SMALL BUSINESS GROWTH   |   6 minute read

4 eCommerce shipping strategies to help you take on the competition

In 2017 and 2018, more than half of all retail sale growth was in eCommerce sales. As online sales continue to form an increasingly large share of the overall retail industry, major online retailers like Amazon and Walmart are becoming more dominant as the default one-stop-shop for customers - making it difficult for SMBs to compete.

Last year, 80% of market gains came from Amazon, and 64.7% of online sales in the U.S. came from five companies. These companies are continuing to expand their offerings with competitive prices, lightning-fast shipping, and a flexible returns policy, and customers have become accustomed to free shipping with short turnarounds (often one to two days).

Historically, many SMBs have been able to remain competitive with larger brands through offering similar shipping rates and a high level of customer service. However, as customers become more demanding and automation becomes more prevalent, it’s important for businesses to keep innovating their eCommerce shipping strategies to stay on equal footing with the big guys.

By using smarter, more-optimized processes in order to meet consumer expectations of shorter shipping windows, SMB’s have an opportunity to use their flexibility and unique place in the market to take advantage of successful ecommerce business shipping strategies.

If you’re an SMB looking to compete in the eCommerce space, here are four tips to help you get ahead in business shipping strategies - and stay ahead.

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3 important considerations for eCommerce shipping

Before you start researching eCommerce shipping companies or commit to eCommerce shipping software, it’s important to first understand what type of shipping will best benefit your business. This means looking at:

  1. Product dimensions. Shipping costs and processes become complicated when shipping products of multiple sizes and weights. It’s important to be aware of the size, weight, and differences in the size and weight of each of your SKUs, from your largest to smallest, so you can find the right packaging and shipping company to suit these needs.
  2. Shipping locations. Are you shipping domestically or shipping internationally? There are major differences in how to ship products to customers in your own country, compared to those in another: shipping windows are longer, customs authorities are involved, and countries’ shipping restrictions need to be considered. Some shipping companies also only ship domestically, which means you may have to choose a different supplier for international shipping - and pay more as a result.
  3. Shipping options and partners. SMBs have to consider a variety of shipping options to make sure they are providing best possible shipping practices and offering the best rate for customers in order to remain competitive. Local delivery and courier companies may be the best option, especially in major cities, as they could provide competitive rates compared to national postal companies. Shipping options such as LTL freight carriers or in-store pick-up are also viable alternatives to help cut down on shipping costs and provide the best shipping experience for customers.

In order to accurately forecast your shipping costs, many shipping companies offer an eCommerce shipping calculator where business owners can put in the dimensions of their product, the location they’re shipping to, and the speed of delivery - this way, you can gage exactly how much your customers will be paying for delivery.

How to ship products online: eCommerce shipping best practices for SMBs

Reduce manual labour through automated order processing

SMBs often do not have the luxury of dedicated shipping teams and departments, and automation tools allow small businesses to remain competitive with larger brands. Through automation, SMBs can create straightforward rules for eCommerce shipping software to effectively automate shipping and fulfillment tasks - reducing the amount of back-office needed, and minimizing the risk of errors.

Often utilizing a simple if/then statement, shipping technology can easily level the playing field for small businesses looking to compete with the large online retailers. Rather than automating these processes manually or building software, small businesses can utilise eCommerce platforms like TradeGecko Connect to simplify, automate, and increase operational efficiency.

Offer free shipping

Another way for SMBs to compete with large online retailers, or any competitor that charges for shipping, is to offer free shipping. Customers often abandon shopping carts at checkout when confronted with additional shipping costs, with 44% of customers abandoning their carts because shipping costs were too high. Free shipping entices customers to purchase products by wrapping all costs into a single price for the item, and delivering a seamless transaction process.

Though it’s much easier for major eCommerce retailers to offer free shipping as they absorb it into their margins, there are several ways that small businesses can account for shipping costs:

  1. Increase product costs so that they cover shipping costs. In this example, the customer ends up paying for the shipping costs, but it’s not perceived as an “extra” on top of the cost of the product.
  2. Cover the shipping costs in your margins. This keeps the customers from paying for shipping, but could also limit the amount of profit you make. As an SMB operating on already-tight profit margins, this option may be risky - as such, it’s better used for more expensive items with higher margins and more wiggle room.
  3. Increase the price slightly on your product and add a minimal cost for shipping, so that shipping costs are paid by both the business and the customer.

Charge a flat rate for shipping

If you’re looking to improve business shipping strategies, another option is to offer flat rate shipping. With flat rate shipping, SMBs can avoid overcharging or undercharging customers and have predictable costs and profits no matter what the customer purchases.

Using flat rate shipping, SMBs don’t need to spend time and effort adjusting shipping rates - plus, in being upfront with customers, you’re offering a more transparent and improved customer experience. However, flat rate shipping doesn’t work for all businesses: it’s most effective for companies offering products of a similar size and weight.

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Use the Right Shipping Technologies

Shipping technologies and analytics have made it much easier for businesses, regardless of size, to monitor shipping at every stage. This increased visibility isn’t just beneficial for the customer - businesses can also be more accountable and react quickly to delays, errors, or damages that occur during the shipping process.

Today, customers expect to be able to track details of every stage of the shipping process, and ecommerce shipping software allows small businesses to offer transparency across every part of the buyer journey.

Multi-carrier shipping is also key for SMBs looking to compete with major eCommerce retailers: by offering shipping services from multiple eCommerce shipping companies, small businesses have the flexibility to offer the best rates and fast shipping in line with large online retailers.  Platforms like Shippit are integrated as part of TradeGecko’s eCommerce platform, and allow small businesses to scale their shipping needs as business expands, and find the best carrier to ship a product based on the customer’s location and the size of the product.

Finally, as mCommerce continues to accelerate, omnichannel strategies are essential for SMBs looking to compete with major retailers - particularly when it comes to shipping. Mobile purchases account for 58.9% of all online sales, and SMBs have to accurately track and fulfil orders across mobile websites, social media storefronts, and offline stores, in order to offer customers a seamless shopping experience.

Whether you’re looking to revamp your eCommerce shipping strategy or automate your existing processes, TradeGecko’s powerful eCommerce platform can help you track every stage of the order, inventory, shipping, and fulfilment process.

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