E-commerce continues to expand year over year: in 2019, it was responsible for 45 percent of U.S. retail growth, despite making up 11 percent of U.S. retail spending. We expect these figures to only increase in the near future, as more and more consumers realize the benefits of shopping online—including convenience, better deals, and a wider range of products.
Without a reliable way to connect customers with products, however, the entire e-commerce industry would be dead in the water. It’s no surprise, then, that 56 percent of online retailers say that shipping costs are the biggest challenge for their business. What’s more, 63 percent of customers say that they’ve canceled a purchase due to excessive or unexpected shipping costs.
Choosing the best e-commerce shipping methods for your business is essential to satisfy your customers and compete in this crowded market. In this comprehensive e-commerce shipping guide, we’ll discuss 10 e-commerce shipping methods that you should consider offering.
The simplest e-commerce shipping solution is to use flat rate shipping: charging all customers the same flat rate for any purchase, regardless of their location or the item’s size or weight.
Businesses that use flat-rate shipping will often have a standard box or package size that they use to ship items with a particular carrier. For example, the FedEx One Rate service charges a flat rate for all shipments under 50 pounds.
You can also charge a single flat shipping rate for the first item that customers purchase, and then a reduced rate for additional items. This lets you cut costs by sending multiple items in the same shipment while encouraging customers to spend more by receiving “discounts” on shipping.
Table rate shipping is essentially the opposite of flat rate shipping. With table rate shipping, the cost of shipping is determined by factors such as:
For example, your business might charge a certain shipping rate for orders within a 100-mile radius, and a higher rate for orders outside this radius.
Table rate shipping may be more cost-effective for your e-commerce business, depending on the type of products you sell and where you send them to. However, it’s more complicated than flat rate shipping, and customers may be frustrated by your seemingly opaque shipping costs.
Expedited shipping (e.g. two-day or overnight shipping) requires you to deliver orders within a guaranteed time window, shorter than the typical 3 to 7 business days of standard shipping. The popularity of services like Amazon Prime, which offers free two-day delivery, reveals how many e-commerce shoppers want to receive their purchases faster and more efficiently than ever.
Carriers such as USPS, UPS, and FedEx all offer expedited shipping options, making fast shipping a (potentially pricey) possibility for your e-commerce business. You can improve your profit margins by requiring a minimum spend for expedited shipping, or by storing inventory at multiple fulfillment centers so that shipments can reach customers faster.
“Free shipping” is the holy grail for many e-commerce shoppers. 20 percent of customers say that they only purchase online with free shipping, while 27 percent will buy from a different store to get free shipping on their purchase.
Offering free shipping for your e-commerce business may be a matter of the right free shipping strategy. Some businesses bake free shipping into the price of high-value items, while others require a minimum spend threshold before offering free shipping.
If you’re receiving inquiries from potential customers abroad, offering international shipping is an excellent way to grow your e-commerce business. According to a 2017 study, 62 percent of e-commerce retailers already have international shipping options.
When expanding into international shipping, it’s wise to start small with countries such as Canada and Mexico before sending packages overseas. You can decide which markets are most promising by looking at your website analytics to see where visitors are located around the world. You’ll also need to consider issues such as customs duties and insurance.
Per product, shipping is an e-commerce shipping method in which you charge different shipping rates for each product, based on factors such as the item size and value. For example, if you run an e-commerce apparel store, you may be able to send jewelry and accessories in smaller envelopes, while requiring larger parcels for bulkier items.
Per product, shipping gets more complicated if you want to combine shipping costs and offer discounts when customers purchase multiple items. If you’re using an off-the-shelf e-commerce solution like Magento or Shopify, you might need to use a plugin or do some custom web development.
Some e-commerce businesses charge shipping rates based on the distance between the source and the destination address. This type of shipping can make sense if your carrier charges more based on the recipient’s location.
For example, USPS uses a system of postal zones to determine the price of postage between two locations for services such as Priority Mail Express. The zones range from Zone 1, within a 50-mile radius from the origin, to Zone 8, more than 1800 miles away.
You may also need to set restrictions on which items can be shipped to certain locations, or via certain shipping methods. For example, many U.S. states have restrictions on shipping alcoholic beverages over state lines. Meanwhile, damaged, defective, and recalled (DDR) batteries cannot be shipped by air.
Some e-commerce businesses let customers take advantage of multi-address shipping, specifying more than one destination for different items in their shopping cart.
This feature is functionally equivalent to creating multiple orders for different items. However, it’s more convenient for customers, who don’t have to manually add and remove items and enter their payment details multiple times.
Providing multi-address shipping is more a question of web development than it is logistics. Once the order is in your system, multi-address shipments can be split up into multiple shipments with a single address that you can handle normally.
If you’re worried about charging too much or too little for shipping costs, real-time shipping may be for you.
Rather than estimating shipping costs or using a flat rate, some e-commerce businesses automatically calculate the costs of shipping during checkout, based on the items in the customer’s cart and your choice of carrier. This cost is then dynamically displayed to the customer.
Using real-time shipping quotes helps you protect your profit margins, while providing greater transparency to customers about how much they’re paying for shipping.
Many people are frustrated with traditional front door delivery options—from those who live in gated communities to those who’ve been the victim of “porch pirates” one too many times. To cater to these customers, you can offer “hold at location” shipping, where a shipment is sent to a secure nearby location for local pickup.
Amazon Locker is the most visible example of self-service pickup, but several carriers also offer this service. FedEx, for example, provides the Hold at Location service, where packages are sent to a local FedEx store or participating retailer, like Walgreens, and securely held until customers pick them up.
There are a variety of shipping methods that your e-commerce business can use, each of them a good fit for different situations. Implementing the best e-commerce shipping methods on your website may require you to install plugins or find a custom web development partner to get the results you need.
Eniture Technology specializes in helping e-Commerce merchants grow by providing useful information, digital marketing services, off-the-shelf apps that solve common problems, and custom programming services. Please contact us if you need help growing your online business or implementing the concepts presented in this blog post.
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