The following blog was written by guest author Binh, a content executive at Mageplaza, one of the top Magento Extension Providers and custom development service providers.

Are you planning to join the multi-trillion-dollar industry of eCommerce? Or do you simply want to improve your business and deliver better customer service? Today, those things go hand-in-hand.

Whatever the case, when selling online, delivery is a fundamental factor that should never be taken lightly if you’re looking to improve the customer service experience and boost your business.

This post will take you through why well-planned and carefully-executed delivery is indispensable in e-commerce, and how to ensure your own delivery practices are as effective as they can be.

Is shipping in eCommerce special?

The Definitive Guide on Ecommerce Shipping

On the fast-approaching horizon of the new e-commerce market norm, shipping has become an initial concern of any business selling online. Why?

It’s self-evident, really: online purchases require shipping! The thing is, shipping expectations for ecommerce have some particularities that a business has to be aware of if their aim is to keep today’s consumer satisfied, such as:

84% of shoppers admit that they'll never shop with a brand a second time after a bad delivery experience
98.1% of buyers build their brand loyalty based on the shipping experience
13% of consumers will never come back to buy from a business after a late delivery
40% of buyers say more than two days waiting for delivery would make them abandon their carts

It’s in no way an exaggeration to say that delivery is the key to any e-commerce company wanting to gain a foothold online for their brand. Looking through the lens of the buyer experience, delivery is one of the last touchpoints between customers and your business. So, if they experience a poor delivery service, these are the consequences:

Customers leave negative views of your brand
You lose a chance to turn them into loyal customers in the future
And, in the worst-case scenario, customers decide they will never buy from you again and even spread the bad experience among their friends and family

Technology and the logistics industry have evolved as eCommerce has grown, leading to a massive change in customer's expectations on how delivery should work.

By understanding the e-commerce shipping mechanisms, merchants and marketers will know how to use the delivery service as effectively as possible.

Ecommerce shipping checklist

Shipping carriers

Shipping carriers are the service providers that take charge of delivering your customers' orders.

Typically, shipping carriers will let e-commerce businesses drop off packages to them, thereby expediting the process. (Most couriers pick up from a warehouse or whatever fulfillment service your business uses).

When using shipping carriers, you need to pay them for shipment. Of course, that fee is either passed onto the consumer via the online purchase, or it’s a cost assumed by your brand for the purpose of marketing free shipping, VIP offers, and other special deals.. And how you account for shipping costs varies based on your product pricing and marketing objectives.

No matter which carrier you work with, below are some crucial elements you need to consider to find your most suitable shipping carrier:

Types of products: Your products' size and weight can significantly affect your shipping rate and cost. Each carrier has different restrictions for weight and size with additional charges for oversized products.

Location: Your target market will determine whether local or international carriers are the best fit for you.

Carrier reputation: Reputable carriers can ensure your parcels are delivered on time. Check out the online reviews before choosing a carrier, and ask the carrier for references from other ecommerce businesses.

(Some of the most reputable international carriers are: FedEx, DHL, UPS, and USPS.)

Shipping speed: No online shopper wants to receive a product late. But there’s more—today’s shopper also has little patience to meet shipping times of a week or more. To meet today’s consumer expectations, the speed of delivery is an important determinant when selecting your carrier.

With the local shipment, you can consider carriers that offer same-day shipping at a more expensive rate as an additional option for customers.

Pricing: Offering customers the best shipping rates can enhance their trust and loyalty to your brand. As the fee for a carrier has a direct impact on the customer's shipping payment, your business is best to find the balance between the cost for the carrier and its service quality.

Always choose the carrier that best matches your product and provides the best service while not adding cost-prohibitive expenses to your shipping process.

Shipping methods & strategies

There's no such thing as a perfect e-commerce shipping strategy.

The right e-commerce shipping strategy for your business is based on your audience, products, resources, and many other factors.

And ultimately, it’s the right combination of today’s fast and affordable shipping methods that can help your store reduce shopping cart abandonment and boost its reputation.

6 popular shipping methods to “right size” your eCommerce shipping strategy:

2-day shipping: This is a common type of premium shipping where a consumer is guaranteed delivery within two business days.
Same-day shipping: This option ensures that a buyer's package leaves the warehouse on the same day of purchase.
Overnight shipping: A higher level of the 2-day shipping method, this option guarantees that the customer receives the package on the next business day.
Expedited shipping: This option refers to any shipping method faster than standard ground. The turnaround on these orders varies depending on the carrier and the shipping service.
International shipping: One of the considerations for your overall e-commerce fulfillment strategy might be to approach a global audience. This requires working with an experienced fulfillment partner to offer affordable international shipping rates at a reduced cost.
Freight shipping: For businesses receiving larger shipments (such as from their manufacturers or fulfillment centers), any shipment larger than 30 in x 30 in x 30 in or that weighs over 150 pounds is known as freight.

Shipping Insurance & labels

For your own internal shipment processes, shipping labels and insurance are the nitty-gritty of how to get your e-commerce shipping strategy right.

Getting your shipping labels right will mean:

You provide the carrier with the right information about the origin and destination of your parcels
You protect your customers’ orders from getting lost, delayed, or mishandled
Include the return address, destination address, shipping classification, package weight, and tracking number

The advantages of shipping insurance are:

The shipping service will offer reimbursement when a package is stolen, lost or damaged in transit
You offer your customers peace of mind and further brand yourself as the seller who takes care of their own

Tracking shipments & returns

If you think the shipping process ends once the carrier picks up an order, or when that carrier delivers it to its recipient, you’re mistaken!

Tracking shipments is an essential part of delivering excellent customer experience during and even after the order has traveled to its destination.

Here are 3 factors to consider when it comes to tracking ecommerce shipments and returns:

Order management: This is the process of receiving, tracking, and fulfilling customer orders. E-retailers use order management software to centralize all critical data and to streamline the retail fulfillment process. Order management software also helps reduce stock-outs or back-ordered items.
Ecommerce shipment tracking: Store owners should follow each step of a shipment (just like the customers). And thanks to that same order management system, businesses can monitor each shipment and pass the exact tracking number to the customer when they need it.
Ecommerce return management: E-retailers need a return policy that meets customers’ perception of what’s right and fair in order to encourage them to come back.

95% of shoppers happy with the returns process said they'll purchase from the same retailer again.

Depending on what you're selling, the right combination of shipping insurance and package tracking can offer a great deal of security for you as well as your customers.

Shipping costs

According to Convey, 61.8% of consumers agree that cost is the most essential shipping factor when purchasing. Not only does it affect customer satisfaction, but shipping costs are also one of the most significant expenses for any business—especially small ones.

And if you want to be a successful e-retailer, profit margins are the thing you always need to keep an eye on so that you won't end up losing money on shipping.

By understanding how your shipping costs are calculated, you can create a shipping plan that works by reducing this expense for your business as much as possible.

How shipping costs are calculated:

Rates for all shipping couriers are usually based on several factors, including:

Package size
Package weight
The original country and destination country
Tracking and insurance (considered as additional shipping options)

It’s reported that 73% of shoppers expect affordable, fast deliveries whenever they shop online — but you need to make sure you're offering shipping rates that are affordable for you, too.

Once you have chosen the right carrier for yourself, all you need to do is enter package details like weight and size to receive estimates of the fee you’ll later charge the consumer for the shipping service.

Then, you can map out all costs associated with delivering your products to see the exact price your customers have to pay. This step is critical, especially as many e-commerce entrepreneurs are shocked by how quickly the small charges add up. It’s not just the carrier cost! Other costs to factor in include:

Labor for collecting inventory
Labor packing products into shipping parcels
Packaging materials
Shipment label (generating it plus the materials)
Labor for physical handling in the warehouse

Below, we’ve compiled a list of the most popular shipping calculators so you can compare the pricing and options:

USPS - Shipping Calculator
Canada Post - Shipping Calculator
UK Royal Mail - Shipping Calculator
Australia Post - Shipping Calculator
UPS - Shipping Calculator
FedEx - Shipping Calculator

Some tips to trim shipping costs for your business

To lower your average shipping costs, here're are some ideas that can help you:

Use a shipping platform to enjoy business discounts
Reuse the packaging from orders you received before
Add shipping cost into the prices of your products
Check USPS rates for options to reduce shipping costs
Print the shipping labels yourself
Consider hybrid services

The avoidable shipping cost to consider

The steepest shipping cost your company will incur is in the case of a product return. Whereas 5 to 10% of in-store buys are brought back, that number is projected to be anywhere from 15 to 40% for online purchases. Some of this comes from the reality that consumers aren’t able to try an article on or see and feel it for themselves before buying. But there’s also another culprit that points to your company’s internal practices:

Poor product data.

Not only will you lose sales with sub-par delivery, you’ll also pay a lot more for delivery if your product data is anything less than 100% complete and accurate. And just like there’s order management software to reduce the costs of fulfilling orders, there’s product information management (PIM) software to help you easily manage and optimize your product data. To avoid an excess of product returns, managing your product data wisely is a crucial step.

Time to apply your knowledge!

Ecommerce is no longer a novel concept, but has grown rapidly into a multi-trillion dollar industry. Between March and June 2020, the industry grew as much as it had the 10 years before it, according to Amber Engine research.

Optimizing your e-commerce shipping strategy is about more than just free shipping and fast delivery. Take the time to browse through the service options of reputable shipping carriers and choose the right relationship based on your business needs.

A wise investment will grow your business exponentially!

The Definitive Guide on Ecommerce Shipping