So you have probably figured by now that you want to start your own e-commerce business. That’s great; but there is a crucial piece in the puzzle which is e-commerce shipping; which needs a lot of thought and deliberation. You should definitely look at e-commerce shipping first before you start focusing on other aspects of building your business.
In this definitive guide to e-commerce shipping, we will cover every aspect you would need to build an e-commerce business from the ground up.
But why is e-commerce shipping in India so important to get right? Put yourself in your customers’ shoes, you ordered a season gift and it comes a day late. Would you go back to the same e-tailer? No right? Let’s share some more numbers from an Accenture study on e-commerce so get a better perspective on this.
- 70% of e-commerce players use more than one parcel provider to ensure they get the best price
- 79% of the customers feel that easy return policies are one of the most important considerations for them to choose one e-tailer over the other.
- 79% of customers would like regular updates on their orders proactively as a deciding factor.
- 59% of all e-commerce companies state that returns and refunds are the single biggest issue plaguing their customer experience.
Let’s get started learning more about E-commerce Shipping.
What is E-commerce shipping?
E-commerce shipping is the process of delivering a product from the seller to the buyer. So as you can see, its a fundamental block – one that you need to get right if you want to remain in business. We’ll help you get there.
Why do you need an e-commerce shipping strategy?
Shipping or delivering the received order is an integral part of ecommerce. You earn only when the product is delivered on time and in the manner the customer is expecting it.
What is important to know is how you can deliver effectively and by spending less on delivery. This is important not only from the profitability perspective but also crucial for great customer experience.
You cannot have a good product with a bad delivery service, right? You also need to know the target audience and their preferences, the demographic details like where they live – whether in metro cities or Tier 1/2/3 cities and so on.
How do I build an e-commerce shipping strategy?
When it comes to e-commerce shipping, there are multiple teams involved and you need to build close coordination with all of them to keep them running smoothly. To start building an e-commerce strategy these are some of the aspects you should be looking at.
Build a team
As simple as it sounds; its again got many sub-teams you need to get right. Here are the teams you need to build :
- Marketing: All your shipping is great, but you need to able to communicate this to the customers in an effective and understandable way.
- Technology: This team would look after building the eCommerce website, maintaining your mobile app and any backend ERPs you would be implementing in the company.
- Fulfillment: This team looks at ensuring the ordered goods are delivered to the right customer, safely and on time. They would also be looking at returns and refunds
- Customer Service: Issues are bound to happen, and you would like to set this team up once the moment volumes hit a certain level.
Define your e-commerce shipping goals
Try and define goals in a SMART way.
Specific. Your goal should be specific and precise and not beat around the bush. For example, stating that you would like to become the number 1 e-commerce company is a vision at best. Not a Specific goal. Instead, state what you would like to achieve in absolute numbers.
Measurable. Your goal needs to be measurable and trackable by the company. It needs to drive them to give their best.
Attainable. Create goals that are doable and achievable by the team. If your goals are too broad or big, you can end up discouraging your team.
Relevant. The goal needs to be relevant to the purpose of the business.
Time bound. There is no point making your goals without an expiry date. These goals need to be looked at all the time and revised and updated. If you are not doing it enough, then it surely is a problem, one that needs to be addressed as soon as possible.
Having said that, these are the e-commerce shipping goals you should be looking at:
- Increasing conversions
- Increase average order value
- Expanding your market or target audience
- Decreasing your costs be it operational or capital
- Improving overall efficiency
Choose the right e-commerce shipping partner or solutions
There are a lot of options to dabble with and factors to consider too. While price maybe something to be looking at, you should also be considering aspects like technology, support, returns, cash on delivery and so on.
Some of the factors that will help you decide on choosing the ideal e-commerce shipping partner are taking into consideration a saying that has become all the more relevant now – Data is the new oil!
Here are some factors when choosing your Shipping Partner
- Bulk Order processing: Does your e-commerce shipping partner allow you to upload and process bulk orders. If not, you might find it more and more difficult as volumes increase.
- Email/SMS tracking: If there’s one thing that customers like; its regular updates on their orders. Does your shipping partner do that?
- Integration with your sales platform: As your volumes go up, you will eventually need a CRM which can connect a lot of functions from social media, marketing, and sales. So why not integrate your shipping information?
- Inventory management: In the time and age of shared economies; check on how inventory is managed. Some e-commerce shipping partners like Amazon even manage your inventory for a nominal monthly cost.
- Processing of undelivered orders, RTOs, refunds: The smarter to manage this is let your e-commerce shipping partner manage this piece. But sometimes, we too are amazed at how many times this is not part of the standard service offered.
- Analytics for shipment monitoring: Data is important as it defines your business. The analytics you get on the shipments you process each month, can help you decide your future goals and targets. This will enable you to figure bottlenecks and improve the processes.
Pitfalls when choosing an e-commerce shipping partner
- Going for the cheapest: The easiest one to fall into. While there is a saying that the best things in life are always free; do always think from a customer’s perspective. Are you willing to go for the cheapest while compromising on customer experience?
- Going only by peer recommendations: E-commerce shipping partners that are right for your friends or business peers may not be right for you. So, make sure to look at all options before you choose a partner.
- Choosing only partners near to you: Sure, you might want to choose someone for proximity for any help or escalations. But would you put all your trust in a smaller setup; compared to a larger one which may have invested in tech, scale and better processes?
- Coverage of the partner: You start off thinking, that the major cities are good to go with and you may not have customers in smaller cities. But these days a lot of the smaller cities provide the biggest business, so don’t forget to include them into your plans as well.
- Not considering the delivery performance of the partner: Ask for past performance details and case studies. Asking for customer references is also not a bad idea.
What is order management and fulfillment?
Order Management
Order management is a crucial process which consists of taking purchase requests from customers and then in the next step organizing internally and fulfilling them with all the tracking in place.
The term, order management is meant to automate and streamline order processing for companies.
One of the aspects is that it needs to continuously update inventory data and provide a record of customer refunds and returns.
Other that that, your order management needs to keep the database of vendors up-to-date, provide information about payments and billing, and general ledger information. These could be great value adds as you move up the value chain.
Order Fulfillment
When it comes to order fulfillment, the usual process that is followed is as below
What is the cost of shipping?
Shipping costs are often a significant part of the operational expenses, especially for small businesses. A lot of companies today are looking for innovative ways to ship products and reduce their shipping costs at the same time.
In today’s competitive market, even a small percentage of cost savings in shipping and logistics can go a long way to improve the overall competitiveness and profitability of the company. But the key here is to also ensure that the customer experience does not suffer while you reduce the cost.
How to keep costs in check when it comes to e-commerce shipping?
- Standardizing your package dimensions can help to optimize the packing process and process orders quickly.
- Use of technology effectively can help you organize your packages better.
- Partnering with efficient 3PL Companies can help to cut down on a lot of costs as they already would have a process in place.
- Consolidating all data and costs together can help to visualize the current orders and foresee further expenditures.
What are fulfillment networks?
Let’s start with the definition of a fulfillment center first. It is a third-party logics (3PL) warehouse where incoming orders are received, processed and filled. Now a network of these would become a fulfillment network.
What is 3PL?
In the 3PL supply chain model, a provider is hired to oversee the entire transportation and logistics of the manufacturer’s goods/products right from the source to destination. The task gets multi-faceted when the provider also needs to take care of packaging, storage, and delivery of goods to the sellers.
Generally, 3PL architecture is one of the most common logistics models followed by any significant logistics company.
What are 4PL fulfilment networks?
4PL providers take 3PL supply methodology and add a new layer of complete management of the technology involved, resources, and the infrastructure of a business. It even takes care of any involved 3PL supply chain to manage and deliver better solutions for the company. In short, 4pl providers are the umbrella under which 3PL supply chain services and the management of business thrive.
Choosing between 3PL and 4PL
As a business owner, understanding the key features and differences between logistic providers across various layers is equally essential.
It is even more relevant before taking calls on which existing supply chain model is suitable for your business, in case you’re scaling or trying to sell online.
Both the logistics provider models and their differences are based on contextual grounds that can be understood from any working scenario. It all adds up to a bigger picture projecting the shipping and storage needs of a business.
Nothing except your business model, supply chain network, and overall budget can define the superior architecture for your brand.
How to use 3PL companies to get feedback on your services
A process-driven business caring for its customers and believing in providing the best services, apart from quality products leads to customer satisfaction. Timely delivery is one of the pillars of your operational processes.
3PL companies not only give you considerable cost-savings in terms of workforce, space, transportation, and technology; they also provide you with business intelligence and insights related to customer feedback and service. Let’s see how we can use these to get feedback on your services.
Plug the Delivery Gaps Promptly: There are many reasons why orders don’t get delivered on time. Maybe the order is ready for dispatch, but the logistics partner has not yet picked up.
Reduce Return to Origin (RTO) Time: Sometimes, return orders are not even your fault, such as in case of an incorrect pin code/address. Third-party logistics companies like Shipping101 enable you to address this concern by predicting address correctness using their high-end technology.
Provide COD Facility to Customers: Many customers, especially those who do not have a digital payment facility, like to opt for a COD facility. This is especially important in India where 70% if all e-commerce is done in cash.
Get Customer Reviews: Some logistics companies also incorporate a delivery feedback survey on their platform. This information is very useful.
Logistics and Supply Chain Management
The Logistics and supply chain management and strategy may sound like important terms when it comes to business, but how exactly do they help a business grow?
In simple words, Logistics is the transportation of goods or information from one place to another. It mainly involves transportation, inventory, supplies, inventory, warehousing, etc.
The supply chain refers to steps that are taken to get the product from the place it is manufactured to the place it is bought.
- Logistics management can help you identify inefficiencies and redundancies in the supply chain, so that you can optimize it
- Efficient supply chain management can reduce operational costs and free up more revenue
- The success of your supply chain management is depending on customer satisfaction
How to efficiently handle e-commerce shipping for your products
For business owners, expansion, credibility, and growth are undeniable priorities. And for the same, focusing on shipping logistics is crucial. While the benefits of well-managed logistics are widely understood through business expansion, its role in bagging credibility cannot be underplayed.
Build Partnerships
For all businesses, big or small, establishing strong industry partnerships is incredibly important. Customer’s trust is built on having big shot partners . Integrations with major carts or marketplaces also increase brand recollection.
User-friendly, real-time and smart
Today, having an online presence is crucial for any business. However, what is equally crucial is the ability to navigate through online services that aid your business model.
Managing logistics is a tedious task. If done manually, it requires dedicated employees with efficient tracking, management, and data-entry skills.
Become a pan-India brand!
Becoming a pan-India brand and making a place in households across the country is a dream most young brands begin with. However, excessive shipping costs can put a hold on these dreams.
Tackling RTO reduction
Return to Origin or RTO is a simple concept in shipping but a major problem for businesses. When an order is returned due to an error, such as the buyer’s address or inability to contact the buyer, it leads to loss of resources.
COD for the customers
Cash on Delivery (COD) helps build trust while ordering products online. Pay for what you get when you get it – seems like a fair deal.
What is a Shipping Process?
The Shipping Process is the journey of the product from the place of origin to the place of destination.
This process includes the entire journey of the actual product and the accompanying documents such as permissions, invoices, etc.
Creating a shipment process
The shipment process plays an integral role in your customer’s experience, as well as your brand’s image. Many times, the shipment can be the defining factor for customer satisfaction and retention.
- Good shipping processes build trust and loyalty between the customer and brand
- Proper shipping and delivery can boost small businesses that sell on Instagram/Facebook marketplaces
- On-time delivery along with safe and secure shipping is crucial
With so many people scrolling through social media, selling on Facebook Marketplace or Instagram can have several advantages. Not only are you able to reach larger audiences all at once, but it allows consumers to check out a product without leaving the platform.
However, there are several steps through a customer’s journey that influence whether they reach the checkout page. A product may be just what they’re looking for, the reviews may be excellent, and the website or app may be seamless and beautifully designed. But it does not end there.
The shipment process can make a world of difference to a customer’s experience. Ensuring that their order gets to them in one piece and on time is crucial because good delivery can hold a lot of weightage in repeat sales.
So it is important to understand how to improve the shipment process as a way to also improve the customer experience.
How do I improve my e-commerce shipping process?
Offer Great Bulk Rates – People who want to ship multiple items will definitely look for companies that will provide them with great bulk rates.
Transparency – Providing up-to-date information about parcels and always keeping the customers in loop is a great way to create a shipping strategy that stands out. People appreciate being informed even if there is a delay in delivery.
Warehouse Management – The warehouse is one of the most important parts of your shipping process. Maintaining a clean and organized warehouse will make it easier when it comes to keeping track of your products and deliveries.
Up-to-date Technology – Technology is changing the shipping industry, and for the better. The latest technologies make it easier to not only track your packages but can also keep your customers updated in real time about their products.
Clear Paperwork – This is the most important part of shipping. These include proper government permissions, invoices, product descriptions, insurance papers, etc. Keeping this clear will not only ensure a smoother process but also keep you away from legal messes.
What is shipment tracking?
In a nutshell, shipping or shipment tracking is when you create check points for your package and monitor it’s whereabouts.
To tracking a shipment you would need the following to be available and setup.
Generating, scanning and storing the bar code: This important because it gives an identity to the shipment that is being made.
Generating the tracking code: Post scanning, a tracking number is generated for the product. Codes are useful for knowing the location of time sensitive deliveries. It is a unique ID number or code assigned to a package or parcel.
Receiving and re-scanning of the shipment: Once the shipment has reached the destination city, it is sent to a local warehouse / center where its scanned again to update the system.
Delivery: The delivery executive then takes the shipment to the addressee; which is shown as ‘out for delivery’ and then finally delivered. The last stage is entered by the delivery executive in a hand held device.
What are the different kinds of courier services for fulfillment?
Broadly speaking there are five kinds of couriers services for order fulfillment.
- Standard Courier Services: As the name suggests, they are pretty straight forward and simple. This is a cost effective option.
- Overnight Service: With this, you can guarantee delivery the next day.
- Same day Express Courier: A growing segment in the delivery business in India. Hyperlocal delivery has a strong flavor with businesses which deliver food and other items.
- International Courier: While looking for a partner, it may help to look for those who offer international services as you may expand business.
- Pallet courier services: A pallet or a skid, is a flat transport structure that supports goods while being lifted by a forklift. These are commonly used to transport heavy items like cars, machinery and so on.
What is e-commerce shipping insurance & how is it calculated?
In shipping, sometimes things get lost, stolen or damaged and this is why a lot of companies opt for shipping insurance.
Shipping insurance is a service that guarantees reimbursement in case your shipment gets lost. For this service, the company charges a small premium or fee that you pay in the beginning.
Shipping rates are calculated on the declared value of the shipment. The value of the shipment is calculated in increments, called as Declared Value Units (DVU). For example, most companies use $100 as a DVU and the insurance is the rate of insurance per DVU multiplied by the value of the package.
What is flat rate shipping? Benefits of Flat Rate Shipping
Shipping rates can often be confusing especially for people who are just getting started with E-commerce shipping. This is why there are different rate plans that exist such as Flat Rate Shipping.
Flat rate shipping is when you offer same rate for shipping regardless of the weight or size of the box. This shipping is offered to customers who ship boxes of similar weight and size.
Flat rate shipping is the opposite of Standard rate shipping, in which the cost of shipping changes according to the size, weight and other dimensions. However, Flat rate shipping does offer a few benefits.
Benefits of Flat Rate Shipping:
Transparency: Since the rate does not change, the customer is at ease knowing the exact figure that they have to pay.
No Extra Hidden Costs: Customers don’t have to pay any extra costs or surcharges.
Simpler Process & Management: Since the rate is fixed, your process becomes simpler when it comes to keeping track of products.
While flat rate shipping does work great for customers, shipping companies will have to start streamlining and managing their costs more efficiently to keep making profits.
What are shipping labels?
Shipping labels are an important part of E-commerce Shipping, One wrong label can create a lot of confusion and chaos.
Shipping labels display important information regarding the package:
- Name of Recipient
- Address including postal code and country code
- Manufacturer/Distributor Information
- Courier Company Information
- Tracking Number
- Parcel information like weight, product details, method of delivery
- Other useful information such as Fragile, etc.
Each shipping label is unique and should not be reused and a new shipping label must be issued for every new package.
How to provide the best Customer Service?
Customer is King
In E-commerce, this phrase has become a mantra and a rule. Your customers are the most important part of your business.
This is why it is top priority to ensure that you provide the best customer service and keep your customers happy.
Here are a few ways you can provide better customer service:
Be Always Available: You should always be present for your customer even if you can’t solve their problem. Be patient with them and listen to their problems.
Offer Clear Information: Transparency is key. To reduce issues even before they arise, it is important to always keep your customers in the loop. Provide them with as much information as possible.
Maintain Constant Communication: Once an order is placed, do not disappear. Keep messaging them with the updates including providing tracking number or live updates about their shipment.
Have Industry Knowledge: Learn about the industry that you are servicing. It is important to be able to answer any questions that your customers might have.
Offer Customer-centric Solutions: Do not always think about your business. Try to offer solutions that will make your customer happy.
How to improve customer experience?
Customer experience is always changing and you have to keep updating it to ensure you are providing the best customer experience possible.
Here are a few things that can help you improve customer experience:
Better Software: Use the latest software and keep your software updated to ensure that you have real time accurate information to offer.
Reduce Delivery Time: Try to remove any road blocks that are causing delays in delivery time. Constantly strive to make your delivery times as efficient as possible.
Ensure Quality Delivery: Keep improving the quality of your delivery so that you can offer the best service to your customer.
Error-free Information Records: Make sure your records are accurate and error-free. Always keep your records up to date with the latest information for your customers.
Transparency in Delivery: Ensure transparency throughout the delivery process. Make sure that your processes are simple and easy to understand, internally and eternally.
Maintaining Contact: Keep constant contact with your customers and keep them updated at every step possible.
Shipping is constantly in a state of flux and is changing as more new and improved processes are added, while outdated processes are phased out. So, it is important to keep updating your processes to keep in line with the changing times.
