Putting an effective ecommerce shipping strategy in place is one of the most impactful steps you can take to grow your business online. While many brands start out in ecommerce by taking a simplistic approach to shipping –– like offering free shipping across the board or showing unmodified UPS or USPS rates –– the most successful merchants use strategic shipping options to differentiate themselves from their competition and increase margins.This requires coordination between multiple teams within your organization, all the way from your marketing team to your fulfillment team –– and several others in between. Establishing a shipping strategy for your online store lets you ensure that everyone involved in this pipeline knows what's going on and their part in the process. In this guide, we'll walk you through the absolute must-haves and must-knows for a solid ecommerce shipping strategy that makes both your margins and your customers happy.
There are some basics that set a foundation for the rest of your shipping. While you can come back and change each of these later on, as you learn more, these are the key decisions and steps that make up your high-level shipping strategy.
Are you going to pass the full cost of shipping on to your customers, or will you offer free or flat-rate shipping to absorb some or all of the cost? By the end of the post, you'll have more information on how to make this choice for your business.
To streamline the process, measure and update the weight of each product you sell. Having that information set up will help you get a good sense of your total costs, and pass along accurate prices to your customers.
While there's more to be said about what kind of packaging is right for your products, once you've selected it, you can add that information to Shopify so you can calculate accurate shipping prices.
You can order free packaging from USPS, UPS, or DHL, or invest in branded packaging if that's part of your strategy.
Now that you have all of this considered, you're ready to face the gamut of questions and potential push back from other teams.
Here are your shipping options and strategies available.
Free shipping may seem like the simplest strategy and it's grown massively in popularity since Amazon introduced free shipping for orders over $25.
If you choose to offer free shipping, it's vitally important to understand its impact on your bottom line. Even if you're making more sales, if you're losing money on each one it's of no benefit to your bottom line.
The most effective approach to free shipping is to only offer it for orders where you know you're making enough on the sale to cover shipping and still make a profit. This means setting a free shipping order subtotal threshold that makes sense for your business and, maybe, excluding products that are too heavy or bulky for you to offer free shipping on.
We'll dive more into exactly how it implement free shipping for your business later in this article, if that is the route your team chooses.
One extremely effective way to avoid some of the challenges of free shipping is to go the flat rate or table-rate route.
Flat rate shipping is something like $10 shipping regardless of order value (see, for example, Overstock.com, who charges $2.95 to most locations in the United States).
Table-rate shipping is a bit more complex, but doesn't have to be much more so.
Customers in certain regions, like the United Kingdom, prefer table-rate shipping versus being charged a live rate. For example, a merchant with a warehouse in London might charge customers near the city a certain amount, say £5 per order, with rates going up to £10, £15, etc. as you get further away from the fulfillment center.
You might also charge based on the order subtotal ($10 for orders up to $50 in value, $5 for orders up to $100, and free for orders over $100). Alternately, you might charge a different rate for certain groups of products or set rates based on the order weight.
While it's harder to use this approach as a promotional tool (the rates may vary significantly depending on what the customer orders and the distance from your warehouses to the customer), you can ensure that you're offering the cheapest possible shipping option by charging your customer exactly what you'll be charged by the carrier.
Especially if you're in a market where many of your competitors are offering live rates, it may be important to do so.
This means that for lightweight orders or customers located near your warehouses, you can often offer significantly cheaper shipping than your competition while still making sure your costs are covered.
Of course, it doesn't have to be as simple as plugging into a carrier like UPS and showing exactly what UPS returns for each order. You can add a surcharge if you want the shipping charge to cover things like packaging and your cost of fulfillment. You can also discount the rate returned to be that much more competitive over others in your market.
While these three options are the most popular and frequently used, thinking outside the box and mixing and matching these approaches can be extremely effective. This allows you to balance your revenue needs with promotional opportunities.
For example, offer free standard shipping (with no delivery commitment or a range commitment like 5-10 business days for delivery) alongside other options like Expedited shipping (for example, 3-5 day delivery at a table rate based on order value) and live rate options for Second Day and Overnight delivery.
The one thing that every ecommerce business has in common — regardless of size, niche and experience — is shipping. Whether you sell food, fashion accessories or tech gadgets, you're always going to have to ship something to your customers.
But shipping isn't cheap and at times it isn't even fast. At least not for small businesses. Large brands like Walmart can offer free shipping and programs like Amazon Prime have made one-day shipping a reality.
As a small ecommerce business, you probably ask yourself "How can I reduce my shipping cost?" The good news is there are strategies small businesses can use to reduce shipping costs. Here are five strategies that will help you create a shipping plan that works for your business.
Some millennials might remember a time when waiting in line at the post office to mail something was a thing. This didn't just require a lot of time; it was also very expensive. Depending on what you had to ship and where it was headed, shipping costs varied, which made it hard to plan and budget effectively.
Fortunately those days are behind us — for the most part — and the advent of shipping platforms, like ShipStation, have made it easier to ship products and save money while doing it. After all, as an ecommerce company, it makes sense to manage as much of your business online as possible to save yourself time.
Depending on what you sell, your products likely come in different shapes and sizes. You might be able to use one size box, but chances are that the packaging changes depending on how much — or how little — customers buy. This alone can make shipping a challenge because there's no easy way to plan for it and budget.
One option available to you is to check if you qualify for flat rate shipping. The way flat rate shipping works is as long as your package is less than 70 lbs, you pay one rate and can ship to any state. For one low price you can ship packages anywhere in the country regardless of their weight or size.
What's also great about this option is that the packages ship within 1-3 business days. Not only can you pass on the low shipping costs to customers, you can also get orders to customers quickly. This shipping timeline is the same as what larger brands offer their customers. Customers expect quick delivery, and flat rate shipping caters to that expectation.
If you qualify for flat rate shipping, promote your low shipping costs to customers. For example, use copy like "Low domestic shipping" or "Save on shipping" on the product pages of your website. Repeat the promise of low-cost shipping on the cart page so that customers know what to expect.
When you're just starting out, it's tempting to want to buy every new gadget there is. This might include a specialized printer to print custom inserts to go along with customer orders, or you might want to buy a shipping label printer to print labels that stick to packages.
What's great about printing with Sellbrite is how simple it is to use. All you have to do is select the type of package you're shipping — choose from a list of options or enter your own custom package dimensions — enter shipping details, and select the label format for your package. Lastly, choose how to ship your package — Priority Mail, Parcel Select, or Priority Mail Express — and then print the label. An added bonus is your settings are saved, so the next time you have to print labels, you save time and money.
If you sell fragile products or anything that needs to be handled with care, chances are you spend a lot on packaging to protect customer orders. Whether it's bubble wrap, peanuts, paper, tissue or crinkle paper, the costs add up over time.
Remember that reducing shipping costs isn't just about postal rates, it's also about the supplies you need to mail your orders. Some things have to be new — like packing tape — but if you're just starting out, it's OK to reuse packaging as needed.
Shipping is never truly free; someone has to pay for it. It can be the company that's shipping orders or the customer. What's interesting to note is that 88% of shoppers prefer to shop on sites where free shipping is available.
If you're not in a position to offer free shipping, another option is to work the cost into the price of your product. Be careful with this option because you don't want to drive up the cost of your products just to accommodate shipping.If pricing is a lot higher than comparable products on the market, guess where your customers are going to go? To the brand that offers something similar but for a lower price. To figure out if this option works for you:
Also, if you qualify for flat rate shipping, pass the savings on to customers. You can advertise this as "Take advantage of our low shipping rates" or "We'll ship to you for less than the competition." This way, even if you can't offer free shipping or work shipping into your price, you show customers that they're still able to save when they buy products from you.
Managing fulfillment in-house can get complicated and may be difficult to scale up and down based on demand. If you have top-selling items, outsourcing to the right fulfillment partner can help you sustainably provide a great customer experience (fast, reliable delivery), no matter how much you sell.
Partnering with Deliverr means you get access to fast shipping tags for your listings, which will help boost your sales even further. Unlike other outsourced solutions, they only have two main fees: Fulfillment and Storage, so you don't have to worry about compounding little fees for every move like pick, pack, label, etc. Their rates are all-inclusive and competitive with Amazon's multi-channel FBA, which will help you keep your entire fulfillment process costs down.