How to Choose a Shipping Strategy for Your Online Store
Updated: Oct 31, 2019
For most of the parts it is you who is in control of your customers experience with your online store. You make everything from the ads, the images, and you even customize your website and think about the emails you send them. But the moment your customer orders from you, you hand it over to someone you don’t know for shipping. Now this stranger could make or break your business, choosing the wrong shipment partner could make your customer feel bad about ordering with you. A lot of online stores that are new in the industry never take the time to strategize shipments, but little did they know what it can do to their business. Don’t be one of them; let this post enlighten you on a lot of basic things you have to know about strategizing your shipping.
You might think that it’s unimportant now, you might think that shipping is as simple as calling a courier and sending your orders out but it isn’t. For every country there are rules, restrictions and taxes that you as a merchant should be aware of in order to not surprise yourself or your customers about additional fees or delays. Knowing everything you need will not just be good for your customers experience but for yourself too. Don’t worry because as you read below, you’ll know everything from the important things to shipment strategies.
Let’s start with talking about Packaging and marketing.
The eCommerce world is quickly evolving, and so is what’s expected from you by your customers. Years ago, packaging really didn’t matter, as long as you get your order in good condition there’s no problem at all. But today, people are expecting you to have their items shipped in a good packaging to make their online purchase experience complete. In other words, customers don’t just expect you to impress them through the website but through the products they receive as well, and they expect you to be able to give them more than just satisfaction from your product but also in the way they received it too.
Your packaging will make you unique from other online stores, you should also make them feel your store through your packaging. If you take time to analyze successful brands, they are the ones that are actually giving their customers more taste of their brand through going an extra mile for their packaging. So before shipping your first sale, consider doing a little extra to make your customer experience your brand through the way you packaged their order. But also remember that you also have to keep your orders safe, so think of a way that you can secure your product but at the same time give your customer an experience of what your brand offers.
Choices for packaging
Of course before you have to ship your customer’s orders you have to make sure they get it in good condition so either you’d go the extra mile or not, you’ll have to package it. For this you have a lot of options from boxes to even envelopes, but you have to make sure that it has padding or something that could be like a padding. But if your product doesn’t need protection you can try the bags used for coffee because they’re more convenient and thin so it wouldn’t be that expensive when you ship your item. As much as you can, try to keep their orders light and thin because most of the time couriers charge your deliveries based on the weight and the size of your package. Keeping them light and thin would benefit both you and your customer.
Keeping them light and thin would benefit both you and your customer. Also, if you want to include your brand name on the packaging, you can also order personalized boxes for shipping with your brand's logo or name on it in bulk.
Before you even start shipping you have to have a strategy ready for shipping because this part is crucial for your store and this part is where abandoned cart rates are high. When strategizing this part you have to consider somthing that would cut into your margin as less as possible. But make sure your customers will still think it’s good enough. This is something you can’t serve half-baked, the moment you implement it, it should be good to go. Below we have three options: First: FREE Shipping
This is one way to get you more customers, but it could potentially decrease your revenue unless you strategize it well. This is usually more ideal for domestic shipping, but still could be used for nationwide or worldwide deliveries. Free shipping will attract more customers into your website, and there’s two things to achieve this, first you just absorb the cost for shipping or second you slightly increase the amount of your products to cover for it. If you decide to absorb it, you can still earn right by offering a minimum amount per order to avail the free shipping promo. Free Shipping as long as strategized well is a good way to gain more conversions.
Now when you are selling one of a kind items, or handy crafts then you can opt for increasing your price to cover for shipping. Just remember that if you have a lot of competition and their prices for the same item is lower, you should beat that than increase your price. In order to make the right decision, before promoting anything you have to make sure that you know the shipping fee for your items.
Second- Be Fair
There are shopping carts that actually show shipping quotes that are real time, these are convenient because your customers would be paying the exact amount (more or less) you would when you ship their order. Having real-time calculators could actually make your customers trust you more, it shows them that you are fair when it comes to pricing. It doesn’t bring in the same effect free shipping does with conversions but it makes your customer know that it’s a fair deal and they would more likely share their experience with their friends and come back. This is the type of shipping that is suitable for larger items that are just impossible to have free shipping for.
Third- Go for Flat Rates Now another strategy that you can use is flat rates for every weight range and totals of orders. But make sure that you know the average cost of shipping per package in order to know the right cost and just be over or under the actual shipping cost a bit. Make sure which flat rate would be okay for your business, either by weight or order total it will need a bit of time and tests.
What you should know
International Carriers- FedEx, DHL and UPS are some of the large companies that have been shipping both domestically and internationally for years already. For those who are still starting, this could be a bit more pricey than others but it’s better to be safe with an experienced courier than end up having problems while still starting up. The good thing about them aside from their experience is that they offer more services like tracking door to door.
National Carriers- These ones are more keen on serving specific countries, their prices are usually lower than international companies but they don’t have extra services like international couriers.
International Freight Forwarders- These guys are the ones who handle your shipment from the start until your customer receives their purchase, they usually have the highest price but they take care of almost everything including the customs tax.
BEST and Trusted International Freight Forwarders:UPS,DHL, Nippon Express, Hellman Worldwide logistics.
Terms you should be familiar withIt’s important to know the terms that would be used in shipping, especially with international carriers. Listed below are some of the most common terms used by carriers when negotiating and talking about details:
Harmonized Tariff Code- this one is a code that describes your product, this is usually legally required in a lot of different countries. Failing to input the correct code on your product may cause it to be shipped back to you, delayed or be given a higher tax fee to pay.
Customs Documentation- this is important for international shipments, and the documents that you would need would depend on your shipment details.
Commercial invoice: This is the true value of the item that you are shipping and tax and duties depend on the price that you give here. The foreign exporter will have to complete this and the buyer would be the one to arrange for the payment as long as they get to prove themselves as the owner.
Export declaration: this one is an export control document which states the complete information of the item/s to be shipped.
Certificate of origin: an exporter should secure a certificate that the item has originally come from the stated country and this is called the certificate of origin.
Duties and Taxes
Every country has an imposed duty and taxes that are made to protect local businesses from foreign competition. The receiver usually pays this at the customs before they release your items but sometimes the merchant can pay for this too. The amount you’ll be paying would depend on the value of the product, country manufacturer, harmonized system code, the item itself and trade agreements.
Delivery Duty Paid- This is when you will pay for the fee, and this includes the warehouse to end destination transportation, clearance from customs, and handling expenses. This would give your customers a better experience.
Delivery Duty Unpaid- this is when your customer pays for all the fees. But make sure that your customer is aware of this because if not, it could give your customer a really bad experience.
There are some products that are restricted by their law to be delivered to some countries, or there are products that you aren’t allowed to export from the country you’re in. By law, any shipment could be stopped by the customs. But don’t worry because all you have to do is be aware of the restrictions before you ship your products. This could be prevented too when you make a different group for countries that have restrictions, just to make sure there wouldn’t be any mistake.
Starting into eCommerce and thinking about shipping domestically, nationwide and eventually internationally could be very intimidating, but don’t be intimidated by it because the world is a big place where a lot of people are looking for your products.
Shipping is actually a very hard part of eCommerce to perfect, especially with the problems that could arise which are out of your hands, but with having the right knowledge and taking the time to strategize it’s achievable. Now I’m not saying problems would not arise but when you have everything handled right from the beginning you can plan different scenarios in advance to save your reputation, and knowing who to trust could also make a big difference. It’s given that for every business challenges would appear and those challenges could actually help you create the best strategy to help in your shipping needs. Just like when building your online-site, with experience, there would definitely be a need of some changes as time goes by.
Knowing how couriers work would be a benefit for you, and being able to understand the restrictions, rules and regulations will make your business better for both you and your customer. Make sure that as your company is growing, as your reach for shipment is growing, your knowledge should be growing too. And when you think you have your shipments figured out, be sure to still reevaluate and check your feedbacks from time to time. It’s given that as time goes, everything will evolve so never be contented with what you have, make sure that you’re able to give the best to your customers by giving them the most convenient services, the most experience from your brand by making sure they feel your brand from your packaging. Doing a little more for your customers would bring them back to your shop and eventually make them regular customers.