A Beginner's Guide to Ecommerce Shipping and Fulfillment
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The moment your new eCommerce business goes live is unforgettable. You've put tremendous effort into creating a great customer service experience and the perfect storefront. Yet, all that effort could be for nothing if things fall apart when you start shipping. To prevent all of your hard work from crumbling to the ground, here's a quick how-to guide for keeping your inventory, fulfillment, and shipping goals on track.
Prepare A Strategy
There are a few key decisions you need to make before you get started. Which shippers are you going to use? According to a study conducted by US Packaging & Wrapping, of the big three shippers in the United States (USPS, UPS, and FedEx), UPS is the least likely to break your shipment. Unfortunately, they're also the slowest, so your choice may depend on price and the type of product you need to send.
Next, decide on your packaging. Will you be using branded packaging or standard shipping materials? Branded packaging makes a strong impression, but it's also going to cost more.
Just remember that the unboxing experience gives you a chance to make a lasting impression. Without that moment, your item simply arrives with no reminder of who sold it. The customer might otherwise never think of you again once they hit the "submit order button," but a well-crafted, uniquely branded box can help inspire loyalty.
Set Your Prices
Customers will only pay so much for shipping, especially for low-cost products. In fact, one of the primary reasons customers abandon their cart is because they thought they were getting a deal until they saw the shipping price.
You may choose to pass on the full cost to customers, you may offer completely free shipping and raise prices to cover it, or you could split the cost in some way.
Two strategies to consider to boost sales are discounted shipping for high-volume purchases and offering customers a discount code for free shipping on their first order. To help manage costs, you could also consider flat-rate shipping. This means you'll be slightly overcharging some customers and slightly undercharging others, but as long as this isn't too drastic it can mean fewer complications.
Be Sure Of Your Margins
Your profit margins are key to business success, and shipping is one of your biggest expenses. Don't get caught in the trap of discounting little charges here and there until one day you wake up and realize it's all costing more than you can afford.
Your profit margin is more than just the difference between the cost of the product to you and the final selling price to the customer. You must also calculate the cost of packaging, shipping fees, credit card fees, and customs fees (if they apply). To make a comfortable margin on a product that costs you $10, you may need to charge more than $30.
If you find your margins are too thin, it's time to start considering where to cut back. Buying Amazon liquidations by the pallet can get you access to returned and refurbished goods at a huge discount. Passing on credit card fees by increasing prices slightly or setting a minimum purchase amount can also add valuable percentage points back to your profit margin.
Sign Up For Business Accounts
Whichever shippers you choose to use, setting up a business account makes it easier to keep track of your expenses and save money. Business accounts with USPS, UPS, and many others offer access to online tools for improved cash flow and reduced expenses.
Most shippers also offer the best discounts to their business account customers. In fact, some shippers have small business accounts tailor-made for your eCommerce business.
With a small business shipping account, you get more options for shipping speeds and more flexibility in shipping options. Some also offer you access to experts so you can get advice about how to solve your shipping problems and expand your business.
