Ecommerce Shipping Explained

Any business that sells products or goods online needs to ensure that their ecommerce shipping strategy is watertight. Failing at having an effective strategy can cause a whole range of issues including delays, missing items and, most importantly, a poor customer experience.

To fully grasp the importance of ecommerce shipping, we need to first break it down into its components. From definitions and considerations to strategies and solutions, this guide will explain the entire process from start to finish, giving you a head start on optimizing your own shipping strategy.

What is ecommerce shipping?

Ecommerce shipping is the process of shipping products to a customer once they complete a purchase online. Small businesses can fulfill their own shipping, while larger companies can choose to outsource to a 3PL such as 3PL Center. This means the 3PL will manage the shipping for the business.

Ecommerce shipping can be split into three main areas:

Receiving – Receiving product from your manufacturer or vendor

Storage – Put away of your product in an efficient way for later picking of orders

Processing and shipping orders – Once the platform receives the order, workers will begin the process of picking orders, checking if they are correct, and packaging them if needed. Once prepared, the order is processed via the best shipping method and handed to the respective carrier.

All of these areas are equally important and add to the overall success of ecommerce shipping. Failing to correctly optimize one of these areas can lead to a backlog of orders, affecting both workers and customers.

Why is ecommerce shipping important?

Successful ecommerce shipping is vital for any online business and failing to get it right can lead to some severe consequences.

First and foremost, a poor ecommerce shipping strategy will likely lead to missing items or heavy shipping delays. This creates a poor customer experience, deterring customers from becoming repeat buyers and leading them to go elsewhere.

If the customer had an exceptionally bad experience, this may prompt them to give the business a bad review. No ecommerce owner wants unnecessary bad reviews that will impact future sales and reduce the probability of a customer interacting with a brand.

Trying to amend these mistakes will cost more time and money; in reality, it should not be happening in the first place. Mistakes can happen – that is inevitable. But when this starts becoming a regular occurrence, it affects the customer, the warehouse team, and the overall health and future of the business.

Ecommerce shipping fulfillment options

Ecommerce shipping, while seemingly simple to many, is actually a very intricate and complex process. Because of this, businesses need to determine who exactly will be responsible for managing such a complicated system.

Many choose to fulfill this themselves to begin with. However, as the business grows, many outsource to a third party provider so that they can focus on other areas of their business.

Here are the three main fulfillment options for businesses looking to optimize their ecommerce shipping:

1. Self fulfillment

Small businesses that make their own products or have a small inventory may find it easier to ship directly from your own office, warehouse, or home. This is much more cost effective due to the low quantities you are shipping, but can become time consuming as the business starts to scale up.

The biggest downside to self fulfillment is inevitably the time it takes. Time is money, and if you think this time could be better off spent elsewhere, it is probably time to explore an alternative ecommerce shipping solution.

2. Dropshipping fulfillment

If your business sells items that you buy from a retailer, dropshipping fulfillment may be the best choice for you. Similarly to self fulfillment, this option is best for businesses that are smaller and do not sell in high enough quantities to qualify for large scale shipping operations.

However, dropshipping comes at a cost: less control over products. With most fulfillment companies, you never get to see your product, meaning customization options are limited. Although, this is not the case with some fulfillment providers, including the likes of 3PL Center.

3. 3PL fulfillment

Businesses that are expanding and no longer have the time, money, or energy to handle their own ecommerce shipping should look to outsource to a 3PL provider. This is ideal for businesses that either own their own product or buy from multiple retailers, meaning they need somewhere and someone to handle it for them.

Businesses of all sizes can benefit from outsourcing their fulfillment due to the convenience and cost-effectiveness it provides. Businesses will likely save money in the long run due to higher volumes of shipping generating discounted shipping rates.

Moreover, 3PL providers have the expertise to optimize the ecommerce shipping process. There are many things that providers do to ensure this, shown through their efficient onboarding and receiving, highly optimized storage and warehousing, and rapid processing and shipping.

Which option should I choose for ecommerce shipping fulfillment?

The best option to fulfill your ecommerce shipping needs entirely depends on the size, scalability, and focus of your business.

If you are a small business that only sells to a specific country or region due to your niche audience, self fulfillment is likely the best option. 

However, businesses that wish to scale and hand over responsibility of their products to a third party are better off exploring the dropshipping or 3PL fulfillment routes.

Importantly, things can change. Your current ecommerce shipping solution may be working fine currently, but as your business starts to scale up, it may become much more difficult to maintain. Always consider the future and look ahead for new ways to make the process easier.

Important considerations before developing an ecommerce shipping strategy

Before you start outsourcing your ecommerce shipping to a fulfillment partner, there are a number of factors to consider:

Shipping costs

It is important to know how much shipping will cost you as this will determine how much you will charge your customers. Customers will compare prices across different platforms, so pricing that both appeals to them and keeps you in profit is absolutely essential.

Packaging

If your business prides itself on customized and branded packaging, you need a fulfillment partner that can provide this service. Certain providers are not able to accomplish this, so they will not be the right fit for you.

Tracking and returns

Logistically speaking, your ecommerce shipping services need to offer both tracking and returns. Failing to do so will cause massive issues later down the line when packages go missing or customers want to return an item.

Shipping locations

Where does your target market primarily live? If you are selling a particularly niche product, it is probably better to ship to a specific region rather than opting to ship across the continent (or even worldwide).

How does ecommerce shipping work?

Now that you have nailed down your priorities, it is time to get into the nitty-gritty of ecommerce shipping. As mentioned above, the process has three key areas: receiving, preparation, and shipping. If one area of this process fails, then the entire ecommerce shipping model crumbles.

A brief overview of the process looks like this:

1 – A customer places an order for one of your products

2 – The location holding your product prepares it for shipping

3 – Your product is shipped to the customer

On the surface, this looks fairly simple. However, as we dive deeper into each step, you will see how detailed and intricate they truly are. Optimization is key as saving a few minutes or even seconds with each order will add up in the long run, saving time, money, and energy.

Here is how each individual area works:

1. Receiving

Receiving orders from customers is a crucial step to get right.

Firstly, your product needs to be ready for shipping at a moment’s notice. Businesses that manufacture their own product need to ensure that enough volume is available for shipping, otherwise they may find themselves at a bottleneck. 

Alternatively, fulfillment partners need to ensure that their onboarding process is optimized so that they can guarantee the product is ready for sale. For instance, a partner such as 3PL Center offers a 24 to 48-hour turnaround guarantee on any products that come into their warehouses, meaning the product is ready and in storage within this time frame.

The second major point is your warehouse management system. A properly integrated and efficient system will connect with all your major online platforms, effectively merging all bodies into one. Without a working WMS, it becomes incredibly difficult to oversee the logistics of receiving orders, which leads to delays and poor customer satisfaction.

2. Preparation

Once a customer order comes through, and your product is available to send, the preparation stage begins. This is arguably the most convoluted step in the ecommerce shipping process, specifically due to the many sub-sections that require acute attention and optimization.

The primary step is picking and packing. Regardless of your product’s size, weight, or complexity, every order will need to undergo pick and pack fulfillment.

The WMS will generate a picking list, informing workers of the optimal route to pick items for the order. There are many different ways that fulfillment partners such as 3PL Center optimize this pick and pack process, with many opting to place products with high shipping volumes closer to packing points.

Once the order is picked, it goes to the packing station. It is here that the customer’s order is packaged. Workers will know which products require special handling and packaging based on the list generated by the WMS.

Kitting and assembly is another important part of order preparation under the ecommerce shipping process. Unlike picking and packing, it does not occur during every order. Products that require building before shipping (i.e. bundles and kits) or orders that come with multiple items (i.e. mobile phones with chargers and headphones) will need to go through kitting and assembly.

Upon completing preparation, the order will be given an order sticker so that workers know what it is and where it is going.

3. Shipping

The final step in the ecommerce shipping process is the shipping itself. It is great if a warehouse has a highly optimized onboarding, storage, and picking and packing process, but if the customer receives their order late or not at all, then this efficiency is meaningless.

Depending on where the product is going and how far away the customer is will affect which shipping method and provider to opt for. For instance, orders that are within the same region as the warehouse can go to a local delivery service as it will be more cost-effective. Nationwide orders, or even orders across the continent, are better off going with bigger delivery companies like USPS or FedEx as they have the tools to get the customer’s order to them quickly. 

The most vital part of shipping is keeping your customers happy. If you have promised 2-day delivery, you need to keep that promise. Other things businesses need to consider include:

Eco-friendly shipping – can you promote your product as being shipped in an eco-friendly fashion.

Expedited shipping – if you can offer next day or even same day delivery, this will increase the likelihood of sales and repeat customers.

International shipping – businesses looking to scale globally need to consider the logistics of shipping worldwide, meaning finding a partner who understands the regulations and requirements of doing so.

Calculating the costs of ecommerce shipping

It is great if you can offer the likes of 2-day and eco-friendly shipping to your customers. However, the big question is this: can your business afford that ecommerce shipping strategy?

Shipping obviously costs money, but many people are unaware of the full scale of these costs. Every cent adds up, so it is vital to know where your money is being spent.

Here are all the costs you need to consider when looking at your ecommerce strategy:

Shipping carriers – the delivery companies that physically transport the item to the customer. This will be determined by the weight and volume of orders you send.

Packaging – the materials that encase the order and ensure it is secure (boxes, tape, pallets) 

Overheads –  the cost of maintaining ecommerce shipping in-house (rent, wages, equipment etc.)

Outsource fulfillment –  third party labor to pick, pack, and ship the order

Returns – refunding items that customers are unhappy with

Miscellaneous costs – other costs that may not be applicable for every business (insurance, importing/exporting)

How can I calculate how much an order will cost to ship?

The costs of ecommerce shipping for a specific package will depend on four key factors:

The dimensions and weight of the package

The carrier’s cost for shipping the package to the customer

The value of the package contents ( only if insurance is required)

Where the item is shipping from and where it is shipping to

Most major shipping companies use dimensional weight (DIM) to calculate their costs. They also factor in oversize and overweight fees, rural area fees, and residential fees. 

It is important to bear in mind that fulfillment partners like 3PL Center receive discounted shipping rates due to the high volume of orders they ship. Alongside a vast network of warehouses to lower shipping distance, this greatly increases the cost-effectiveness of any strategy.

On top of this, you can see exactly how much a specific order will cost through our customer portal, giving you clear insight and transparency into how we calculate individual shipping costs.

Want to know how much your ecommerce shipping will cost? Contact us now to get started.

Ecommerce shipping tracking and returns

A big part of the online shopping experience is giving customers the ability to track their package. By sharing this data with them, it creates loyalty and trust as your customer is receiving live updates on the status and position of their order.

On top of this, businesses need to offer ecommerce shipping solutions when things go wrong. Namely, your returns process needs to be fast and effective in order to minimize any potential backlash.

To deliver this seamless experience to the customer, businesses need to ensure a number of key things are in place:

Managing orders

Tracking your ecommerce shipping orders is impossible without a fully integrated management system. You need to know which products are available, and if any are nearing depletion. 

Once you have internal updates that inform you of product status in real time, you can effectively chop and change which products are available for purchase, thus eliminating any potential disappointment when a customer’s order arrives late or not at all.

Tracking numbers

Businesses should provide order tracking information to the customer to give them the ability to see exactly where their product is at all times. Regardless of if you are doing this in-house or through the help of a fulfillment partner, it is your responsibility to pass this information on to the customer.

3PL providers such as 3PL Center offer the ability to integrate the tracking number with their system. This can automatically send a confirmation email to the customer, thus removing the need for you to provide the details for them. This system also allows the customer to filter through their orders and amend any delivery details such as their name or address.

Efficient returns process

Having a set out returns process to ensure excellent customer satisfaction is incredibly important for any ecommerce shipping strategy. Mistakes happen and customers are usually mindful of that; if you can remedy the situation quickly and efficiently, it may in fact improve the customer experience more so than if the order had gone as originally planned.

This works both ways however. Poor handling of returns can result in some serious backlash, especially if the customer has had a particularly bad experience. This can lead to negative reviews which will seriously affect the likelihood of first-time customers engaging with your business. It is vital to a proper return process for the company selling the product to provide the 3PL with a detailed way of evaluating the product returned and how it should be put into stock or not. 

Ensure you have a strict system in place to quickly and efficiently handle returns. Working with a fulfillment partner like 3PL Center gives you access to years of industry experience and expertise in managing returns at a larger scale. 

5 common ecommerce shipping issues (and how 3PL Center combat them)

Errors are inevitable when it comes to ecommerce shipping and it is impossible to guarantee 100% accuracy and delivery. Because of this, it is important that anyone handling shipping understands where errors persistently occur and how best to deal with them before they get out of hand.

3PL Center has many years of experience working with a wide range of businesses and industries, meaning we know what the most common issues are when it comes to ecommerce shipping. Here are some ecommerce shipping solutions for five of the industry’s biggest problems:

1. Slow processing times

A big issue for many of our customers is that their former fulfillment partner took too long to process their orders, leading to delays and unhappy buyers. To ensure orders are shipped quickly, we employ strategic warehouse tactics in order to optimize our picking and packing. 

At 3PL Center, we use a mixture of both batch and zone packing so that time spent moving around the warehouse is kept to a minimum. Because of this, we can guarantee a 24-48 hour turnaround time for products entering our warehouse and being ready for shipment.

2. Not sticking to guaranteed delivery times

While it is near impossible to guarantee 100% on-time delivery, mistakes should only occur few and far between. Fulfillment partners that are constantly delivering items late are not sticking to their guarantees, which only angers you and your customers.

To ensure we keep to our 99% shipping accuracy guarantee, we partner with the best shipping carriers and only choose the best option for local, regional, and nationwide delivery.

3. Poor customer service

When something does go wrong, someone needs to be on hand to deal with the situation accordingly. Customer service needs to be taken care of seriously, otherwise it can cause severe dissatisfaction.

To help our customers when shipping does not go according to plan, we have staff available 24/7 to help with your concerns.. Poor customer service is the worst mistake in fulfillment, so we show the utmost care and support when dealing with any issues you raise.

4. Struggling to track inventory

Many fulfillment partners make integrations with WMS sound easy. In reality, no setup is ever simple and you will be lucky to find a business that experiences no issues with connections between online platforms and their central system.

At 3PL Center, we ensure our team of developers scrutinize all integrations with online platforms so that they are fully working and giving you the data you want. This allows our customers to get the most out of their WMS, thus giving them statistics that show growth, cost-effectiveness, and overall success.

5. Keeping costs down

The number one reason why many of our customers choose to move across to 3PL Center’s fulfillment is due to the rising costs of many other providers. It is hard to balance keeping profits high while keeping buyers happy with prices, so it is vital to find a partner that can help you do both.

Due to the large volume of shipping we carry out through our various shipping carrier partnerships, 3PL Center gains access to incredibly discounted shipping rates. This gives the businesses we work with excellent cost-effectiveness and value for money.

Why choose 3PL Center for ecommerce shipping fulfillment?

It is clear that the sudden push for online shopping in the last few decades has changed the shipping scene forever. Customers expect fast and reliable delivery or else they will take their business elsewhere.

At 3PL Center, we understand the need for experience and knowledge when handling ecommerce shipping. It is a massive part of any online business that, if left unchecked, will cause hard to repair damage to your reputation and future sales.

Having the expertise in dealing with various businesses and industries gives us the tools to fully optimize your shipping model. If it needs to be fast, efficient, and nationwide, we can guarantee a seamless experience.

We adopt a customer-centric approach for our ecommerce shipping solutions, ensuring that both you, your customers, and your business needs are well looked after. Our commitment to efficiency, flexibility, and our guarantees ensures that all parties are happy.

Why wait? Choose 3PL Center and start optimizing your ecommerce shipping experience today.