Global eCommerce sales are currently in excess of $3.5 trillion and the cumulative data suggests a 276% increase in global retail sales over the last year. If you are just starting your eCommerce business, the first thing to understand is that selling globally requires a global presence. This, of course, does not entail the creation of several international warehouses, but requires a strategic and thoughtful approach to delivery.
Why should you care about eCommerce shipping? According to the BigCommerce Survey 2017, price and shipping speed are two of the top three factors influencing shoppers’ buying activity. In addition, 45% of customers abandoned their cart due to unsatisfactory shipping options, 38% say about a negative shipping experience, while 66% of shoppers claim they won’t purchase from an eCommerce site due to high cost.
The statistics speak for themselves. If you are not dropshipper or you are still too small to switch to 3PL (third party logistics) service delivery you will have to store, manage and ship products to your customers yourself. Regardless of the type of products you are selling, if you are just starting out, order fulfillment can be a very intimidating process with a huge number of variables to consider.
Understanding Delivery Variables and Setting Goals
It is important to remember that there is no such thing as a one-size-fits-all approach to an ecommerce delivery strategy. Your shipping strategy will constantly evolve and change according to your requirements. As your business will grow, so will your needs and opportunities. The number of countries you can offer free shipping or one-day or two-day delivery options will increase, your packaging materials and your unboxing experience will (hopefully) improve, your budget, your products, your bottom line – basically every aspect of your fulfillment process will be changing. You will of course adapt as your business grows, but before orders start to multiply in numbers, it is imperative that you understand all shipping options and set your goals accordingly.
Delivery variables include, but are not limited to:
- Potential legal barriers depending on the type of products you sell.
Do you work with pharmaceuticals or other products that may be restricted in some jurisdictions? Think carefully about the type of goods you are selling and whether they might cause customs delays or any legal issues with the countries you plan to export to. Also, don’t forget to double check if there are any embargoes or additional tariffs between the country of origin and the country of destination, as this can greatly impact your business.
- Variables that affect your shipping costs.
These primarily include the package size and weight of your package, distance between origin and country of destination, insurance costs, tracking, customs.
Narrow your focus and set your main delivery goals. What exactly are you trying to achieve?
your business to new markets requires adequate delivery strategies. Implementing in-store pickup or same-day local delivery can help you.
Let’s look at some of your potential targets:
- Increase conversions. Match the number of visitors to your sites with the number of buyers who take the target action. The increase in conversion depends on various factors such as the layout of your site, the quality of the products you sell, the content on your website, marketing strategy, and so on. Free shipping, for example, is one of the few things that has been proven to successfully increase conversion rates and should be the first thing you should think about, while fast and inexpensive international shipping will certainly help expand your business no matter how wide or narrow your niche is.
- Increase in Average Order Value – AOV is one of the most important KPIs (Key Performance Indicators) of any eCommerce business. To calculate your average order value, divide your income by the number of orders. A proven strategy to increase your AOV is to offer free shipping on all orders over a certain dollar amount. Offering promotions on any additional costs for warehousing, packaging materials, labels, etc. Bulk purchases and using additional sales funnels, you can simultaneously increase your average income.
- Minimizing Shipping Costs. Having a clear and strategic approach to your order fulfillment can have a huge impact on the growth of your business. By optimizing operational efficiency and reducing shipping costs, you can either increase your bottom line or offer products at lower prices to attract and retain more customers. There are many variables that affect your shipping cost, but you should mainly take care of those that are under your control:
- improve the efficiency of the entire order fulfillment process
- optimize packaging
- find the right carrier and match fares
- double-check for hidden fees and take advantage of free perks offered by your carriers.
Once you understand all of the shipping variables and determine the primary goal of your shipping strategy, it’s time to solidify your shipping policy. Simply put, your shipping policy should be designed according to your shipping goals, and it should answer two basic questions: (i) what is the shipping cost and (ii) what is the shipping method?
Regarding the price you charge customers for shipping, you can:
- Offer free shipping. You can take two approaches to this and offer free shipping conditionally or unconditionally. If you choose the first option, you can structure your free shipping offer in several ways: (i) set a minimum order amount, (ii) offer free shipping as a promotion, (iii) only offer free shipping on some items, and (iv) allow your customers to choose between fast or free economy shipping. However, if you choose the latter, you’ll soon find out that free shipping isn’t actually free and you’ll have to find a way to pass the shipping cost on to the buyer discreetly.
- Real-time Rates. While customers almost always prefer free shipping, displaying real-time carrier rates at checkpoints offers some real benefits. First, customers know the full shipping cost in advance, with no unexpected fees or additional costs. Secondly, this method allows you to charge customers the exact amount you cost to send them their order. Some eCommerce platforms allow you to receive all data directly from carriers and automatically calculate shipping costs.
- Charge a Flat Rate. This method really works best if your product line consists mostly of products that are the same size and weight. If you sell a wide range of products, a flat rate is not an option for you, as it is very easy to undercharge or, worse, overcharge your customers for shipping.
As for the shipping method, you can offer:
- Same-day or same-day/two-day delivery. Thanks to Amazon Prime, same-day and two-day delivery has become the industry norm over the past few years. Younger customers (aged from 18 to 26) actually expect to receive their package within two days, and in most cases they are willing to escalate the problem to support if they don’t. What’s more, 61% of buyers say they’re willing to pay more for that speed of delivery. Offering expedited shipping is great for increasing customer loyalty, reducing shopping cart abandonment, and meeting customer expectations. However, unless you use a third-party fulfillment service, successful overnight or same-day deliveries require appropriate training, technology, resources, and flawlessly streamlined operations.
- International shipping. Expanding into new markets is a great scaling strategy, but it has its limits. For smaller eCommerce businesses, international shipping can be quite a challenge. Different countries have different requirements and restrictions for incoming shipments, as well as different tariffs, tax policies and regulations. To successfully complete this task, you will need a good international carrier. Larger companies such as UPS, FedEx and DHL are a great option as they have years of experience in international shipping and can offer shipping, tracking, insurance and customs duties.
- In-Store Pick Up. There is a significant gap between the number of shoppers who want to pick up in store and the number of companies offering it in eCommerce. Store pickup is one of the most overlooked shipping options on the market, and no matter your shipping approach, you should definitely try to capitalize on it.
Shipping cost calculation
Calculating the total cost of a product is simple and should look something like this:
- Cost of goods – $15
- Package – $3
- Cost of delivery – $10.30
- Customs / Duties (if you cover them) – $0.00
- Payment fee – $3
When you add all of this, the total cost of the product drops to $31.3. To calculate the price at which you should sell your product, add the profit margin to the total cost of the product. If we’re assuming you’re going with a relatively conservative 30% margin, your product should be selling for ~$41.
However, in order to get this number, you first need to calculate ecommerce shipping costs. Carriers determine their shipping rates based on the following factors: package size and weight, country of origin, country of destination, customs and duty charges, any additional insurance and tracking charges, and any volume or business account discounts you may have when using said carrier.
Calculating shipping costs for your products is easy enough, and almost all of the largest and most popular shipping couriers provide shipping cost calculators. Use the ones we’ve listed below to compare prices and weigh your options:
- USPS: Shipping calculator
- Canada Post: Shipping calculator
- FedEx: Shipping calculator*
- UPS: Shipping calculator*
- DHL: Shipping calculator*
- UK Royal Mail: Shipping calculator
- Australia Post: Shipping calculator
*shipping methods integrated by default with CS-Cart
Shipping insurance and tracking
Nothing irritates customers more than having to wait for a package without knowing where it is or how long it will take for it to arrive. Tracking and insurance offer excellent value for money; for a few extra dollars, you can give your customers more security and peace of mind. If you’re selling high-value items, including tracking and insuring your shipment, you should use it by default.
Some courier carriers offer free insurance coverage up to $100 and in some cases even up to $200.
Read more about Insurance Marketplaces in this article.
If you intend to sell your products across international borders, you will need to include all relevant customs and duty documentation in your package. The exact forms you will need to fill out may vary slightly depending on your location, but they are generally always required and serve to tell customs officials in the importing country what is in the package, why you are exporting, and what the total commercial value of the package.
To find out exactly which forms you will need to attach to your package, just contact your country’s postal service and they will help you with everything. Also, make sure you inform your customers that you have no control over any additional taxes, tariffs, and customs fees they may incur (clearly state this on the shipping policy page), and that this is determined by each country.
If you are from the US, UK, Canada or Australia, you can find more detailed information about customs duties in the links below:
- USPS: Customs Forms and Shipping Labels
- Canada Custom Requirements
- FedEx International Courier Service
- UPS Import and Export Regulations in the U.S.
- DHL: Shippers and Receivers Guide to Duties and Taxes in the UK
- Royal Mail Help with Sending Items Abroad
- Australia Post Custom Regulations
What is the first thing your customer sees when they receive a package? That’s right – it’s not the product itself, but the packaging. Packaging is the first impression you make, and first impressions can make or break your business.
Like it or not, unboxing is a new presence on the shelf, and considering customer satisfaction and shopping experience, the design and quality of the packaging is just as important as the product itself.
Email delivery: customized packaging options
Before you can decide on the exact design of your packaging, you must take into account all the variables that can affect you: what is your product, what is its shape, size and weight, and how fragile or durable is it?
Depending on your situation, you can choose from three types of shipping containers for your product: postal envelopes, shipping boxes, or a combination of both.
Mailing envelopes are best used for sending smaller, more durable items. Envelopes usually take up much less space, they reduce packaging efforts and are much cheaper than the corresponding shipping containers. You can choose from three types of postal envelopes: (i) plastic envelopes – the least environmentally friendly of all, but serve their purpose nonetheless; (ii) paper envelopes – very affordable and have a much lower minimum order quantity (MOQ) when you use custom printing compared to plastic envelopes and (iii) cardboard envelopes – they are designed to stay flat during transit, and they print beautifully.
Mailboxes, on the other hand, come in all shapes and sizes, so they fit almost any type of product you might be selling. The most commonly used type of mailbox is the regular brown corrugated box. The upside is that they are lightweight, durable and come in a variety of shapes and sizes, and the downside is that they only come in two colors (brown or white) and if you want to add colors and graphics to them, it will cost you a fortune. MOQs on custom printed mailboxes start at 1,000 units and lead times are two to three weeks.
That being said, depending on the type of product you’re selling, custom letterbox printing – even if it’s expensive – can still be good for business because it allows you to showcase your brand values and takes your brand image to the next level. What’s more, 40% of shoppers say they’d be slightly more or much more likely to buy from the same online store again if the product was delivered in premium, thoughtful packaging.
Printing, however, isn’t the only thing that makes for a great unboxing experience; branded ribbons, handwritten thank you cards, custom cushioning, decal stickers – every detail counts.
Once you’ve decided on your ecommerce shipping strategy, selected a courier, calculated all shipping costs, and recorded your presentation, it’s time to label your packages and ship them on the go!
You can start by labeling and manually writing shipping and return addresses. It can be tedious and time consuming, but honestly, you’ll feel all warm and fuzzy every time you tag a package and set it aside for shipping.
However, once your business is up and running, it won’t be sustainable, so you’ll have to automate the process and start printing postage. There are a number of label printing services you can use to help you streamline the process and successfully scale your business:
- Stamps.com: 17.99 / moths + postage
- Shippo: $ 0.05 per label + postage or $ 10 / month (up to 60 labels)
- ShipStation: $ 9- $ 159 + postage
- ShippingEasy: FREE for 30 days, then $ 99 / month + postage
Starting your own eCommerce business can be quite a challenging experience. However, it is also a great way to make your dreams come true. If you’re wondering how to get started with things like shipping and order fulfillment, I hope this article helps.
Even in times of crisis like Covid-19, you will succeed!
There are many tools available when it comes to accessing the right software and shipping strategy for your online shopping company. You do not need to track the delivery time and tracking numbers yourself. You can find many ways to make your eCommerce store shine with a little extra help. Plus, you can avoid some of the big surcharges with the right strategy.
With clearly defined goals and the right strategy, it’s time to take action and implement everything you’ve learned from this guide. Shipping is one of the more difficult aspects of any ecommerce business, but once you address this issue and optimize your operations accordingly, your business will skyrocket!
And we will help you integrate any delivery service you choose into your online store or marketplace without hassle.