This is a guest post by Jesse Kaufman, the CEO of ShippingTree.
There’s nothing more exciting than seeing your business grow by leaps and bounds. It’s something every entrepreneur dreams of.
Should your e-commerce business be lucky enough to face serious growth you should be prepared for the challenges that come along with it.
At ShippingTree we too often see online sellers running into problems with their fulfillment process.
Staying on top of fulfillment can be difficult. Getting your products to your customers is a complex process and there are lots of things that can go wrong.
Here are the five best practices to consider when you’re designing the best possible shipping experience for buyers:
1. “Custom” is not always customer friendly
A lot of startups assume that building a fully customized e-commerce platform right away is a must. This is a myth.
The promise of an amazing website often lures businesses into a creating a customized experience, but it requires major work on the company’s end to integrate with a fulfillment company. After establishing your beautiful (but incompatible) store, you will face two doors:
Door No. 1 – Leads to higher spending on perfecting your store-to-fulfillment integration.
Door No. 2 – Reveals a lofty manual process for transmitting orders and data.
Behind neither door is a jackpot. Avoid that situation by choosing an established solution as the foundation for your online store.
These services provide easy integration and hold down costs. The best part: A pre-packaged solution looks just as amazing as a customized store.
The same holds true for outsourcing your shipping. Regardless of age or industry, any business that is struggling with cash flow will be better off handling things in-house. Sometimes you have more time to spend that money.
But if your business is growing quickly and you have the cash on hand to outsource, you may be interested in exploring third-party warehousing and fulfillment.
A good way to check if outsourcing your fulfillment process looks right for your store is by checking with the following checklist.
- If sales rapidly increase and you have trouble turning them around
- If sales patterns are erratic due to shortcomings in filling orders
- If you have difficulty finding or tracking inventory
If your business can check off two of those three boxes you should be considering shifting towards a third-party fulfillment service. If your margins are good and you can focus on the front end of your business, there are benefits to acquiring a third-party partner
2. Avoid muddling costs
An unexpectedly high shipping rate sucker-punches a customer. If shoppers are presented with shipping costs they didn’t expect, 28 percent of them will abandon their online carts.
Because the shipping price can make or break a purchase, it is critical to inform customers upfront about the shipping figure. Buyers find it frustrating when they wade into the weeds of the checkout process only to see a huge price tag on shipping.
Pro Tip: Post the shipping price on the cart page before checkout. The best approach would be to display shipping estimates on the product page itself.
Of course, there’s no use in displaying the shipping rate if it doesn’t match what your customer sees on the checkout page. It needs to be accurate.
That accuracy comes from your shipping software. Installing and maintaining powerful software increases your chances of delivering accurate rates.
When customers aren’t surprised with high shipping costs, conversion rates and customer loyalty are proven to increase. The market brims with shipping software most businesses can drop into their shopping cart platforms.
3. Give customers an offer they can’t refuse
Customers love incentives.
Whether it’s free or cheaper shipping, a shipping incentive can serve as a key decision-maker in a customer’s purchase decision.
Studies show that customers buy more when offered free shipping. Just look at the millions of Amazon Prime members.
Consider free shipping:
As we move closer into the holiday season, if you don’t already offer free shipping, this is something you should definitely consider. A good rule of thumb is setting the shipping threshold at or slightly higher than your current average order value (AOV).
You can calculate your e-commerce stores AOV by dividing total revenue by the number of orders.
For example: say for the month of October, your web store’s sales were $31,000 and you had a total of 1,000 orders. 31,000 divided by 1,000 = $31.
In this example, you would want to consider setting your shipping threshold anywhere from $31-$34 dollars.
Consider a flat rate:
If your store isn’t quite ready to implement free shipping, a flat rate may make more sense for you. Flat rates work best when the majority of orders ship for a relatively low cost ($5-$15).
Utilize Saturday delivery:
This is something that could differentiate your store for little to no additional cost for your store. Consider Saturday delivery as an option for customers at an additional cost or offer it for free as a holiday gift for your customers. Using USPS, who delivers on Saturday for free, could help your company absorb these extra costs.
Offer free returns:
56% of online shoppers take issue with having to pay for returns, with more than 81% of shoppers wanting free, easy and no-questions-asked returns. Free returns are becoming the norm in e-commerce and 62% of shoppers are more likely to make online purchases if they can return them.
Implementing a firm delivery cut-off date can be crucial, especially for the holidays. Here is an example of how Amazon has established their delivery cut off dates.
- Free shipping: Dec. 16
- Standard: place order by Monday, Dec. 19.
- Two-Day (Free with Prime): Thursday, Dec. 22.
- One-Day: Friday, Dec. 23.
- Same-Day Delivery (Free with Prime): Saturday, Dec. 24, 9:30 a.m.
- Two-Hour Delivery (Free with Prime): Saturday, Dec. 24, 9:30 p.m.
When a customer goes to your site, they should immediately know that shipping is free or reduced.
Place these shipping benefits in obvious places the customer can easily spot. Including a pop-up box when a user first reaches your site is a great way to do this.
4. Let choosy buyers be choosy
Customers know what they like.
Most receive multiple packages a week so they know the routine.
Certain customers may prefer a specific shipping carrier. UPS might toss packages on their front porch while FedEx may hand deliver them.
There will be as many shipping idiosyncrasies as there are consumers. Let have multiple options when it comes to choosing their career.
If they provide the option, a customer may be willing to pay more for their preferred carrier.
It’s unrealistic to be able to accommodate all niche carriers to cater to each customer’s individual preference. What you can do is let buyers know which ones you do work with so they know what to expect.
People fear uncertainty and variability so by being upfront and straight with your customers, you’ll ensure a more enjoyable experience.
5. Be direct about expectations
In politics, managing expectations is critical. The same goes for shipping solutions.
Reach for a higher level of clarity than simply “standard” or “express.”
You want to describe the shipping time frames with as much accuracy as possible. Don’t provide unrealistic expectations that you can’t meet– be straight with your customers.
It’s important to note that you’re likely not the only party involved in this step.
If you aren’t handling your own shipping, it’s important to factor in a fulfillment company’s turnaround time.
For example, one company may process an order the same day it receives one, while another company will wait until the next business day.
Understand not only your own methods but your partners’ as well. Keep your customers in the loop, or better yet, search for a shipping partner who handles these processes for you.
Shipping done right changes the customer’s perception of the transaction, but also your company as a whole.
By remaining proactive and transparent with your buyers, you’ll hold their excitement through every step, right up to the moment when they open that much-anticipated package.
Shipping can be a tedious part of your operations. Nobody wants to talk about it, but everybody’s got to deal with it. In fact, shipping is one of the most challenging aspects of business for many entrepreneurs.
Following the tips from this article will make your shipping more efficient and less of a headache. Now it’s time to implement these tips and start reducing shipping lead times!