Last Updated on January 21, 2022
In today’s time, when a customer makes an ecommerce store, he expects to get delivered as soon as possible within two days or even one-day delivery. There are many companies that are approaching the ecommerce business by using a very simplistic shipping method. There are offering free shipping services to a range of services or exhibit unmodified postal service rates. A lot of ecommerce retailers got successful by providing many different options for shipping.
The strategy is helpful for them to get a competitive advantage in the same industry niche and maximize their profits. Since a clean and uniform shipping framework is beneficial for the companies to get a competitive advantage in the economy, it is unavoidable that the company can adhere to the framed shipping strategy.
Implementing a highly successful ecommerce store can be achieved when all the teams within that organization are working in a very coordinated manner. It implies all the teams from manufacturing and marketing to fulfillment. This will result in a strategy implemented in the ecommerce business to create a proper supply chain network.
A proper shipping strategy in your ecommerce store will lead to effective communication between one part of the company to another. The stakeholders would be aware of all the processes currently running in their business and what are their roles & responsibilities.
In this article, we would be focusing on the importance of shipping, its types, and how to improve it for your ecommerce store. Let’s begin with what actually is shipping in ecommerce
What Is eCommerce Shipping?
Shipping in an ecommerce store is defined as a service whose purpose is to transport the products purchased from the ecommerce retailer to the destination. It should be faster, manageable, and affordable for buyers as well as sellers.
You would be surprised to know that it can even play a major role in shopping cart abandonment. Customers don’t prefer to buy a product if the delivery charges are too high.
The cost of shipping also matters a lot. Here are some important stats regarding the shipping costs:
- 45% of shoppers abandoned a cart when the order value didn’t qualify for free shipping.
- 52% of consumers have added items to their cart with the intention of keeping them to qualify for free shipping.
- 56% of shoppers decided to pay for shipping when the total cost of their order was still a good bargain with shipping charges.
Strategies Or Methods In eCommerce Shipping
Every strategy of ecommerce shipping must be customized in accordance with the business needs. Choosing the proper strategy of shipping depends upon understanding the audience, products, price margins, and many other factors.
The process of shipping for online products:
- An online sale will be recorded
- The products will be selected for packaging and their weight & size would be determined
- Shipment destination will get confirm
- Determine which shipping carrier would be best for the business and then shipping costs would be generated
- The products will be dispatched by the best courier option available
The only key to choosing the best shipping strategy is to combine shipping methods which are both fast and affordable. This will also lead to a reduced rate of shopping cart abandonment and increased conversion rate.
These are some of the popular shipping methods that you can provide to your customers for increasing conversion rate:
1. Same-Day Delivery
As the name indicates, in this delivery method, the orders will be dispatched and will get delivered to the customer on the same day that it got placed on the ecommerce store. The customers choose this expedite delivery method when they required an item urgently either for gifting, medicines, shoes for attending a party, or any other purpose. Research shows that 61% of the customers are ready to pay extra for getting products on their door-step on the same day.
However, still, this kind of delivery requires proper coordination as if the product doesn’t get delivered to the customer, you will not just lose your customer but it will create a negative image of your brand.
2. 2-Day Shipping
With the magnum opus players of the ecommerce industry, such as Amazon Prime, two-day delivery is getting synonymous with online shopping. The small businesses are trying to meet the two-days delivery but it is still a difficult task to meet. Still, plans exist to facilitate the same for these businesses without creating a hole in the company’s pocket.
3. Expedited Shipping
Expedited shipping is a faster version of normal shipping. In this method, transportation employs to deliver goods than standard ground shipping methods. The turnaround time for the expedited shipping depends upon the shipping provider or carrier chosen. Most of the businesses that provide this type of shipping have less abandoned cart rates, better customer rates, and more customer loyalty.
4. Overnight Shipping
In this shipping method, the product will be delivered to the buyer on the next business day. This method is distinguishing brands in an industry where 2-day shipping is the standard norm. The cost of the overnight shipping can vary from provider to provider.
5. International Shipping
If your ecommerce business or company is having a presence in many other countries then the biggest challenge you can face is international shipping. The main problem in international shipping is that the price for shipping varies a lot depending upon the country’s product is being shipped and the country’s exchange rates.
Hence, it is very expensive for a company to provide this shipping mechanism. Also, every country has its own laws, with different requirements for shipments entering the states, and are subject to separate tariffs & taxes.
6. Freight Shipping
This shipping method is mostly used in B2B business and often done with cargo shipment across the world through land, sea, or air transportation. Generally, a shipment whose weight is more than 150 pounds and size is more than 30 x 30 x 30 inches is considered as freight. ecommerce retailers use this shipping to build up their inventory by receiving shipments from the manufacturers and sending them to the regional distributors.
Best Practices In eCommerce Shipping
1. Mustering The Proper Team For The Task
The first process is to find the right people who will help you in making the right decisions. You also need to determine the stakeholders in the daily operations. Every team member and stakeholder has to work harmoniously. Some of their functions are:
The team will promote the shipping methods to the customers and can also attract new potential buyers to your ecommerce store. Some of the popular delivery incentives that they can promote are free shipping or flat-rate shipping etc.
Web Development Team
The web development team of your ecommerce store would be responsible to show the right options to the customers. This team would be in charge of providing information about the preferred mode of shipping for the customers.
The primary role of the order fulfillment team is to ensure proper packaging and shipping of the orders on the basis of chosen delivery by the customer.
This team will collect the data of the company’s approach to the shipping methods and how it can affect the customer at each delivery process level.
2. Shipping Strategy Goals
After the company will identify the proper teams and members, the next step for them is to make certain what needs to accomplish using different ecommerce policies. The major focuses are:
You can increase the conversion rate by offering different shipping options and shipping rates which would be affordable for the customers. The shipping fees have a direct impact on the conversion rate and order frequency rate.
Increasing Average Order Value
You can implement multiple promotional offers so that the customer would be motivated to spend more and this will have a positive impact on the Average Order Value. Mostly, in this method, there is a threshold of order value after which the customer will get the order at no shipping fees.
Expansion into new markets
You can get a newer market by shipping the products into those areas to which you were not shipping earlier. You can do this by giving options such as international shipping, local delivery, in-store pickup, etc.
Try to get as lowest shipping rates as possible. There are many prominent players in this industry, such as FedEx and UPS which provide a great level of service. You can also use a real-time calculator and ensuring a good relationship with the shipping partner.
Improving the efficiency of the supply chain
If you have maintained the supply chain then it would be helpful for better-informed decisions such as picking, packing, and shipping the orders.
3. Choosing A Perfect Shipping Strategy For Your Business
After analyzing all your business goals and choosing the right team to carry out the purposes, the next thing you have to do is to identify the best shipping strategy for accomplishing the goals. Before strategies execution and implementation, you must define the pros and cons of each strategy. You must also know that none of the strategies would be mutually exclusive. There are several different options you have to combine to come up with a proper plan. Here are some of the things on which you have to focus:
Dimensions & Weight Of The Product
It is one of the most simple factors which will have a direct impact on the shipping mechanism. If the products are having a uniform size then you can consider the per-item approach would be best on the basis of zones. In this approach, the shipping rate varies in accordance with location not the product’s size.
The location where the product needs to be delivered has an equal impact as size or dimensions. In domestic shipping, free or flat rate shipping can work better. The process is simple for nearer delivery up to a limit, the delivery rate would be low, then as the distance will increase, delivery rates will increase.
Available Shipping Options
Another way to happy your customers is to give them multiple shipping options just as Amazon does. There are one-day delivery options as well as the normal delivery option. The other options are:
- Free shipping
- Free in-store pickup
- Same-day delivery
- LTL Freight carriers
How To Make Money Even When You Are Offering Free Shipping?
1. Understand The Niche Of Your Business
As a business owner, you understand your business niche and how it works. Suppose your competitors don’t provide the free shipping that you also don’t need to opt for that. It is highly important for B2B business as your shipping costs really matter for the customers too.
2. Provide Free Shipping To Only Limited Places
You can provide free shipping to only those states or cities which are quite nearer to your company’s warehouses. You can achieve this kind of delivery by asking the pin codes from the users. If the location is very far away from the warehouse location then you must charge minimal shipping fees.
3. Offer Surcharge For Expedited Delivery Options
The buyer adds a product into the cart by going through an ad in which the product will get delivered for free but in 10 days. At this point, the customer may be enticed to pay more to get ordered delivered faster. This is the strategy of expedites delivery.
4. Provide Free Delivery Options Once The Minimum Cart Value Has Been Met
As we discussed before, if the customer makes more purchases on your site you will end up making more profit. And then you can even pay for the shipping fees. In simple words, if you set a minimum cart value limit above which the delivery is free then the customers will make an order for that value.
5. Use Free Shipping As A Promotional Campaign
Domino’s Pizza got highly popular as they were offering free home delivery for their pizza. They also highlighted this in their promotional campaigns. You can use the same strategy for your ecommerce store. A vast majority of the customers are highly inclined towards free shipping.
In this article, we have discussed the different aspects of shipping in an ecommerce store. At Emizentech, the best ecommerce development company in India we are having expertise in implementing shipping options, payment methods, version upgrades, theme development, developing an ecommerce store from scratch, and much more. Please let us know your requirements.