Shipping Ecommerce Orders

By Angus  |  2 Jan 2015 16:00:00

Order fulfilment is rarely the first thing merchants consider when starting a new ecommerce venture, but arguably it should be as it’s something that can have a significant impact on your profit margins and your customers’ experience. This post is intended to highlight what you should consider when developing of a cost effective shipping strategy that works for your business.

Marketing & Order Fulfilment

Developing a great ecommerce shipping strategy is about achieving a balance between reducing costs for the business and also recognising the role that order fulfilment plays in your overall marketing strategy.

A study has shown that high shipping costs are the number one reason for cart abandonment, with 44% of those questioned citing this as the decisive factor in not completing their purchase. With this in mind, and especially if you are selling a product that is readily available online, you should consider experimenting with different pricing techniques to increase your sales.

Offering free shipping will certainly have a positive impact on sales however it may not be the best option for everyone. For web stores selling lower value items, offering free shipping when customers spend over a certain amount would make more sense.

If you feel that you have to offer free shipping across the board then you will probably have to absorb these costs in your mark up, however this is probably worth it if you are not selling in a highly cost sensitive market as it’s been suggested that this increases conversions by anywhere between 15% and 20%.

For larger items that attract substantial shipping costs, a good idea could be to charge cost price and make a point of this so that customers do not feel that the costs are unfair.

Alternatively you could consider a flat rate. This is likely to reduce cart abandonment as customers always like to know the total cost of their order before the latter stages of the checkout process. This strategy is well suited to a retailer selling a smaller range of products that are either of a similar price or weight to each other. This way, the price that is set will be attractive to the customer and will mean that even though some items may be shipped at a profit and some at a loss, it will even out over time.

It’s not just in terms of optimizing conversions on your website that your shipping strategy plays a role in your businesses marketing. Investing in quality package design can really help differentiate your brand and enhance your customers’ experience. Packaging is often described as the “5^th P” of the Marketing Mix and as an ecommerce retailer it is especially important as it’s the first physical impression customers get of your business. A 2013 survey (by logistics and order fulfilment provider DotCom Distribution) found that 52% of customers who had received an order in “premium” packaging were likely to order again.

Going down the route of premium packaging can require significant investment, however for some brands, such as those operating in the fashion industry it has been proven to pay dividends in repeat purchases. Even if you conclude that premium packaging isn’t suited to what you are selling, be sure to at least brand your packaging with your company logo and put a thank you note on the inside. Most branded packaging gets reused and there is no harm in people being reminded or made aware of your brand! Custom label stickers such as those sold by Sticker Mule are an easy low cost way to ensure that your packaging still makes a strong impression.

Choosing Your Packaging

The rate you pay for your shipping is determined by your parcels…

• dimensions
• weight
• delivery country
• tracking
• insurance

With regards to your choice of packaging, there are a huge range of options available. Because your choice will completely depend on what you are selling, it’s advisable to contact a supplier as soon as you know your requirements. The rule of thumb is that the smaller the package the better due to the lower costs of shipping and purchasing the packaging.

Obviously the package must be fit for purpose and for packaging that is protective or an obscure shape you can expect to pay more. As I can’t state enough, it’s all about planning and if you can establish your requirements across the product range early on then you will be able to limit the number of different packaging options that you hold and purchase them in bulk.     

If your products can fit in a coffee bag or padded envelope then you will save significantly. With larger boxes it is still possible to get an acceptable flat shipping rate as long as the weight isn’t ridiculous. With Sellr you are able to manage your order bookings through the software with UPS as standard.