Top Tips for your Cross Border E-Commerce Fulfillment Distribution and Shipping Business
You control your customer’s experience for the most part. You write the ads, you approve the images, you tweak your website and you write the emails. Once your product leaves your hands to be shipped to your customer you have now handed over your brand to the hands of a stranger. E-commerce fulfillment distribution shipping can make or break your business in multiple ways. Choose the wrong shipping partner and your customers may suffer a poor experience. Learn more about Packair’s e-commerce shipping and fulfillment services. Don’t plan out your e-commerce fulfillment shipping strategy and you could end up unprofitable.
Many new e-commerce entrepreneurs either don’t give much thought to shipping their products, or rightfully so, don’t understand the confusing and complex world of shipping and e-commerce fulfillment. In this post, we will go over some of the basics to shipping your products and help demystify this complicated topic. We will talk about packaging, provide resources and links to popular couriers, look at tracking & insurance, shipping profitably and apps to help make it all easier..
Packaging & Marketing
As the world of e-commerce and amazon fulfillment distribution develop, so do the expectations of customers buying online. Years ago, packaging and shipping was simply a way to receive a product purchased online, however, more and more, people are looking for presentation, shipping and packaging to all be part of the shopping 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 more than just a product, but also an experience..
In a world where sealed factory bags and a white and black order receipt are considered standard, it’s the small details like this that go a long way in making an exceptional impression on customers. Today, some of the most interesting and successful brands are those that are using packaging to delivery an experience on top of the product..
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 will most likely need to package them for safe transport. What options do you have? There are a few common options for packaging including envelopes or boxes (unpadded or padded). For most businesses and products, you’ll likely need to use some size of box to package your products for shipping as well as some form of stuffing or product cushioning.
You may also want to try thinking outside of the box (no pun intended) and look at other packaging material. For example, consider opting to go with unconventional packaging options like coffee bags if your products don’t require protective padding.
Coffee bags offer an inexpensive, but high-quality option. A huge additional benefit to packaging options like coffee bags is that they keep orders thin, affording you much cheaper shipping rates vs. the bulkier box counterparts.
Keep It Small and Light
Because most shipping couriers and e-commerce shipping options are charged based on size and weight, you want to do your best to keep your packaging as small as possible. This will help you save not only on shipping costs incurred by you and your customer but to also keep packaging costs from eating away your profit margin. Depending on your business and your product line, you may want to consider carrying a few strategically selected sizes of packaging materials, like a small, medium and large size boxes. 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.
Customer Shipping Options
Before you can ship products, you’ll first need to decide your strategy for charging your customers. There are several common methods highlighted below.
- Offer Free Shipping.
As you might suspect, shipping is never free. In this case, again, you have a few options.
1. Increase product prices to cover costs for shipping (customer pays).
2. You pay the full price of shipping out of your margins (you pay).
3. Increase prices of products slightly to cover partial costs of shipping (you and your customer pays).
- 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, however you’re still the one paying for it out of your margins.
- Charge Real Time Carrier Rates.
Another effective shipping strategy is to charge real time carrier rates for shipping. Ecommerce platforms like Shopify can integrate in real-time with various couriers like USPS and Canada Post (amongst others), to fetch shipping options and live pricing from the various carriers. This allows for your customers to pay and choose for the exact service they want.
- Charge a Flat Rate.
The last popular option is to offer flat-rate shipping. The best practice for this option usually is to try and make sure that you don’t drastically undercharge or overcharge your customers. Flat rate shipping usually works best when you have a fairly standard product line of similar size and weight products. If you sell a wide variety of products with different sizes and weights, flat rate shipping tends to become a little complicated and less effective.
General Shipping Information & Options
There is no easy way to summarize shipping options. There are a wide variety of factors that come into play, including size and weight of package, departing country, destination country as well as personal and customer preference for tracking information and insurance.
- Calculating Rates
All shipping couriers base shipping rates on a variety of factors including:
- Package Size.
- Package Weight.
- Departing Country.
- Destination Country.
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 to some of the largest and most popular shipping couriers so that you can begin comparing pricing and options.
One of the best secrets to being successful at e-commerce is to figure out how to ship profitably. Because shipping represents a significant expense for e-commerce 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 e-commerce store you should use a chart, like the one below to map out all your costs associated with getting your products into your customers hands. Many e-commerce entrepreneurs are shocked but how quickly the little charges add up. Don’t get caught in the same trap.
Insurance & Tracking
Depending on what you’re selling and its value, shipping insurance and tracking can offer a great deal of security. With most couriers, insurance and tracking is relatively inexpensive and provides you recourse should one of your packages get lost or damaged. Some payment service like PayPal require either proof of delivery or a tracking number to be eligible for Seller Protection insurance..
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..
Customs Declaration and Forms
If you’re shipping outside of your own country, you’ll need to include the proper customs documentation. These are available online or at your local post/shipping office. These forms tell the customs officers at the country of import what is in the package, how much it costs and whether it was a gift or a purchase. This makes the import customs clearance process go much smoother and free of delays. Check with your customs broker to find out exactly what 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.
Getting Stuck in Customs
In general, international shipments aren’t a problem for the most part, however packages can get stuck in customs sometimes for days, and sometimes longer. Make sure your customers are aware that you don’t have control over customs delays.
Tariffs, Taxes and Duties
Your customer will be responsible for any additional fees that are charged by customs. It’s always a good idea to make sure to include this information in your policy page so customers aren’t hit with unexpected fees.
Here’s an example of how one store prominently displays information regarding additional charges on their shipping policy page to ensure customers are aware of possible charges:
Customs Declaration Information
- Labelling Your Packages.
Once you have figured out your presentation, packaging, courier and costs, you’ll need to determine how you want to label your packages. Many new e-commerce entrepreneurs start off by writing the shipping and return address on the package by hand. This can be a great way to start, it tends to be time consuming, tedious and not scalable as your business grows.
- Most e-commerce platforms will allow you to print shipping addresses from your orders page that you can stick onto your packages using tape. If you want to take things one step further, consider sticker mailing labels you can buy for your home printer.
Using a Fulfillment Warehouse
A fulfillment warehouse can help handle the shipping and automate for you. When you choose to work with a fulfillment warehouse, 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 the purchase order 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’re also integrated (usually) with all of the major shipping logistics companies, 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 you inventory closer to the bulk of your customers.
- Branding Experience – Generally, if you use your packaging presentation as part of your branding experience, like Trunk Club noted at the beginning of this post, you’ll be hard pressed to find a fulfillment warehouse that will work with that level of dedication and customization for your brand.
- Additional Costs – 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 service fees as well as warehouse storage fees. if you feel like you’re ready to work with an order fulfillment warehouse.
Shipping is definitely a challenging aspect to any e-commerce business. Every business will have their own unique challenges they will need to work through and overcome to develop the best and most efficient shipping strategy. Like many aspects of building your new e-commerce site though, it will take time and tweaking to determine what works best. Understanding all the variables and evolving your shipping strategy with your growing business is vital to its long-term health and success. Once you think you have it 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.
Choose the wrong shipping partner and your customers may suffer a poor experience. For most products and businesses, you’ll likely need to use some size of box to package your products for shipping as well as some form of stuffing or product cushioning.
Another effective shipping strategy is to charge real time carrier rates for shipping. Flat rate shipping usually works best when you have a fairly standard product line of similar size and weight products. Flat rate shipping tends to become a little complicated and less effective if you sell a wide variety of products with different sizes and weights.
To speak with an experienced agent to assist you with your e-commerce shipping, import customs clearance, ocean freight, warehousing and storage, or distribution and fulfillment needs, please contact one of our agents at (310) 337-9993 or click the Free Quote button below to get your free quote today!