You know the adage: You have to spend money to make money. In the world of shipping, it’s a hard point to contest. Unless all of your customers are local, you have to pay to get their orders to them. The challenge is not to eliminate the cost of shipping, since you have to pay for it in some way, shape or form, but to maximize what you get out of it.
Shipping seems like a fairly straightforward task (i.e., move package from point A to point B) but when deciding to outsource there are actually a number of factors to consider. Not all carriers offer the same service levels or service the same locations. Not all fulfillment centers connect to the same carriers or offer the same service levels and flexibility. Different countries require different import/export procedures. Here are some ways you can create value for your business as you ship.
Gaining customers. To gain a significant number of new customers in one move, move your products closer to your customers. Shipping becomes faster and less expensive, which is a recipe for gaining new customers.
Earning more money per customer. To capitalize on per-customer sales, it is helpful to first understand what deters customers from buying. By identifying pain points, you can offer ways to avoid these obstacles while building sales boosters into the solutions.
For example, the perception of high delivery fees is a significant barrier in getting customers to complete purchases. Buyers shop around in search of vendors offering shipping deals. A good solution is to offer free shipping at a certain sales thresholds. That rewards customers who purchase more. According to comScore, three-out-of-four shoppers add items to their carts to qualify for free shipping. Your per-customer sales will increase while you save money optimizing your shipping and logistics strategy.
Another way fulfillment providers can help is by giving you shipping options, and price breaks, from different carriers. More carrier options translates into more service-level options, allowing you to cater to your customers’ shipping requirements.
The trick to increasing per-customer sales is to reduce your own shipping expenses by roping in a shipping partner to increase your per-sale margins. Pass your savings on to customers by tinkering with shipping promotions, which will drive up your order volumes and profits per sale.
Freeing up time. Managing shipping on your own is complicated, often requiring the help of additional employees who require training on the vast array of shipping options, tax consequences, customs clearance rules and international trade policies.
If you don’t have the time or interest in calculating all these factors, consider outsourcing fulfillment. Offloading shipping means that inventory storage, packaging, labeling, shipping and even returns is left to seasoned specialists who can handle anything from one order a day to a thousand orders a day. By cutting out the nitty gritty of picking, packing and shipping, your team can run a leaner operation and kick back more often.
Improving your brand and customer satisfaction. You can really make or break your business over shipping practices. At the very least, customers need to trust they’ll receive orders on time. But there’s potential to exceed their expectations, and with so few brands taking advantage of the opportunity to wow their buyers, it’s a no-brainer opportunity to make your mark and build your brand’s reputation. The first step is to ensure fast shipping.
Increasing conversions. Consider attractive shipping policies your deal-closer: It’s a measure to counteract the abandoned cart phenomenon that plagues so many ecommerce sellers. Every day, customers are following through on purchases they might otherwise have passed on thanks to free shipping or other promotions.
A big move to increase conversion rates is unconditional free shipping. If you choose to make all shipping free, shout it from the rooftops. Free shipping can clinch the sale, so make sure potential buyers know that you’ve got them covered. Shoppers are more inclined to follow through with a purchase and to add more to their carts when shipping is free, so you want them to know about it before they begin shopping. If they only learn about the deal during checkout, its effectiveness in converting buyers is diminished.
Enabling more flexibility. Fulfillment and delivery aren’t one-size-fits-all solutions. Outsourcing fulfillment offers the flexibility to determine a shipping strategy (and there are a lot of them!) that actually fits your business. Even better, it allows you to adjust your practices seasonally or as your business grows. Third-party logistics solutions can combine the best aspects of direct shipping, drop shipping, and outsourced fulfillment. Ultimately, it’s about delivering the best possible shipping experience, no matter the method.
Shipping has become as critical to your business as the goods and services you provide. The immediacy and care with which you deliver products is important for building customer satisfaction. Fulfillment is now intimately tied with your brand’s image and ability to generate loyalty.
Thanks to technology, the world is flat. Shoppers can compare prices across a crowded marketplace with the click of a button and they want their products delivered to their door just as quickly. Likewise, successful companies no longer look at just one demographic when targeting customers. Instead, they focus internationally and engage with customers on multiple channels – in stores, online, through advertisements, and just about everywhere in between.
It’s essential to deliver consistent, reliable service that will keep customers coming back to spread the word that your brand is a great one. But it all harkens back to the ideas we’ve been discussing all along. Like your core business, shipping can be a profit center. An optimized fulfillment process can make that possible by leaving picking, packing and shipping to the experts, while you buckle in and work out future business plans.
After all, when you get shipping right, it frees up time for you to focus on growing your business. A terrific shipping program pays for itself.
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