A step-by-step guide for getting your products to your customers.
A high-impact guide written for entrepreneurs by entrepreneurs.
CONTENTS
CHAPTER 1
Introduction 1 CHAPTER 2
Shipping Fundamentals
3
CHAPTER 3
Charging Customers
6
CHAPTER 4
Packaging 14 CHAPTER 5
Shipping Your Package
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CHAPTER 6
Scaling Your Shipping Strategy
52
CHAPTER 7
Conclusion 55 CHAPTER 8
Bonus: Shipping Resource Roundup
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ABOUT THE AUTHOR
Richard Lazazzera
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Chapter 1
Introduction
CHAPTER 1
Introduction Shipping in ecommerce is a lot more than getting your product from point A to B. Your shipping and fulfillment strategy is an integral part of your overall business profitability and your brand. If done correctly, your shipping strategy and package can help foster repeat business and even help acquire new customers through powerful word-of-mouth marketing. However, done wrong and you run the risk of increased costs, unhappy customers and potentially an unprofitable business. Most people don’t realize just how important and complicated shipping can be to your ecommerce business. Planning a shipping strategy well in advance can be a huge asset to your business but is also critical from an operational standpoint and should be revisited on an ongoing basis.
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Introduction
In this guide, we’ll take you through all aspects of shipping and fulfillment. From deciding on how to charge your customers, to packaging and branding options, to choosing the best carrier for your business, deciding on options like insurance and tracking, as well as outsourcing and fulfillment options. This is the most thorough and complete guide to help you get your products from you to your customers in a way that creates a great experience for them and maintains a profitable business for you.
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Shipping Fundamentals
CHAPTER 2
Shipping Fundamentals Shipping and fulfillment can be one of the most challenging aspects of building an ecommerce business. The reason it’s so complicated is because there’s a lot of variables that need to be considered and everyone’s approach to shipping and fulfillment will be slightly different. Your shipping and fulfillment strategy will depend on a combination of a multitude of factors. Some of those factors include: • Your brand • Where your products are shipping from
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• • • • • • • • • •
Shipping Fundamentals
Where your products are shipping to Your average order value (AOV) Your product margins Your product’s weight Preferences for tracking and insurance Carrier preferences Customer shipping preferences Product costs Product restrictions and regulations Customs and duties
Not to worry though, with the help of this guide you’ll tackle each element so that you can make the best decision for your business and your customers.
Shipping Strategies When you’re starting an online business and choosing a shipping model, you’ll have several major options to choose from: • Ship Yourself (Starter) - Shipping from home. Writing labels. Walking to the post office. • Ship Yourself (Intermediate) - Shipping from home. Automated label printing. Package pickup from your courier. • Fulfillment Warehouse - Orders are automatically received and shipped from a fulfillment warehouse. • Dropship* - Orders are shipped directly from a dropship partner on behalf of your brand. You never purchase inventory upfront or hold inventory yourself. *Dropshipping is not only a shipping and fulfillment model but also a business model. This guide will not focus on businesses that are utilizing the dropshipping model. For more information on dropshipping, please see The Ultimate Guide To Dropshipping.
When you begin your new business, it’s usually a good idea to begin by shipping your initial orders yourself. This allows you to better understand the many elements that come into play when shipping products and further
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help you refine operations and better control your brand while you scale your business.
Stages of Shipping Growth The average online business, provided there are no major external factors involved, will go through several stages of shipping and logistics growth. • Launch - In this stage, you’re likely receiving just the occasional order sporadically with no real consistency. • Consistency - At this point you’re getting consistent orders but they are still limited. This may be a few orders per day or approximately 20+ orders per week. Regardless, there’s some consistency and predictability to the orders. • Growth - In the growth stage, orders have picked up and shipping and fulfillment is now taking a large chunk of time to manage. There is a growing volume of orders and the need for services to help streamline operations. Shipping may feel chaotic at this point. • Scaling/Infrastructure - In the scaling/infrastructure stage, there is a very high volume of orders and the need to build infrastructure or work with a 3rd party fulfillment warehouse to manage shipping.
Shipping Fundamentals Conclusion Now that you understand the challenges of shipping and fulfillment, the three strategies for shipping your products and the four stages of shipping growth, it’s time to get started building your shipping mix. In the next chapter, we will look at your different options for charging customers for shipping.
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Chapter 3
Charging Customers
CHAPTER 3
Charging Customers NOTE: Before determining how you’re going to charge customers, you’ll want to go through this complete guide and make some other decisions first. Things like packaging, the carrier you choose, the need for insurance and tracking can considerably change and affect the shipping price. This information is critical to determining what you end up charging customers and how you charge them.
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How To Charge Customers It’s the all too familiar story. A new customer comes to your store, finds a product they want, at a price they like, and adds it to their cart. They get to the checkout page and then it happens, they get hit with the shipping and handling rates and all of a sudden they start second guessing their decision to buy. Suddenly a product they thought was a fair price is starting to seem a little expensive. One of two things happens next. Either they decide to continue despite the increased costs, or they abandon their cart and leave your website. The fact is, the majority of times, they abandon their cart, and according to Statista, unexpected shipping costs are the number one reason for shopping cart abandonment:
Image Source: Statista
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Your shipping strategy and how you charge customers can be a critical element in the success (or failure) of your online business. Let’s take a look at some of the most popular strategies for charging your customers shipping: 1 Offer Free Shipping - For example: Free shipping on all orders over $100 2 Charge Exact Costs - For example: Using real-time shipping carrier rates ($8.36) 3 Flat Rate Shipping - For example: $10 flat rate to all U.S.A.
Option 1: Offer Free Shipping Offering ‘Free Shipping’ is a proven way to get your customer’s attention and increase conversion rates. However, free shipping is never free, ‘Free Shipping’ for your customer just means the shipping cost has shifted from the consumer to you. Depending on your margins, offering free shipping may or may not make sense. With that said, large companies like Amazon have left many consumers with the expectation that shipping should be free for consumers, so the marketing effect of ‘Free Shipping’ on your website can be a significant advantage over any competitors that don’t offer the same perk. Deciding to offer free shipping will require you to either absorb the cost or slightly increase your product prices to help cover or offset the cost to you and the impact on your margins. Free Shipping Over $X - Another option is to offer free shipping for orders over a certain dollar amount. This type of offer can incentivize customers with free shipping while providing you the benefit of helping to increase your average order value (AOV). The most common strategy for offering free shipping over a certain amount is to get some sales under your belt first and determine what your average order value is, then, offer free shipping on all orders X% greater than your average order amount. For example, let’s say you have some orders already for the following amounts: $86, $112, $71, $65, $105 8
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If you add them all up and divide them by the total number of transactions (5 in this case) you’ll get your average order value (AOV). In this case, it works out to $87.90. With this particular example, you might want to offer free shipping on all orders over $100. This will help increase your average order size which should provide you with a little more profit that can help you partially cover the cost of the free shipping. Kauffman Mercantile, a high quality homewares company utilize this approach by offering free shipping on all orders over $75.
Image Source: Kauffman Mercantile
Determining whether to offer free shipping on all orders or require a minimum threshold often comes down to your margins, the niche you operate in and what your competitors are doing. If you offer luxury or handmade, one-of-a-kind items, rolling in an extra percentage for shipping and handling probably isn’t too much of an issue and it will be hard for consumers to notice. However, if you’re in a highly competitive market where both free shipping and the lowest prices are the norm, marking up your products to cover shipping costs may not the best idea as consumers will immediately notice the increased product cost. This is where you have to consider either a different option entirely, or absorbing the cost for shipping on most of your items. There are of course exceptions. Large or particularly heavy products like furniture can cause some problems for your ‘Free Shipping’ promotion as shipping on items like this can be extremely expensive and cut into your margins significantly. Doing your research and knowing your numbers about things like how much each of your products actually costs to ship, how
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your competitors handle shipping, your average order size, and your profit margin can help you make the best decision.
Option 2: Charge Exact Costs (Real-Time Rates) In many shopping carts (Including Shopify’s Unlimited plan), it’s possible to setup real-time shipping quotes. This means your checkout will be connected with your shipping partner (UPS, FedEx, USPS etc.) and your customers will be presented with a real shipping quote based on the number of products, size and weight of all items in their cart. They will then be charged more or less the same price that you will be charged when you ship their order. There are always small discrepancies that can happen but in many cases you can end up breaking even between the shipping charges you collect and what you ultimately have to pay to ship the package. Simple Sugars, a store that was featured on Shark Tank, employs this approach at checkout. Once a customer gets to the checkout, they select where they want their order shipped to, and the calculator does the rest.
Image Source: Simple Sugars
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Using a real-time calculator can help you earn trust with your customers. The calculator acts as evidence that you’re not inflating your quoted shipping fees or raising your item prices to cover the charges. This is also a good option to use for heavy or oversized shipments that you simply cannot or do not want to allow to ship out under a free shipping promotion. NOTE: You can purchase shipping labels directly in your Shopify admin to simplify your fulfillment process and receive reduced rates with USPS. The costs of the shipping labels you purchase are calculated according to the weight of your shipment, and are added to your next Shopify invoice.
Option 3: Offer Flat Rates Your third option is to offer a flat rate for every package, or flat rates for weight ranges and order totals. This flat-rate method of charging for shipping requires a bit of preparation as you need to figure out your average cost of shipping a package. This is a best practice you should be doing anyway to make sure that you don’t drastically undercharge or overcharge your customers. When you hit the right cost, you’ll probably be over - or under - the actual shipping cost by a little, but it should balance out in the end. J.Crew Canada, a clothing brand, utilizes the flat rate shipping approach, and has a simple $9.95 charge for all orders and prominently displays it with a popup on their homepage.
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Image Source: J.Crew
Truly’s, an all natural deodorant company also charges flat-rate shipping. Angela Collison, the founder of Truly’s said: “My main focus in setting up my shipping prices was to make it as inexpensive as possible while still delivering the product in a reasonable amount of time. My products are relatively inexpensive and I don’t think anyone wants to pay as much for shipping as they do for the item ordered. USPS was a good fit for us as they are very affordable for single items and their flat rate priority options allow me to ship out multiple items for one flat rate regardless of the weight. I was able to set up price-based shipping as I have only a few different products, but I am not sure how that would work out for someone who has a large number of products.” - Angela Collison The above quote highlights an important point about the nature of flat rate shipping: figuring out what flat rate works for you, and if you need to do it by order totals or weight ranges will require some testing.
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How To Charge Customers Conclusion The method you choose to charge customers can have a significant impact on your conversion rates as well as your overall profitability. You’ll need to decide that will work best for your brand, business and customers and will likely have to test a few methods before you settle on one. In the next chapter, we’re going to show you how to select packaging for your shipments that will create a great impression with your customers, is cost friendly and protects your merchandise as it moves around the world.
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Packaging
CHAPTER 4
Packaging Packaging is a very important part of the shipping and fulfillment process. It protects your products from bumps and bruises and is the first thing your customer see when it shows up at their door. It’s your brand’s first impression in-person and it’s a big deal. In this chapter, you’ll learn all about how to package your products, the different types of packaging available, and a plethora of resources to get you started.
Utility Packaging Vs. Branded Packaging Now that you understand your options for charging your customers, it’s time to look at your packaging options. It’s important to note that your packaging
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options, depending on cost can also affect the strategy you use to charge your customers as packaging can be a significant contributing factor in your overall shipping costs. There are two extremes of packaging options with a whole lot of grey area in between the two. Let’s take a look at those two extremes: • Utility-Focused Packaging - Nothing fancy. A plain envelope or brown cardboard box and any necessary filler to protect your product. • Branded, Experience Focused Packaging - The sky’s the limit on how fancy and memorable you want your customer’s experience to be. Though the use of packaging, you can create a unique experience that also acts as a marketing channel. We will discuss this more below.
Image Source: Packaging Of The World
As mentioned previously, the two options listed above are extremes. For most businesses, your packaging will likely fall somewhere in between utility and some custom branded experience.
Standard Packaging Options Before you can ship your products, you’ll need to package them for safe transport. There are a few common options for utility focused packaging including boxes or envelopes (padded or unpadded).
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Unless you’re shipping a very small or ultra durable product, most businesses and products will require some type and size of box to protect the order for safe transport, as well as some form of stuffing or product cushioning.
Image Source: Uline
Uline is a popular choice to purchase packaging materials including over 1,300 sizes of boxes, bubble mailers, and package cushioning, however we have provided many more resources for boxes and cushioning later in the resource section of this chapter.
The Importance of Package Size Because most shipping couriers and shipping options are charged based on size and weight, you want to do your best to keep your packaging as small as possible. This will help you save not only on shipping costs incurred by you and your customer but to also keep packaging costs from eating away at your profit margin. Depending on your business and your product line, you may want to consider carrying a few strategically selected sizes of packaging materials, like small, medium and large size boxes.
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What this boils down to is that you always want to use the smallest packaging available, while still providing your products with enough protection to get them to your customer safely.
A Branded Packaging and Unboxing Experience For ecommerce businesses, the shipped package represents the most direct touch point and connection with the customer. It also happens to be one of the most under-utilized marketing opportunities for merchants. Packaging in ecommerce came out of necessity for protecting the most important thing, the product that the customer ordered. However, as ecommerce evolves and as consumer habits shift, delivering a complete brand experience extends beyond the product itself and transcends into the whole experience.
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What Exactly Is a Branded Packaging Experience? Simply put, a branded packaging experience is a thoughtful selection of packaging and shipping materials as well as the deliberate presentation of your products. Its purpose is to provide additional value for your customer as well as your business through the ability to create a memorable and sharable experience. Unlike physical retail, ecommerce merchants have less touchpoints to impress and wow customers with so it’s important to utilize each one to create a branded experience that sets you apart from competitors and creates a memorable experience. TrunkClub is one such company that has taken the customer unboxing experience seriously. To start, instead of choosing a standard box sealed with clear packaging tape, they opted for a custom printed box with a handle that resembles a trunk, closely matching and accentuating their brand. From the moment a trunk from TrunkClub arrives at your doorstep, you know you’re in for a great experience and one you can’t wait to open.
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Image Source: Trunk Club
Inside the trunk, the contents are thoughtfully laid out to create a presentation and experience. To further build a custom branded experience for their customers, all orders include a handwritten card from a personal stylist explaining the selection of products. It truly makes you feel part of something special and exclusive.
Image Source: Trunk Club
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The Importance of a Branded Packaging Experience A big part of building a long-term, sustainable brand is bringing customer back time and time again. It’s almost always less expensive to get a current customer to purchase again than it is to always find new customers. Consider this, with every package shipped, your customer’s experience with your brand will either: • Fall below expectations • Meet expectations • Exceed expectations There are many ways, some even out of your control, that your customer’s experience with your brand can fall below expectations. If everything goes well and the shipping courier isn’t late, you may meet your customer’s expectations. It’s the little extra things though, like great packaging, marketing inserts, and surprises that will help you stand out, exceed expectations and get your customer telling friends and family about your business. In a recent survey, Dotcom Distribution found that 52 percent of consumers are likely to make repeat purchases from an online merchant that delivers premium packaging. In that same study, Dotcom also found that nearly 4 in 10 consumers would share an image of a delivery via social media if it came in a unique package. “The value of premium packaging extends far beyond the customer experience into residual marketing effects. The experience goes beyond the online order to when the customer actually opens the beautifully wrapped package and shares that experience across social networks. That act of online and social recommendations drives loyalty from your customers and promotes brand awareness.” - Maria Haggerty, CEO of Dotcom Distribution Fundamentally, people like sharing great experiences. Going back to our TrunkClub example, if you do a search for “TrunkClub Unboxing” on Google, you’ll find thousands of blog posts, images and videos. Many of those pieces of content were created by customers, further helping
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TrunkClub get their name out there to more people, along with valuable backlinks to help improve their search engine rankings and visibility. Still not convinced how important an unboxing experience is for customers? According to Google, in 2014 alone, YouTube hosted 1.3 million unboxing videos with 10.3 billion collective views. More importantly, 62 percent of users viewing unboxing videos are actually doing product research with the intent to purchase.
The Elements of a Custom Branded Unboxing Experience There can be many elements of a well-designed, branded packaging and unboxing experience. You don’t have to include every single one, however, looking at each element can help you decide which ones deliver the best experience and the most value for your customers. Strategically choosing just a few of these items below can go a long way in creating a better and more memorable experience for your customers. Let’s take a look at some elements you may want to consider in your branded, unboxing experience: • Box - The biggest element to consider is the main shipping box. Traditionally, white or brown corrugated packaging options ruled the world as they are cheap, sturdy and get the job done. The shipping box represents the biggest opportunity to begin creating that wow experience, but can also come at a high price. There are a variety of options, including colored boxes, custom printed boxes or custom size/shaped boxes. • Tissue Paper - Wrapping your products in tissue paper adds an extra level of mystery and excitement for the unboxing experience. Some options to consider here are using custom printed tissue paper or colored tissue paper. • Protective Cushioning (Filler) - Traditional protective cushioning includes styrofoam packing peanuts, foam inserts, air pillows or bubble wrap. Other forms of packing filler to consider include crinkle paper (colored), or excelsior.
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• Stickers - Stickers are a versatile and fairly inexpensive way to brand your packaging and can be used in several ways. If you use tissue paper, a branded sticker can be used to seal the tissue paper together or it can also be used instead of custom (expensive) printing on your box as an option to brand it. • Receipt - It’s pretty standard to include a receipt in your package, but there’s a lot of room for improvement on how the receipt is presented to the customer. Consider how and where to present the receipt to your customers. Some higher end brands will use a custom envelope to present the receipt in an elegant way. • Tape - The standard is clear packaging tape but these days you have some options of different colored tape that can complement your custom packing and brand colors.
Internal Marketing Collateral & Package Inserts Marketing collateral and package inserts can be a cost-effective and versatile medium for building a solid relationship with your customers. It’s these relationships that can help increase sales, average order size, and profit. Let’s take a look at some of the other top reasons packaging inserts are so important: • Packaging inserts are low cost - Below we will discuss five package insert opportunity types, each of them are very low cost, yet can yield high return. • Inserts can be highly targeted - They are already a customer and you know what they bought. This can allow you to tailor your package insert closely to the exact person receiving it. • The cost of delivering the message has already been paid The package is already being shipped so you might as well make the most of it.
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• Package inserts are perfect for cross-selling - Because you know exactly what the customer already likes, you can add highly targeted cross-sell opportunities. • Package inserts are a great channel for liquidating merchandise - Hard to move merchandise can be converted to a marketing expense and used to bolster your relationship with current customers. • The right inserts increase loyalty - By making the customer feel special, inserts make the customer feel like they are important and provide a reason for them to share their experience. Package inserts seem pretty simple - just throw a flyer or coupon in the box whenever you ship an order. However, there are a lot of options on the table you can use and mix to deliver more value and build greater loyalty with your customers. Let’s take a look at some of the most popular types of packaging insert options. 1. DISCOUNT OFFERS One of the most popular types of package inserts are discounts offer on future purchases. Sure these could always be delivered by email but including discounts or credits for future purchases right in the shipped box ensures your customers will receive the offer and leaves them with a tangible reminder. As an example, Julep, an online beauty brand makes use of several types of discounts to build loyalty.
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One of the most cost effective ways to create discount or deal offers to be included with your packaging is to print them at business card size (business cards are such a commodity at this point they are extremely inexpensive). You can use a service like VistaPrint, OvernightPrints or, for a more premium quality, Moo Cards and upload your images for print. You may want to consider including two discount cards with each purchase, one for the purchaser and one for the purchaser to give away to a friend. You may also want to test out different types of offers to see which one your audience responds best to. For example: • Free Shipping On Your Next Order • $10 Credit Towards Your Next Order • 25% Off Your Next Order TIP: To create your print design, you can use the native design and template tools with each service or you can use an online service like Canva.
2. PRODUCT SAMPLES Samples can be a great value add to your packages for a few reasons. First, depending on the products you sell, you can sometimes get samples for free from your vendors. Second, product samples provide a great way to crosssell customers and introduce them to other products and product lines that they may not know about or have been curious about trying. Beardbrand, a premiere beard grooming brand specializing in beard oil will sometimes provide small beard oil samples to their customers and wholesalers. This small sample provides customers with additional value and increases Beardbrand’s exposure.
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Image Source: Beardbrand
3. SMALL GIFTS Much like samples, small gifts can be a great way to surprise and delight customers without them feeling like you are trying to sell them on other products. The gift you give doesn’t have to be expensive. Since it’s not expected, most people will be pleasantly surprised by any additional gifts. Take for example what Ryan French did. As the founder of GameKlip, he decided to add a small package of candies with every order. It was so well received by his customers that they talked about it all over social media, forums and blogs. Today, if you search Google for “GameKlip Rockets Candy” you’ll find nearly 27,000 results of people talking about the surprise they received.
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Image Source: Pikdit
GameKlip isn’t the only one taking advantage of adding small gifts to their packages. Johnny Cupcakes, a popular streetwear brand, knows exactly how well additional inserts can impact a customer’s experience. They include a variety of items in their packages that provides additional value and leaves customers with a smile. When Nikki Mueller received her package, it contained the following in addition to the t-shirt she ordered:
Image Source: Not Made In China
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On her blog, Nikki wrote: There was also several little branded ziplocs with a gorgeous mini-brochure, a Power Rangers card, a button, and a breath mint! Digging the randomness. So basically Johnny Cupcakes is my new hero. Just how effective can a small, almost valueless gift be? It’s been well documented that the little candies delivered by servers at the end of a restaurant meal help increase tips. Two experiments were conducted to evaluate the impact of this gesture on the tip percentages received by servers. Experiment #1 found that customers who received a small piece of chocolate along with the bill tipped more than customers who received no candy. Experiment #2 found that tips varied with the amount of the candy given to the customers as well as the manner it was delivered. So what can be learned from this study? The little, seemingly valueless gifts, combined with some personalization and presentation makes people feel special encouraging them to return the favor. It’s the law of reciprocity and it’s a powerful psychological trigger. 4. THANK-YOU CARDS AND PERSONAL NOTES The simplest, least expensive and most personalized insert you can add to customer packages is a handwritten thank-you card. A simple card can be a really thoughtful gesture that can help build loyalty. This can be particularly effective when first starting out, as it’s a competitive advantage that most larger scale companies can no longer compete with. Use this to your advantage. Brandon Eley, founder of 2BigFeet posted the following photo in a popular ecommerce forum:
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Image Source: 2BigFeet
Brandon went on to explain: One of the ways we encourage repeat business is by sending our best customers a handwritten thank you card with a coupon for future purchase. It’s my goal to send 1,000 cards every year, which works out to just 4 cards every weekday. I write all of them personally, but I’m automating the procedure of running the reports, making the coupon codes, etc to cut down on the amount of time it takes me every day. A customer appreciation campaign like the one from 2BigFeet has the ability to produce massive results and can be done with a very small financial investment for the cards and just a small time commitment to write them. As another great example of a really personalized note comes (again) from TrunkClub, the premium subscription menswear service. TrunkClub includes handwritten notes from personal stylists explaining their selection of products with all orders:
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Image Source: Sketch42
Here are some quick tips on writing a thank-you note to your customers from Gregory Ciotti from Help Scout: • • • •
If it’s financially feasible, try to use quality stationary. Be sure to use the customer’s name. Express your gratitude, clearly stating the reason for sending the note. Mention details about what you enjoyed about your experience with this customer (a fantastic opportunity to be specific and thoughtful). • Allude to your future interactions with the customer. • Close with professional but warm sign-off and a signature. (i.e Best, Kindest Regards, Sincerely, Cheers, etc.) 5. PRODUCT REVIEW OR SOCIAL SHARE REQUEST Since the shipped package usually represents the end of the transaction for most customers, packaging inserts can also be a great place to ask for a product review or to share their experience on social media. Frank Body, a coffee based body scrub, encourages social interaction at almost every touch point. This includes adding an insert which further bolsters their brand and a request to share their experience on social media.
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As a result, Frank Body has built a massive community (615k on Instagram) of fans all promoting their product which provides social proof to others and further builds their brand exposure.
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Costs of Branded Packaging The costs associated with a custom branded and beautiful unboxing experience can be high and can quickly spiral out of control if you aren’t being careful. The benefits of creating an experience for your customers needs to be carefully weighed with the costs associated with it. These costs come in the form of both time and price. You’ll need to decide based on your average order size and profit margins what you can and cannot afford along with which options present the greatest value to your business and most importantly, your customers. Custom boxes tend to be the most expensive costs associated with creating a custom branded unboxing experience. To have your own custom printed boxes you can be looking at a minimum order of 500+ and can cost $5-$25 per box. Being creative can easily help you save costs and achieve similar results. Consider pre-designed colored boxes from places like Uline. These boxes come with much lower minimum orders and prices, at little as 50 boxes at $2.50 per box. Another option is to search AliExpress where very similar colored boxes can be purchased with a minimum order of 50 units for as little as .39 cents per unit (depending on size) and free shipping to most countries. If you wanted to further customize the experience you can consider adding printed stickers with your logo from a service like Sticker Giant or a similar service. 31
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Use the chart below to help plan out what elements you want to include for your customer branded packaging and unboxing experience as well as the costs associated with it:
Packaging Resources If you’re looking for packaging material to create a great branded unboxing experience for your customers, take a look at our shortlist below of some great suppliers of various packaging supplies: Standard Boxes • Uline • ValueMailers • Fast-Pack • eSupplyStore • Papermart • eBay You’ll also want to consider local packaging options. Many times, purchasing your main packaging locally can be cheaper by saving the shipping costs,
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which tends to be fairly expensive due to the size of boxes. Check online for packaging suppliers and box manufacturers in your area. Custom/Unique Boxes • Custom Boxes Now • Any Box Today • Uline - Colored Boxes • Box Geek • Custom Boxes And Packaging • InstaBox (Canada) • Packlane Tape • Tape Jungle • Uline - Tape Envelopes • Envelopes.com • Uline - Envelopes Stickers • Sticker You • Sticker Giant • Sticker Mule Bonus: Free Shipping Supplies. Many carriers will offer a selection of free packaging products when you use them. Here are links to free packaging supplies from some of the biggest carriers: USPS, UK Royal Mail, FedEx, UPS.
Protecting Your Product Depending on the products you sell, you may require protective material to ensure that your products reach your customers undamaged. There are several options you can use to fill void spaces in your packaging and cushioning to protect your products including bubble wrap, foam, tissue paper, air pillows and packing peanuts.
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Package Protection Test So how do you know if you need protection for your products? As a good rule of thumb, you should fill any extra space with some type of filler in your packed boxes. You’ll also want to make sure that they can stand up to the abuse they’re likely to endure while in transit. The standard test for this is called the 4-foot drop test.
Image Source: Shipwire
According to Shipwire, a popular fulfillment warehouse, your products and packaging should be able to pass a 4-foot drop test onto a hard surface
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without breakage. Doing this test on your packaging ensures that your products will be able to withstand typical impacts during shipping. The 4-foot drop test consists of dropping your package at five different angles: • • • • •
Landing flat on base Landing flat on top Landing flat on longest side Landing flat on shortest side Landing on a corner
In addition to the drop test, your products and packaging should be able to withstand a full minute of vigorous shaking without any contents breaking.
Carrier Packaging Best Practices Each carrier also has specific requirements for packaging. Although these are mostly standard and common, you should review your chosen carrier’s specific requirements and best practices. • • • • • • • •
USPS Domestic USPS International Canada Post UK Royal Mail Australia Post FedEx UPS DHL
Shipping Label Printing Once you have figured out your presentation and packaging, you’ll need to determine how you want to label your packages. Many new ecommerce entrepreneurs start off by writing the shipping and return address on the package by hand. Although this can be a great way to start, it tends to be time consuming, tedious and not scalable as your business grows. Depending on your brand, the products you sell, and your particular customer, this may also been seen as amateur instead of personal.
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The next step after handwriting customer addresses is to print shipping labels. Most ecommerce platforms will allow you to print shipping labels from your orders page that you can stick onto your packages using tape. If you want to take things one step further, consider sticker mailing labels you can buy for your home printer. These are available from any office supply store or online.
As you grow there are variety of shipping apps and tools that can further help you streamline your shipping process. This includes simple apps like the Shopify Order Printer which will help you print invoices, labels, receipts and packing slips, as well as more full-featured shipping apps like Shipstation or Shippo. Shipstation and Shippo will integrate with many of the most popular courier companies and your ecommerce platform so that you can print more than just shipping labels but the postage as well, charging it directly to your account.
Label/Postage Printing Apps and Services • Shopify Order Printer - Free - This is a must-have if you’re on the Shopify platform. Order Printer lets you quickly and easily print invoices, labels, receipts, packing slips, and more. You can customize and create templates to suit any need or print in bulk to speed up your shipping process. • OrderCup - $20-$50/month - With over 250 reviews, OrderCup is one of the original label printers for Shopify stores. With OrderCup you can print USPS, FedEx, UPS, DHL and Canada Post shipping labels in Batch or one by one. With seamless integration, OrderCup will also automatically update your Shopify orders with shipping information and automatically trigger Shopify to send tracking information emails to your customers.
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• Stamps.com - 15.99/month + postage - Stamps.com allows you to do almost anything you could normally do at a USPS post office, right from the comfort of your own home. Print postage and labels and prepare all of your packages for shipping all for just $15.99 per month. • Shippo - $0.05 per label + postage - Shippo integrates your Shopify orders and allows you to print labels with one click. Choose your parcel dimension, pickup date, service type and preferred carrier and you will get your label within seconds. • ShipStation - $25-$145 - Shipstation makes it easier to ship products yourself. It integrates with major carriers, including USPS, FedEx, and UPS, so that you can easily create shipping labels and packing slips in bulk. It offers a great deal of other tools for shipping management as well. • ShippingEasy - Free-$99/month - ShippingEasy prints labels and sends email notifications to customers for tracked parcels. ShippingEasy is free for up to 50 packages per month. • ShipRobot - $10-$50/month - Sync orders from multiple sales channels you use in real-time. Create and print shipping labels for all your orders with one solution. Update order statuses automatically once orders are fulfilled.
Shipping Label Printers and Hardware Furthermore, as you grow, you can look at dedicated hardware to print shipping and postage labels for your orders like these label printers from Uline.
Image Source: Uline
Printers like these can really help you streamline and speed up your shipping and fulfillment as well as make your packages look more professional.
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Chapter 5
Shipping Your Package
CHAPTER 5
Shipping Your Package When it comes to shipping your packages, you need to decide which shipping courier or couriers to partner with. Remember, the received package is the first physical touchpoint your customer will have with your brand. When choosing a shipping carrier, you’re choosing a business partner, you want the best representative of your brand.
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Shipping Labels from Your Shopify Admin Like many business owners, you probably spend hours of your busy work week in line at the post office, waiting to do one of the most important things you’ll do all day – ship your orders. That’s why shipping within your Shopify Admin is more important than ever.
Here’s How it Works When you’re ready to ship an order, click “Buy shipping label” from the fulfillment screen. Then, choose your box size and shipping method (first class, priority, or priority express). We’ll calculate the shipping cost for you based on your box size, product weight, and shipping method.
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Some Major Benefits One of the most important things to any entrepreneur or business owner is time. With this added functionality to your Shopify Admin, you’ll save plenty of time to focus on growing your business.
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YOU’LL SAVE TIME 1 No separate shipping account is required. Anyone in the US can print USPS shipping labels from within Shopify. 2 You can begin purchasing labels instantly. No need to pre-pay or fill your meter before buying postage. You’ll simply be billed on your next Shopify invoice. 3 You can skip the line at the post office by purchasing and printing labels at your convenience, when you want, wherever you want. YOU’LL SAVE MONEY On Shopify Basic plan, you’ll pay standard shipping rates. However, on the Professional Plan, you’ll get a discounted rate – and on Unlimited or Plus Plans, you get a heavily discounted rate. Rates depend on the dimensions, originating point, and destination – you’ll generally, however, save up to 30% (or absolute dollar amounts). YOU DON’T NEED ANY SPECIAL EQUIPMENT You don’t need any special equipment to print your own shipping labels, just a regular printer and some clear packing tape will do. But, if you ship dozens of packages at a time, or you’re tired of fumbling with printer paper and rolls of tape, you’ll want to buy some supplies. Visit the Shopify hardware store to stock up on everything you’ll need for a do-it-yourself shipping station. Ready to ship? Simply stick the label on your package and drop it off at any USPS office. Because your package is ready to ship, you’ll be able to skip the line. Or, if you have at least one priority package, you can schedule a free home or office pickup. NOTE: Want more details on shipping within your Shopify Admin? Be sure to checkout our dedicated documentation for a more in-depth look into shipping.
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Shipping Outside of Shopify There are many different carriers, small and large, public and private that are up for consideration. For the purpose of this guide, we’ve provided information and resources as it relates to several of the biggest carriers. • • • • • • •
USPS Canada Post UK Royal Mail Australia Post FedEx UPS DHL
Unfortunately, there’s no one-size-fits-all for choosing a shipping partner for your business. Each carrier has their strengths and weaknesses. You’ll need do your own research with each carrier to determine what would be best for your business. The following sections will better help you understand the factors you’ll need to consider when evaluating the various shipping carriers.
Calculating Shipping Rates Shipping couriers base their rates on a variety of factors. Everything from weight and size, departing and destination country, as well as extras like insurance and tracking. All shipping couriers base shipping rates on a variety of factors including, but not limited to: • • • • • • • •
Package Size Package Weight Departing Country/City Destination Country/City Tracking Options Insurance Options Volume of Orders Negotiated Discounts
It can be difficult to compare services exactly as they all offer slightly different options and every business will have their own unique variables.
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Below is a list of shipping calculators for some of the most popular shipping couriers so you can easily find the most cost effective option for your business needs. • • • • • • •
USPS Canada Post UK Royal Mail Australia Post FedEx UPS DHL
NOTE: It’s important to experiment with these calculators for different box sizes to see the effect on shipping costs. This can help you choose the right size packaging to save on shipping costs.
Shipping Add-On Services There are a variety of add-on services available that can either add value for you (the merchant) or your customer. For the purpose of this section, we’re going to talk about the two most common and important ones, insurance and tracking for your shipments.
Package Insurance Depending on what you’re selling and its value, shipping insurance can offer a great deal of security to you. Shipping insurance is a service which may reimburse you when parcels are lost, stolen, or damaged in transit. Shipping insurance is sold by postal services, courier companies, and 3rd party shipping-insurance companies like My Shipping Insurance or Shipsurance. Not all insurers will insure all goods so you’ll want to check with your carrier of choice or a 3rd party insurer to make sure your products are eligible.
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You may want to consider only purchasing insurance on high-value items and shipments so that in the rare cases when a package does go missing, you’ll be covered. Keep in mind that some shipping services have insurance already built into the shipping price depending on which service you use, so consider this when you are comparing various courier services and prices.
Package Tracking Being able to track packages is beneficial so you can confirm delivery should there be any issues, however, it’s particularly valuable to customers as it allows them to see where their merchandise currently is and help them predict delivery.
It’s also important to note that with some carriers, payment providers (PayPal) and 3rd party insurance providers, tracking is the only way to prove you shipped a product to the customer and is often required to receive insurance compensation in the event a package goes missing. If you’re shipping locally or domestically, especially within more reliable countries for postal service like Canada, UK, USA, and Australia, tracking is not necessarily needed and becomes a large expense for the little gained from it.
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Just like package insurance, your other option is to only provide tracking on higher value shipments, or ones that you deem to be high risk of either postal loss, or customers making the claim their package never arrived.
Shipping Add-On Services Conclusion You’ll quickly get a sense of what works best as you actually begin shipping packages and taking note of what percentage of packages go missing. If your products are lower value, or your loss rate is minimal, it may not be worth it to pay for tracking on every package. Vice-versa, if the majority of your orders are high-value, you may want to consider a 3rd party insurance provide that can provide blanket rates on all your shipments.
Setting Up Business Shipping Accounts Once you have decided on the carriers you want to use, you’ll want to consider setting up business accounts with them. Business accounts offer a variety of services including discounts, better expense tracking and a whole host of online tools to more efficiently manage the shipping aspects of your business, and some will include discounts on your shipping. Here’s a list of some of the most popular shipping carriers with direct links to get set up with a business account: • USPS Business Gateway - Set up an account with USPS and get access to the full suite of business tools they offer that can help with label and postage printing, shipment tracking and more. • Canada Post Venture One - The Venture One account with Canada Post can help you save 5% on shipping and packaging products as well as upgraded services on parcel shipping. • UK Royal Mail Online Business Account - An online business account with Royal Mail will help you save time by managing all your shipping expense and invoices all in one place.
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• Australia Post Business Credit Account - A Business Credit Account with Australia Post will allow you to charge many of the common services directly to your account for better management of your expenses. • FedEx Business Center - Sign up with FedEx Business Center and manage all your shipment information online in one convenient place. • UPS Business Solutions - Get a 20% small business discount and manage all your shipments, package tracking, billing schedules and package pick up schedules. • DHL Business Account - Open an account with DHL to save up to 30% on shipping and personalized customer service. Note: Some carriers may require a minimum number of shipped packages per day/week or month. Make sure you check with your selected carriers to find out if they have any minimums. BONUS: Free Shipping Supplies. Many carriers will offer a selection of free packaging products when you use them. Here are links to free packaging supplies from some of the biggest carriers: USPS, UK Royal Mail, FedEx, UPS.
Shipping Profitably One of the best and least talked about secrets to being successful at ecommerce is to figure out how to ship profitably. Because shipping represents a significant expense for ecommerce merchants, if you don’t do your research, you could end up losing money on shipping and this can significantly affect overall profitability. Before you finalize your pricing and strategy for your ecommerce store you should use a chart, like the one below to map out all your costs associated with getting your products into your customers hands. 1. DETERMINE PACKAGING COSTS Use the template below to help calculate your total packaging costs.
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2. DETERMINE ALL OTHER SHIPPING COSTS Use your total price from the previous chart for your packaging costs in the next shipping costs template:
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3. TWEAK YOUR SHIPPING PACKAGING & SHIPPING STRATEGY Now that you have an idea of costs for a sample package. Pay close attention to the highest costs and look at where sacrifices can be made to reduce costs if necessary.
Customs & Duties If you’re shipping outside of your own country, you’ll need to include the proper customs documentation. These are available online or at your local post/shipping office. These forms tell the customs officers at the country of import what is in the package, how much it costs and whether it was a gift or a purchase. Based on this information, your customer may or may not be charged applicable duties and taxes. Check with your country’s postal service or courier of choice to find out exactly what forms you’ll need to attach to your package. These forms should be completed honestly and clearly to prevent your package from getting held up in customs.
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Getting Stuck In Customs In general, international shipments aren’t a problem, however packages can get stuck in customs sometimes for days, and sometimes longer. Make sure your customers are aware that you don’t have control over customs delays and consider accounting for delays in your copy and conversations with international customers.
How Much is Customs & Duties? Fees for customs & duties can be extremely complicated. Like all things in the shipping and logistics world, it will depend on a wide variety of factors including, but not limited to: • • • • • •
Country of export Country of import Product classification Product material origin Manufacturing country Value of shipment
To get an idea of what fees your international customers may incur, check out this duty calculator.
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Communicating Customs & Duties To Customers Your customer will be responsible for any additional fees that are charged by customs. They usually will have to pay any additional fees at the time of delivery. It’s always a good idea to make sure to include this information in your policy page so customers aren’t hit with unexpected fees. Here’s an example of how one store prominently displays information regarding additional charges on their shipping policy page to ensure customers are aware of possible charges:
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Additional Customs & Duties Declaration Information For more information on customs declaration and the required forms and policies, please see the resources below: • • • • • • •
USPS Canada Post UK Royal Mail Australia Post FedEx UPS DHL
Customs & Duties Conclusion Customs and duties can be complicated for both you the merchant, as well as your customers. Understanding some of the potential taxes and duties involved in the countries you ship to and clearly articulating it to your customers can help your business run smoothly and prevent unpleasant surprises for your customers. In the next chapter, we’re going to show you how you can use outside help to scale your shipping operation, while lowering your costs as your business grows.
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Chapter 6
Scaling Your Shipping Strategy
CHAPTER 6
Scaling Your Shipping Strategy As your business grows and your order volume increases you will probably want to consider the advantages that a fulfillment warehouse affords you. A fulfillment warehouse can help automate and handle your shipping for you. When you choose to work with a fulfillment warehouse, you store your inventory at one of their warehouses. Depending on their level of integration with your shopping cart, when an order comes in, your fulfillment partner will automatically be forwarded the order to pick, pack and ship on your behalf.
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There are a number of advantages to using a fulfillment warehouse including: • Cheaper Shipping Rates - Because fulfillment warehouses ship such large quantities for multiple vendors, they receive cheaper shipping rates. They’re also integrated (usually) with all of the major shipping logistics companies, giving you easier access to the widest range of shipping options. • Shorter Shipping Times - Strategically choosing your fulfillment partner and the warehouse to store your inventory means you can store your inventory closer to the majority of your customers. Fulfillment warehouses aren’t for everyone though. There are several disadvantages as well that you need to consider: • Branding Experience - Generally, if you use your packaging presentation as part of your branding experience, like Trunk Club noted at the beginning of this post, you’ll be hard pressed to find a fulfillment warehouse that will work with that level of dedication and customization for your brand. • Additional Costs - Although you will likely receive better shipping rates working with a fulfillment partner, there are other rates that
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need to be paid including what are commonly referred to as pick and pack fees as well as warehouse storage fees. If you feel like you’re ready to work with a order fulfillment warehouse, there are several that have fantastic integrations with Shopify including Shipwire, Fulfillrite and a host of others. For a better idea of pricing and costs, you can use Shipwire’s pricing calculator.
Fulfillment Conclusion Working with a fulfillment warehouse is a logical step for ecommerce businesses once they have some predictability and regularity of orders. Working with a fulfillment warehouse frees up precious time and gives you the opportunity to focus on growing your business and acquiring new customers instead of dealing with logistics.
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Chapter 7
Conclusion
CHAPTER 7
Conclusion Shipping is a challenging obstacle for any ecommerce business. The many variables involved in shipping a product from point A to point B means every businesses shipping strategy will be unique to their product, customers, business and location. Every business will have their own unique challenges they will need to work through and overcome to develop the best and most efficient strategy for them. Like many aspects of building your new business though, it will take time and tweaking to determine what works best. Understanding all the variables and evolving your shipping strategy with your growing business is vital to its long term health and success. So once you think you have it figured out, don’t let it go stale. Reevaluate every six
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months to make sure you’re delivering the absolute best possible service and experience for the best possible price to your customers.
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Chapter 8
Bonus: Shipping Resource Roundup
CHAPTER 8
Bonus: Shipping Resource Roundup Throughout this guide we have provided lots of resources to help you ship your products. We have rounded up these resources in this chapter for easy reference as you build your shipping strategy. NOTE: Want an easy solution to all of this? Be sure to checkout how to print shipping labels directly within your Shopify Admin. We’ve made it a flawless and inexpensive way to print shipping labels, and fulfill orders directly from your orders page. Read up on the documentation here.
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Packaging Resources Standard Boxes • Uline • ValueMailers • Fast-Pack • eSupplyStore • Papermart • eBay Custom/Unique Boxes • Custom Boxes Now • Any Box Today • Uline - Colored Boxes • Box Geek • Custom Boxes And Packaging • InstaBox (Canada) • Packlane Tape • Tape Jungle • Uline - Tape Envelopes • Envelopes.com • Uline - Envelopes Stickers • Sticker You • Sticker Giant • Sticker Mule BONUS: Free Shipping Supplies. Many carriers will offer a selection of free packaging products when you use them. Here are links to free packaging supplies from some of the biggest carriers: USPS, UK Royal Mail, FedEx, UPS.
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Carrier Packaging Best Practices Each carrier has specific requirements for packaging. Although these are mostly standard and common, you should review your chosen carrier’s specific requirements and best practices. • • • • • • • •
USPS Domestic USPS International Canada Post UK Royal Mail Australia Post FedEx UPS DHL
Label/Postage Printing Apps and Services The following apps can help you purchase postage and print the shipping labels quickly and easily. • Shopify Order Printer - Free - This is a must-have if you’re on the Shopify platform. Order Printer lets you quickly and easily print invoices, labels, receipts, packing slips, and more. You can customize and create templates to suit any need or print in bulk to speed up your shipping process. • OrderCup - $20-$50/month - With over 250 reviews, OrderCup is one of the original label printers for Shopify stores. With OrderCup you can print USPS, FedEx, UPS, DHL and Canada Post shipping labels in Batch or one by one. With seamless integration, OrderCup will also automatically update your Shopify orders with shipping information and trigger Shopify to send tracking information emails to your customers. • Stamps.com - 15.99/month + postage - Stamps.com allows you to do almost anything you could normally do at a USPS post office, right from the comfort of your own home. Print postage and labels and prepare all of your packages for shipping all for just $15.99 per month.
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• Shippo - $0.05 per label + postage - Shippo integrates your Shopify orders and allows you to print labels with one click. Choose your parcel dimension, pickup date, service type and preferred carrier and you will get your label within seconds. • ShipStation - $25-$145 - Shipstation makes it easier to ship products yourself. It integrates with major carriers, including USPS, FedEx, and UPS, so that you can easily create shipping labels and packing slips in bulk. It offers a great deal of other tools for shipping management as well. • ShippingEasy - Free-$99/month - ShippingEasy prints labels and sends email notifications to customers for tracked parcels. ShippingEasy is free for up to 50 packages per month. • ShipRobot - $10-$50/month - Sync orders from multiple sales channels you use in real-time. Create and print shipping labels for all your orders with one solution. Update order statuses automatically once orders are fulfilled.
Calculating Shipping Rates • • • • • • •
USPS Canada Post UK Royal Mail Australia Post FedEx UPS DHL
Business Shipping Accounts Here’s a list of some of the most popular shipping carriers with direct links to get set up with a business account: • USPS Business Gateway - Set up an account with USPS and get access to the full suite of business tools they offer that can help with label and postage printing, shipment tracking and more.
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• Canada Post Venture One - The Venture One account with Canada Post can help you save 5% on shipping and packaging products as well as upgraded services on parcel shipping. • UK Royal Mail Online Business Account - An online business account with Royal Mail will help you save time by managing all your shipping expense and invoices all in one place. • Australia Post Business Credit Account - A Business Credit Account with Australia Post will allow you to charge many of the common services directly to your account for better management of your expenses. • FedEx Business Center - Sign up with FedEx Business Center and manage all your shipment information online in one convenient place. • UPS Business Solutions - Get a 20% small business discount and manage all your shipments, package tracking, billing schedules and package pick up schedules. • DHL Business Account - Open an account with DHL to save up to 30% on shipping and personalized customer service.
Customs & Duties Declaration Information For more information on customs declaration and the required forms and policies, please see the resources below: • • • • • • •
USPS Canada Post UK Royal Mail Australia Post FedEx UPS DHL
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ABOUT THE AUTHOR
Richard Lazazzera Richard Lazazzera is an ecommerce entrepreneur and content strategist at Shopify. He is also the founder of A Better Lemonade Stand, a blog dedicated to reverse engineering the process of building and growing ecommerce businesses. Follow Richard on Twitter.
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