How to Handle Shipping for Your Ecommerce Business

For small e-commerce entrepreneurs, there are several important factors to take into account, including website design, online store management, marketing, and particularly the shipment of products to customers. 

Indeed, there has been a notable expansion in e-commerce shipping. On average, 45% of U.S.-based merchants in popular e-commerce sectors, including apparel, electronics, health/wellness, beauty/skincare, sports/outdoors, and jewelry, have engaged in selling and shipping products internationally in the past year.

The shipping procedure holds great significance in ensuring customer satisfaction and can greatly influence the overall success of your business. Given the array of shipping choices, it is crucial to grasp the process of selecting the most suitable method for your specific business.

Choosing the Right Shipping Method:

  1. Self-fulfillment: This method involves small businesses shipping products themselves while outsourcing delivery. It is considered suitable for businesses starting out, as it offers cost savings and opportunities for branding.
  2. Dropshipping: With dropshipping, the responsibility of shipping products directly to the customer lies with the product manufacturer or wholesaler. This eliminates the need for businesses to manage their inventory.
  3. Outsourcing: Businesses have the option to outsource their fulfillment process to a third-party company. This entails entrusting them with tasks such as inventory storage, packaging, and shipping. While outsourcing provides convenience, it can be more expensive and may involve the use of branded packaging from the third-party company.
  4. Hybrid fulfillment: Businesses can adopt a hybrid fulfillment approach by combining various methods, such as in-house fulfillment and dropshipping. The goal is to ensure faster delivery to customers by utilizing different fulfillment strategies.

When selecting a shipping method, keep the following factors in mind:

  1. Delivery locations: Consider where your products need to be shipped and choose reliable carriers that can deliver on time.
  2. Cost: Research shipping rates from different carriers and evaluate how costs may vary based on customer locations, package weight, and size. Utilize tools like ShipStation to find cost-effective options.
  3. Delivery speed: Offer reasonable shipping times to meet customer expectations. Consider providing expedited options for faster delivery.
  4. Packaging: Packaging plays a role in branding and customer experience. Decide whether you want to use standard or branded packaging based on your budget and fulfillment method.

International Shipping

 If you plan to ship internationally, be aware of additional complexities, including customs forms, tariffs, taxes, and duties. Research and comply with international shipping regulations and consider the potential impact on your profit margins.

Determining Shipping Charges

When deciding how much to charge for shipping, consider both the expenses incurred and the convenience it provides to your customers. Here are three commonly used shipping options to consider:

  1. Free shipping: Offering free shipping is highly appealing to customers. You can incorporate the shipping costs into your product prices or establish a minimum purchase amount to cover the shipping expenses.
  2. Standard shipping: With standard shipping, you have two options. You can either charge every customer the same flat shipping rate or charge them the exact cost of shipping.
  3. Expedited shipping: Some customers may require faster delivery, such as two-day or next-day service. Similar to standard shipping, you can either charge a fixed expedited rate or pass on the exact shipping cost to the customer.

It’s important to ensure that your shipping prices do not eat into your profit margins. If you’re unable to provide free shipping at the moment, offering standard and expedited shipping options can be a good alternative. When setting a flat rate for shipping, make sure it takes into account the expenses involved in shipping heavier packages or covering longer distances.

Establishing a Fulfillment and Shipping Schedule

Allocate dedicated time during each business day specifically for packaging and shipping your products. This practice enables you to efficiently handle a large number of orders at once. By maintaining a consistent fulfillment schedule, you ensure that orders are processed and shipped within one business day, which is considered a best practice.

By considering these guidelines and adapting them to your unique business requirements, you can optimize your shipping processes, enhance customer experiences, and contribute to the overall success of your e-commerce venture.