Millennials make over half (54 percent) of their purchases online.
Additionally, non-millennials make 49% of their purchases via the internet.
Consumers are turning to eCommerce stores to help solve their problems. And, the competitive atmosphere of online retail is forcing businesses to up the ante.
How are you going to stand out? What do you offer that customers can’t get anywhere else? How are you going to stay profitable AND ahead of the curve?
Fulfilling and shipping orders is a good place to start. Why? Because consumers care about:
- Product packaging and design
- Fulfillment and shipping times
- How much they have to pay for shipping
Keep reading to learn how to develop a shipping and fulfillment strategy.
Specifically, one that will wow your customers and is kind to your profit margins. Your customers and your business will soon look back and say “thank you”.
How Much Are You Going to Charge for Shipping Orders?
Shipping plays a large role in product pricing structures. At the end of the day, shipping isn’t free even if you offer free shipping. So, that cost has to come from somewhere.
The good news is that you get to decide where it comes from.
Understanding your budget, product pricing structure, and customers is key. Are your customers willing to pay for shipping? Can you afford to offer free shipping?
Let’s dive into your options.
Flat Rate Shipping
This means that you charge the same fee regardless of the product’s weight. This works well when you have similar products that ship in the same size packaging.
If you offer a variety of sizes, it can be difficult to find a happy medium. But, it tends to be less complicated as long as you aren’t losing money.
Real-Time Rate
Real-time rates are based on carrier rates and the dimensions of your package. Your customers can choose the delivery speed and you don’t have to cover any shipping costs.
This works well if your products aren’t similar in size and weight.
Free Shipping Above an Amount
Free shipping over a set dollar amount is a popular method for eCommerce businesses. It encourages customers to spend more money to get free shipping.
But, it’s hard to calculate this into your product pricing structure. You may have to increase your prices or absorb fees from your profit margin.
Free Shipping
75% of customers expect free shipping. But, that means you have to cover it, instead. This might result in increasing your prices or decreasing your profit margin.
Choosing a Cost-Effective and Efficient Shipping Method
Not all shipping methods are equal in price, speed, and availability. And, the method you choose depends on who you’re shipping to. Your customer might be a store, warehouse, or the end-user.
When shipping to a warehouse or store, it’s standard to send large quantities at a time. In this case, freight shipping is more cost-effective even if it’s interstate freight, national freight or simply local freight delivery. With freight shipping, LTL (less than truckload) options are available.
This means you share truck space with other businesses. Shipping LTL is a common way to reduce shipping costs across the board.
If you’re shipping to the end customer, standard mail services (USPS, UPS, and FedEx) are the easiest to use. You can visit their websites to automate package delivery and payments online.
Packaging Design Is More Than Just a Box
Package design could be an entire book by itself. But, keep these things in mind when choosing your packaging materials:
- Infusing your brand and marketing message
- Protecting your products until they reach the end-user
- Weather protection
- Getting dropped or thrown around
- Tampering
- Considering your environmental impact
- Making things easy for the customer to open and enjoy
- The unboxing experience
Shipping and Fulfillment: Who’s Going to Do It?
Large businesses with a lot of inventory may benefit from outsourcing order fulfillment. But, if you’re captaining a small ship, in-house fulfillment might be the better route.
Think about your budget, the amount of time you have, and the nature of your products. This decision might change as your business grows.
In-House (DIY)
For small businesses and custom work, in-house fulfillment is cost-effective. With DIY shipping and fulfillment, you get to put your brand front and center. You have complete control over how your customer receives your product.
But, at some point, in-house fulfillment will no longer be cost-effective.
Drop-Shipping
With drop-shipping, you don’t produce or package anything. Everything goes through a third-party. And, you don’t have to buy inventory.
This third-party is in charge (and control) of manufacturing, packaging, and shipping. It’s a virtually hands-off approach that’s beneficial for small to medium-sized businesses.
With drop-shipping, you pay for the added convenience of saved time. But, you sacrifice control over what your customer sees on their front porch.
Fulfillment Warehouse
As your business grows, automation becomes necessary.
There’s only so much you can do in a day. If you spend most of your day fulfilling orders, you aren’t prioritizing your time.
Fulfillment warehouses take that weight off your shoulders. But, you’re still in charge of buying inventory and shipping it to the warehouse.
Once an order comes through (cha-ching), the warehouse packages it and ships it out. Like drop-shipping, you have less control over branding and appearances. But, you don’t have to do anything aside from providing inventory.
Fulfilling and Shipping Orders
It’s important to develop a dynamic strategy for fulfilling and shipping orders. As your business and budget grow, your strategy will shift towards automation. Let’s recap the process:
- Determine how much you’re going to charge for shipping
- Choose a shipping method that makes sense for your business
- Design your packaging for marketing and protection
- Decide who’s going to package, prepare, and ship your orders
Shipping and order fulfillment set a foundation for the success of your business. Browse our blog to learn more eCommerce tips, tricks, and automation hacks, today!
