You put a lot of effort into making sure your customers have a great experience. You approve the images, you tweak your store, and you write the emails, all with the goal of leaving your customers happy.
But you’re probably still asking yourself, “how to ship my products to customers”. Ecommerce shipping is a key part of your business. It’s the point where a customer finally experiences your product in person, and it can also represent a major expense in your business, depending on your ecommerce shipping strategy.
In this guide, we’ll go over shipping strategy, product packaging, using popular carriers, tracking and insurance, reducing your shipping costs, and delivery options for ecommerce shipping integrations.
Navigate the ecommerce shipping and fulfillment guide
Ecommerce shipping strategy 101
There are some basics that set a foundation for the rest how to ship products to your customers. While you can come back and change each of these later on, as you learn more, these are the key decisions and steps that make up your high-level shipping strategy.
Your shipping rates and methods
Are you going to pass the full cost of shipping on to your customers or will you offer free or flat-rate shipping to absorb some or all of the cost? How will you get orders to your local customers? By the end of this post, you’ll have more information on how to make this choice for your business.
To streamline the process of shipping ecommerce orders, measure and update the weight of each product you sell. Having this information about your ecommerce shipments set up will help you get a good sense of your total costs, and pass along accurate prices to your customers.
Choose your preferred packaging
While there’s more to be said about what kind of packaging is right for your products, once you’ve selected it, you can add that information to Shopify so you can calculate accurate shipping prices.
Source your packaging
You can order free packaging from some carriers such as USPS, UPS, or DHL, or invest in branded packaging if that’s part of your strategy.
Before you can start shipping ecommerce orders, you’ll first need to decide your pricing strategy for shipping. There are several common methods, but your choice should always be informed by the underlying financials of your business.
Offer Free Shipping
Offering your customers free shipping is one of the best ways to reduce shopping cart abandonment. However, as you might suspect, shipping is never free. Someone always has to pay. To make free shipping work, you have a few options.
- Increase product prices to cover costs for shipping (customer pays).
- You pay the full price of shipping out of your margins (you pay).
- Increase prices of products slightly to cover partial costs of shipping (you and your customer pays).
- Offer a discount code to certain customers for free shipping.
Additionally, you can also try offering free shipping on a minimum order amount. This strategy can help offset the costs of shipping by helping to increase your average order size, but you’re still the one paying for it out of your margins. Therefore, it’s not always the best shipping solution for online sellers.
Charge real-time carrier rates
Another effective shipping strategy is to charge real-time carrier rates for shipping. If you’re using Shopify as your ecommerce platform, you can use Shopify’s ecommerce shipping integrations that work in real-time with various carriers like USPS and Canada Post (among others) to generate shipping options and live pricing from various carriers. This allows your customers to choose and pay for the exact service they want.
Charge a flat rate
A popular option is to offer flat rate shipping. The best practice for this option is to try and make sure that you don’t drastically undercharge or overcharge your customers. Flat rate shipping works best when you have a fairly standard product line of items that have similar sizes and weights. Flat rate shipping tends to become complicated and less effective if you sell a wide variety of products with different sizes and weights.
Offer local delivery
Another method to consider is local delivery. This is a great option for small businesses looking to offer a simple and reliable next-day delivery method to their local customers. When you set up local delivery, you can customize your delivery area using a radius or a list of zip/postal codes. Customers who are within your defined delivery area will be able to select “local delivery” as a shipping method at checkout. Offering local delivery for free over a certain order amount, or offering it for a low cost can help you cut down on shipping costs and get more local customers. In some cases, you can do it all yourself without using an ecommerce shipping provider.
Calculating ecommerce shipping rates
All shipping couriers base shipping rates on a variety of factors including:
- Package size
- Package weight
- Origin address
- Destination address
Plus additional shipping options like tracking numbers and insurance.
It can be difficult to compare services exactly as they all offer slightly different options, and every business will have their own unique variables.
Below we have compiled a list of shipping calculators with ecommerce shipping rates for some of the largest and most popular shipping couriers so that you can begin comparing pricing and options. If you’re based in the US or Canada, you can pay for USPS, UPS, DHL Express, Canada Post, and Sendle Shopify shipping options and receive pre-negotiated rates. See example rates here.
Consider your margins
To be successful at ecommerce, you always need to keep an eye on your profit margins. Because shipping for ecommerce represents a significant expense for merchants, if you don’t do your research, you could end up losing money on shipping.
Before you finalize your pricing and strategy for your ecommerce store, you should use a chart like the one below to map out all ecommerce shipping solutions and costs associated with getting your products into your customers’ hands. Many of the best ecommerce entrepreneurs are shocked by how quickly the little charges add up for shipping ecommerce orders. Don’t get caught in the same trap.
Here’s a quick example of how you could calculate your total price to include the cost of ecommerce shipments.
|Cost of product||$10|
|Customs/Duties (if you cover them)||$0.00|
|Credit card fee||$2.50|
As the world of ecommerce develops so do the expectations of customers who buy online. Years ago, packaging and shipping was simply a way to receive a product purchased online, but more and more people are looking for shipping, packaging and presentation as part of the ecommerce experience.
This expectation means that for many businesses, outside of selling commodities, competing effectively means going above and beyond to impress customers and exceed their expectations by delivering an experience, not just a product.
Packaging inserts and presentation can be an effective way to set yourself apart. Consider Trunk Club. Trunk Club is a monthly subscription service that sends men a custom curated selection of men’s clothes and accessories each month. You can see from their packaging below that their customer unboxing experience is very central to their overall brand experience.
Trunk Club does such an exceptional job, that customers even make unboxing videos on YouTube which further amplifies Trunk Club’s reach through word of mouth marketing.
Consider how you can provide a better customer experience through your packaging, and how you can use packaging as an extension of your brand.
Before you can ship your products, you’ll need to package them for safe transport. So what ecommerce shipping options do you have in this regard? There are a few common options for packaging including boxes or envelopes (padded or unpadded). For example, Arka and its Shopify app offer blank and custom packaging materials including boxes, mailers, package tissues, tape, and stickers.
For many businesses and products, you’ll use a box as well as some other packaging materials to safely ship your products.
You may also want to try thinking outside of the box (no pun intended) and look at other packaging options. For example, some ecommerce shipping providers offer poly mailers as a way to mail products that don’t need a lot of structure or cushioning, like clothing.
Poly mailers offer multiple benefits. They’re lightweight, which reduces your shipping costs, and they can adjust to different volumes and weights depending on what’s included in the order. For example, the same size of poly mailer could accommodate one pair of socks, or five, and you wouldn’t be overpaying on packaging weight or dimensions for the single pair.
Some other large packaging suppliers you may want to consider are ValueMailers, Fast-Pack and eSupplyStore. Additionally, many carriers like USPS, DHL, and UPS offer free packaging in different types and sizes.
Keep it light and small
Because the cost of most shipping options is based on size and/or weight, do your best to keep your packaging as small as possible. This will not only help you save on your ecommerce shipping rates and what your customer paid for shipping, but will also keep packaging costs from eating away your profit margin.
Depending on your business and product line, you may want to consider carrying a variety of package sizes and packaging materials.
Most people would consider the packaging for the product above to be excessive. This is exactly what you’re trying to avoid as it inflates shipping costs dramatically.
Free Guide: Shipping and Fulfillment 101
From deciding what to charge your customers, to figuring out insurance and tracking, this comprehensive guide will walk you step-by-step through the entire process
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Insurance and tracking
Depending on what you’re selling and its value, shipping insurance and tracking can offer a great deal of security. With most ecommerce shipping companies, insurance and tracking is relatively inexpensive and provides you recourse should one of your packages get lost or damaged. Some shipping services like UPS and USPS Priority Mail include complimentary coverage for up to $100, and that coverage can be up to $200 in some cases.
Consider purchasing insurance on big-ticket items so that, in the rare cases when a package does get lost, you’ll be covered. Keep in mind that some shipping services have insurance already built into the price, so consider this when you are comparing various courier prices.
For international shipping, you’ll need to include the proper customs documentation. These are available online through Shopify shipping options or at your local post office or shipping retail location. These forms tell the customs officers at the country of import what is in the package, how much it costs, and whether it is a gift or merchandise.
Check with your country’s postal service to find out exactly which forms you’ll need to attach to your package. These forms should be completed honestly and clearly to prevent your package from getting held up in Customs.
Tariffs, taxes and duties
If there are any additional customs fees due when a package reaches its destination, your customer will be responsible for them at the time of delivery. It’s always a good idea to make sure to include this information in your shipping policy page so customers aren’t surprised by unexpected fees.
Here’s an example of how one store prominently displays information regarding additional charges on their ecommerce shipping policy page to ensure customers are aware of possible charges:
Customs declaration information
For more information on customs declaration and the required forms and policies, please see the resources below when shipping for ecommerce:
Once you have decided on the carriers you want to use, consider setting up business accounts. Business accounts offer a variety of services including discounts, better expense tracking, and a whole host of online tools to more efficiently manage the shipping aspects of your business.
For USPS, UPS, DHL Express services in the United States and Canada Post services in Canada, sign up through Shopify Shipping for preferred rates and discounts.
- UK Royal Mail Online Business Account – An online business account with Royal Mail will help you save time by managing all your shipping expense and invoices all in one place.
- Australia Post Business Credit Account – A Business Credit Account with Australia Post will allow you to charge many of the common services directly to your account for better management of your expenses.
Once you have figured out your presentation, packaging, return policy, carrier, and costs, you’ll need to determine how you want to label your packages. Many new ecommerce entrepreneurs start off by writing the ship-to and return addresses on the package by hand. Although this can be a great way to start, it tends to be time consuming, tedious, and not scalable as your business grows.
That’s where Shopify Shipping comes in. You can print and pay for multiple shipping labels directly when you use Shopify shipping options.
You can print your labels on plain paper using any printer, or to save even more time, you can upgrade to a thermal label printer to print directly on self-stick labels.
Fulfillment services and warehouses can help automate and handle the shipping for you. When you choose to work with a fulfillment center, you will store your inventory at one of their warehouses. Depending on their level of integration with your shopping cart, when an order comes in your fulfillment partner will automatically be forwarded the order to pick, pack, and ship orders on your behalf.
There are a number of advantages to using a fulfillment warehouse including:
- Cheaper shipping rates. Because fulfillment warehouses ship such large quantities for multiple vendors, they receive cheaper shipping rates. They also have ecommerce shipping integration capability (usually) with all of the major shipping logistics, giving you easier access to the widest range of shipping options.
- Shorter shipping times. Strategically choosing your fulfillment partner and the warehouse to store your inventory means you can store your inventory closer to the bulk of your customers and meet customer expectations more readily.
Fulfillment warehouses aren’t for everyone, though. There are several disadvantages as well that a business owner should consider.
- Branding experience. Generally, if you use your packaging presentation as part of your branding experience, like Trunk Club, you’ll be hard pressed to find a fulfillment warehouse that will work with that level of dedication and customization for your brand.
- Less cost-effective. Although you will likely receive better shipping rates working with a fulfillment partner, there are other rates that need to be paid including what are commonly referred to as ‘pick and pack fees’ as well as warehouse storage fees. These fees can be determined by order or by monthly fee, so be sure to look into the details and choose what’s best based on your volume.
Best rates, right away
Businesses in North America automatically get access to pre-negotiated shipping rates with all of the top shipping carriers—UPS, USPS, DHL Express, and Canada Post. Normally you would need to get your own account with each of these carriers and negotiate your own discounts (often based on your previous shipping volume). But if you’re just starting out, business costs are already high, and the last thing you want is to pay high rates for shipping.
With these online store shipping rates in hand, you now have options. You can use these rates to show exact shipping costs at checkout, passing on savings to your customers. You can also use these rates with Shopify’s built in label printing. This means every time you fulfil an order, you can print out the corresponding USPS, UPS, DHL Express, or Canada Post shipping label, saving yourself a trip to the post office, a visit to another website, or paying a third party to print labels.
Schedule pickups when you need them
Dealing with a stack of orders is both a blessing and a curse. It’s exciting you’ve made all of these sales, but now you need to get them to your customers. Instead of ordering an Uber, driving through traffic, and waiting in line, you can now schedule a pickup for UPS or DHL Express shipments directly in Shopify. Just go in and schedule when you want a driver to arrive at your door, including same day pickups, with no minimum volume required.
Pickups are free for DHL Express shipments, and $4 flat for UPS (retail costs start at $5.80 and can include surcharges).
Shipping is a fundamental part of your ecommerce business
Here’s the bottom line: figuring out how to ship products to customers is a challenging aspect for any online product-based business. Every business will have their own unique challenges they need to work through and overcome to develop the best and most efficient ecommerce shipping solutions. Like many aspects of building your new ecommerce site, it will take time and tweaking to determine what works best.
Understanding all the variables and evolving how you approach shipping ecommerce orders is vital to its long term health and success. So once you think you have ecommerce shipments figured out, don’t let it go stale. Reevaluate every six months to make sure you’re delivering the absolute best possible service and experience for the best possible price to your customers.
Thank you to Mike McGuire and Desirae Odjick for their contributions to this post!
Illustration by Rachel Tunstall
Ecommerce Shipping FAQ
What is shipping and fulfillment?
Shipping and fulfillment refers to the process which puts ordered products into customers’ hands. Fulfillment encompasses the entire process, from the moment a customer’s order goes through to the moment they receive their package. Shipping is a component of fulfillment and refers to the actual transit of the package from its holding destination to the customer’s location.
Does fulfillment include shipping?
Yes, fulfillment includes shipping. Fulfillment refers to everything that happens from the second a customer places their order to the time the product is delivered to their intended destination. Shipping is part of the fulfillment process.
What are the six steps in the order fulfillment process?
The six steps in the order fulfillment process are receiving, storing/holding, picking, packing, shipping, and returns processing. You can learn more about what goes into the order fulfillment process in this blog post.
What are the three functions of order fulfillment?
The three functions of order fulfillment are receiving, processing, and delivering. Receiving involves obtaining inventory, processing is when orders are received and managed, and delivering is when packages go to customers.