How to choose the best shipping provider for ecommerce business?

Don’t be a sheep – that follows the herd – while choosing the best shipping provider for your ecommerce business.

With thousands of different shipping couriers to choose from, the process to figure out which couriers are best for your ecommerce business can be both time consuming and overwhelming.

By the end of this post, you’ll know what are the ways for filtering out the best shipping companies for ecommerce business. Wait. Before anything else, you must see some stats related to the problems that customers face due to bad shipping, which may influence your thoughts while choosing the right shipping provider for your business.

These statistics provide information about various reasons for dissatisfaction with shipping service providers according to online shoppers of the United States as of April 2017

Source: statista.com

A dissatisfied customer is the least you want, right? And it all depends on two things – your product and your service (how quickly & correctly you deliver for no or little extra cost). While there’s a lot of focus on products you offer, in this article, let’s count on the prime factors to consider while choosing your RIGHT shipping provider/s.

Start with analyzing what your product needs

When reviewing different shipping providers, thoroughly examine the sizes, weight, and services offered by the shipping company. This knowledge will help you in determining which ones best suit your business needs. You may come across a few shipping companies that won’t be suitable for your products, such as if you’re selling medical supplements or food items.

There are even shipping companies that do not provide services for very expensive or fragile items such as gold, diamonds. Therefore before opting for a particular shipping provider understands their shipping policies and ask questions like, do they ship the product you sell or not.

Emilie Dulles design expert at Dulles Designs shares her insight on the topic…

“It’s critical to first step back and look at your business liability, seasonality, and insurance options offered by any e-commerce shipping companies. If your package is lost or destroyed, what is the process for reproducing and shipping out replacement products or an entire custom project? During high volume seasons (winter holidays, spring weddings, graduation) can your shipping provider handle the rush traffic / inclement weather?

E-commerce businesses that sell mass-produced items that exist on shelves and that are easily re-shipped have less operational and fiscal pressures on their shipping agent policies. Custom, one-of-a-kind, hand-produced e-commerce businesses must choose shipping provider based on handling, insurance, and replacement value policies.

If you use 1st-2nd-3rd ranked shipping companies options as a “vendor blend” to carry out your e-commerce business according to slight variations, you will earn rewards and price reductions for i) volume and ii) risk patterns. You may simply call your shipping provider 3-4 times per year for a pricing review to earn the best possible rates.”

This brings us to our second but most important factor in choosing the right shipping provider- pricing.

Most important: Pricing, Pricing & Pricing

The second most important factor to consider during the hunt for shipping provider is – pricing. Pricing undoubtedly plays a major role in deciding which shipping carriers to opt for. And nowadays tons of ecommerce sellers are offering free shipping to capture and secure consumers trust and loyalty.

However, the pricing factor also depends on what type of shipping method is used. Well, the costliest and fastest shipping method is air freight shipping. If your target audience is mostly international or distant locations within the country, then find a shipping provider that provides air freight.

If your ecommerce business is of FMCG and you intend to ship products frequently to your buyers, then make sure the shipping company you choose gives you a good discount for regular business.

An outline of well-known shipping providers and their pricing

United States Postal Service (USPS)

USPS is one of the best-known shipping companies across the globe. At present, USPS offers 3 main shipping services

• First Class Mail – Delivery within 2-5 business days
• Priority Mail – Delivery within 2-3 business days
• Express Mail – 1 – 2 business days depending on customer’s location

But choosing USPS as your shipping provider would only be a good choice if you ship items weighing more than 2 pounds.

FedEx

FedEx is well-known for its one-day or overnight delivery. FedEx is the cheapest among  UPS and USPS for packages exceeding 3 pounds. Below are the services offered by FedEx (US) across all the fifty states.

• FedEx First Overnight– Delivery on next-business-day by 8, 8:30, 9 or 9:30 a.m.
• FedEx Priority Overnight– Delivery on next-business-day by 10:30 a.m
• FedEx Standard Overnight– Delivery on next-business-day by 3 p.m.

UPS

If you usually ship in large volume packages which exceed 3 pounds then UPS becomes economical. UPS also offers 3 days, 2 day and next day shipping depending on your needs you can choose from the services offered by them.  

117 countries leverage the service of UPS Worldwide Express, which includes routine customs clearance and early delivery options for urgent shipments.

DHL

DHL covers more than 220 countries, with a variety of options to meet all your shipping needs. A survey in Asia shows that DHL ranks first among air freight express companies and logistics.

DHL SmartMail Parcel and DHL SmartMail Parcel Plus both services guarantee delivery between 2-3 days. The prime difference between the two is DHL SmartMail Parcel Plus has a maximum weight of 25lbs while DHL SmartMail Parcel only has a maximum weight of 1lb. Also for DHL SmartMail Parcel Plus charges are a bit high.

Do they offer Live Rates?

Live rates are carrier-calculated real-time rates with the automatic computation of shipment rates based on the weight of products, destination, and other provided details.

Nowadays online sellers need to be competitive in the market- otherwise, they would lose their valuable customers – to competitors. Because there may be instances when the shipping rates are really low (globally), but shipping provider doesn’t have the dynamic rates option, then you might have to charge the high rates as per your shipping provider, which eventually costs your ecommerce business heavily..

Hence a shipping carrier which offers real-time or live rate and that gets updated with your inventory’s price is something you must look for.

Orderhive’s shipping management software let’s you calculate live shipping rates by integrating with shipping companies

Alternative: Opt for a 3PL

Also, nowadays many small and medium-sized business owners are moving towards the 3PL to manage their shipment process – so that they can focus on more important business aspects that can skyrocket their ecommerce business.

Thousands of sellers find it difficult to pick and pack the online orders. Hence they opt for a 3PL (third party logistics) fulfillment providers to outsource the order fulfillment process.

Collaborating with best 3PL companies allows small and medium-sized business owners access to a network of fulfillment centers and integrated technology. As a retailer, you just need to notify the order details to 3PL partner, and they would pick, pack and ship the order to the destined location.

Shipping rates OR and Shipping strategy

Carriers and 3PL companies usually offer a variety of shipping options at discounted rates, leverage these discounts to build the best shipping strategy for your business. Here are a few ideas Amber Fullerton, Chief Customer Office at One World Direct shares regarding what type of shipping rates and shipping strategy is recommended:

1. Consider flat-rate or free options only for specific items or with an order minimum. All carriers have economy methods with delivery timeframes that range from 4-10 days. Many consumers are fine with this transit time if shipping is cheap or free, but be sure to set customer expectations from the beginning itself.
2. If splitting inventory between 2-3 US regions is an option, you’ll be able to offer 2-day shipping for the ground at economy pricing. In this case, you’ll want to work with a fulfillment provider or shopping cart that has routing logic based upon the destination zip code.
   
   
3. Offer Express shipping for a premium. If you have something consumers really want, studies show consumers’ willingness to pay a premium for shipping. Express is usually the most heavily discounted method so these shipments could be a profit center for your company.

What if products/items are not delivered on time?

One important factor to consider while choosing a shipping carrier is the guarantee provided in their contract. UPS, FedEx, USPS, Canada Post, and most shipping carriers include in their contract a reimbursement policy for when packages are delivered late. This means that businesses can get a refund of up to 20% of their shipping costs if all late deliveries are claimed.

There are solutions like Busterfetcher which take care of finding all late deliveries and filing all the claims, so the customers can get their money back, according to their own contract with their shipping carriers.

This solution also analyzes each invoice of their customers received from their shipping carriers to determine all errors that might have slipped in and help them get reimbursed.

Although there are some easy-to-use shipping management software which does all the shipping related tasks. Such cloud-based software allows sellers to centralize processes like printing labels, track late delivery and many more. Investing in good shipping management software is all that you need to handle complex processes of the e-commerce business.

Carrier Stability

Knowing the stability of shipping carrier is crucial for sustaining in the e-commerce business for a longer period of time. Below mentioned are a few factors that affect or measures shipping carrier stability:

• Tenure of the shipping carrier in the marketplace
• What mode of transportation is being used to ship the product?
• Warehouse space, to store your goods and products
• Do they charge real-time rate as per industry standards?
• Do they provide insurance if the product is lost or damaged?
• Buyers are now inclined towards buying products with companies that follow sustainable practices and are environmentally conscious.

Remember it would not be beneficial to partner with a shipping provider that charges low, but is unstable.

Conclusion

Like many aspects of building your new ecommerce site, it will take time and tweaking to determine which shipping provider works best. However, there are some shipping companies (mentioned above) which rule the world when it comes to ecommerce shipment.

Understanding and studying all the shipping policies of a shipping provider and obviously the tips/approaches cited in the article would let you – easily choose the “best” shipping provider – for your ecommerce business.

However, counting upon a reliable order & shipping software that manages your complete shipping backend along with a suitable shipping provider can solve all your cumbersome problems of shipping.