Ecommerce Shipping: Methods, Strategies, and Solutions for 2024
By Abhishek Sebin on
E-commerce sales accounted for 15.9% of total retail sales in the first quarter of 2024, making it an undeniable component of the retail landscape in the US. When running an online business store, one of the most critical tasks is shipping products to customers. In 2024, e-commerce shipping is not just a final task; it's a crucial part of customer service and satisfaction.
There is an increasing reliance on online shopping, and your shipping methods should adhere to consumer preferences and convenience for your business to thrive! How can you adapt e-commerce shipping strategies to promote customer loyalty and increase your revenue?
Let's discuss the different e-commerce shipping methods, strategies, and solutions to accelerate your online business in 2024. Whether you are a beginner in e-commerce or want to improve your shipping processes, this blog will be the perfect guide! We will also cover the different shipping software, shipping cost optimization techniques, and strategies for adequate packaging to help you understand the various factors associated with e-commerce shipping.
Read on below!
E-commerce Shipping Models
E-commerce shipping is the entire process of selling online products to the customer who purchased them. This involves several steps like order processing, picking up the order, packaging it, and partnering with different shipping carriers to ensure timely delivery. From order placement to handling last-mile delivery of goods to consumers, shipping can influence purchasing decisions and brand loyalty.
As more consumers shift to online shopping, with studies forecasting a revenue increase of 51.28% from 2024 to 2029, adopting the best e-commerce shipping options becomes relevant. Choosing suitable shipping methods for your business depends on several factors, including your product, customer base, and budget. The right e-commerce shipping model can give you a competitive advantage and offer better choices for your customers.
But with so many options available, how do you know which ones are right for your business? Let's explore some of the most relevant shipping models to help you make an informed decision.
Two-day Shipping
Two-day shipping is a standard expectation of customers, popularized by services like Amazon Prime. E-commerce consumers prefer fast delivery, with a notable 24% dropping out of their purchase if the shipping is slow. Considering that two days is not too long, this model satisfies customers who need items quickly but not urgently.
Retailers like Walmart and Target have adopted two-day shipping and utilize their regional fulfillment centers to facilitate quick dispatch and delivery.
Same-day Delivery
Same-day delivery is a popular shipping model, specifically for groceries and instant requirements. It relies entirely on local warehousing and effective order processing systems. Online sellers should maintain inventories in regional warehouses to complete delivery quickly.
Implementing same-day delivery needs stellar coordination between inventory management and local courier services. Companies like Instacart and Postmates leverage their local partnerships to ensure timely deliveries.
Overnight Shipping
Overnight shipping is a high-profile service typically in demand during the holiday season or for urgent requirements. This model ensures that customers receive their packages the next day after placing an order.
Sometimes, online merchants promote overnight shipping during peak seasons. For instance, retailers often offer this as a delivery option for people wanting their packages quickly during Black Friday or Christmas. Carriers like FedEx and UPS provide overnight delivery options.
International Shipping
International shipping allows e-commerce businesses a global reach, but it comes with its own set of challenges. Some of the common challenges are customs regulations and an increase in transit duration. This shipping model involves stronger partnerships with reliable carriers who are well-versed in cross-border logistics.
Businesses must navigate customs documentation and tariffs while ensuring compliance with international regulations in different countries. Their collaboration with logistics providers experienced with international shipping can streamline shipping processes and improve consumer experience.
Eco-friendly Shipping
As sustainable transportation practices become more prominent, eco-friendly shipping processes are attracting attention. This shipping model prioritizes reducing the carbon footprint caused by e-commerce shipping through sustainable packaging, localized warehousing, and energy-efficient transportation methods.
Implementing these methods reduces pollution and enhances brand appeal among eco-conscious buyers. Brands like Patagonia have adopted eco-friendly packaging using recyclable materials and optimized delivery routes to minimize emissions.
After reading about the different e-commerce shipping models, you must wonder how to select the ideal model for your customers. However, before that, understanding the available carrier options is equally essential. How do you choose a suitable e-commerce shipping carrier for your business? Read below.
Choosing the Right E-commerce Shipping Carrier
A shipping carrier transports goods from one location to another for a shipper. That shipper can be an individual or a business that owns goods. E-commerce shipping carriers transport customer orders to the desired delivery locations for e-commerce businesses. E-commerce shipping carriers operate through various modes of transportation, including trucks, vans, airplanes, ships, and railroads.
How to Choose a Shipping Carrier
Selecting a suitable e-commerce carrier is crucial for your business and involves many factors. For instance, do they deliver on time as promised, and does that come with a secret extra fee? Can you use their services in all of your locations? Make the right choice, and you stand to save on operational costs while improving buyer experience and loyalty through quick and reliable services. These are some of the essential factors determining choosing a carrier for your business:
Type of Product
Opting for an e-commerce shipping carrier depends on the product's nature. Fragile or hazardous items require experienced carriers that offer special handling. Similarly, for shipping heavy goods, it is better to opt for carriers providing freight services.
Location
Consider where you need to ship. If you need to send items internationally or to remote locations, select a carrier with a strong network. Regional carriers may also offer competitive services for local deliveries.
Reliability and Reputation
Research different carriers and their reliability by checking available services and customer feedback. A carrier with a strong reputation for timely deliveries will benefit your business by helping maintain customer loyalty.
Cost
E-commerce shipping costs vary among carriers based on package size, weight, and delivery locations. Comparing different carrier rates and checking for hidden charges will help retailers ensure or maintain profits. For example, USPS charges less for lighter packages, while FedEx or UPS will save more on heavier shipments.
Technology and Tracking
New-age shipping carriers provide advanced tracking capabilities that allow your customers to monitor and engage in the shipment process. Check for carriers offering multi-platform integration.
Shipping Carriers in 2024
Your business goals should guide your decision-making about shipping carriers. Some carriers specialize in handling small domestic packages, while others handle large packages or international shipping. Below are some of the top-rated e-commerce carriers, each with varying levels of transport service and shipping rates.
- UPS: Known for time-definite deliveries and services, UPS is a popular choice for businesses looking to ship large packages both domestically and internationally. UPS offers everything from overnight delivery to economy shipping, allowing enterprises to choose based on urgency and cost. Their advanced tracking system provides real-time notifications, reducing customer anxiety. It is a reliable choice for e-commerce stores, especially for B2B or bulk shipping expensive or time-sensitive items.
- USPS: Ideal for small to medium-sized businesses, USPS offers low-cost shipping solutions for lightweight items, such as clothing or accessories. Their services, including Priority Mail and Flat Rate boxes, help simplify shipping costs, which is excellent for businesses with tight margins. USPS is often the best choice for domestic shipping due to its extensive coverage and cost-effectiveness for everyday requirements.
- FedEx: Renowned for tailored shipping solutions, FedEx is also known for express shipping services. They specialize in fragile or high-value shipments, ensuring precise care for each order. Their advanced tracking technology keeps customers updated throughout the delivery process. FedEx's logistics support and international reach make them an excellent choice for businesses requiring fast turnaround times or shipping sensitive products.
- DHL: DHL specializes in international shipping and offers one of the most comprehensive global logistics networks. It is a viable choice for businesses shipping cross-border products, especially to Europe or Asia, and provides customs support and reliable delivery times. While DHL may have longer delivery times than some competitors, it excels at handling urgent deliveries (like early morning deliveries) and international orders.
- Bluedart: A key South Asian player, Bluedart provides domestic and international express shipping services. Its extensive network makes it an ideal choice for businesses operating in or shipping to South Asian markets. Bluedart specializes in freight forwarding and supply chain solutions, handling everything from small parcels to large freight shipments.
- TNT: TNT Express is a global carrier that offers cost-effective shipping for less time-sensitive shipments. For businesses seeking reliable delivery without spending much, TNT provides great value. Its international shipping options make it a solid alternative for sellers needing dependable cross-border solutions at competitive rates.
Selecting the suitable shipping carrier will save money and foster customer loyalty through reliable services. Combining this with effective shipping software like PostShip can help streamline logistics, boost efficiency, and build customer loyalty. Postship is an essential tool that eases post-purchase processes like order tracking and return management by facilitating multi-carrier integration on its branded tracking page!
For instance, using UPS for large and high-value orders and USPS for lightweight and low-cost shipments, Postship ensures effortless management through a branded tracking page. This improves operational efficiency while giving customers a unified experience, reinforcing brand trust and loyalty.
Let's explore how integrating the ideal shipping carrier with an ideal shipping software will streamline your logistics and enhance customer satisfaction.
Shipping Software Solutions
PostShip
PostShip offers a comprehensive platform designed to enhance the shipping experience for e-commerce businesses. Focusing on order tracking and returns management, PostShip actively employs revenue recovery methods to maximize profits and improve customer satisfaction and retention.
The platform offers a branded experience with solutions tailored for e-commerce businesses looking to optimize their post-purchase interactions.
PostShip is free for the first 100 orders. Our pricing page provides more details about monthly and annual subscriptions.
ShipStation
ShipStation is a cloud-based shipping software that can streamline the order fulfillment processes for online retailers. It allows customers to split, combine, edit, and import orders across multiple warehouses from a single dashboard and includes advanced reporting tools for tracking orders and performance metrics.
ShipWorks
ShipWorks is another shipping solution that automates the shipping processes for online merchants. It is known for its flexibility in handling orders from multiple sales channels. It integrates with several e-commerce platforms and provides a centralized system for managing orders from different sources.
ShipBob
ShipBob is a third-party logistics provider that simplifies the order fulfillment process for e-commerce businesses. It aims to provide quick shipping solutions and offers complete logistics software support.
Employing the best shipping practices also includes following the best strategies to calculate and optimize shipping costs to enhance profitability and customer satisfaction. Let's explore all the strategies below!
E-commerce Shipping Strategies in 2024
Modern e-commerce shipping strategies must be tailored to meet rising consumer demand. By focusing on diverse shipping options, maintaining transparency in pricing, and leveraging technology, businesses can create a satisfactory shopping experience for customers. Shipping strategies directly impact consumer satisfaction, conversion rates, and profitability.
Online businesses should utilize advanced technology to facilitate smooth order management and shipping processes, as speed remains a priority for online shoppers. Retailers can optimize their supply chain by implementing local fulfillment centers and AI-driven inventory management and order and return tracking systems. Brands can also partner with 3PLs (third-party logistics) providers to ensure faster shipments.
Sustainability is also a factor, with eco-conscious buyers pushing companies to adopt greener shipping methods. This involves using electric vehicles and using eco-friendly packaging materials. Implementing effective e-commerce strategies is vital for driving sales. Some of the critical strategies to consider are:
Order Tracking and Return Shipment
If customers can track their orders and return processes in real-time, this would enhance the brand appeal and turn them into loyal customers. Likewise, a clear return policy and customizable options can encourage repeat purchases.
Monitoring Performance Metrics
Regularly analyzing shipping performance metrics like delivery time, costs, and customer feedback helps identify areas for improvement and enhance the overall shipping strategy.
Choosing the Right Carrier
Businesses must choose reliable, experienced carriers to ensure timely deliveries and maintain a positive brand image. You can evaluate them based on cost, service, and delivery quality.
Inventory Management
Effective inventory management is necessary for e-commerce businesses. If you have the right products available when customers place their orders, that is likely to increase your brand image.
Inventory management involves tracking stock levels and timely replacements of products, forecasting demand, etc. Well-managed inventory improves order accuracy and reduces carrying costs, which can affect your profits.
Fulfillment with 3PLs
Third-party logistics (3PL) providers play a vital role in e-commerce by managing warehousing, inventory, packaging, and shipping processes. More than that, they empower sellers to scale their operations without investing in infrastructure, reducing costs compared to in-house fulfillment management. 3PLs offer flexible solutions for growing businesses, including partnering with shipping carriers, which reduces shipping costs and transit times.
Shipping Labels Generation
The generation of accurate shipping labels is a crucial step in the order fulfillment process. These labels, with their precise information such as the recipient’s address, return address, tracking number, and carrier barcodes, provide a sense of security and reliability. Automating this process can save time and reduce human errors, further enhancing the trust in your order fulfillment system. Many e-commerce software offer integrated label generation tools that sync with carriers, enabling instant label creation upon order receipt.
Barcodes
Printing order barcodes on the product is a key strategy to reduce human error in the picking and packing process. By scanning barcodes, warehouse staff can quickly identify the orders, track inventory, and update fulfillment stages.
Barcode integration not only helps businesses streamline operations but also significantly improves order accuracy and reduces the chances of shipping the wrong items, thereby enhancing overall logistic efficiency.
Shipping Insurance: Damaged, Misplaced Packages
Shipping insurance is an effective strategy to minimize financial losses from damaged, lost, or stolen packages. By offering insurance through carriers like UPS, FedEx, or USPS, which provide coverage for high-value shipments, businesses can protect both themselves and their customers.
Adding insurance at checkout reassures customers, particularly for expensive items, and helps maintain trust. Additionally, automating the claims process ensures efficient resolution, further enhancing customer satisfaction and loyalty.
In the upcoming sections, we will elaborate on more e-commerce strategies that can maximize your profit. Read below!
Calculating Shipping Costs
Determining shipping costs is a complex process for an e-commerce business, as several factors influence the actual price. Understanding these elements is vital to ensure fairness to both organizations and consumers.
Package Weight
Usually, carriers use a pricing model based on the size and weight of the shipment. Understanding how to calculate the dimensional weight helps e-commerce businesses reduce shipping expenses. Overlooking package weight can lead to discrepancies in shipping fees, either overcharging customers or undercharging, which can cut your profit.
For example, a large but lightweight box may incur higher charges than a smaller, heavy package as it occupies more space in transit.
Shipping Destination or Distance
Shipping rates are generally based on how far the package has to go. Hence, shipping costs will differ according to the distance and regional shipping zones. Shipping within the same state is cheaper than sending packages across the country.
Using Shipping Rate Calculators
Many e-commerce platforms come with built-in shipping calculators or integrate with carriers that provide automated shipping rate calculators. This makes it easy for businesses to automate the calculation process and provide real-time rates to customers during checkout.
Maintaining Profit Margins
To ensure that business runs smoothly, it is better to keep profit margins intact while managing shipping costs. Companies must analyze their pricing strategies and operational efficiencies, as higher shipping costs can lead to cart abandonment. A seller can offer free shipping on orders over a certain amount to encourage buyers to buy more to qualify for free shipping.
International Shipping
International shipping costs can be higher than domestic orders, including customs duties, taxes, and international zone rates, which can increase the overall cost of shipping a package.
Managing shipping costs directly impacts profit margins and customer satisfaction. Now, let's explore how e-commerce businesses can optimize their shipping rates and streamline their shipping processes while remaining competitive in the market.
Optimizing Shipping Rates and Methods
Maximizing profit by offering discounts and competitive pricing is vital to effective e-commerce shipping.
Offering Multiple Shipping Options
Giving your customers the upper hand in choosing the desired shipping option can increase conversion rates. Some pay for faster shipping, while others prefer slower, more affordable shipping options.
Picture this: You own an online skincare store, and your customers are from different locations. Some may be budget-conscious, some willing to pay extra for their desired product, or some willing to pay more for lightning-fast deliveries. By tailoring your shipping options, you can satisfy all of them.
Most students might opt for the free, slower shipping option, as they have budget constraints. However, employed people, preferably businesswomen, might purchase a last-minute gift or product they need urgently by paying for same-day or next-day delivery.
Offering Free Shipping
Won't the revenue be hit if companies started offering free shipping for all?
Not really. Read some of the strategies that will help with free shipping.
- Adding shipping costs to product prices
An online footwear retailer could increase the price of a shoe from $30 to $35 to cover the additional shipping cost of $5. This practice enables the business to advertise "free shipping" on all orders, attracting consumers who prefer free deliveries. This strategy helps maintain profit while building customer trust.
- Setting a minimum order value to be eligible for free shipping
An online home decor store can implement a scheme where free shipping is available on orders above $100. Customers would add more items to their shopping cart to reach the threshold, thereby increasing the average order value. For example, if a customer orders something worth $60, they might add an item worth $40 to be eligible for free shipping.
- Offering selective free shipping for products with higher profit margins
A furniture business could offer free shipping on smaller items, like pillows, lamps, or decorative lights, with higher profit margins than large furniture. This selective approach absorbs the shipping costs without impacting the business's overall profit while allowing customers to enjoy free shipping on popular orders.
- Implementing paid membership schemes
A cosmetic store can introduce a loyalty program in which customers pay a monthly or annual fee for unlimited free shipping on all orders. This generates upfront profits and encourages repeat purchases from members who have subscribed for the shipping benefits.
Charging Real-Time Carrier Rates
By integrating real-time rate calculations during checkout, customers can view the accurate shipping fees based on location and packaging details. This approach ensures that the shipping is fair and transparent and builds customer trust.
Providing Flat Rate Shipping
Flat-rate shipping eases the shipping process for customers and businesses by offering a consistent shipping fee for all orders, regardless of the size or weight of the product. This benefits merchants who sell similar-sized products, as they will be able to predict shipping costs accurately, and customers will have a transparent pricing model to look up to.
Customizing Local Delivery Options
Customizing e-commerce deliveries to specific geographical locations can impress customers and reduce costs. Offering same-day or next-day delivery within local regions can attract more buyers who love to receive their orders quickly. Moreover, leveraging local delivery services or partnerships can help manage logistics efficiently while keeping costs at a minimum compared to traditional shipping methods.
Adequate packaging plays a critical role in further reducing e-commerce shipping expenses. Let's list the do's and don'ts of packaging that will streamline packaging efficiency and lower costs.
Strategies for Effective Packaging
Adhering to these guidelines can help e-commerce businesses improve their shipping processes, enhance customer satisfaction, and build a stronger brand identity in the online marketplace.
Conclusion
In summary, effective e-commerce shipping strategies are imperative for success in today's business world. With the rise of self-made entrepreneurs and small and medium-scale businesses, there has also been an increase in consumers adopting online shopping. The rapid development of online e-commerce demands more flexible delivery methods, and companies must adapt their shipping models to meet these demands.
By selecting suitable carriers and utilizing advanced shipping software like PostShip, businesses can streamline logistics, enhance customer experience, and ultimately drive revenue home.
Don't miss out on Postship's impact on your business! A reliable and branded order tracking and return management system, Postship offers the first 100 orders for free! Want to learn more? Book a demo today!
