Shipping might not be the glamorous part of e-commerce or online shopping, but it is central to a successful E-commerce business and fostering sound customer relationships.

Fulfilling customer expectations starts with a comprehensive shipping strategy that ensures your goods arrive to your customers in perfect order, are not damaged and contain the correct products. This is especially important if you’re a small business just starting and trying to build a loyal customer base.

We’ve created this complete guide to eCommerce shipping solutions to help you create an effective shipping strategy that ensures you consider costs, operations and customer satisfaction.

In this guide, we define eCommerce shipping and explain its operations, including a guide to why it’s essential, the best shipping solutions, costs, best practices and much more!

What is Ecommerce shipping?

Before we get into the specifics of eCommerce shipping services, we must first define eCommerce shipping. Ecommerce shipping is the delivery process in which a package containing a customer’s order travels from the source to the customer.

This involves multiple logistics stages, fulfilment, distribution centres and more. eCommerce delivery isn’t as simple as travelling directly from the retailer to the customer’s front door.

There are several stages that the package must go through to determine shipping costs, speed, and method. Retailers can choose several shipping options to transport orders, from road to air freight.

The type of shipping service depends on several factors such as the retailer’s location, manufacturing requirements and shipping costs.

Ecommerce shipping solutions

How eCommerce shipping works is based on the shipping method, you choose. There are a few typical options that several eCommerce businesses will offer their customers. Here’s a guide to some eCommerce shipping solutions:

• Same-day delivery: It’s hard to believe you can pay for an item online and have it appear at your door in mere hours, but this is a common, albeit expensive, option for businesses. However, this is a vital tool if you want to add a wow factor to your eCommerce business and build a loyal customer base! The caveat is that you’ll usually need to partner with a logistical partner to make this possible.
• Overnight shipping: Most of us like to click ‘add to cart and bask in the satisfaction that in less than 24 hours, our parcel will be with us. With the benefit of overnight shipping, you can meet your customer’s needs in this category (with an additional fee, of course.)
• 2-day shipping: While it pales compared to same-day delivery or overnight shipping, 2-day shipping is still relatively fast when considering the journey to reach its destination. 2-day shipping tends to be the most cost-effective option, and some customers may opt for this for budgeting reasons.
• International shipping: Ecommerce businesses have the luxury of being better prepared for catering to international orders, but this comes with a cost. Lots of eCommerce businesses will offer increased prices due to international shipping rates. This is because it costs more money to shop orders across long distances.

How vital is shipping for Ecommerce?

When you place an order from an online business, most of us are itching to start tracking our orders the minute we get a dispatch email. That’s because fast and effective shipping is a significant part of meeting customer expectations.

Studies suggest that customers are more likely to be loyal to a company with an effective E-commerce shipping strategy with fast shipping.

But, it’s not just expedited shipping that customers are begging for.

Customers now have much higher shipping expectations than previously, with many customers expecting free shipping, same-day delivery, or long-term offers that cover the cost of shipping for an extended period for a small fee.

That means your customers might be more likely to leave your E-commerce business website if they’re not offered free shipping and other benefits.

The proof is in the pudding with this, as Amazon’s expedited shipping worldwide and product savings are one of the main reasons many customers opt for Prime memberships in exchange for a small fee.

So, you might want to re-think that choice not to offer free shipping!

An effective eCommerce shipping process can provide you with a competitive advantage. By offering attractive solutions such as free shipping, you may take a customer away from a competitor and make a name for yourself as a reliable and speedy shipping brand!

Ecommerce shipping costs

Shipping costs are one of the more tricky steps to navigate for eCommerce shipping because there are several methods you can choose from when deciding on your pricing strategy.

However, you’ll need to base this decision on the broader financial goals of your business. Here’s a guide to some of the methods:

Provide free shipping

As we’ve mentioned, providing free shipping as an option is a great way to motivate your customers to follow through on their purchases and avoid them straying toward competitors.

The downside to this is this is a costly option for your business, and you’ll need to make up the cost of your shipping products elsewhere. You can do this by:

• putting up product prices to cover the cost
• Pay the total shipping cost outright from your budget.
• Only slightly increase product prices to split the cost between you and the customer.
• Offer free shipping discount codes.

Another common way online retailers offset the cost of free shipping is by introducing a minimum order rate for free shipping.

This means that customers will qualify for free shipping after adding enough items to their cart and reaching a specific price.

While this increases the cost for the customer, this also helps to incentivise buying larger orders.

Flat rate shipping

Flat rate shipping is a popular option with many eCommerce sites that aim to not dramatically change their shipping costs. Flat rate shipping works by charging a fixed rate for every delivery regardless of the product.

This means that the price will always be the same regardless of the package’s size, weight, or destination. However, flat rate shipping can become complex if customers order large packages travelling long distances.

Local delivery

Local delivery may be your best option if you’re a small business. This eCommerce shipping method provides fast shopping to the business’ local customers. Customers can choose local delivery with the help of a radius tool on your website.

You can offer local delivery at a low rate or even for free. You might even be able to do this, depending on your circumstances.

Calculate shipping costs

Calculating shipping costs is relatively simple, as these are standard across the logistics industry. Primarily, shipping costs will be determined by the size of the package, weight, address of origin and destination.

The price will vary if you need to include shipping insurance, additional shipping labels, or expedited shipping speeds.

Why not use the Australia Post shipping calculator to determine the price of your parcel for both domestic and international delivery.

Calculating your parcel delivery costs should always be based on your profit margins. This is important as this ensures that eCommerce stores don’t lose money when sending eCommerce shipments.

To calculate your profit margin, you should weigh the cost of the product, packaging, shipping costs, and customs fees against your profit margin. This will give you an accurate idea of how much you should charge for goods and shipping.

Tracking shipments and returns

You’ll also need to consider whether you want to include tracking and free returns in your price package. Parcel online tracking provides excellent comfort to you and the customer.

This allows you to answer those dreaded emails asking where their package is with accuracy and allows them to plan for their delivery. Consider including SMS tracking notifications on your online store. This level of transparency can boost customer loyalty.

Your returns policy should also be a significant part of your eCommerce shipping strategy. You should consider whether you’ll offer free returns to your customers, which may impact your profit margins.

Best practices for eCommerce shipping

Here are some of the best practices for successful eCommerce shipping and optimising your eCommerce shipping solutions:

Partner with eCommerce shipping companies

If you’re overly ambitious and want to ship orders the same day or overnight, you’ll need to partner with eCommerce shipping companies that can offer reliability and affordability.

Use your team

Your team are a valuable resource and can help you complete a successful shipping process. From marketing to fulfilment services, you’ll need your team to help you communicate with customers, include the correct shipping options on your online store, and help you pick, pack and ship orders.

Final thoughts

Choosing the suitable eCommerce shipping options is a make or break for your online business, so it’s important to consider everything we’ve discussed.

If you want to simplify your eCommerce shipping strategy and not worry about packing and sending your goods, helping meet your customer’s expectations, use eCommerce Shipping for all your shipping services.

Contact us now to find out more!

Frequently asked questions

1. What is eCommerce shipping?

ECommerce shipping refers to a parcel’s process and shipping methods before arriving at its final destination. This can be on a same-day, overnight, 2-day, extended or international basis.

2. Why is eCommerce shipping important?

Effective eCommerce shipping methods are essential as they facilitate customer satisfaction and reduce shopping cart abandonment. Companies can make more money and reduce costs with more innovative shipping solutions.

Suitable eCommerce shipping methods are also crucial as they can provide a competitive advantage and motivate customers to buy from your store over a competitor.

3. What are shipping fees based on?

Shipping costs are determined by:

• parcel size
• weight
• destination
• insurance and tracking
• delivery method
• delivery origin