that an ecommerce solution isn’t tasked with any tax filing priorities.
Instead, they limit their support to sales tax calculations and history reports. These pieces of data are only handy when the seller needs a supporting reference while filing taxes.
For that discernible reason, the merchant, therefore, has to do business registration with the local or federal authorities.
International Shipping Carrier Companies
For an optimized shipping strategy, it’s vital to look at all the accessible carrier companies and compare the shipping rates on each solution.
FedEx offers e-commerce businesses an automated platform to make international shipments, track deliveries, create promotional materials. It has a dedicated support system for online stores looking to fulfill and ship orders with speed and efficiency.
The E-commerce Center is the right spot to not only deliver orders in time but scale at an incredible rate. FedEx is a compelling solution for most online businesses since it has the capacity to handle returns and engage with customers in a responsive manner.
This carrier company is ideal for online retailers looking to offer same-day delivery services. USPS has a better approach when it comes to making deliveries to local routes every day.
For ground shipping, this is perhaps the most cost-effective option that small online stores can hang on. This USPS calculator should help you arrive at shipping cost estimates.
You should consider working with DHL if you plan to sell internationally. DHL eCommerce offers delivery services to merchants looking to ship light orders.
It has plans for both domestic and cross-border shipments. You can get a rate and time quote using the DHL shipping cost calculator.
UPS has a dynamic e-commerce shipping strategy to help merchants handle cart abandonment. If you’re buying products from AliExpress in China, you can use UPS as the ultimate carrier solution via its integrated system.
You can use the UPS calculator to capture the delivery time and shipping cost. Apart from package tracking, the carrier company offers next-day shipping by air.
Ecommerce Shipping Best Practices
Have an Effective Return Policy
Returns and refunds are quite inevitable for any e-commerce business. In an effort to keep the process simple and engaging, the content in your policy should expressly state all the conditions needed for a return or a refund to suffice.
Since you’ll be dealing with all sorts of customer demographics, you want to keep it simple and off from any baffling jargon.
In any ecommerce setup, it’s crucial to visibly highlight the time frame for any return claim. Most retailers offer a 90-day return policy. If this time lapses, then a customer is locked out and the seller can validly reject the return.
The return policy needs to define the returned item’s condition. Most often, a customer can ship back a product to the seller if it’s defective or doesn’t match the description. The seller, on the other hand, reserves the right to reject any return which is used or damaged by the buyer.
It’s relevant to point out if there are any return shipping costs. You need to clearly spell out who’s responsible for any associated fees.
Work With the Right Shipping Stakeholders
The merchant needs a team that leaves nothing to chance. It’s far more fulfilling to overlook shipping costs but work with a competent logistics team. This goes a long way to make shipping reliable and far-ranging.
Prior to choosing a precise shipping company, the seller has to look at the foremost priorities. Shipping companies aren’t a ‘one size fits all’ kind of entity. It’s, at all times, in the customers’ interest to have their orders shipped the next if not the same day.
Fast shipping is only close enough to be achieved if the online retailer has a ductile shipping team on deck. Most shipping companies in the industry offer a dedicated logistics support for e-commerce businesses.
We’ve been asked a couple of times by our loyal and happy readers to recommend some of the best ecommerce shipping companies.
Well, so far, our top ten list goes to these solutions:
- Shipbob (full review)
- Shippo (read review)
- ShipStation (review)
- ShippingEasy (review)
- Shopify Shipping
- ShipWire (review)
- ShipMonk (review)
At the core of it all, choosing the right shipping partner can prove to be quite an overpowering task.
For delivery optimization, you might want to go with one that supports shipping from different selling channels. And that goes down to the ease of use, API integrations, and access to multiple carrier solutions.
Optimize the Checkout Experience
Customers always want the easy way in.
Benchmark studies show that about 69% of shopping carts get abandoned due to a distorted checkout page. The most straightforward onboarding experience always takes the lead. Customers want nothing less than a fast shipping solution that gets down to brass tacks in an uncomplicated way.
Another deeply analyzed data reveals that 28% of online shoppers abandon their shopping cart if the shipping costs appear to be vague and unanticipated.
The seller needs to refine any associated costs at checkout especially if they don’t plan to offer any free shipping. Other e-stores ask a visitor to open an account before they make an order.
That’s a major cause of low sales and a significant downturn in the average conversion. To counter any possibility of sales surge, the right course of action is to optimize the checkout experience and include a stable customer support system.
No matter what kind of resources you’ll need to chip in, it’s still a crucial consideration since customers want their concerns resolved without any shortfalls.
Part of structuring a successful checkout involves making a conclusive thought to all the possible shipping destinations and working with shipping options that are capable of producing desired results for customers.
The ease to make integrations between your store and the multi-carrier shipping software should also be part of the bargain.
To make this process not look anything close to being fictional, here are some of the robust features to look for in a shipping software:
An automated system racks up as an elementary feature in e-commerce shipping. This slashes the blooming manual input which merchants have to deal with when handling large volumes of orders.
Your online store should integrate with a multi-carrier shipping company without any apparent gaps. A system that automates your workflow helps optimize the fulfillment process and the customers' shopping experience.
The best possible shipping software should, to the largest extent, offer quick integrations in order to streamline the seller's operations, especially if they’re hanging on an omnichannel selling strategy.
Shippo, for instance, partners with platforms such as Shopify, BigCommerce, and ChannelAdvisor– which allows retailers to automatically import customers’ orders, print labels, and compare shipping rates from various listed carrier solutions.
An easy API link to the shipping software is such a great deal for the seller since it’s much easier to customize the store’s checkout.
Order Tracking and real-time reporting functionalities are also key to keeping the productivity prospects on a higher scale.
Shipping Rates Calculator
It’s needless to say that working out the shipping rates without tagging along all the hidden costs builds up a significant drop in the profit projections.
To take off the manual data entry process, a shipping rates calculator allows you to estimate the whole cost which is, nearly at all times, contingent on the weight, value, and destination.
Given the multiple variations that come with customers’ orders, it’s significant to have an automated calculator on board. Multi-carrier shipping companies such as ShipBob, ShippingEasy, and ShipStation give retailers a whip hand while assessing the cost to ship a customer’s order.
Batch Shipping Capacity
Any ecommerce merchant with a sole objective to scale their business needs to work with a software that has a batch shipment support.
Batch shipment is designed to give an online seller the capacity to set different shipping options across a large volume of orders.
Well, of course, you do want to have a systematic workflow while processing all pending orders. But what matters most is the level of support a shipping software is devised to offer its users.
To put it in context, the merchant should look for a shipping company that has a scope to concurrently process, (say over 200 orders) using the same carrier and packaging model.
If you ship products in large volumes, then chances are, you’re entitled to strike a better deal with your regular carriers.
One solid bench of reference suggests that by 2020, same-day deliveries will fuel up the shipping costs by 50%. Rates keep going up as the need to offer faster shipping takes the larger share of expenses over other fulfillment priorities.
And while shipping costs form a sizeable part of the online store’s expenses, it’s pretty needful to figure out any negotiation tactics to help you move the needle. This is all you need to cut down on operational costs and widen the profit margin.
First, you need to check out the shipping rates from each carrier (USPS, FedEx, UPS) to pull together an effective comparison. Both FedEx and UPS offer prepaid shipping which comes with a 20 percent discount.
It turns out that most carrier companies offer discounts only when a particular condition is met. In most instances, a merchant would expect a volume-based discount anytime they ship a certain number of packages.
Make sure to verify if there are any extra charges that might reflect on your invoice. Whenever any hidden fees crop up, this tends to pin down your plan to minimize the shipping expenses.
The quest to negotiate shipping rates sits in various dimensions. You can opt to negotiate contracts with multiple carriers to get a mixed bag of rates and surcharges– which seems technical while shipping products at an enterprise level.
Besides shipping, UPS offers fulfillment while USPS ranks better for its diverse strategy which is open for merchants when calculating the shipping rates. Presumably, this means that each service has a distinct selling point in the market.
Frequently Asked Questions
What Affects Shipping Costs?
The answer to this question hangs on multifold variables.
With a shipping calculator on board, it's accurate to say that the seller can calculate all the estimates in minutes. But on the buyer's end, this should happen in the instant. If you’re dropshipping a product from a supplier, it’s best to a little curious about where exactly the products are being shipped from.
Along with this, it’s equally important to capture the right location of where the products have to be shipped to. These two segments allow the retailer to create a primary quote. But that alone can’t give you a concise breakdown of all the elemental shipping costs.
The seller must consider the dimensions and weight of each package while working out all the shipping expenses.
Express couriers will charge higher fees depending on the dimension and weight of the shipment. They frequently use the dimensional weight technique to calculate shipping rates by taking into account these two metrics.
Another essential factor to note is shipping insurance. The vast majority of e-commerce merchants who sell highly-priced products merit the significance of having an insurance policy in place.
Most carrier companies offer insurance as an extra service which happens to be a small percentage( about 3%) of the entire value of the shipment. Ecommerce sellers have to look ahead to any unforeseen incidents that are likely to occur while a package is in transit.
Shipping insurance works as a reimbursement cover anytime the goods are lost, stolen or damaged. Sellers need to take into account the costs that are associated with package handling especially if they're dealing in high-volume and relatively fragile/dangerous goods.
Duties and taxes are also key elements while calculating shipping costs. This is assessed based on the country where the goods are being shipped to, type of product, and the entire value of the shipment.
How To Handle Returns/ Refunds?
While running your e-commerce business, you’ll undisputably encounter returns quite often. You’ll, therefore, need to include a well-reasoned return policy for customers to get acquainted with the whole process.
To deal with return shipping in a way that utterly settles customers’ issues, it’s all decisive to disclose what it costs to return an item. While free return shipping stands as a balmy incentive for customers, this option might not be viable for all ecommerce businesses.
Same as the conventional method of initiating the fulfillment process, you want to lay open all the return shipping options available for the customers. There’s no one right formula that fits all the return/refunds situations.
The cost can be calculated at a free rate or the seller can decide to make return shipping a free transaction. Either way, it’s essential to identify all carrier companies that support return shipping.
Based on our concise assessment, these solutions also help create return labels for customers;
- Canada Post
- Australia Post
- UK Royal Mail
What is Overnight/ Next Day Shipping?
As the term suggests, overnight shipping is where customers get their orders within the next business day. Fast shipping is the only way to beat your customers’ expectations.
Amazon Prime was built to optimize this convenient delivery option. Its same-day delivery service is also open for non-Prime members who shop for products that are above the $9.98 price mark.
Merchants can borrow a leaf or two from Amazon’s infrastructure(including Amazon FBA) to gain ground on how expedited shipping should technically work.
Overnight shipping is more of a premium and staple service which customers expect any basic e-commerce shop to have. But competing with large retail giants is never an easy undertaking.
Regardless of how crunchy overnight shipping can get mostly for new retailers, carriers such as UPS and FedEx are seemingly economic options for SMBs.
Through fulfillment companies like ShipBob or Shippo, online sellers can negotiate on rates and bank on wide-reaching carriers for next day shipping services.
What is Shipping – Last Takeaway
Shipping is perhaps the most significant part of fulfillment in any enterprise. To match your customers’ expectations (think fast shipping), you need to partner with the right logistics team and look out for the most competitive shipping rates.
Since shipping can get a little overwhelming at times, outsourcing this service from recognized experts in the industry helps to straighten out all the curves.
If you plan to sell products internationally, the best possible practice is to work with third-party multi-carrier companies that have a couple of warehouses across all corners of the globe.
Apart from those which we’ve long-windedly mentioned, you can look around for better bargain from shipping companies like ShipBob, ShipperHQ, AfterShip, and Shippit. They all have simple yet diverse delivery strategies.
To gain better traction at all the requisite priorities, the seller has to work with powering shipping options that help convert more sales and are designed to automate shipping and returns, which ultimately lowers customers' complaints.
That's all for now.
If you have any questions, please drop them right below in the comments section.