Seven Shipping Mistakes eCommerce Retailers Make
There are three parts when it comes to online shoppers making a purchase. The first part is browsing through an online store to see what items you want to add to your cart. The second part is going through the checkout process and committing to the purchase. The last part is waiting for items to be delivered to the shoppers’ doorstep. Shipping and delivery is the only tangible part of the online shopping experience, so it’s crucial to make sure your eCommerce store makes the right decisions when it comes to shipping. Here are the seven biggest shipping mistakes you should avoid.
1. Not Utilizing Shipping Optimization.
Shipping optimization means accessing multiple carriers’ data to find the best rate for your shipments. One mistake that eCommerce retailers commonly run into is not committing enough resources to shipping optimization, which can directly impact the cost of shipping your goods. In order to aggregate carrier data your business will have to do multiple credit applications and build each carriers’ rates into your fulfillment system, unless you utilize an intelligent transportation management system (TMS) that gives you access to a diverse carrier ecosystem. If shipping optimization isn’t a viable option an alternative is using a single carrier for fulfillment. This option streamlines the fulfillment process since you don’t have to get multiple quotes or set up multiple systems for tracking, however it means you may not be getting the best shipping rates. Make sure that your carrier of choice is offering you the best rates possible (see three), so that you’re maximizing your margins.
2. Cutting costs on packaging and carriers.
Part of the shipping experience is how the product is delivered to your customer. This includes the item’s packaging and how the product is finally delivered to your customer’s doorstep. When trying to cut down costs you should be weary of doing so with packaging and carriers. The main reason to avoid using cheap packaging is to avoid items getting damaged during transit, resulting in the customer having to return the item and having a negative experience with your store. The same logic goes for using cheaper carriers. You run the risk of the items not being handled properly and also not meeting delivery timetables. These two elements are the most important part of the supply chain because this is how your customer actually gets your product in their hands. Make sure to invest wisely in packaging and your carriers.
3. Not negotiating carrier rates.
Sometimes retailers think that the listed prices are set in stone and don’t realize the ability to negotiate with the carrier. Here are the different ways to get the best carrier rates:
- Consolidate volume to one carrier. A lot of online retailers use multiple carriers to fulfill shipments. You may be able to negotiate reduced shipping rates if that carrier manages all of your shipments.
- Understand the size, weight, and dimensional range that you ship most often. Knowing what items you ship most often may allow you to negotiate better shipping pricing for that specific group of items. For instance, you could talk to your account rep about getting better rates for anything weighing less than 50 lbs.
- Relationship management with account reps. By having a strong relationship with your account rep, you may be able to lower your shipping rates by negotiating with your representative for the best possible rates.
- Leverage regional carriers. Using regional carriers like OnTrac, Golden State Overnight, and Lone Star Overnight as a bargaining chip will allow you to better position yourself with the national carriers, since you’ll be taking your business outside of their network. However, when using this tactic to negotiate you are lowering your volume with the carriers you’re trying to get better rates from.
4. Giving inaccurate information to customers.
There are a lot of moving pieces when it comes to fulfillment, which means communication with customers isn’t always current. Information like ship dates, delivery dates, in-stock vs. out-of-stock, and over / under quoting for freight shipping isn’t always accurately given to the customer. In order to prevent this from happening try using a TMS that gives visibility to your internal team and customer-facing tracking.
5. Neglecting packing optimization.
One box does not fit all. Oftentimes eCommerce retailers overlook packing optimization in favor of readily available packaging. Since the shift to dimensional weight pricing, it’s even more important to know the optimal way to package and ship your items or else you may experience excess shipping charges.
6. Not investing in automation.
A lot of online retailers make the mistake of managing shipping manually. One way you can invest in logistics automation is a transportation management system that identifies the best rates, provides documentation and dispatch, gives real-time tracking updates, and reconciles post-shipment bills.
7. Managing fulfillment all by yourself.
All the other mistakes are tied to the biggest mistake eCommerce retailers make when it comes to shipping: trying to do it themselves. When your business is first starting out it works to store, package, and ship your own products. However, as your business grows you have to outsource fulfillment to a partner in order to keep scaling your business for growth. Make sure to work with a fulfillment partner in order to not only meet but exceed your customer expectations for shipping and protect your margins.
The best way to avoid making shipping mistakes as a retailer is to work with the logistics experts. This means working with a fulfillment partner or TMS in order to optimize shipping for scalability and growing your business.