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 withing 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.
