WHAT TO WATCH FOR IN FULFILLMENT

Shipping is one of the most difficult aspects for any e-commerce business will have its own unique set of challenges to work through to develop the most efficient shipping strategy, and it takes time to determine what works best. Understanding the variables and evolving your shipping strategy along with your growing business is vital to long-term success. You already put so much effort into ensuring your customers have a great experience, but when it comes to shipping it can feel as if you are handing your brand to a stranger. With thoughtful planning, it doesn’t have to be that way, which is a good because shipping is a key part of your business. It’s the time where a customer experiences your product in person, and it can also represent a major expense for your business. That’s why it’s critical to map out a defined shipping strategy. These are some of the key steps that make up your high-level shipping strategy and can be the foundation for future success.

SHIPPING METHODOLOGY

Will you pass the full cost of shipping on to your customers, or will you offer free or flat rate shipping and absorb some or all of the cost? You should measure and log the weight of each product you sell. Having that information readily available will help you get a good sense of your total costs, and pass along accurate prices to your customers.

SET YOUR RATES

Before you can ship products, you’ll first need to decide your pricing strategy for shipping. There are several methods, but your choices should always be guided bythe underlying financials of your business.

FREE SHIPPING

Offering your customers free shipping is one of the best ways to reduce shopping cart abandonment. However, shipping is never free and to make it work for you, there are several options:
• Increase the product prices to cover costs for shipping, so effectively your   customers pay
• You pay the full price of shipping out of your margins, so you pay
• Increase prices of products slightly to cover partial costs of shipping, so both you and your customers pay.

DISCOUNT CODES

Additionally, you can also try offering free shipping on a minimum order amount. This strategy can help offset the costs of shipping by increasing average order size, but you’re still the one paying for it out of your margins.

REAL TIME RATES

Another effective shipping strategy is to charge real time courier rates for shipping. Some e-commerce platforms, like Shopify for example, are integrated with various carriers to generate shipping and live pricing options in real time. This allows your customers to choose and pay for the exact service they want.

FLAT RATES

The best practice for flat rate shipping is to try and make sure that you don’t drastically undercharge or overcharge your customers. Flat rate shipping works best when you have a standard line of products that have similar sizes and weights. Flat rate shipping tends to become complex and less effective if you sell a wide variety of products, with different sizes, shapes and weights.

CALCULATING SHIPPING COSTS

Couriers all base shipping rates on a variety of factors, these include:
Package size
Package weight
Origin city/country
Destination city/country
Additional options like insurance
It can sometimes be difficult to compare services exactly as they all offer slightly
different options, and because every business will have their own unique set of variables.

CONSIDER YOUR MARGINS

To be successful in e-commerce, you always need to keep an eye on your profit margins. Because shipping represents a significant expense for e-commerce merchants, if you don’t do your research you could end up losing money on shipping. Before you finalize your pricing and strategy for your e-commerce shop, you should map out all costs associated with getting your products into your customers’ hands. Many e-commerce entrepreneurs are shocked by how quickly small charges can add up.