Create a shipping strategy for your Shopify store
So you’ve designed the product, it's now made, photos are taken, a description is written, it's been marketed and finally you’ve made the sale. Time to celebrate!
Now all you need to do is ship it to your customer. But wait...how are you going to do that?
Shipping is one of the most overlooked facets of e-commerce and often the aspect that generates the most critique of an online store. Online shoppers are accustomed to near-instant gratification and shipping times that do not meet their expectations can result in negative reviews and lost business. While some shipping delays are beyond the control of the retailer, there are a number of steps that can be taken to minimize shipping delays and ensure that orders arrive on time.
Setting up a shipping strategy for your Shopify store is one of the most important decisions you'll make as an online retailer. It can be difficult to know where to start, but luckily, there are a few basic steps that will help you get started. In this article, we've outlined the key considerations when setting up your shipping strategy and provided some tips on how to get started.
Table of Contents
What is a shipping strategy?
A shipping strategy is a comprehensive plan that takes into account all aspects of shipping operations in order to optimize efficiencies and reduce costs. The provisions of a shipping strategy must align with the company's business goals and objectives. Typically, a shipping strategy will address issues such as mode of transport, routing, packaging, loading/unloading, and warehouse storage. By taking a strategic approach to shipping, businesses can increase their competitiveness and improve their bottom line.
Choosing the right shipping strategy is a key part of any e-commerce business. Not only does it impact your bottom line, but it can also affect customer satisfaction and loyalty. There are a few things to consider when choosing a shipping strategy for your Shopify store.
Fulfillment and Packaging
Availability of Shipping Services
Whilst it may be possible to ship your products to certain parts of the world, other areas may not be possible due to regulations, halting the fulfilment process altogether.
Check what countries are restricted and what aren’t and make a note of this later in your shipping policy for full transparency and explanation if a customer is having trouble making an order with you.
There may be ways around restrictions (legally) through using third-party carriers that act as a go-between before they get delivered to your customer. A third party can act as a secondary address to emulate a non-restricted location and therefore allow the fulfilment to occur. You will need to decide whether you will absorb the cost of shipping or pass it on to the customer. Like any extra service, using an alternative carrier will result in a fee which can be absorbed by increasing the shipping cost or absorbing the cost yourself due to the added benefit of potential extra sales. There are pros and cons to using these types of services with package communication and who is liable if a package goes missing or is damaged etc.
If you are not interested in using a third-party carrier, simply do not make shipping possible to those areas by not listing those countries as available shipping locations inside Shopify’s shipping Settings, deciding this in advance removes the headache of client communication and sending back refunds - or worse, avoiding fraudulent transactions.
Cost of Packaging
Packaging is another important consideration when setting up your shipping strategy. The type of packaging you use will need to be able to protect your products during transit and must meet any requirements set by the carrier. For example, if you are using a specific carrier, it can be compulsory to use their branded packaging or approved packaging sizing & materials. Depending on the type of product you are shipping, you may also need to use special packaging such as Styrofoam or bubble wrap to protect fragile items
When choosing packaging, it's important to consider the environmental impact of your packaging materials. If you are using packaging that is not recyclable or reusable, this can result in increased costs for waste disposal. In some cases, it may be possible to find eco-friendly packaging options that are also cost-effective.
Shipping methods and rates
Once you have a clear understanding of the size of your product and the final dimension once it is packaged appropriately, you can now consider what type of shipping will best suit your needs.
Shipping Methods
The shipping method is the way in which the product is shipped from the point of origin to the destination. There are three main types of shipping methods: air shipping, ground shipping and freight shipping.
Air shipping
Air shipping is the quickest method but also the most expensive. By using an air carrier, businesses can have their products delivered to their customers in a matter of days, or even hours. This is especially beneficial for businesses that need to get their products to market quickly, or for businesses that ship internationally.
Ground shipping
Ground shipping is less expensive but takes longer. This type of shipping is often used for items that are not time-sensitive and do not need to be delivered urgently. businesses may choose to use ground shipping if they want to save on costs or if they are shipping items that are not fragile and can withstand a longer delivery time. Ground shipping is a popular option for many businesses and is often the most cost-effective choice for delivering goods to customers.
Freight shipping
Freight shipping is the strategy used to move large goods or products by land, sea, or air. The term can refer to the actual physical goods themselves, as well as the vehicles and vessels used to transport them. Freight shipping is the least expensive but is often the lowest cost.
Deciding which option to choose depends on your business type and what you are selling. Because of the number of variables involved, what works for one business might work for another. For example, if you are shipping large or bulky items, air shipping may be the best option but if cost is an issue then freight shipping might be your best bet to not off-put clients with the shipping price. If you are shipping smaller items or items that are not time-sensitive, ground shipping may be a more economical choice.
Selecting the method of shipping will then allow you to choose which carrier to use to ship your goods. It’s common to have 1-2 carrier options to cover different shipping scenarios such as domestic vs international or domestic metro vs domestic rural.
Shipping Rates
First, you need to decide whether you want to offer free shipping or charge for shipping. If you decide to charge for shipping, you'll need to consider what type of shipping options you want to offer (e.g., flat rate, per-item, or weight-based).
There are two main types of shipping: free shipping and flat rate shipping.
Free Shipping
Offering free shipping is a great way to encourage customers to buy from your store. But while free shipping may be a good marketing tactic, it’s not always a win for the retailer. In fact, there are some definite pros and cons to offering free shipping.
On the plus side, free shipping can help increase sales and boost customer loyalty. It can also encourage customers to add more items to their cart — which means they’ll spend more money — and encourage them to come back to your site in the future.
On the downside, free shipping can be costly, eating into your profits. And if you’re not careful, it can also lead to an increase in returns. To make sure free shipping is right for your business, you’ll need to carefully consider the pros and cons.
Flat-Rate Shipping
Flat rate shipping is a fixed price that is charged for shipping regardless of the order size or weight. This can be a great option for businesses that want to simplify their shipping process.
This method suits businesses that sell similar-sized items and is not shipping large or heavy items. By charging a flat rate, businesses can avoid the hassle of calculating shipping costs for each order and also ensure that they do not lose money on shipping.
Per-item Shipping
The per-item shipping strategy is simply charging a shipping fee for each individual item in an order, as opposed to charging one flat rate for the entire order. This can be a great option for businesses that are shipping multiple items or products of different sizes and weights.
There are pros and cons to this strategy that businesses should consider before selecting it as their go-to shipping method. On the plus side, per-item shipping is often fairer to customers, since they only end up paying for shipping on the items they actually receive. It can also incentivize them to purchase more items in a single order to save on overall shipping costs. By charging a set price for each item, businesses can ensure that they are not losing money on shipping and still be compensated for providing their customers with a quality shipping company.
On the downside, per-item shipping can be confusing for customers and lead to frustration at checkout. It can also be expensive for businesses to implement since they need to factor in the cost of packaging and shipping each individual item.
Weight-based Shipping
Weight-based shipping is a popular option for businesses that are shipping large or heavy items. With this method, businesses charge a set price for each pound or kilogram that is shipped. This can be a great option for businesses that want to ensure that they are not losing money on shipping.
Many companies use weight-based shipping, which means that the rates charged for shipping are based on the weight of the shipment. There are pros and cons to this method. One pro is that it is easier to estimate shipping costs upfront. Companies know how much their product weighs and can use that information to calculate shipping rates. This eliminates the need for billing adjustments later on. Another pro is that it encourages customers to consolidate their orders. If they know they will be charged by weight, they may be more likely to ship multiple items in one order instead of multiple smaller orders which can save on overall shipping costs.
However, there are also some cons to weight-based shipping. One con is that it can be difficult to estimate the final cost of a shipment when there are multiple items of different sizes and weights involved. This can lead to billing surprises for customers. Another con is that it can encourage companies to over-package their products in an effort to reduce shipping costs per unit which can result in wasted materials and increase environmental impact. Also, some shipping carriers preferentially calculate rates with dimensions and only take into consideration an overall weight limit so fully utilising this method may be dependent on which shipping carrier you choose to use.
Overall, there are pros and cons to weight-based shipping. It is important for companies to weigh these factors carefully when deciding whether or not this is the right approach for their business.
Shipping Promotions and Discounts
As a business owner, you're always looking for ways to save on shipping costs. And one strategy is to take advantage of promotions and discounts offered by shipping companies.
For example, Shopify offers various promotions and discounts on shipping for its customers. These include free shipping on orders over $100, discounted rates for express shipping, and more. So if you're a Shopify customer, be sure to take advantage of these deals to save on your shipping costs.
Another popular method is to have an email newsletter coupon code and provide 10% off or free shipping with the subscribers’ first order. You can also look for other discounts and promotions from other shipping companies. By doing some research, you can find ways to save on your shipping costs and keep more money in your pocket.
Shipping Policies - Shipping, Returns, Damages Policy
Once you've decided on a shipping strategy, be sure to communicate it clearly to your customers so they know what to expect. A well-crafted shipping policy can be a key part of your e-commerce strategy, helping to build customer trust and loyalty. At the same time, a poorly designed policy can result in lost sales and unhappy customers. When crafting your shipping policy, there are a few important things to keep in mind:
Get a lawyer to draft a policy for you or use a lawyer-drafter template and customise it with your business details to start on the right foot. Whilst new businesses try to avoid legal costs, this is a major investment that could end up saving you a lot of money and give you legal protection for years to come.
Be clear and concise. Your customers should be able to understand your policy without difficulty.
Make sure your policy is reasonable and fair. You don't want to be too lenient or too strict - find a balance that will work for both you and your customers.
Remember that your policy is subject to change. As your business grows and evolves, so too should your shipping policies. Schedule a date in your business to revise your policies to ensure they remain up to date.
Now that you understand the basics of shipping, it's time to decide which type of shipping will work best for your business. There are a few things to consider when making this decision, including the frequency of turnover, the amount of space available for storage, and international shipping considerations. Once you've made a decision, be sure to communicate it clearly to your customers so they know what to expect.