A seamless shipping and delivery process enhances the customer experience, strengthens customer loyalty, drives repeat business, and keeps your business ahead of the competition.
However, as much as customers expect fast shipping, the reality is that many factors at play can impact timely delivery. From distance to weather conditions and shipping carrier delays.
The success of your online business depends on how effectively you tackle these challenges. To help you understand e-commerce shipping better, here’s what you need to know.
Key Highlights
- E-commerce shipping is a vital part of running an online business and impacts customer satisfaction, operational costs, and delivery timelines
- Assess all the available shipping options and choose a strategy that meets your customer’s needs and budget
- Many factors to influence the cost and speed of delivery including the size, weight, and location of your products as well as the delivery method and time
- The most common e-commerce shipping options are USPS, UPS, and FedEx; each of these carriers offers a shipping calculator to help you determine shipping costs
- The cost of shipping should be factored into the overall product price, and e-commerce businesses should aim to offer free or discounted shipping options whenever possible.
What Is E-commerce Shipping and Why Should It Be a Top Priority?
E-commerce shipping refers to the delivery of online purchases to customers. It’s a crucial aspect of any online retail business, as it can make or break customer satisfaction and impact the operation’s overall success.
In the highly competitive e-commerce world, getting shipping right is vital. Customers expect their packages to arrive quickly, in excellent condition, and at a fair price. Any missteps in the shipping process can result in lost sales, frustrated customers, and negative consequences for the business.
- Research indicates that 95% of online shoppers rate convenient delivery options as a significant factor in their decision to shop with a particular retailer.
- The aim is to deliver packages accurately, on time, and exceed customer expectations.
- Factors to consider include selecting a suitable shipping carrier, managing order fulfillment and tracking, adhering to packaging regulations, and choosing cost-effective shipping options.
Considering all these factors, you can provide customers with an exceptional and memorable shopping experience.
What Is the Process of E-commerce Shipping?
To ensure seamless delivery of your online purchases to customers, it’s essential to understand the process of eCommerce shipping. This encompasses tasks such as
Order Processing
The first part of the process is to receive an order and process it in your eCommerce system. This involves creating a sales record for the transaction and preparing other paperwork, such as invoices and packing slips, that will be sent with the shipment.
Shipping Label Creation
It allows you to provide accurate information regarding the destination address, weight, postage cost, return address, and other essential details related to the shipment. This helps ensure that shipments reach their destination on time, with accurate tracking information and minimal delays.
In e-commerce shipping, label creation is typically done through an automated system. You can integrate it into a website or shopping cart software or manually use a printer and blank labels. Mechanical systems make it simple to create labels quickly, allowing you to get orders out the door faster and reduce customer wait times.
Order Packaging and Preparation
To complete the shipping process, you must adequately prepare the package for shipment after creating the shipping label. This includes selecting the appropriate packaging materials, such as cardboard boxes, padded envelopes, or bubble wrap, and securely seal the package.
For items with delicate or fragile components, you must exercise extra caution to ensure safe transit. Adequate cushioning and secure packaging are essential to protect the contents of the package during transit.
Including a packing slip in each shipment is a wise practice as it provides the customer with a clear understanding of the contents of the package and facilitates prompt resolution of any queries or complaints.
Finally, accurately measuring the weight of each shipment helps avoid any additional costs due to incorrect postage pricing.
Shipment Delivery
When the packaging of an order is complete, the next step in the eCommerce shipping process is delivery. The method of delivery depends on the type of product.
- For physical goods like clothing or furniture, businesses often use third-party carriers like UPS or FedEx for shipment.
- Digital products, on the other hand, can be delivered via email with a download link.
Expedited shipping may provide faster delivery but comes at a higher cost, so it’s important to compare different carriers and options to make an informed decision.
Be mindful of customs and duties that may apply to their shipment. Different countries or regions may have varying taxes or fees, so conducting research beforehand helps ensure a seamless shipping and delivery experience.
Tracking Shipments
After you ship a package, you can track its progress throughout the delivery process. This is done by entering tracking numbers into your eCommerce system or checking with the carrier directly. Tracking shipments lets you keep customers informed of the delivery status and helps ensure packages are delivered on time.
Methods of E-commerce Shipping
Selecting suitable shipping methods and carriers is essential to satisfying customer expectations.
Here are eight standard e-commerce shipping methods to consider incorporating into your shipping strategy:
Free Shipping
Free Shipping is a popular incentive for customers in e-commerce. It can drive sales and build customer loyalty. However, offering it comes with costs, either absorbed by the retailer or passed on to the manufacturer, making it challenging to manage from a business perspective.
Retailers may need to make a profit when offering free shipping, as the cost is often incorporated into the product’s price or absorbed to remain competitive with other e-commerce stores. Retailers need to weigh the benefits and costs of free shipping and decide if it aligns with their business model and customer base.
Offering it as a reward for customers who spend a certain amount or purchase items in bulk can be an effective strategy.
Pros
- Helps increase basket size as customers can add more items to their cart without worrying about additional shipping costs
- Free delivery gives a competitive advantage to businesses, allowing them to stand out from competitors who may not offer free delivery
- Lowers the likelihood of cart abandonment since customers are more likely to finish their purchases because they are not concerned about the expense of shipping.
Cons
- Free shipping could result in reduced profit margins since most businesses will have to increase their product prices to cover the cost of delivery
- Customers may become accustomed to free delivery and expect it as a standard feature, making them less likely to purchase from businesses who don’t offer it.
Economy/Standard Shipping
Economy/Standard Shipping is an economical and cost-effective way for e-commerce merchants to ship their merchandise. It typically takes longer than expedited shipping options but can offer significant savings for clients. This type of shipping is often the default setting in an eCommerce store and provides customers with basic service at an affordable price.
Pros
- Most cost-effective option for merchants, making it ideal for orders with a low delivery time demand
- Ideal for bulk orders, as the shipping costs are much lower than those associated with express or overnight delivery.
Cons
- It can take longer for the package to arrive than other shipping methods. Depending on the carrier, Economy/standard shipping can take anywhere from 7-10 business days.
Flat-rate Shipping
Flat-rate shipping is a type of e-commerce shipping where the cost of delivery for an item remains constant regardless of the quantity or weight of the package. This type of shipping is beneficial for businesses as it allows them to offer a fixed price for delivery, making it easier for customers to estimate the total cost of their order.
Flat-rate shipping helps businesses save on costs by eliminating the need to calculate exact shipping costs per package.
Pros
- Makes shipping costs easy to understand and predictable for customers
- Drives repeat business
- Helps to reduce costs, as businesses don’t have to package items individually or worry about the cost of packaging materials
Cons
- It may discourage smaller orders from customers
- Smaller orders may no longer be cost-effective to ship when a flat rate is applied
- Eliminates branding opportunities for your business
Same-day Shipping
Same-day delivery is a highly sought-after shipping option that can make a real difference for both customers and retailers. This fast and convenient option delivers orders directly to the customer’s door on the same day and is available internationally. It’s no wonder that 49% of shoppers say they’re more likely to shop online if same-day delivery is an option.
While this shipping method offers plenty of benefits, it’s essential to keep in mind that there are some restrictions. Most retailers have a cut-off time for same-day delivery, typically around 12 PM or 2 PM, so customers need to place their order before this time to take advantage of this service.
Pros
- Convenient for customers and gives them the incentive to buy from you
- Boosts customer loyalty
- Stand out from competitors who may not offer same-day shipping
- Reduce cart abandonment, as customers will have their products in a matter of hours rather than days or weeks.
Cons
- High shipping costs
- Unreliable delivery times. To avoid this, the logistics operator must have an accurate and reliable tracking system in place
- Possible weather delays and other uncontrollable events that may disrupt the delivery process.
2-day Shipping
Offering 2-day shipping is a way to provide exceptional customer service and increase customer satisfaction. To deliver on this promise, careful planning and management of inventory, staffing, and logistics are essential. The cost of 2-day shipping includes not only shipping fees but also materials such as boxes and packing tape, as well as labor costs.
There are two standard methods of 2-day shipping: air and road. Air shipments are faster but more expensive, while road shipments are slower but more cost-effective. The cost of 2-day shipping varies depending on the package weight, size, origin or destination location, and shipping method chosen.
You can offer 2-day shipping while controlling costs with proper planning and inventory management.
Pros
- Customers receive their orders faster, which can provide a more delightful shopping experience
- The ability to lower costs associated with storing merchandise in warehouses, as orders can be shipped directly from your store.
Cons
- High costs – 2-day shipping can be expensive, especially if you are sending multiple items.
- Delays – While 2-day shipping promises quick delivery, there are still potential delays due to unforeseen circumstances such as weather, road closures, etc.
Expedited Shipping
For businesses looking to get goods to their destination faster, Expedited Shipping is a reliable and cost-effective option. By bypassing the slower rail and sea freight methods, companies can use road or air express shipping for quicker deliveries.
This shipping method allows goods to travel by air freight, allowing for delivery within hours instead of days.
Pros
- Faster delivery times
- Improved customer satisfaction
- Increased revenue opportunities due to faster order turnaround
- More efficient logistics, reducing the need for physical inventory storage and management.
Cons
- Higher costs. Some retailers may not offer expedited services as they can be more expensive than standard shipping options.
Hybrid Shipping
Hybrid shipping refers to a method of logistics where multiple modes of transportation are utilized to deliver goods from one place to another. This often includes a combination of air, sea, and ground shipping and can be customized to meet the specific needs and requirements of a business or individual.
The main advantage of hybrid shipping is that it offers greater flexibility and cost-effectiveness compared to relying on a single mode of transportation. For example, air shipping may be fast and reliable but expensive, while sea shipping may be more cost-effective but slower.
By utilizing multiple modes of transportation, businesses can find a balance between speed, cost, and reliability that best meets their needs.
Pros
- Increased flexibility in delivery options, allowing customers to choose different methods for delivery such as ground, 2-day, and overnight
- Reduced costs by optimizing routes and choosing the most economical shipping option based on order size
- Faster delivery times due to the ability to track packages in real-time.
Cons
- Hybrid shipping requires organizations to manage many e-commerce shipping issues. This makes managing the entire process, including order fulfillment, shipping tracking, and customer updates, more complex and costly.
International Shipping
When e-commerce businesses start to grow and expand, the need for international shipping arises. International shipping is a complex process, and e-commerce businesses must know the rules and regulations specific to each country they are shipping to.
The e-commerce business should also clearly understand customs regulations so that packages reach their intended destination without any delays or disruptions. Additionally, international e-commerce businesses must consider the cost associated with international shipping.
International shipments involve many different parties, such as carriers, customs, freight forwarders, and insurance companies. The e-commerce business must coordinate with these parties to ensure that their shipment is handled correctly and arrives safely.
Pros
- Reach a global market and increase sales potential
- Offer customers more choices of products to purchase
- Attract new customers from different countries
- Diversify revenue streams with e-commerce shipping services
- Reduce risk associated with seasonal slowdowns in specific markets.
Cons
- Higher costs due to international customs fees and taxes
- More complex process due to laws and regulations from different countries
- Extra market research is required to understand the local regulations and customs of different countries.
E-commerce Shipping Strategies
A well-designed shipping strategy can enhance customer satisfaction, minimize costs, enhance operational efficiency, and drive sales growth by balancing customer requirements and business goals.
Here are some tips for developing a shipping strategy that meets the needs of both the business and the customers:
Offering Free Shipping
Free shipping is a popular and effective way for companies to increase customer satisfaction and drive sales. Offering free shipping can provide a significant competitive advantage, as it can help to differentiate the business from its competitors and attract new customers.
In addition, offering free shipping can increase the average order value and drive repeat business. Customers are often more likely to purchase additional items or make repeat purchases if they do not have to pay shipping fees. This can increase revenue and profitability for the business.
Charging Real-Time Carrier Rates
Charging customers the exact cost of shipping – as opposed to a flat-rate or free shipping model – is the most profitable option for e-commerce stores. By charging precisely what the carrier charges, you can ensure that your business covers its costs while remaining competitive in pricing.
When using real-time rates to make shipping calculations, you’ll need to integrate with a carrier API that provides live shipping rate information. This requires some technical knowledge, but it’s well worth it when you consider the potential savings.
Additionally, you’ll need to ensure that you present customers with the most accurate and up-to-date information on your store.
Providing Flat-Rate Shipping
For businesses that ship large orders with similar weights and dimensions, offering flat-rate shipping may be advantageous. With this option, you can provide a single shipping rate for all orders regardless of weight or size. This is a great way to provide consistent pricing and make it easier for customers to understand their shipping costs before they complete their orders.
This pricing could be a great way to remain competitive with other online retailers, but if you don’t factor in the cost of packaging and shipping your items, you may lose money on each order. To avoid this, ensure you’re offering a rate that is both fair to customers and profitable for your business.
Multi-Shipping Option
Companies can meet diverse needs and preferences by providing customers with different shipping options, such as standard, expedited, and same-day shipping. This can increase customer satisfaction and drive sales, as customers are more likely to purchase from a business that offers shipping options that meet their specific requirements.
For example, customers who need their orders delivered quickly are more likely to choose expedited shipping, while those who are more budget-conscious may opt for standard shipping.
Customizing Shipping Options
Regarding eCommerce shipping, it’s essential to consider the diverse needs of customers across different regions. Your location and your customers’ destinations can significantly impact your shipping options.
To cater to these varying needs, it’s a good idea to offer multiple shipping speeds tailored to specific regions. For instance, customers living in remote areas may need their orders to arrive faster than those closer. By providing region-specific shipping speeds, you can ensure all customers receive their orders promptly and as quickly as possible.
Calculating E-commerce Shipping Costs
Calculating the cost of shipping your products is an important step. This helps you price your products correctly and ensure profitability.
You can determine the cost of shipping by various factors, including the item’s weight, the package’s size, and the distance it needs to be shipped;
Weight
Carriers base the cost of shipping on the package’s weight—the heavier the package, the more expensive it is to ship. Carriers must use more fuel and labor to transport heavier packages. Additionally, some carriers offer discounted rates for lighter packages shipped within specific weight ranges.
Package Size/Dimension
Oversized packages may incur additional fees or surcharges, as they may require special handling or may not fit within the standard shipping dimensions of the carrier. This can also result in longer delivery times, as oversized packages may require special handling and not fit on classic delivery trucks.
Destination
Shipping rates vary depending on the distance between the sender and the recipient and the carrier’s shipping routes and delivery times.
For example, shipping a package from one coast of the United States to another may be more expensive than shipping within the same state.
Delivery Method/Time
Different delivery methods, such as standard shipping, expedited shipping, or same-day delivery, can have varying shipping rates. The faster the delivery time, the higher the shipping cost is likely to be.
For example, expedited shipping or same-day delivery may incur higher fees, as these services require additional resources and coordination from the carrier.
In contrast, standard shipping is generally less expensive but may take longer to reach the recipient.
Insurance & Tracking
Some carriers may offer insurance coverage for lost or damaged packages as part of their shipping services, while others may charge additional fees. The cost of insurance coverage can vary depending on the value of the shipped items, the destination, and the carrier.
Tracking services, which allow customers and businesses to track the location of their packages during transit, can also come with additional costs. Some carriers may offer essential tracking services as part of their standard shipping packages, while others may charge extra.
Bulk Orders
Shipping large orders can be more cost-effective than shipping multiple smaller orders, as carriers may offer volume discounts for larger shipments. Additionally, shipping a large number of items for a single charge can help to lower shipping costs by reducing the number of packages that need to be processed, handled, and transported.
Profit Margins
Profit margins represent the amount of money a business makes after accounting for all its expenses, including shipping costs. If shipping costs are too high, they can eat into the profit margin and reduce the overall profitability of each sale.
To balance shipping costs with profit margins, eCommerce businesses must carefully consider the cost of shipping, packaging, and insurance and the value of the goods sold.
For example, offering free shipping can be a great way to attract customers and increase sales, but it’s essential to ensure that shipping costs are accounted for in the price of each product.
Emergency Budget
In times of financial crisis, businesses may need to reduce expenses to stay afloat. Shipping costs can be a significant expense for eCommerce businesses, and reducing these costs can be a way for companies to cut costs and maintain profitability.
For example, during an emergency, a company may need to switch to a cheaper shipping carrier, reduce the number of delivery options available, or offer limited shipping services, such as ground shipping only.
5 Tips for Accurately Calculating Shipping Costs
Accurately calculating shipping costs is crucial for the success of your eCommerce business. To ensure that you’re pricing your products appropriately and maximizing profits, here are five tips to help you calculate shipping costs effectively:
- Use a shipping cost calculator: A shipping cost calculator is a valuable tool for accurately determining shipping costs. This tool considers factors such as item weight, package size, shipping distance, and shipping method to provide a reliable estimate of shipping costs
- Consider item weight: The weight of an item is a significant factor in determining shipping costs, so be sure to weigh your products and packaging materials accurately
- Take into account package size: The size of the package also affects shipping costs, so measure your products and packaging materials and include this information in your calculations
- Factor in shipping distance: Shipping distance is another important factor in determining shipping costs. Consider the location of your customers and the cost of shipping to each destination
- Negotiate shipping rates with carriers: Shipping carriers may change their prices periodically, so consider negotiating shipping rates with carriers to ensure that you get the best possible pricing for your business.
Updating Shipping Policy
Having a clear shipping policy is crucial for an eCommerce business. It sets customer expectations, improves customer satisfaction, and strengthens the company’s credibility. A clear policy includes the following information such as;
Delivery times: Customers want to know when their items will arrive and are more likely to buy if given an accurate estimate. A precise delivery policy that outlines the estimated delivery time is crucial to customer happiness.
Shipping costs: E-commerce shipping costs affect your business favorably and poorly. Before opening, e-commerce merchants must set delivery rates. This should contain delivery times, services (standard or express), and freight prices.
Shipping costs significantly impact how much you can charge per item and how competitive your price point will be.
Return Policies: A clear return policy outlines the conditions under which a customer can return a product, the process for making a return, and the company’s responsibility for handling the return.
Shipping Restrictions: A shipping policy should indicate geographical constraints, shipment methods, charges, and delivery times. It should also list dangerous or unlawful things that you cannot send. To avoid confusion, clients should simply understand the policy.
Display the shipping policy in a prominent location: A shipping policy that is easily accessible and well-communicated, such as on the checkout page or a dedicated shipping information page, can help set expectations and improve the overall customer experience.
Examples of effective shipping policies include:
- Amazon’s shipping policy is clear, concise, and easily accessible. The policy provides information on shipping methods, delivery times, and shipping costs
- ASOS provides a detailed shipping policy that includes information on delivery times, shipping costs, and return policies. The policy is prominently displayed on the checkout page, ensuring that customers are aware of the shipping options before making a purchase
- Nike’s comprehensive shipping policy provides detailed information on delivery times, shipping costs, and return policies. The policy is displayed in a clear and easy-to-understand format, making it accessible to all customers.
How to Package Orders for Shipment
Packaging orders for shipment involves several steps to ensure the safe and secure delivery of the product to the customer. Here are the basic steps:
Step 1 - Gather materials: Obtain suitable shipping boxes and packaging materials such as bubble wrap, packing tape, and labels.
Step 2 - Prepare the product: Ensure the product is appropriately packaged to avoid damage during shipping. Wrap delicate items in bubble wrap and secure them inside the box. Fill any space in the box with packing materials to prevent the product from shifting during transit.
Step 3 - Measure and weigh: Measure and weigh the package to determine the appropriate shipping method and cost.
Step 4 - Seal and label: Close the box and seal it with strong packing tape. Label the package with the correct shipping address and any necessary special instructions.
Step 5 - Choose a shipping carrier: Choose a shipping carrier based on cost, delivery time, and the level of tracking and insurance required.
Step 6 – Final inspection: Perform a final inspection of the package before shipping to ensure that it’s securely closed, labeled correctly, and ready for shipment.
Best Practices for Return Shipping
While the thought of managing a return may seem daunting, you can follow several best practices to make returns easier.
- Provide clear return instructions and policy information on your website and product pages. This will help customers understand their rights and expectations when they need to return a product
- Offer a variety of return shipping options, such as USPS, UPS, or FedEx, so that customers can choose the option most convenient for them
- Consider providing a return shipping label or prepaid shipping options to make the process easier for customers
- Provide prompt refunds or exchanges once the return is received. This will help ensure customer satisfaction and decrease the likelihood of negative feedback.
Top E-commerce Shipping Solutions
With the growing demand for fast and reliable delivery, it’s important to choose the right shipping solution to meet your business needs . Here are some of the popular e-commerce shipping solutions available:
| Features | Ease of Use | Price |
| USPS | Ships to 180+ countries Destinations with money-back guarantee Package weight and destination determine price Free home or office package pickup | Flat Rate option: Ship using free Flat Rate Envelopes up to 4 lbs, starting at $54.75 Ship by weight: For packages up to 70 lbs, prices vary by destination country price group and start at $56.00. To calculate USPS shipping costs, click here |
| FedEx | Numerous shipments High customization and versatility Cost-effectively streamline business procedures | as low as $11.10 – $39.10. To calculate FedEx shipping costs, click here |
| UPS | Offers many shipping options with various destinations and transit timeframes Ability to monitor customer returns and arrange pickups Provides resources for small business owners | To calculate UPS shipping costs, click here |
| DHL | Delivery from door to door No pick-up charges There is a significant global presence in almost 220 nations The presence of an international help desk | International shipping costs are more expensive than domestic ones Using the delivery calculator, one can figure out DHL’s foreign rates |
Conclusion
In the e-commerce industry, shipping plays a vital role in determining the success of an online business. As a critical aspect of the customer experience, choosing a reliable courier service that can meet your delivery needs and expectations is crucial.
To achieve a seamless shipping process, it’s essential to understand the complexities involved and have the right strategy in place.
Investing in a streamlined shipping solution can enhance the customer experience, increase customer satisfaction and retain a competitive edge in the fast-growing e-commerce market.
Next Steps: What now?
- Once you’ve decided to invest in e-commerce shipping, finding a reliable logistics provider is next. When choosing a shipping partner, look for one that offers competitive pricing, consistent performance, and customer service support.
- Consider the type of business model you will be using to sell products.
- Find which e-commerce website builder or shopping platform best suits your needs.
- Choose the best e-commerce hosting provider for your website
