Creating the perfect ecommerce shipping strategy for your online store is crucial for attracting and retaining loyal customers, increasing profitability, and ensuring overall success. It is just as important as offering high-quality products and understanding the basics of ecommerce accounting.
Most online shoppers expect fast delivery times and free shipping, so it is essential for online stores to prioritize speed and cost in their fulfillment strategy. However, shipping ecommerce orders involves more than just these factors. A well-designed shipping process can help minimize errors, reduce returns, lower operating costs, build positive customer relationships, and reinforce brand identity.
To optimize your approach to ecommerce shipments, you can use this guide to develop a shipping strategy that streamlines your operations and delights shoppers.
From packing up an order to delivery confirmation, there are many steps involved in the fulfillment process. It starts with choosing packaging, determining the best shipping services and methods, and calculating shipping costs. Next, you need to print labels, get the packages to the carrier (or schedule pickups), keep customers informed with tracking and status updates, complete delivery, and manage customer service.
The first thing to determine when developing your ecommerce shipping strategy is who will be responsible for fulfilling your orders. Will you pack and ship them yourself? Will they ship directly from the fulfillment center, manufacturer, or wholesaler? Or will you contract with a third-party logistics provider (3PL) to handle all your order fulfillment?
Let’s take a look at some ecommerce shipping solutions and walk through the ideal use cases for each, as well as their pros and cons.
1. Fulfill in-house:
Shipping from your own fulfillment warehouse, production facility, or retail location can be a cost-effective solution that provides maximum quality control, but it requires more work. The right inventory management systems can help streamline the process and pay off in the long run.
Ideal use cases for managing your own end-to-end fulfillment:
– You have one or more staffed warehouses already.
– You manufacture your own products.
– Your products are for local delivery or are time-sensitive.
Pros of shipping orders yourself:
– Complete control over the ecommerce shipping process.
– Customization to your needs.
– Saving money on third-party warehousing fees.
– Building relationships with customers through personalized touches.
Cons of shipping orders yourself:
– Time-consuming, especially with a high volume of orders.
– Need for staff to pack orders, print labels, and arrange carrier pickup or drop-off.
– Purchase of shipping supplies and equipment.
– Potential need to hire additional staff for inventory and shipping management as the store grows.
2. Ship direct from manufacturers:
Instead of storing goods in your own warehouse, you can have suppliers dropship them directly to customers. This is a cost-effective option that allows for flexibility in product offerings and quick response to changes in demand.
Ideal use cases for dropshipping:
– Selling items from a single manufacturing facility.
– Running a marketplace style business with products listed by different sellers.
– Selling large items that are complex or expensive to import and store.
Pros of dropshipping:
– Low-cost, no need to invest in inventory upfront.
– Flexibility in product offerings.
– Ability to quickly adjust to changes in demand.
Cons of dropshipping:
– Less control over product offerings.
– Less control over product quality.
– Longer and less reliable shipping times.
– Longer resolution times for shipping issues.
3. Use a third-party logistics (3PL) service:
For growing companies with a high order volume, using distributed warehousing and shipping solutions can be beneficial. 3PL providers can handle ecommerce shipping while keeping costs affordable and predictable.
Ideal use cases for 3PLs:
– Reduce shipping time by distributing inventory across multiple fulfillment warehouses.
– Ship products from the same locations and avoid dropshipping from multiple suppliers.
Pros of using a 3PL fulfillment service:
– Handling the entire shipping process, from packing to delivery.
– Relationships with major carriers for cost savings.
– Ability to scale up quickly.
– Reduced time spent on shipping and fulfillment management.
– Lower overhead costs and clutter in office or retail spaces.
Cons of using a 3PL fulfillment service:
– Less control over the shipping process.
– Additional fees for storage and handling.
– Some aspects of customer service handled by the 3PL.
– Longer resolution times for shipping issues.
Ultimately, the best shipping solution for your business will depend on various factors, including goals, limitations, and customer needs. You may decide to use a mix of fulfillment solutions to optimize efficiency and customer satisfaction.
Regardless of the fulfillment option chosen, it is essential to be familiar with various shipping methods and carriers, ensure accurate information entry into ecommerce platforms’ shipping settings, and keep carriers and shipping methods up-to-date for customers’ convenience.
Factor in shipping zones, delivery times, and shipping methods before choosing carriers and methods for your online business. Consider where you are shipping, how quickly packages need to arrive, and the most cost-effective shipping options for your products.
Before shipping products, ensure they are packaged safely, securely, and cost-effectively. Packaging considerations include the number of items per package, the need for separate shipments, and protection from damage during transport.
Here are some best practices for packaging products and orders for shipment:
1. Keep packages small and light to reduce shipping costs and increase safety.
2. Combine order items into a single package when it makes sense, and ship separately when necessary.
3. Choose the right packaging materials based on item fragility, customer accessibility, eco-friendliness, and cost vs. quality.
4. Use highly-visible product and package labeling for easy tracking and identification.
5. Provide a branded experience to enhance customer satisfaction and brand identity.
Calculate shipping and handling costs, and shipping rates to charge customers based on factors like weight, size, distance, and delivery options. Consider offering free shipping, flat rates, table rates, or combined shipping to meet customer expectations and balance costs.
Plan for return shipments by defining return policies, setting up return labels, and communicating expectations with customers. Make it easy for customers to understand their order’s location through tracking systems and clear communication.
For ecommerce stores with multiple retail locations, implement centralized inventory management systems, distribute fulfillment strategies, use advanced shipping software, offer ship-to-store capabilities and in-store pickup, and streamline returns management for better efficiency and customer service.
After setting up your shipping strategy, back up your store, configure WooCommerce settings, install and activate shipping extensions, make it easy for customers to understand their order’s location, and plan for return shipments. Adapt and improve your shipping strategy over time to meet changing customer needs and optimize operations.
By following these steps and continuously refining your ecommerce shipping strategy, you can create a seamless and efficient shipping process that enhances customer satisfaction, drives sales, and boosts your online store’s success.