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May 05, 2020

How to Choose an E-Commerce Shipping Method

Introduction

E-commerce now represents 10 percent of all U.S. retail sales, and this ratio is only rising year after year. This means that your e-commerce customers increasingly expect a shopping experience that’s as similar to brick-and-mortar retail as possible—including easy returns and the e-commerce shipping method of their choice. For example, the success of the Amazon Prime subscription service is in no small part thanks to its guaranteed free two-day delivery.

The choice of the best e-commerce shipping method can make or break your business. 45 percent of e-commerce customers have abandoned their purchases due to “unsatisfactory” delivery options, while 38 percent have refused to shop with a retailer ever again following a negative delivery experience. 

In our previous article, we discussed some of the different types of shipping methods that e-commerce merchants should consider: free shipping, flat rate shipping, international shipping, and more. But how can you choose the best e-commerce shipping method for your business?

Below, we’ll discuss 6 factors that should go into your decision when choosing the best e-commerce shipping method.

6 Ways to Choose an E-Commerce Shipping Method

1. Package size, shape, and weight

Perhaps the most important question to ask is: what type of items will you be shipping, and how much space and weight will they have?

Depending on the answer, you may be restricted to certain carriers. Most e-commerce shipping carriers use a pricing metric known as "billable weight," which is the greater of the item's actual weight or dimensional weight. Dimensional weight is an estimate of a shipment’s weight based on the package’s length, width, and height. For example, UPS specifies that packages can weigh no more than 150 pounds, and measure no more than 165 inches in length and girth combined.

2. Source and destination

The next most important question to ask is: where are you located, and where are you planning to ship to? If your products are fairly uniform in size, then it could make more sense to charge shipping costs based on the item’s source and destination.

With micro-regional, regional, and national carriers to choose from, the best e-commerce shipping provider may depend on where the majority of your customers are located, and which carriers will offer you the best deals on your shipments. Offering international shipping will be more complicated logistically, including possibly working with a separate carrier, but it may be worth it if you observe high demand for your products from abroad.

3. Packaging and marketing costs

Another factor that will influence your choice of e-commerce shipping method is the costs required for packaging and marketing. Before you decide to offer a particular shipping option, do the math to make sure that it’s a cost-effective solution for your business.

If you plan to offer free shipping, for example, then it’s likely a good idea to keep your packaging as lightweight and economical as possible. E-commerce businesses that offer free shipping usually have a very good reason for it:

  • The price of free shipping may already be baked into the sticker price of the product (for example, if free shipping is only available for purchases above a certain dollar amount).
  • Your profit margins may be large enough that you can afford to waive shipping costs.
  • Offering free shipping may be a calculated risk early on, in order to widen your customer base and distinguish yourself from your competitors.

On the other hand, some businesses make packaging and presentation a selling point for their brand. For example, this is often the case for subscription services that send customers a bespoke, curated collection of items (e.g. clothing or skincare products) every month. The effort required to improve the customer experience through careful packaging and neat presentation may be such that free shipping doesn’t make financial sense for your business.

4. Carrier reputation and capabilities

When you choose an e-commerce shipping carrier, your business assumes the reputation (and the risk) of that carrier to a certain degree. Many customers will view shipping delays and missing packages as a failure of your own business—even if it’s ultimately the responsibility of the carrier.

As such, you need to make an informed choice of carrier for your e-commerce business, choosing one with a strong reputation and a suite of useful features and capabilities. For example, many e-commerce customers now expect that they will be able to track their packages from origin to destination, including estimated or guaranteed delivery dates and receiving notifications through emails and text messages. Choosing a carrier with a tracking service will markedly improve your user experience (not to mention cut down the emails from customers asking where their packages are).

5. Value of the contents

While the vast majority of e-commerce shipments will be completed without a hitch, some deliveries will inevitably go wrong—whether that means damaged items or a package that vanishes in transit. One study found that roughly 10 percent of packages shipped by UPS, USPS, and FedEx were damaged, as well as 0.5 percent of the products inside.

In these situations, keeping customers happy should be your first priority, but you also need to recoup your losses. If you plan to ship high-value items, make sure that you choose a carrier with shipping insurance that can adequately cover the costs of replacement.

What’s more, some carriers may place limitations on their liability for damaged or missing shipments. For example, FedEx specifies that their liability for “fragile items” and “items of extraordinary value” is no higher than $1000.

6. Special considerations

On a related note, some e-commerce products require special care during shipping and handling. If these concerns apply to your business, make sure you choose a carrier and a shipping method that will ensure the safe delivery of your items.

For example, certain food, medical, and pharmaceutical items may need to be subject to strict temperature controls. Meanwhile, large items such as furniture and equipment can require white-glove delivery, which includes door-to-door service, installation inside the home or business, and removal of any bulky packaging.

Conclusion

Many factors influence the choice of the best e-commerce shipping method for your business—from the type and size of items you ship to the special features offered by a certain carrier. For more information, check out Eniture's Beginner's Guide to E-Commerce Shipping. If you're comparing FedEx vs. UPS, in particular, check out our article FedEx Ground vs. UPS Ground.

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. Do you need help growing your online business or choosing the best e-commerce shipping method? Get in touch with us today to learn how we can help.

About Eniture Technology

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.

Interested in learning more? Check out our free guide, A Beginner's Guide To E-Commerce Shipping and subscribe to our blog!

A Beginner's Guide To E-Commerce Shipping

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