If you run a business that involves e-commerce transactions, you likely experience shipping frustrations. It’s just a part of the process — regardless of whether you are conducting B2B or B2C transactions. However, there are ways to circumvent most problems before they arise. Whether shipping to businesses or individual customers, the success of your company depends on overcoming some main shipping challenges. Consumers are expecting better and better shipping service, year after year. Understanding the logistics — and potential problems — of routing your deliveries is essential to creating a smooth shipping experience for all parties.
1. High Shipping Costs
Whether you ship large or small quantities of goods, you are likely to be hit with exorbitant shipping fees. Of course, customers prefer low shipping costs, but the charges have to be covered. Usually, that responsibility falls on the business, and you are stuck subtracting shipping fees from your total profits.
However, there are strategies to lower these shipping costs. Consider:
- Comparing pricing from all carriers;
- Negotiating when possible;
- Bulk shipping;
- Consolidating supplier shipping on your account;
- Packing items in boxes with the smallest dimensions possible;
- Using carrier-provided packaging;
- Pre-paying online;
- Asking about association discounts;
- Factoring shipping fees into product pricing.
Take every opportunity to save money when shipping, because a little discount here and there will add up over time. Generally, the more items you ship, the better the discount will be. Keeping with the same carrier may help you accurately predict shipping spend and, therefore, adjust projected earnings appropriately.
2. Slow Shipping Speeds
Regardless of how much you’re paying for shipping, you’ll sometimes encounter elongated shipping times. In theory, springing for expedited shipping should alleviate this issue — but that isn’t always the case. Depending on the nature of your business, this can make or break sales. Luckily, there are tools and tricks to help you avoid shipping delays, including:
- A streamlined delivery process — set roles for each staff member and fewer shipping options;
- E-commerce automation tools — this may come with your e-commerce platform, allowing you to keep track of orders;
- Route Optimization Software —a platform for analyzing your drivers’ delivery routes and customizing the best course of action for your shipping services;
- Dropshipping — outsourcing stocking and shipping to another facility;
- Anticipatory Shipping (AS) — utilizing data analytics to forecast consumer purchases and plan to ship accordingly.
Big retailers like Amazon have capitalized on the consumer preference for instant gratification — or as close to instant as possible. Along with two-day shipping, Amazon uses advanced analytics to refine AS. AS predicts consumer behavior by analyzing previous data, allowing Amazon to stock warehouses with specific products geographically closer to consumers that are likely to purchase those products.
3. Shipping-Location Limitations
Depending on the physical location of your company, you may run into some location-specific issues when shipping. For instance, if you don’t run AS, you may end up stocking items at warehouses too far from your customer base and, therefore, misquoting the estimated time of arrival. If you’re shipping internationally, each country will have its own rules and regulations that you will have to consider. You may even lose GPS signals from drivers if you aren’t prepared for international delivery management.
Even within the United States, domestic shipping zones come with their own unique challenges. Zone 1 is the closest to the point of origin, and Zone 8 is the farthest away. Generally, the farther away the shipping destination, the more expensive the shipping and fulfillment. If possible, the best way to avoid location issues is to procure multiple warehouses in targeted locations to best serve your consumer base.
4. Items Lost or Damaged During Transit
If the shipped items do become lost, you should have a game plan. Predetermine what to do when you encounter lost, stolen, and damaged packages. Instead of just taking the loss, consider:
- Shipping insurance;
- Contacting delivery provider customer service;
- Checking tracking information for updates;
- Communicating with customers about the status of the order;
- Providing an FAQ for customers to consult when missing a package;
- Filing a police report for larger orders.
Of course, there is only so much you can do when the order is out of your hands and in transit to the customer. Shipping insurance may be offered to the customer, and you should have a clear policy of how that will be implemented. Place this policy, along with any other information about refunds, in an easily accessible spot on your website.
5. Offering Free Shipping
In most cases, buyers prefer free shipping. However, taking the brunt of the shipping cost is not feasible for most companies. A simple way to offer free shipping without losing money is to adjust for shipping fees in other ways. This may be done by:
- Raising product prices;
- Enforcing a minimum threshold for sales that qualify for free shipping;
- Creating a subscription-based system to offset shipping fees;
- Only offering free shipping on special occasions.
Whatever route you choose, free shipping is more of a psychological marketing tactic than anything. Remember that it just must appear that consumers are receiving free shipping, but your profit margins should remain unchanged. You could see more profit from offering free shipping as a consistent option.
6. Managing Returns
No online retailer wants to see a mass of returns, but returns are inevitable. Customers may be dissatisfied for several reasons, including some that have nothing to do with the quality of the product. However, you should keep tabs on these returns to minimize them and manage them effectively in the future. Some tips for managing returns are:
- Having a clear return policy;
- Collecting reasons for returns;
- Examining items upon return;
- Refunding customers properly;
- Having a system to restock the items;
- Analyzing return reasons and reevaluating.
The e-commerce process is roughly cyclical. If you can streamline returns and pinpoint the origin of most issues, there will be fewer returns to deal with in the future.
7. Choosing a Shipping Solutions Provider
Unless you are an extremely small business, it’s almost always worth it to invest in a shipping solutions provider. There are many tools available, but the most useful of the bunch will integrate with your preferred carrier — UPS, USPS, FedEx, etc. In fact, FedEx has its own shipping platform called FedEx Ship Manager. There are other providers, though, so make sure to outline your priorities and choose the best one for your business. You may do this by:
- Reading reviews of top shipping platforms;
- Testing out free trials;
- Comparing features;
- Staying within your budget.
Common features include return management, tracking information, account numbers, and shipping discounts.
8. Tracking Online Orders
Most customers prefer to be able to track their orders — and understandably so. For this reason, you should have a system in place to track orders, internally, and send customized updates to buyers. You should:
- Give notification options upon purchase;
- Provide the tracking number upon request;
- Keep track of all orders with an internal platform.
The more you know about the location of each package, the easier it will be to resolve any issues that arise.
9. Building Your Own Fleet
If your business is expanding, you may want to consider starting your own delivery service. This is more involved than using a carrier, but it also allows for more hands-on management of the shipping and fulfillment process. This may enhance the customer experience if done correctly. Here are the elements you need to have in place:
- A reliable fleet of vehicles, possibly with branding;
- Temperature-controlled environments, if necessary;
- Security measures for vehicles and connection points;
- Experienced and licensed drivers;
- Route planning software;
- Constant, two-way communication with drivers.
Fleets are usually a good option for local businesses, as they have set shipping boundaries. Plus, if the vehicles are adorned with your logo and branding, this serves as extra promotion.
10. Customer Experience
Consumers expect to receive their items quickly and in one piece. They also expect to be able to reach you if any of the above issues occur. As an online retailer, you should have several points of contact. If you are able, employ knowledgeable customer service representatives for every step of the shopping experience.
All of these precautionary measures seem a bit daunting, but they will become old hat once integrated seamlessly into your organization. Preparing for shipment issues will allow you to avoid the worst of them — while gaining loyal customers.