How do small businesses handle shipping?
Most small eCommerce businesses all start the same way; managing your own inventory and packing & shipping the products out of your home, garage, local post office, etc. And if you don’t have a team of employees to help you with shipping distribution, it can be very time-consuming.
And in the age of Amazon Prime, consumers have come to expect fast & free shipping. So to best satisfy the customer without cutting into your bottom line, follow these tips to streamline your shipping in 2021.
1. Understand Your Shipping Costs
Before determining how much you plan to charge & how fast you can deliver packages to your customers, you need to know how much shipping is going to cost you. Shipping costs are calculated using weight & distance; meaning that costs increase as package weight and shipping distance increase. Fortunately, with a variety of companies such as FedEx, UPS, the USPS, and DHL, there’s plenty of small business shipping solutions available.
If your products are larger in size or heavier in weight, FedEx typically offers better rates than UPS & the USPS and will deliver your packages in 3 days. If you are shipping smaller packages such as jewelry or apparel, USPS Priority Mail is likely your best choice.
If you’re looking for the most cost effective method, final leg delivery may be your best bet. Final leg delivery is when two or more shipping companies “team up” to ship packages. For example, UPS may pick up the product from a facility, then deliver it to a local post office, and the USPS would handle the final leg to the destination.
2. Know Your Shipping Zones
As popular shipping carriers continue to move to zonal based shipping, it can become a bit easier to estimate your shipping costs. As the distance increases from point A to B, so too does cost. Thus, local shipping in zones 1 & 2 (see table below) are the least expensive shipping options.
|Shipping Zone||Mile Radius (from origin)|
|Zone 1 (local)||50 mi.|
|Zone 2||51 – 150 mi.|
|Zone 3||151 – 300 mi.|
|Zone 4||301 – 600 mi.|
|Zone 5||601 – 1000 mi.|
|Zone 6||1001 – 1400 mi.|
|Zone 7||1401 – 1800mi.|
|Zone 8||1801 + mi.|
Knowing these shipping zones, along with your product weight & dimensions, will help you determine your shipping strategy. You can then look at the zones and come up with an “average” cost of Zones 1-8. For example, let’s say the average shipping cost given your product dimensions lies somewhere within Zone 6. Then you can better determine how much you’ll charge for shipping, whether it will be a flat fee or baked into the product price.
3. Determine Your Shipping Strategy
Once you’ve determined your shipping costs, you’ll need to decide how to charge for shipping. The most common shipping methods for small businesses are standard, flat rate, and free shipping. Standard shipping is based on weight and distance traveled, while flat rate shipping means you can ship any package (usually up to a certain weight & dimensions) for a constant rate.
And though free shipping may seem difficult to offer as a new business, the majority of consumers expect free shipping even on smaller orders.
4. Adjust Product Prices to Offer Free Shipping
Consumers want to feel like they’re getting a deal; thus, offering free shipping can decrease cart abandonment rate and increase conversion rate.So once you’ve determined your average shipping costs, you can bake this into the product price, charging just a few extra dollars and likely boosting your conversion rate.
Another way to offer free shipping to customers is to offer free shipping over $ X, which can also entice customers to spend more to reach the free shipping threshold. If a customer’s cart totals $80-90 and you offer free shipping at $99, they’ll likely opt to purchase another product rather than paying for shipping.
5. Take Advantage of Free Shipping Supplies
All major carriers such as the USPS, FedEx, UPS, and DHL offer free shipping supplies ranging from boxes to envelopes to poly mailers to shipping labels. It also goes without saying that if you take advantage of these free supplies, you are required to use that provider’s courier service. If you plan to use a less popular shipping service however, you’ll likely need to supply your own packaging.
If you choose to partner with a fulfillment service or 3PL provider, they will supply the packaging and other necessary supplies. At Dollar Fulfillment, a standard bubble or poly mailer is included with our $1/order fee.
Picked, Packed, and Shipped All for $1 per Order
6. Use the Correct Size Packaging
Bubble mailers and boxes come in all shapes and sizes. But, if you choose the wrong one, you could be stuck paying with unnecessary costs.
If you use packaging that is too large for your product, you will have to use filler/padding to prevent your products from rattling. Not to mention, you can run into the problem of dimensional pricing. To elaborate, your product may only weigh 3-4 pounds for example, but if you pack it in a box that is far larger than the product, the box will actually “weigh” far greater than its actual weight due to dimensional pricing.
Thus, your products all vary in size & weight, it will be an extra cost to properly stock packaging to fit all of your products. And depending on the size of your company, stocking extra packaging supplies might be space-restricted if you’re working out of your home or garage.
Due to their high volume of shipping & transportation however, fulfillment & 3PL providers always have access to the correct size packaging for your product.
7. Consider Sustainable Packaging Solutions
It’s no surprise that modern consumers have become more environmentally conscious. In fact, nearly three-quarters of consumers said they would pay extra for sustainable packaging. And though modern cardboard packaging is often made from recycled materials, poly mailers are not always recyclable due to their largely plastic composition.
So even though sustainable packaging solutions may cost a bit more than traditional options, your business may benefit in other ways if your customers view you as environmentally conscious.
8. Include Return Slip in Packaging for Easy Returns
If you own an apparel company that is likely to incur returns due to wrong or incorrect sizes, including a return slip is a handy way to ensure hassle-free returns. If the customer has to search back through their emails or login to their shopping account to locate the return label., they likely won’t be too thrilled about the return process.
By providing the packing slip the first time around, you can streamline the return process and insure the best possible customer service.
9. Automate Your Shipping
If you’ve surpassed the dropshipping phase, where you order products directly from the supplier and have them shipped to your customers, you’ve likely already considered shipping automation. And whether this is done via internal processes or with the help of third-party shipping software, automation is critical to ensuring you can process orders quickly.
Fortunately, there are plenty of automated shipping platforms available such as Shipstation and ShippingEasy which integrate directly with your eCommerce website. Once an order is placed, these platforms will automatically create shipping labels, update your inventory, and more.
10. Consider a 3PL or Fulfillment Partner
If automated shipping solutions aren’t the right fit for your business, a 3PL or fulfillment center is your best bet. Because that’s all these types of businesses do, they’re going to be faster, more efficient, and make less mistakes.
Rather than your team packing each & every order and driving them to the local post office, a 3PL will handle every aspect of shipping, without you ever even touching the product. Saving this kind of time & money will allow you to scale other aspects of the business such as sales, marketing, and more.
Find the Shipping Service That Works for You
As a small business, it’s important to get shipping right; and there are many things to consider. From costs to packaging to automation, a streamlined & customer-friendly process can make or break your business.
Customers want free shipping. They also want sustainable packaging. Fortunately, there are plenty of options available to satisfy both your margins and customers. And with the help of a fulfillment center, you can grow your business while we scale your shipping alongside.
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