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With online sales expected to reach $467B by 2024, up significantly in the last year due to the rise in ecommerce during the pandemic, it is a market worth tapping into. But one of the biggest pain points around ecommerce is the often confusing and complicated logistics involved in getting your product from point A to point B. And this can often require an intense amount of knowledge around how shipping and fulfillment works.
Knowing which carriers to use when, wanting to minimize the manual operations behind the scenes and needing to automate processes in order to grow, are all struggles that most, if not all, retailers face both in their online and offline operations. That’s why our friends at ShipStation have put together a guide on how to navigate and evaluate the best strategies for shipping and fulfilling your ecommerce orders.
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3 Best Practices for Ecommerce Shipping & Fulfillment
It doesn’t matter if you’re just getting started with your ecommerce launch or looking to improve your workflow to allow room for growth, shipping and fulfillment can be a difficult task. To help, we’ve outlined three best practice strategies that will help optimize your shipping and fulfillment.
1. Focus on delivery experience.
Ultimately, your goal is to provide the best delivery experience to your customers. This is what keeps them loyal customers and happy reviewers.
Think of ways you can extend your branded experience throughout the lifecycle of your customer’s order. Do you include a business card or promotional offer in every package? Is your returns process easy to follow? Are your shipping labels and packing slips branded with your logo? These branded elements may seem trivial, but they will help your customers keep your brand — not the product — at the top of mind.
2. Let your audience inform your shipping methods and carriers.
Paying attention to your shipping overhead is a top priority, so never offer something that would be unsustainable to your bottom line. According to the Baymard Institute, shipping costs are one of the top reasons for cart abandonment. Everyone may love free shipping, but if it’s not cost-effective for your business, it just simply isn’t an option.
However, because the delivery experience can make or break you, it is important to tailor your shipping options and carriers based on what you know your customers want. A few popular ways retailers choose to price their fulfillment options are:
**Free shipping on minimum orders **Whether we like it or not, Amazon Prime has conditioned us to expect free shipping. And if you can afford to offer it to your customers, it will only help encourage sales. However, it can seriously impact your bottom line if you don’t roll those costs into the price of your product. Creating a minimum order threshold can help curb this overhead, while still giving your customers the delivery option they want.
Flat rate shipping This is a great option if you ship small, light packages. USPS offers a Priority Flat Rate that allows shippers to pack as much merchandise into a single box as needed as long as the total weight remains below 70 pounds. Choosing the flat-rate approach encourages conversions and customer loyalty, and it also means customers can order more products without increasing their shipping costs.
Real-time rates When you integrate with a third-party shipping solution, you can use APIs to connect your store with the carriers you want to use. The API helps communicate real-time rates from carriers during a customer’s checkout by using their ship to address and the weight of the product(s) they are buying. With automation rules, there are also ways to have the lowest cost option calculated as free for the buyer.
Free in-store pickup The easiest way to offer a free option is to skip out on shipping altogether. More and more retailers with hybrid online and offline operations (whether a physical store or warehouse) are starting to offer curbside or in-store pickup options at checkout. Not only does your customer save time and money, you do as well.
In-cart delivery options For the best of all worlds, give your customer the ability to choose their preferred delivery method with in-cart delivery options. This is a great way to build your reputation with customers and takes the responsibility off your shoulders of coming up with a shipping service or carrier that pleases everyone.
Whether or not you choose to pass along the costs of shipping to your customers, or add it into the cost of your products, providing delivery options that fit the needs of your customers is key.
3. Automate the process.
When you sell through multiple channels, from your own store to marketplaces like Amazon and Ebay, you will likely want a way to seamlessly import and fulfill all of your orders from one place.
Inventory management is one of the simplest ways you can automate your process. However, there are a number of unique ways you can integrate automations into your shipping workflow. These are essentially “if, then” statements. A few of the most common are:
Apply specific shipping services based on price or weight.
Use order tags to deliver certain products via certain carriers.
Assign carriers based on residential address.
Customize packing slips and notes based on residential address.
Add package weight to certain orders to account for packaging weight and avoid overcharges.
Choosing the Right Shipping Solution
With these best practices in mind, you may be asking yourself, “what is the right shipping solution for my business?” When it comes to third-party solutions, there are many options with varying features from inventory management and branded tracking to customized automation rules and customer marketing.
With the BigCommerce app marketplace, you can easily integrate these third-party solutions into your online store. But, it is helpful to know what you’re looking for when evaluating all the options. Here are a few questions we recommend asking before you decide:
1. Do I really need a third-party shipping solution?
If you operate on multiple platforms, want to offer multiple shipping options, and know your business would benefit from time and cost savings from automations and discounted shipping rates, you should highly consider an investment in a shipping software. This will significantly impact the fulfillment process, often cutting hours of manual work into minutes.
2. What should I look for in shipping software?
Ensuring that the software integrates with your current selling channels is key. Once you have confirmed that they can support your business model, you can start evaluating whether the features they offer best meet your needs. For example, if you’re only selling on one channel, inventory management may not be as big of a priority for your business. Similarly, if all of your products are relatively the same size, you may not need to set up any automation rules around package weight.
Write down what the manual process looks like for you or your team (from copy and pasting orders to rate shopping) and your monthly package volume. Compare what you need to the features offered by various shipping software solutions.
Leveraging Offline and Online Shipping Strategies
If you operate both an ecommerce shop and physical store, it’s important that your offline and online strategies operate in sync with each other. There are a number of ways in which your online store can support your offline operations, and visa versa.
1. Give them options.
One of the easiest ways to do this is through offering in-cart delivery options — giving your customers the opportunity to complete the ordering process online, but pick up and return items in store. These are more commonly known as Buy Online, Pick Up In-Store (BOPIS) and Buy Online, Return In-Store (BORIS).
2. Make returns frictionless.
A reported 65% of consumers say they use BOPIS to counter shipping fees, which means that in-store pick-up could be a great option if you’re unable to absorb the costs of free shipping for your ecommerce business. In fact, in 2018, 48% of surveyed BOPIS shoppers said they use BOPIS to save on shipping costs.
Similarly, with convenient and free returns becoming more of an expectation than a perk, retailers are having to find ways to absorb costs for a package potentially having to make a round trip journey.
One option has traditionally been to include scan-on-return shipping labels in every package. This allows the customer to simply apply the label and ship off an unwanted item, and ensures that retailers only get charged for postage once a return label has been scanned. Another option is to offer online returns in-store.
3. Link inventory across online and offline stores.
The above options not only help create a seamless omnichannel experience rooted in convenience for your customer, they allow you to cut down on costs associated with postage, packaging, and personnel.
However, it’s important to note that BOPIS and BORIS necessitate needing an inventory management tool that spans across your online and offline systems. This provides real-time information to you and your customers.
Executive Summary
First and foremost, there is no one-size-fits-all approach to shipping and fulfillment. There are a lot of factors, unique to your business, that will affect your strategy.
However by following these best practices, choosing the right shipping solution and ensuring your fulfillment strategies for ecommece and your physical store(s) mirror each other, you will be well on your way to fulfilling orders efficiently and providing a delivery experience that generates more sales for your business — both online and off.