- by eSellerHub
Amazon Prime is a subscription service from the eCommerce giant that offers you next day and even same day delivery free of charge. Another service by Amazon, Amazon Pantry delivers grocery in less than two hours. We are living in the golden era of eCommerce. An era where everyone from suppliers to sellers, online marketplaces to customers having the time of their life. Suppliers are experiencing demand never seen before. Sellers have an easy time finding new customers and markets. Marketplaces like Amazon, Target, Walmart, etc. are already thriving on the business model. Customers are the biggest beneficiaries of eCommerce rise. Everything they need to buy is less than a few clicks away and delivered faster than ever.
But did you notice what is that one thing that is gluing the entire experience together that is the biggest eCommerce driver. You won’t be surprised if I say Faster, Cheaper, and Reliable Shipping. Remember the old days of mail orders when we used to pay heavily for slightly faster deliveries. Faster deliveries at that time were more of a luxury as opposed to today—they are necessity. Dare to set a delivery date more than a week on your listings and see how many people are clicking it. And it is not just about faster deliveries. As a seller you have to keep the Shipping Costs in check whether you’re offering free deliveries or billing customers. On top of that, you just can’t go with any Shipping Company. You want a reliable one and one that understands the nuances of eCommerce selling.
In this blog, I am going to discuss shipping strategies around these three parameters that will empower you as an online seller.
1. Don’t Put all your Eggs in a Single Basket
A shipping partner is something every eCommerce business needs. When you enter an agreement with a carrier, it extends you certain privileges such as prioritized deliveries, flat pricing, flexible pickups, free insurance etc.
The problem arises when you rely on a single shipping partner for your entire logistics movement—supplier to warehouse, warehouse to customers. A better eCommerce strategy should involve more than one partners and preferably different operators to customers and from suppliers. Successful eCommerce sellers slice their deliveries to different shipping carriers. If one partners is running into some operation constraints, you should always have a backup carrier with a similar agreement. If UPS can’t make the delivery on time, FedEx should be there to fill the void in the same timeline and cost.
Of course, you can always pick any another courier company to do deliveries for you. But that won’t be a cost-effective, reliable method because they too will prefer their partners over you while your listing still says “next day delivery” on Amazon.
2. Because Two is Better than One
If you’re selling on a marketplace that is operating States-wide, and you store goods from every supplier in a single warehouse, then you definitely need to revise your eCommerce shipping strategy. No matter how favorable your terms of agreement are with the carrier, shipping time still depends upon the distance. In Amazon and all other online marketplaces, shipping rates don’t vary with distance. A shipment to Las Vegas from San Francisco or New York will cost the buyer the same.
Shipping companies offset the cost of overnight delivery to far-off places with regular deliveries to nearby in order to give you a flat rate. Ultimately, this is a cost either your customers or you are paying, making you less competitive in the market.
Thus, leading eCommerce sellers insist on many lean warehouses near major cities rather than one large centralized warehouse. With multiple-warehouse strategy, you can do next day, even same delivery to more location without adding unnecessary costs.
3. A Bilateral Agreement can Change Terms
Many shipping companies are in business because of eCommerce boom. They are dependent on you and various other sellers as much as you are on them. As your shipping partner, they expect you to give them enough business in return to the special treatment. In eCommerce, a shipping rebate of $1/item is enough to give you a competitive edge. But shipping companies are not in the market to distribute discount coupons and you will never know what others are paying thanks to NDA.
You get what you give. So start the negotiations with benefits you can deliver to their business in terms of value. How favorable they deem those negotiations in terms of business benefits will decide sort of favorable condition they will give you to ship your products to customers and receive stock from suppliers. It can be anything from $1 rebate to flat shipping across the States. Of course, there is always a room for bargain. But again, they are only as nice as you are.
4. Compromise is a Pit, not a Ladder
If you think you can remain competitive by going with any shipping carrier provided it is offering you lowest shipping rate, you are committing the classical eCommerce mistake—compromise. You’re compromising the quality of services to raise margin. While shipping cost is a matter of life and death in eCommerce, you just can’t go with any shipping company just because it is the cheapest.
Such companies mushroom every day and they are not very reliant if at all they survive. Their cheap rates indicate their desperation to enter the hyper-competitive market and gain acceptance among eCommerce sellers. As soon as they set their foots on the ground, they are going to raise their price. When it comes to choosing shipping partner, choose a balance between price and reputation. Do not compromise your customers’ interest for saving one more penny—it is a pit.
Online Selling with eSellerHub
Building eCommerce strategies to minimize shipping expense is easier with our custom eCommerce solutions for online sellers. eSellerHub empowers you to streamline every part of your eCommerce business, including shipping. You can build custom shipping strategies to boost your business prospective. Our software solution also comes with smart suggestion that gives you the right recommendation at the right time to make the most of your shipping strategy. With actionable insights, you can base you strategy on the vast pool of data generated by the software solution to drive business intelligence.