E-commerce order shipping is an increasingly common business practice and has seen an ever-increasing share of retail sales in the past few years. Since it has a relatively low barrier to entry, e-commerce shipping is popular for small businesses. Those same small businesses, however, may begin to face order shipping challenges that can weaken their competitiveness if not successfully navigated. Here is a handy guide to some of the common challenges faced when using e-commerce shipping solutions as well as the best practices in e-commerce shipping needed to overcome them and thrive.
Common Order Shipping Challenges for Small Businesses
Competing on Price and Shipping
The low barrier to entry for e-commerce is a double-edged sword. While it is easier for your own small business to get online, the same also applies to your competition. This problem is worse for businesses that do not have niche markets since it means that there may be dozens—possibly hundreds—of other e-commerce stores selling the same products. With little or no distinction in the products, this means you only have price and shipping as the main points of distinction. Unfortunately, free and fast shipping are increasingly expected among customers, and this can place strain on any e-commerce shipping solution unless properly managed.
Building and Retaining Customer Loyalty
Under an e-commerce business model, customers are not as tied to a single shopping location as they once were. Going across town to find a better deal is an obstacle. Entering in a new web address is just a click away. Small businesses also lose out on direct interaction with customers when using an e-commerce model, and it is hard (though not impossible) to foster goodwill through a web site. These factors combine to create a situation in which loyalty can be hard to gain but easy to lose.
Dimensional Weight Pricing
Large shipping companies like UPS and FedEx have made a switch towards expanding the use of dimensional weight pricing for ground shipments. Previously, such prices were based on little more than weight. Under the dimensional weight system, the actual size of the package is taken into account in order to depict the “true” cost of shipping (the space it takes up that could potentially have been used for additional shipments). If you primarily ship small packages, this is actually a benefit. If you ship larger packages (anything bigger than apparel, really), this can end up adding to your costs.
The larger your e-commerce business grows, the larger your order shipping operations become, and the greater chance for packages to get lost or misplaced. Ensuring order accuracy is essential at all times, but the risk of making mistakes goes up with the scale of your operations. Without a way to track a shipment’s progress and position, it becomes harder to routinely guarantee customer satisfaction.
Also known as reverse logistics, returns management is an increasingly expected practice among e-commerce consumers. “No returns” is simply not acceptable anymore, and small businesses need to develop ways to address consumer needs while still keeping costs limited and manageable.
Best Practices for e-Commerce Shipping Companies and Small Businesses
The above is just a taste of the sorts of challenges small businesses can face when engaging in e-commerce shipping fulfillment. Here are some of the strategies that can be used to help solve these problems and to enhance your order fulfillment operations overall.
Work with an e-Commerce Fulfillment and Shipping Partner
Third-party logistics (3PL) companies exist and are able to partner with you and let your small business achieve more efficiency and competitiveness than you could alone. For instance, the types of shipping rates you can negotiate for yourself are partially reliant on the kind of business you can bring to a shipping company. On your own, you are at a disadvantage here. When partnered with a 3PL firm that deals with hundreds of thousands of shipments a day from its total clientele, suddenly you can benefit from better rates and pass those savings on to your customers.
Use Personal Touches
Customers tend to assume that businesses do not take a direct interest in them except as a potential sale. You can add personal touches to your deliveries to try and change this idea and give customers the sense that you care. One example is a personalized message that gets included with a first-time customer’s shipment, which can surprise and delight while forming a strong, positive memory to promote loyalty into the future.
Finding ways to reduce the size of your packaging offers several advantages. First, even small reductions can see impressive gains under the dimensional weight pricing model. Second, you can save on the shipping material itself. Third, your customers will appreciate that you are trying to reduce waste, further promoting goodwill.
Develop a Returns Policy
E-commerce orders are returned at a higher rate than in-store purchases since customers lack the ability to physically inspect or try out an item before buying it. Develop a standard return policy and tailor it in a way that promotes customer satisfaction. For instance, free return shipping might cost extra, but it also makes the customer happier since they don’t have to pay more to rectify an error. A focused reverse logistics policy also helps you capture as much of the value from the returned product as possible.
Offer Free or At-Cost Shipping
From a customer satisfaction standpoint, the best e-commerce shipping solution is one that offers free shipping at all times. This is rarely economically feasible, so your best option is to devise ways to conditionally offer free shipping or to at least keep the costs to customers as low as you can. For instance, a common practice is to offer free shipping only once a certain order volume is reached—which has the extra benefit of nudging customers towards purchasing a little more if they’re near the threshold. Another option is at-cost shipping, where you only charge what’s needed to ship the product. There is no direct profit from this, but it also won’t cost anything extra.
Inventory tracking and management tech is a big part of e-commerce shipping best practices. Being able to have a real-time, eagle-eye view of your supply chain and product shipments lets you stay on top of any developments or shifts that arise. You can also pass this information on to your customers by integrating real-time inventory levels and shipment status into your web site. Many 3PL companies use inventory management programs, so consider this an extra benefit for partnering with one.
Look to APS for e-Commerce Shipping Solutions
APS Fulfillment, Inc. is a leading e-commerce order fulfillment service company that operates out of Miami, Florida. Our integrative and careful approach will ensure that our clients’ products will get to their destination quickly and in top condition. We’ve stored, sorted, delivered, and quality-assured products of all shapes and sizes for all kinds of companies across a wide variety of industries. Contact us by phone at 954-582-7450 or reach out to us by email at [email protected] for more ways our fulfillment services can support your e-commerce business.