In e-commerce, for the most part, you have full control over customer experience; it is within your power to ensure that customers enjoy browsing your website and ordering your products. But once the product is bought and paid for, that doesn’t mean your job is over.
Delivery is just as important to the customer experience, and it can be uniquely challenging to manage. Whether you’re just starting an online business or you’re migrating your brick-and-mortar store to an e-commerce website, shipping and fulfillment is one of the pillars on which your online store needs to stand.
The rapid growth of e-commerce happened for two reasons: access and convenience. Access because it gives businesses the ability to offer their products and services to consumers almost anywhere in the world; and convenience because it empowers consumers to shop wherever and whenever they want and receive their purchases right at their doorstep. If orders are not fulfilled quickly and painlessly, access and convenience don’t count for anything.
This “delivery dilemma” can be challenging for small businesses because unless you have your own delivery fleet, large parts of your shipping and fulfillment process isn’t under your direct control.
Since the cost of owning your own delivery fleet is unrealistic for most small to mid-sized enterprises, let’s look at the elements that you can control:
Like most businesses, you’re probably outsourcing the transportation of your products to your customer’s door. In this case, packaging becomes even more important because it’s the only way you can guarantee that the product arrives in good condition. Delivery drivers don’t necessarily know (or care) what’s in any given package, so the responsibility is on you to make sure it’s packed securely.
Beyond simply protecting the product, packaging is also an important aspect of branding. As e-commerce has grown, so too have the standards consumers hold for the e-commerce experience. Packaging should be an extension of your brand – if your products look good when they arrive, your customers are more likely to feel good about their purchases right away and the more excited they’ll be to order from you again and again.
Since branding and presentation are within your control, it is in your best interest to provide that personalized touch that adds value and keeps your customers engaged.
High shipping fees are the number one cause of shopping cart abandonment, so spend some time and consider exactly how you’re going to charge for delivery and what impact that will have on your business. If your profit margins can bear it, offering free shipping is the best option.
Free shipping gives you a competitive advantage and you should see the effects firsthand: from increased conversion rate to returning customer rate.
If your current margins don’t allow for free shipping, there are other ways to make it possible. Some merchants factor the delivery expense into their prices, while others offer free shipping only above a certain order size to ensure they’re not taking a loss.
There are two alternate ways to price your shipping. You can charge at cost by integrating a real-time shipping calculator into your checkout page. This ad-hoc shipping markup ensures that you don’t take a loss and offers customers transparent pricing. Or you can charge a flat rate based on the average shipping costs for your orders.
Choosing the right courier
You can both keep pricing down and ensure the product arrives in perfect condition by being selective when choosing your courier.
Shipping is big business. Take time to shop around this highly competitive market and find the right fit for your budget as well as your needs. Remember as well to negotiate pricing with your courier often, as most shippers are only willing to offer custom pricing once you’ve built up a history with them.
Also, consider outsourcing the whole process by using a fulfillment warehouse. This involves renting space from a third-party company that will store your inventory and ship your orders for you. While this setup limits your ability to personalize your packaging and can be expensive you may decide you can accept these drawbacks after weighing the benefits. What you lose in cost per package shipped, you might make up for in time savings and less overhead.
When making these choices, it’s always important to take into account the nature of your business, your products, and your target market. Do your research, gather data, and test different methods to see how they affect your conversion rate and your bottom line. And be sure to keep an eye on the Payza Blog for the latest information and best practices on running your online business.