eCommerce Products Shipping and Packaging Tips
Shipping is an often overlooked aspect of setting up an eCommerce business. Many operators outsource shipping to a third party to simplify the often complex and unknown world of shipping. But it’s important to recognize that the customer experience doesn’t end with the sale. Shipping issues including packaging, tracking, insurance, and refunds can ultimately make or break the customer experience. So whether you decide to ship in-house, or via third party, put as much care and thought into it as you put into other aspects of your eCommerce operation.
In this article we’ll cover:
- Distribution rules
- Packaging and labeling
- Shipping carriers
- Shipping pricing strategies
Several rules and regulations govern the process of accepting payment and shipping goods. It’s important to know and adhere to them so that you can fight and win any chargeback requests that come in and avoid penalties from the card brands or your payment processor.
- Hold off on submitting deposits to your payment processor until the product has shipped, but be sure to submit deposits no later than 48 hours after shipment.
- Get a new authorization if seven days have passed since the initial authorization.
- Always submit the authorization transaction ID with deposits to avoid forced deposits.
- Test card validity prior to deposit with a zero dollar verification (ZDF) or AVS only authorization. One dollar authorizations on cardholder statements can be confusing and may trigger a chargeback request.
Packaging and labeling
The number of packaging options you’ll need depends on the number of different products you have and the variability between them regarding size, fragility, and weight. One of the biggest non-fraud related reasons for chargebacks is damage to the product that may occur during transport, so it’s important to pick shipping containers that will protect the items you ship.
The packaging you choose will also impact shipping costs since postal services base their fees on the size and weight of a package as well as the distance it travels. Corrugated cardboard boxes are sturdy and durable, but depending on the product, it may be more cost effective to use a bubble mailer or other type of padded envelope.
You’ll also need to consider labels for your package. Some eCommerce platforms allow you to print pre-affixed address shipping labels directly from the orders page. Or you may choose to order label stickers you can print yourself on a standard printer. Or, if you process a significant volume that makes hand labeling a pain but aren’t busy enough to use a fulfillment warehouse, consider buying a dedicated label printer to make shipping production even easier.
Some of the benefits of a hosted marketplace solution include the shipping resources and established relationships they provide. The volume of business that hosted solution providers can offer to large carriers allows them to negotiate for discounted services and pass some savings on to you.
Some payment processors, financial institutions, and professional organizations offer memberships to discount clubs that may provide similar discounts, so be sure to check into all of your resources if you’re not using a turn-key eCommerce solution.
Most large packaging carriers like UPS, FedEx, and USPS offer automated shipping calculators that can be added to your shopping cart page so the customer gets a real-time shipping cost before checking out.
You can compare options and pricing directly from the carrier’s websites.
A final word about shipping: be sure to email shipment tracking details to the customer. Your customers should be able to track their packages and be informed about delivery dates and progress without jumping through hoops. This is a good customer service practice and reduces the burden on your staff to answer calls and emails inquiring about delivery.
Shipping pricing strategy
Shipping costs money. Whether you pass the cost onto your customers, add it into your product prices, or pay for it yourself, the money has to come from somewhere.
A recent Vantiv and Socratic Technologies eCommerce study revealed that a high shipping cost is the number one reason customers will abandon a shopping cart. In fact, 74 percent of respondents selected shipping costs as their top reason for not completing a purchase, whereas only 52 percent reported leaving after finding the same product at a lower price.
Free shipping is becoming a standard feature of online shopping with large retailers like Amazon offering free shipping with an annual membership or on orders over a set dollar threshold. You can consider doing something similar by offering a free shipping membership for repeat customers or by requiring a minimum purchase to qualify for free shipping.
That said, the shipping will still not truly be free. You can make up the difference by marking your prices up, which has certain obvious drawbacks in terms of competitive pricing. Or you can deduct the shipping charge from your profit margin, which also has obvious drawbacks for your bottom line. One obvious option then is to do a mixture of both. Increase your prices a bit, and decrease your profit margin slightly for a good compromise.
Many online retailers have found that requiring a minimum purchase amount to qualify for free shipping significantly increases the per sale amount, which can go a long way towards balancing out the actual cost of shipping and the benefits of offering free shipping to customers.
Another strategy is to charge a flat fee for all shipped goods. This model works well if your merchandise has a similar range of shipping costs from item to item. You may make slightly more on one sale and slightly less on another with the idea that you’ll achieve a satisfactory balance.
And finally, eCommerce operations that have an associated brick and mortar store should offer in-store pick up to eliminate the need for shipping entirely.
Whatever pricing strategy you choose, make sure you are transparent about shipping costs during the checkout process so customers aren’t caught off guard by shipping charges after the fact. If you learned something new here and want to hear more tips for setting up or operating an eCommerce site, checkout this Everything eCommerce ebook. It’s packed full of tips and tricks of the trade to help you maximize your profits and keep your customers coming back for more.