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Best shipping practices for ecommerce websites

I think that shipping is one of the most difficult aspects of running an ecommerce site. In my experience and observations of other sites, shipping costs and delivery time-frames are the biggest customer complaint that online retailers receive, a recent study confirms shipping to be one of the most important thing to shoppers. Even if the shipping is free, customers often have obscene expectations on how fast their order will reach them. If it’s not free, there are always complaints about the cost even when the merchant directly passes down fees with no markup.

This is my guide on presenting, charging, and handling shipping services and fees for small online retailers.

  • Have a shipping policy section on your website.
  • Show shipping options, prices, and delivery time-frames.
  • Be very cautious about offering free shipping.
  • Don’t use USPS.
  • Ship Now!
  • Keep your customer informed.

Have a shipping policy section on your website.

When your customers know what to expect, they are less likely to be upset when you do exactly what you said you would. No matter what your company’s policies are on shipping, even if they are simply rotten, make sure that they are clearly posted on your site. Make sure that you do better than any policy on your site, shipping or otherwise. A shipping policy or refund policy should be a fallback point, not a guideline. If you say we ship within 48 hours, ship today.

Show shipping options, prices, and delivery time-frames.

On the shopping cart page, make sure you show available shipping options with their price and the estimated delivery time-frame. This does not mean, make your customer register or fill out their shipping address or fill out anything at all, before you show them shipping options. Ask for their zip code only (Not their zip and state, you can figure this out yourself) if your prices vary based on the delivery location.

I find that the best way to visually present shipping options is a list with a radio button for them to select their desired method. This is better than a drop-down box because it is easier to see and compare all of the options, and doesn’t require any clicking. Make sure to preselect the cheapest or the best value shipping method for them. This way they don’t have to interact at all if that’s what they choose.

If you use UPS or Fedex they offer tools to help you determine the delivery time-frame. Make sure to have your programmer use logic if you ship tomorrow, or need an extra day for packing, or your customer places an order on Sunday, a Holiday, etc. The delivery time-frame should be as accurate as possible. But when in doubt, add an extra day for padding. It’s perfectly fine to deliver early, but is never acceptable to deliver past the date you said you would.

Be very cautious about offering free shipping.

Free shipping is great. It can drive sales and give a company a huge competitive advantage. I’ve experimented on ebay many times with offering the same product at different prices and different shipping prices. Free shipping is a large enough incentive that many people will chose a more expensive overall price, over an item with high shipping costs. Shipping costs make people feel like they are being gouged, so there’s psychological motivation when shipping is very cheap or free.

However, free shipping is not great when you need to cancel it. If you have an established website, canceling free shipping can literally kill the business. Especially in the case of repeat customers, you can lose a lot of business when you revert back to a paid shipping format. This even applies to limited time free shipping promos.

A good alternative to free shipping, is free shipping based on price thresholds. This can also backfire though, as online retailers often make the same profit (not margin) on expensive products as cheap ones. If your products get heavier as they get more expensive, you can end up cannibalizing all profit if you offer free shipping in situations like this. You need to do the math for your products and your shipping fees, but make sure you aren’t destroying your profit by offering this.

In any case, be very careful if you decide to offer free shipping, or threshold free shipping, even as a promotion. The backlash when you retract it, if you can retract it, can be severe, and it just may not work from a shipping cost to profit perspective.

Don’t use USPS.

USPS can be great for some product types. It is perfect for low ticket products or those that can be crammed into a pre-paid priority box or envelope. It’s also great if your customer has no expectation for the package to get there in the next week, month, ever…

If you’re like most of us, USPS is nothing but a headache.

To start off with, their package tracking is simply unacceptable. Since about 1998, customers have expected to be able to see their package progress once it is shipped. With USPS this current day, they can possibly see cryptic postdated message after it’s updated at 7 or 8PM in the evening. Did I mention that delivery confirmation, package tracking, and just about any other expected service costs extra.

Next, the package pickup services leaves something to be desired. Unless you’re shipping out a semi trailer of packages every day, you need to have the box at the pickup location or post office very early for it to go out the same day. This is completely unreasonable for most online retailers that ship their own products. To make this work, you almost have to delay all orders from shipping by a day so they can be packaged the next morning.

Third, delivery time-frames are a complete toss up. Here in Texas, I’ve seen packages take 1 day, and 5 days in the same state. There’s no reliable way to predict the delivery time-frame. Your customer asks you when the package will be delivered. Your answer of “sometime in the next 5 days” does not make people happy.

Lastly, when USPS loses a package, which happens all the time, it’s a bureaucratic mess to try and find it or get compensation for it.  The time it takes to recover anything often offsets the loss of the product and the cost of sending a new one.

There’s good reason why almost every highly successful online retailer uses UPS or Fedex despite them being more expensive.

Ship Now!

Probably most important of all is just ship the damn package now! Don’t wait for 2 days to package it up, and another day to label it and another day to drop it off. Get it in a box, put a label on it and get it out the door.

If you want to be a remarkable online business, your packages must go out the day you receive the order.

I can’t count how many times I’ve ordered and finally after 5 days, I get an email that my package has been shipping. Seriously, did you have to build the manufacturing plant, required to manufacturer my product or something??? I will not buy from you again if it takes 5 days to ship unless there is some extenuating circumstance and you told me about it immediately.

The quicker you get the package out, the happier your customer will be and you no longer have anything left to perform with the order. Everybody wins when you ship quickly.

Keep your customer informed.

Through every step of the purchasing to shipping to delivery process, you should be keeping your customer informed on the status of their order. This is the one area that you have 100% control of, so there’s no reason not to do this. Send an email letting them know you received the order. Email letting them know it shipped. Email letting them know that you messed up and it’s back-ordered. Email letting them know it was delivered, and follow up in a few weeks to make sure they got it, and it is what they wanted.

This last step is extremely important for 3 reasons. First, it is a proactive approach at solving any problems your customer may be having. It tells them you care enough about their satisfaction that your reaching out to them to make sure everything is excellent. Second, it helps prevent chargebacks by reminding them that they purchased something from you (They will be receiving their statement about right now and they forgot the name of your company. Sorry, it just works this way.). Also, if there’s a problem they know to contact you and not their bank. Last, it gives you an opportunity to make another sale with your new customer. Offering coupons or other incentives is an excellent way to gain a repeat customer and this email is the perfect medium. Too often I see this used with an aggressive marketing tactic to get warranty sign-ups or other high-profit, tasteless services. Don’t forget, this email is still about them so keep it reasonable if you want them to come back.

Concluding thoughts:

No matter how awesome your business is, you will get complaints about shipping. You may not meet some-one’s expectations, you may ship a day later than they were expecting, they think you can miraculously ship or deliver on Sundays, your packages will get lost or destroyed or delivered to the wrong address. As long as you are handling shipping in the best way possible, there’s little more you can do except provide good support to your customers when something does get messed up. If you’re running a site that makes your customers register or fill out a form before getting options, or you ship 5 days after you receive an order, I can almost guarantee your sales will immediately improve once you implement some better shipping practices.

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17 Comments:
  1. Adam Golomb 8 Oct, 2010

    Great post. I couldn’t agree with your comments more. We recently switched to FedEx from UPS and USPS and the service and # of issues has dramatically dropped.

    Quick question, do you have any examples of websites with great Shipping Policy sections?

  2. Ecommerce Software 12 Oct, 2010

    Ecommerce include reducing both the time and personnel required to complete business processes, and reducing strain on other resources.

  3. Patti Hamm 14 Oct, 2010

    Does anyone have suggestions or comments on handling a customer’s over or under payment of shipping?

  4. John Marcus 20 Oct, 2010

    Amen to the “ship today” principle.

    What exactly WERE you doing those 4 days it took to put out the door? A question I have had many times. Sometimes a simple “this will take 3 days to put in a box” is also an answer people will take. Suprises are the worst thing you can do to your customer, ever.

  5. […] eCommerce Blog brings you Best shipping practices for ecommerce websites […]

  6. BlueBoxSystems 10 Nov, 2010

    Great post. one of the very few that deals with the real pain of eCommerce i.e Delivery/Shipping.

    Please publish more content on this topic. Lets discuss various options in details. I’m sure a lot of people have a lot of ideas in their mind.

  7. Web Design Delhi 13 Nov, 2010

    Nice Post, I have agree with you. Thanks for sharing all about the e commerce websites. Its very useful.

  8. Mike 21 Nov, 2010

    A quality courier service can definitely never be overlooked. I operate from home but still have 3 courier pickups a day from my front door. Delivery is easily trackable and problems are very rare. I originally used a national post service, but had too many dramas with lost packages, so find any extra cost is worth it as it is much more reliable service. (Saves leaving the house to go to the post shop also!)

    I package and send everything the same day or following morning along with tracking details, and I always receive a lot of great feedback on speed of service and delivery.

    We offer free delivery and think it is very beneficial. I see way too many shopping cart systems or websites that don’t display shipping costs until you have been right through the checkout process. At this stage you may not then be willing to pay the added shipping cost.

    I find this especially annoying on lower cost items. If I buy a $20 t-shirt but shipping is $10, I’m very likely to cancel the transaction. I don’t want to pay 50% of the cost of the item on shipping. However if the item was $30 with free shipping, I would very likely buy the item. People love a bargain and hate to feel they are being ripped off.

  9. Mike Cormack 2 Dec, 2010

    Wow, I never realised UPS were *that* bad! Duely noted.

  10. cheap shipping company 2 Dec, 2010

    You can even save more on FedEx, DHL and UPS service. I use ShipNex Shipping company. They offer 60% additional discount on FedEx, DHL price. You can also create shipping labels online.

  11. dotcomweavers 27 Dec, 2010

    Best Shipping Practices for E-commerce Websites are the additional advantage. It really help to increase the sales as well. Good Post Related to E-commerce Websites, Thanks for the share.

  12. aheadWorks 16 Aug, 2011

    “Shipping costs make people feel like they are being gouged, so there’s psychological motivation when shipping is very cheap or free”- so true, thanks for the post.

  13. Richard Sparks 12 Sep, 2011

    USPS are useless. I live in the UK and recently ordered some items of clothing from the USA online. This happened 6 weeks ago and I am still yet to receive my items I have been following the tracking but my package seems to stay in 1 place for days. Wont be doing it again. Ecommerce UK is a far more efficient system and I will still to that from now on.

  14. Lina 27 Jan, 2013

    I have a question as a buyer:
    What if you buy from a 3rd party company, like for instance Alibaba and don’t receive item for weeks and you paid big $ for express 3 day shipping? And they repeatedly got your address,telephone number wrong…also never contact you after it’s finally sent out 3 weeks later…Then, they ignore you when package is lost because of their mistake in labeling? Yes, Ups and Usps- even FedEx are very iffy but they usually are OK if the seller puts down correct info and you can’t go wrong w/Paypal–It’s right there.
    When you finally get item,(only because neighbors helped search for it)it’s absolutely not as described! You try to contact through email and site and they ignore you. Then you have to file a claim….which may take forever.(still ignoring)
    As a buyer, you never want to ever go back. Ever.
    I think this is a good article, but as a customer who’s having to send back (paying A LOT of $ for shipping) an item,I think it’s a bit one-sided.
    And just maybe I’m very mad?

  15. Lucrecia Mirabelli 12 Aug, 2013

    Hey, I know a lot of time has passed since you wrote this article, but I would just like to point out that a blogger at this site: http://designmodo.com/shipping-practices-ecommerce/ has totally ripped you off and published your exact content as if it were their own.

    Just wanted to let you know, because your post is awesome, and as a blogger myself, I hate it when people steal my work.

    Best

  16. Kristenhanna 13 Aug, 2013

    I agree “Be very cautious about offering free shipping”, Good advice on shipping practices to be accomplished.

  17. Michael 13 Aug, 2013

    Thanks for the insightful article! The points covered here are definitely ones that you won’t easily find elsewhere.

    And anyone who struggles with order processing should check out http://dokity.com/, a free app that simplifies the exchange/syncing of data (orders, product info) with business partners (suppliers, 3PL companies.

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