The Ultimate Guide to E-commerce Shipping in 2023
Order shipping is without doubt one of the crucial elements of the customer experience journey. It determines the next steps: client feedback, product usage, and possible repeat purchase.
To build client trust in your business and achieve more reliable service, you should carefully plan your shipping process.
With good service comes great responsibility. Along with vigilant assortment and stock planning, you must also pick the most efficient shipping method. Fortunately, there are several e-commerce platform shipping solutions and logistics software tools available to help you tackle these issues.
This e-commerce app industry shipping guide will provide you with helpful insights on how to handle the shipping process and ensure your products reach buyers securely and on time.
Types of shipping methods for e-commerce
Shipping calculation methods define the delivery and transportation fees that a company or customer should pay. Even though free delivery seems to be winning online buyers’ hearts, you must determine your shipping rates based on your business's needs.
We can define five general shipping methods based on cost: free; time-sensitive; per product; flat rate and table rate delivery.
Free shipping
Free shipping is and will stay the most attractive option for the majority of customers. In a competitive e-commerce industry, free delivery has become a major differentiator. Yet, it is not a feasible option for all kinds of businesses.
Let's look into potential pros and cons of free shipping that will help you to decide whether or not to include those extra fees in your customer invoices.
To minimize the impact of shipping costs caused by free delivery, you might want to consider some of the below alternatives:
Define a minimum order price for a free shipping
Offer self-collection option
Offer free shipping as a customer loyalty bonus
Minimize or specify free shipping territory
Time-sensitive delivery
Valuing customers’ time matters, so it is always beneficial to offer time-sensitive delivery options.
There are several time-sensitive shipping alternatives that will define the total delivery cost:
Same-day delivery
On-demand delivery
Overnight shipping
Next day to 2+ days shipping
Third-party shipping services may pose some restrictions in terms of delivery timeframes. With self-fulfillment, however, you will have more freedom to customize your services and remain transparent with your customers.
Flat rate shipping
The flat rate approach simplifies e-commerce shipping since it is based on a single fee for delivery rather than the shipping zone.
Flat rate is beneficial for online buyers as it allows them to predict their total order cost. From a business point of view, the main advantages are easy management and implementation.
Some of the third-party delivery partners have various flat rate options to offer. You might want to check out FedEx’s One Rate option, UPS Simple Rate shipping alternative, or USPS Priority flat rate fees.
Keep in mind that you must ensure your packages are up to the standard measurements set by third-party shipping providers. This might not be an issue if your marketplace specializes in small products, but it could be more of a challenge if you have a larger range of products featuring bulky items.
Now, let's take a look at the overall pros and cons of the flat rate shipping logic.
Table rate shipping
Table rate shipping is a more flexible yet complex alternative to the flat rate option.
This type of delivery rate calculation is based on a combination of factors, including:
Shipping region / distance
Package size / weight
Delivery method & priority
Product type
Total number of items
Delivery dates
Using table rate shipping, you can set up flexible prices for specific delivery scenarios. In this situation, unlike the flat rate system, both you and the customer will avoid overpaying for smaller items or short-distance delivery.
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Table rate shipping is ideal for businesses with limited inventory or similar-sized products. The majority of shipping providers base their fees for businesses on the table rate logic.
Per product / bulky items shipping
Per product shipping is quite similar to the table rate method, but it's mainly used for larger items, such as technical equipment, electronics and furniture.
This delivery fee calculation method takes various factors into account:
Item type & size
Shipping region / destination
Loading / unloading / handling fees
Per product shipping is mostly suitable for businesses selling oversized and heavyweight items. Services like FedEx Large Parcel (up to 150lbs / 70 Kg), TNT Express (up to 1000 Kg), UPS Heavy Parcel (up to 150lbs / 70 Kg), DX Freight (up to 500 Kg) are just some examples of third-party partners that can assist with bulky deliveries.
Self-fulfillment VS 3PL Outsourcing
When deciding which shipping model to use for your e-commerce development or business, there is one big question: should you rely on a third-party supplier or build up your own delivery service?
Let's take a glance at some real-life examples that will hopefully help you choose the right way.
Self-fulfillment
In-house shipping is a delivery strategy where a company fully relies on its own resources to manage shipping. This includes:
Choosing the appropriate product packaging;
Determining optimal shipping rates;
Arranging last-mile delivery;
Finding the optimal (fastest and cheapest) routes;
Handling order returns and exchanges;
It's important to consider the benefits and drawbacks of self-delivery before deciding if it will be a total win for your business.
Your business will likely benefit from having complete control over pricing, delivery standards, and processes. In addition, your customers will enjoy the personal approach and will fully rely on your service.
For small businesses with predictable order volumes, these risks may be outweighed by the advantages of total control over delivery fees. Plus, there are various fully customizable last-mile delivery tools that will save you the hassle. Delivery management software, like Track-POD, will allow you to create and print shipping labels, scan packages and optimize driver routes.
Businesses with floating or high volumes of orders, however, will need to take into consideration their technical limitations related to delivery management.
3PL Outsourcing
When it comes to shipping, third-party delivery outsourcing is often the most suitable method for many businesses. It is predictable and can be tailored to your needs.
There are certain deliveries, such as international or time-sensitive shipments, that might exceed your business capacity. Even though you have your own drivers and fleet, you may need the help of third-party carriers in this situation.
Now let's take a look at what some of the most popular delivery partners have to offer. Please keep in mind that shipping charges vary greatly depending on your location and urgency, so you should consult those companies' pricing directly.
