Shipping For eCommerce: What You Need To Know
April 2, 2020
Author: Georgia Townshend
Reading Time: 3 minutes
Globalisation has changed the game for business and consumers alike. You can buy anything, from anywhere, and have it sent straight to your door – and the more you’re willing to pay, the faster it will arrive.
Convenient shipping experiences has caused a shift in consumer behaviour as people are expecting their products right away. In fact, 91% of consumers have said they will leave if shipping isn’t “free or fast enough”.
Now you understand just how crucial shipping is, what do you need to know before you set up your eCommerce store?
Setting Your Shipping Rates and Methods
Before you can ship any products to your anxiously waiting customers, you’ll first need to decide your pricing strategy for shipping. There are several common methods, but your choice should always be informed by the underlying financials of your business.
According to eCommerce giant Shopify, offering your customers free shipping is one of the best ways to reduce shopping cart abandonment. But as you’ll know, nothing – including shipping – is ever free. Someone always has to pay. So if you’re wanting to provide ‘free shipping’ to customers you have a few options:
- Increase all product prices to cover the cost of shipping
- Pay the full shipping cost from your margins
- Increase prices of products slightly to cover partial costs of shipping, so you and your customer pay a portion
- Offer free shipping with a minimum spend amount. This strategy can help offset the costs of shipping by increasing your average order size, but essentially you’re still paying for it.
Charge Real Time Carrier Rates
Most eCommerce platforms integrate in real-time with various carriers to generate shipping options and live pricing. This allows your customers to choose from a range of options and pay for the exact service they want.
Charge a Flat Rate
The least popular option is to offer flat rate shipping, unfortunately this method can be complicated if you stock a large variety of products. The best practice for this option is to estimate an average shipping cost and pass that on to customers. Best practice is obviously to try and make sure that you don’t drastically undercharge or overcharge your customers. Flat rate shipping works best when you have a fairly standard product line of items that have similar sizes and weights. Flat rate shipping tends to become complicated and less effective if you sell a wide variety of products with different sizes and weights.
Calculating Shipping Costs
All couriers base shipping rates on a combination of factors, usually:
- Package size
- Package weight
- Origin country
- Destination country
With additional shipping options offered like tracking and insurance – be sure to check when you’re comparing prices if these are included or not.
Why Is Packaging Important?
As the world of eCommerce develops so do the expectations of customers. Years ago, packaging and shipping was simply a way to receive a product purchased online, it could show up in a brown corrugated box and no one expected much more. Now, in large part due to social media’s obsession with ‘unboxing’ and extravagant PR boxes, more people are looking at packaging and presentation as part of the eCommerce experience.
So what does this mean for you? It means in order to stand out and compete effectively you need to go above and beyond to impress customers.
Some ways of doing this through packaging are:
- Branded boxes or mail bags
- Fillers such as wooden wool or tissue paper
- Thank you notes
- Voucher for next purchase
- Gift or free sample
- Branded ribbons or tape
While this may seem like a lot, according to Xero ‘customers are more likely to make a repeat purchase if their delivery comes in quality packaging’. And ‘40% would share an image of a uniquely packaged delivery on social media’. That’s a lot of free advertising!
Customs & Other Tariffs
If you’re shipping outside of your own country, you’ll need to include the proper customs documentation. These are available online or at your local post office. These forms are required to tell customs officers at the country of import what is in the package, how much it costs, and whether it is a gift or merchandise.
If there are any additional customs fees due when a package reaches its destination, your customer will be responsible for them at the time of delivery – it’s CRUCIAL your customer is made aware of this before they make the purchase.
With the current saturation of online retailers, it’s just as important to make your business stand out at the shipping phase as it is at any other. Make sure your strategy is tailored to your customer as well as your products.