Endicia Blog

10 Questions Every New Business Owner Should Ask When Developing a Plan for E-commerce Shipping

02/21/2014

e-commerce shipping

As a new business owner, you’re tasked with making a number of crucial decisions. Shipping, as complex and nuanced as it may be, is one of them. Before diving headlong into the logistical labyrinth, ask yourself these 10 questions, and you’ll find that your e-commerce shipping plan virtually writes itself.

What do we sell?

As elementary as this question may seem, it’s the basis for all considerations that follow. Shipping is, at its core, the transport of physical objects safely and efficiently, so understanding what physical objects you’ll be transporting, is key to crafting your shipping logistics plan. Are your products malleable or fragile? Are they subject to customs charges in other countries? Ask these questions first, and your plan will take shape from their answers.

How does it pack?

Next, consider what a typical shipment might look like. Create a scenario with one item, and one with multiple items. How do they fit together? Do they require extra padding? What about refrigeration? Each of these elements will constitute your packaging requirements, which means that each one will cost your company money. Evaluate what your product needs to make the journey safely, and you'll find a greater understanding of your costs in the process.

Does it require any special accommodation?

For most companies, the answer to this question will be “no,” since most products ship without a hitch. But items like cigars, organic produce and live animals all involve some kind of special consideration for successful transport. Whether it’s customs duties, trade restrictions, tax policies or logistical limitations, know the specifics of your product and include these accommodations in your cost analysis.

Can we consolidate multiple-item orders?

The question of combining multiple-item orders can have far-reaching implications on your shipping plans. If a customer orders multiple items, can they be packed together, or will your business be forced to charge for multiple packages? If your firm supplies chemicals to university labs – some of them volatile or oxidative – then the answer is likely no, but more traditional retailers will find savings in consolidation. Doing so will also make life easier for your carrier and allow for more efficient arrangements.

Can we reduce packaging options?

As costs associated with packaging mount, budget-conscious businesses will find solace in savings. One particularly rich area to consider in cutting costs is the range of packaging medium used for typical shipments. While it’s tempting to build a specialized shipping protocol for each item in your catalog, recognizing that the same size box with a little extra padding can fit a variety of items will help secure deals on bulk materials and cut down on the manpower needed to decipher idiosyncratic packaging requirements.

Who is the best carrier for this configuration?

Depending on your specific needs, not every carrier will be able to provide the level of service you need to get the job done. The next step involves vetting vendors for the best fit and building a plan around their offerings. At this juncture, it’s worth noting that the U.S. Postal Service has a wide variety of shipping options, often made even more attractive by lower costs when shipping to residential addresses compared to retail carriers.

What are their extra fees?

The costs associated with each package you send compound as your volume increases. A $2 surcharge on one shipment or another may not seem like much, but when those shipments reach quantities in the thousands, the real cost of this surcharge become apparent. For this reason, gauging the shipping and administrative fees of your carrier is important to keep costs down and determine which carrier fits your needs most effectively.

Can we get discounts on shipping?

Dollars and cents play a significant role in shaping your shipping policy, which is why carrier discounts are worthy of consideration here. Using an online provider opens up the door to automatic discounts. And working with your carrier to make its life easier can open up additional opportunities for savings, depending on volumes and negotiations.

Will we be able to scale our shipping?

If all goes according to plan, your business will grow. That means that your shipping plan must grow with it. Consider your existing infrastructure, inventory systems, storage facilities, production, etc., and make plans for the future. Can your carrier accommodate a dramatic increase in shipping output? How will extra shipping fees scale with your business? Does your carrier provide opportunities for additional savings with increasing volume? It’s unnecessary to make specific plans, since growth will likely occur along a trajectory that’s difficult to predict, but knowing your options will make the transition easier when the occasion arises.

Do our shipping offerings satisfy customer needs?

Ultimately, this is where the rubber meets the road. Customer satisfaction, return business and brand perception are all affected by shipping options and costs. Tabulate your costs and available shipping options and consider how these numbers affect customer perception. If the fees you’re charging are prohibitively high, consider subsidizing shipping while your volume is low in order to drum up business and build a positive reputation. Monitor the most popular forms of shipping and make adjustments to your plan in order to satisfy your customers’ changing needs over time.

Logistics is a complex endeavor, but formulating your business’ online shipping plans is a simple matter of accounting for key considerations along the way. Assess your product offerings and packaging needs and select a carrier that can accommodate your shipping needs. Evaluate costs and savings opportunities on a regular basis and ensure that your fees and offerings satisfy the needs of the one that matters most: the customer.


Category:  Best PracticesE-Commerce