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Best Shipping Strategy for Your eCommerce Business.

Your eCommerce shipping strategy can make or break your business.

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Shipping is often one of the last things many eCommerce retailers consider when running their business. It’s only when the sales start coming in and piling up that the dilemma arises: how to ship and handle products in the most efficient and cost-effective manner? There has to be a balance between satisfying customers with affordable and fast shipping and keeping costs low to make profits.

Nowadays, customers expect to have free shipping for all orders, or, at least, have a free shipping option. And that’s not all. They also want it fast. Really fast. Amazon’s Prime program has set this fast and free shipping standard or shopping trend for the whole eCommerce industry. A new study from L2 found that a quarter of shoppers would abandon a cart online if same-day shipping wasn’t available. This proves customers have an increasing expectation of short delivery times.

Although you may not be able to compete with Amazon’s huge budget for fulfillment facilities, robots, or personnel, there are still shipping strategies that can keep you competitive in the industry. Use this article as a guide on how to decide on the best shipping strategy for your specific eCommerce business. Let’s get started with important things to consider while deciding on a shipping strategy.



Deciding on a Shipping Strategy

When creating an effective shipping strategy, first you have to consider and factor in all costs involved. What works for your business may not work best for another one. Go over the variables below to create your own tailored strategy.

Merchandise Storage

Do you have a warehouse or enough space to store your merchandise? What about if your business grows? Compare the costs of having a warehouse or hiring a third party to store and fulfill your orders. The latter may work best if you’re just starting out. Either option carries costs that should be factored into the cost of shipping.

Merchandise Value

Will you need merchandise insurance? If you’re shipping outside the U.S. or if you sell high-end products, you may want to consider purchasing high-coverage shipping insurance. This is another cost that should be factored into the cost of shipping and handling.

Packaging Size and Weight

Are you packing products on your own or will you get help? It’s a question of paying employee fees vs. spending extra time fulfilling orders.

Your Shipping Goals

Your immediate answer to a shipping goal may be to increase eCommerce conversions—but think again. There are other goals besides conversions you can reach with attractive shipping alternatives. For instance, you can set free shipping options according to set order values to increase your average order value. Victoria’s Secret uses this strategy by setting their 2-day free shipping on orders $125. In this way, they push their customers to spend at least $125 or more to get free shipping.


Best Shipping Strategy for Your eCommerce Business.

On the other hand, if you’re looking to lower operational costs, you may opt for charging a flat fee or offering real-time pricing according to the number of products purchased.

Finally, if you’re just looking to increase conversions, offering free shipping for all orders may be a good idea if you can still be profitable after accounting for all costs.

Shipping Options

Free Shipping

As we’ve previously mentioned, free shipping is a must in the eCommerce industry. The question is how to offer it while still being profitable. There are a few different ways to do this:

  1. Absorb the cost of shipping.
  2. Increase product pricing.
  3. Set a minimum order value to get free shipping

The first option, absorbing the cost of shipping, may make sense if your profit margins are high. However, if you’re already working with slim margins, increasing the product price slightly may be your best bet. Otherwise, you’ll end up losing too much money in exchange for free shipping. The last option, setting a minimum order value to get free shipping, can help you get the best of both worlds by offering free shipping while still being able to cover costs.

Flat Rate

Offering a flat shipping rate can help your customers shop with confidence, knowing their shipping cost won’t change regardless of their order. Just make sure the flat shipping rate is affordable for your average order value. Otherwise, your customers may feel like they have to make a big order to compensate for the high price, which can deter them from making any purchase.

For example, if your average product costs around $3, having a flat shipping rate of $15 may seem too high. A customer would have to purchase five items to equal the cost of shipping. On the other hand, if your average product costs around $100, and your flat shipping rate is $15, it would make much more sense.

When choosing a flat shipping rate, consider the total cost of shipping. This includes all the variables we discussed previously, such as package size and value. The rate has to be affordable enough to encourage potential customers to make a purchase while keeping profit margins.

Real-Time Pricing

Real-time pricing offers benefits and disadvantages for both retailers and customers. Retailers have the benefit of getting a fair shipping price on all orders; however, not knowing the final shipping cost can create purchase doubt and uncertainty for customers. On the other hand, customers can also get a fair price for small orders. Website platforms like Shopify can help you calculate the rates automatically for your store without heavy coding.

Final Notes

Be flexible! Your shipping strategy can—and will—change as your business grows or special occasions come along. Test different strategies to find out which suits your business the best, but always offer some kind of free shipping option. This option should not be hidden. Display it somewhere visible to encourage your customers to make a purchase.

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My name is John, I am the owner of Digital Global JV™. You will find many opinions on Digital Global JV™ Blog, however, Digital Global JV™ may not share or endorse those opinions from other bloggers, however, We respect all blogger opinions.

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eCommerce

How E-Commerce Can Impact Your Business

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eCommerce can affect your business plan

What do you usually think about when someone mentions the word e-commerce? In my case, the image that springs to mind is a consumer buying a product or service online. To a certain extent, e-commerce is about online shopping (link to https://www.digitalglobal.com/how-online-shopping-will-be-trending-in-2020/), but its implications also go far beyond that.

Today, we’ll be taking a look at the ways e-commerce has reshaped business models all across the globe.

E-Commerce in Today’s Competitive Modern World

Today, our long-accepted economic practices are constantly being challenged by e-commerce and a never-ending parade of virtual companies, resulting in an extremely competitive business environment you’ve never seen before. While there are countless opportunities and newer markets for you to tap into because of globalization and the Internet, lying in wait will still be a hoard of fierce competitors looking to take your place in the market.

In an era where digital has taken reign over most industries, those who refuse to jump on the e-commerce train usually end up getting run over or left behind. Of course, this doesn’t mean you should immediately work with the first web design company you come across. You require a perfectly thought-out strategy that allows you to snatch that lead away from your competitors. Your plan should help you accomplish these three important goals: boost revenue, expand your company, and take your business to new heights.



E-Commerce: Disrupting the Very Core of Conventional Businesses

It looks like e-commerce isn’t going anywhere. It’s a threat that cannot be contained—an epidemic affecting all businesses, from little start-ups to majestic enterprises. Your company may have been an industry leader in the last five years but that doesn’t mean this will be the case in the next five. That’s the level of threat posed by e-commerce for traditional businesses who refuse to embrace the ever-shifting commercial landscape.

Adopting the new and improved ways of e-commerce into your business entails more than just updating IT infrastructure. You have to remodel the very core of your business—from management plans to employee function, every aspect should follow an e-commerce-first approach.

Which business do you think will win out in the end: conventional organizations or modern-age e-commerce companies? Who, in the end, will be able to retain their market shares and successfully expand to new markets?

We need to keep in mind that old principles for running businesses are no longer relevant in today’s world. Running a business based on obsolete practices is a complete waste of time and money, and it’s not going to get you anywhere in this incredibly competitive industry.

Here are the remarkable ways in which e-commerce-based businesses have routed traditional ones.

Forget vertical integration.

  • Once considered one of the best practices for running a business for many years, vertical integration has now become irrelevant in today’s ever-changing commercial landscape. Businesses in the past used to think that the best way to get something done was to do it themselves. Growing companies then started making every aspect of their operations an in-house job, from retail, research and development, and, in some cases, even legal matters. It was this kind of mentality that resulted in huge overhead costs, inflexibility, and inefficiency for many businesses. The advent of e-commerce has allowed today’s businesses to outsource tasks that are not part of their core practice, effectively reducing overhead costs, eliminating unnecessary expenses, minimizing capital expenditure, and helping businesses focus on their core service or product.

Limitless outreach.

  • A little more than a decade ago, businesses would have found it nearly impossible to tap into other consumer markets. Today, doing that would be all in a day’s work for any digital marketing professional. Now you can reach out to consumers in the farthest ends of the world if you so desire. E-commerce has made it possible for you to connect with every single one of your target customers. You’re no longer limited to selling products and services to the local market. This recent development has also leveled the playing field for small businesses, allowing them to target their share of large audiences spanning the globe.

More affordable initial business set-up.

  • Back then, setting up a business would require you to have huge capital. This no longer is the case because of e-commerce. Today, anyone who has the desire to start their own business would be able to do so with only minimal investments. Since you’re able to sell online, there’s no need to carry a sizeable inventory. You can simply add to your inventory depending on customer demand. More importantly, e-commerce has become responsible for the great decrease in the overhead costs of managing a business.

More meaningful collaborations.

  • If we were to go by the conventional ways of running a business, a small business owner specializing in a certain niche, like yourself, would only have access limited to specific markets. Even if you wanted to, it would be impossible to aim for higher profits because the bigger markets simply weren’t open to you. These days, small businesses are given the opportunity to sign up on market platforms, paying only a tiny fee so that they can sell their products. Through these platforms, their market reach significantly broadens, resulting in a win-win situation for both parties and fulfilling collaboration.

So long, middlemen!

  • E-commerce has made it possible for businesses to sell directly to their customers without needing any middlemen. Small businesses owners usually had to rely on brokers or vendors to distribute their products to locations beyond their vicinity. Today, you simply have to work with a company that can design the ideal online shop for your business. Your online store is what connects you directly to your target audiences, putting an end to middlemen involvement.

There’s no need to close your business.

  • These days, if your business isn’t open 24 hours a day, 7 days a week, you won’t be able to compete well enough. It’s a good thing that this, again, has been made possible with the emergence of e-commerce. There will be no state of dormancy for your business whatsoever, and sales will be happening at any time. Old-school business owners were wired to close shop by the day’s end. This limited their customers to make a purchase only within a specific time. This isn’t how today’s shoppers want to go about their shopping. To make it as a business in this modern world, you have to take full advantage of the way e-commerce offers your customers the convenience of shopping from your store at any time they wish, even if it happens to be in the wee hours of the morning.

You don’t have to own a big company.

  • These days, it barely makes a difference if you run a large company with a ton of employees or a small online shop managed by you and your friend-slash-business partner. As I mentioned prior, the commercial landscape has now become a more level playing field because of e-commerce. Small, traditional businesses used to suffer a lot from being understaffed. These stores couldn’t even begin to compete with their more massive counterparts. Now, it seems that the roles have switched and the larger, clunkier corporations have become more difficult to manage compared to their smaller equivalents in the digital world.

Business advertising is taken to a whole new level.

  • There’s been a sweeping change in the way modern consumers make their purchases. It’s only right that these changes resulted in the variation of advertising tactics as well. Even consumers who are fond of shopping the traditional way don’t limit themselves to products sold in brick-and-mortar stores; they look up items on the Internet, read online reviews, and compare prices between digital and physical stores before making the decision to buy. Considering that your target audiences are going to approach buying from both conventional and modern angles, you as a business owner would need to adapt and evolve. Even if it goes against your very principle to divert from something that has brought your store success, sometimes it is necessary. Remember that the things that bring you success today may no longer be the same things responsible for your success tomorrow.

How E-Commerce Can Impact Your Business

Digital marketing allows you to constantly meet the demands of the tech-savvy audiences of today. You gain a huge advantage from being able to utilize the following tactics: paid ads, email marketing, social media management, and search engine optimization (link to https://www.digitalglobal.com/5-reasons-why-content-marketing-will-improve-seo/) to push your business to a level you have never seen or experienced before.

E-commerce has made a huge impact on the way modern businesses operate. No matter what kind of business you’re running, you can’t escape its sweeping grasp. When most of today’s consumers go shopping, the first thing they do is fire up an online search. They have information at the tip of their fingertips, making them well-informed and savvy buyers.

As a business operating in today’s dynamic landscape, you need to do your part in adapting and evolving. Stability can be your greatest downfall in the race to outpace your competitors. Why? Because it’s highly likely that most of them will be open to change. Change is the very nature of the commercial environment and you, as the head of your company, need to find ways to keep evolving, introducing new facilities, and making use of current technologies to woo customers who are getting more and more informed by the day.

It’s going to be a wild ride ahead, but are you ready to take that e-commerce leap to skyrocket your business’ growth? You’re more than welcome to share your thoughts and insights in the comments section.

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eCommerce

Why Free Shipping Is Actually A Myth!

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Free Shipping Myths

These days a lot of online shoppers will choose the best online store over another because they offer free shipping. But is free shipping real or is it just a myth? More and more online stores are offering their customers free shipping if they spend a specific amount of money. But is free shipping really “free?”

It is certainly a good marketing ploy. The online store owners know that free shipping is a good draw with customers. Let’s face it we all like the idea of getting something for nothing don’t we? But the bottom line is that everything is not as it seems. If online stores really offered free shipping they would lose a ton of money every year.



What does Free Shipping really mean?

Basically, free shipping is a tool used for marketing. It is where an online retailer removes the charges that a customer would normally pay for shipping where an order is eligible for this. There are exceptions to this rule, such as placing an order on Walmart for $35, then you will get free shipping, which may not even be possible if Walmart did not get huge shipping discounts through their shipping carriers.

The online retailers remove the shipping cost but this doesn’t mean that the online shopper will not end up covering the cost in other ways. As a shopper, you will see that the shipping fee is zero in your cart but that doesn’t mean that the cost has disappeared from your order.

It doesn’t matter how large an online retailer is they cannot absorb the cost of genuinely providing free shipping. Somebody has to pay and it doesn’t have to be the customer (on the surface). There are other components to the supply chain and they can apply pressure there.

The big online retailers have larger economies of scale and are in a strong position with their shipping suppliers. They can demand lower shipping prices and offset a lot of the costs of providing a free shipping offer. Smaller online retailers are not in this position and have to absorb the costs if they really make shipping free.

But the smaller online retailers will not genuinely offer free shipping. They cannot afford to cover the costs and they have no bargaining power with their shipping suppliers. So what do they do? They increase the prices of the items they offer to cover the costs. That means that you as the shopper think that you have saved money but you have not saved anything, and have paid more.

Even the Famous Stores are doing it

The world’s biggest online store, Amazon, has its “Prime” offering where customers in the United States pay a yearly fee of $99 and then get free shipping on millions of items that are included in the Prime membership.

They are not alone in this. Big retailers such as Gap and Best Buy are doing it too. So do Zalora and ASOS. The thing is though that all of these giant online retailers have had to increase their minimum shopping amounts to qualify for free shipping because the costs were prohibitive.



Why do Online Stores offer Free Shipping?

People do not want to see unexpected costs added to their shopping cart. Add on a few dollars for shipping and a lot of shoppers will abandon their shopping carts in the belief that they can get a better deal elsewhere.

Most online shoppers know that there has to be a cost for receiving their ordered goods, but this has a negative effect on them and some even feel like they are being conned. This is not logical but it does result in shopping cart abandonment.

Most online stores that offer free shipping insist that a shopper has to spend a specific amount to be eligible for it. Let’s assume that the order value requires for free shipping that is $100. What would you do if your order value was $98? Would you stop shopping and pay the shipping cost or would you look for another item to achieve the minimum order value?

You are going to add another item, aren’t you? And the online stores know that you are going to do this. You will be motivated to increase the size of your order to get something for free. It has worked for many years in all kinds of conventional trading and it works online as well.

Online stores will not lose that much by offering free shipping on larger orders. Shipping a larger order is more cost effective than shipping several smaller orders. The larger online stores are prepared to continue with a free shipping policy because they know that most online shoppers have an issue with it.

These days’ online shoppers looking specifically for stores that have a free shipping deal. They don’t think too much about whether the retailer has inflated the prices of the items they are purchasing to cover the shipping costs. All they care about is the shipping being free of charge.

What the Surveys had to say

According to the National Retail Federation (NRF) 85% of people that shop online stated that free shipping is a very important factor in their purchasing decisions. In fact, it is second only to discount offers and sales promotions.

The NRF also surveyed a number of online retailers and almost 50% of them stated that they were going to increase the number of free shipping offers that they provide. They also consulted with shipping organizations such as FedEx, UPS and the USPS who all said that they would organize themselves better to cope with increased demand.

There have been a number of surveys conducted on why online shoppers abandon their carts. A comScore survey showed that 57% of online shoppers abandoned their shopping carts because they were just browsing or “window shopping”. Some 56% of shoppers abandoned their carts because they would return and make the purchase later on.

Shipping costs figure high in shopping cart abandonment as well. Econsultancy.com found that 74% of online shoppers abandoned their carts because they felt the shipping costs were too high. Online retailers are always concerned about shopping cart abandonment and Target responded to this by joining in with their free shipping offers.

Trimble conducted a survey on cart abandonment and this revealed that some 58% of the participants felt that free shipping or reduced cost shipping is something that all e-commerce stores should implement.

A study by the Journal of Retailing looked into the effect of shipping costs on the acquisition of customers, the retention of customers and the number of items purchased by customers. This study claimed that if shipping fees are high then this will reduce the amount of traffic that an online store receives.



So what does this all mean for you?

All of the evidence suggests that online stores will continue to offer free shipping in some form or another to attract customers and retain them. But these are businesses and they are not doing this out of the goodness of their hearts.

Someone has to cover the cost of offering free shipping and that will be you as the consumer or another part of the supply chain such as the shipping suppliers. Now you might think that it is great for shipping suppliers to contribute to these costs if you use the larger online stores. But when any company has its profits squeezed, then this will be problematic for any business trying to make a profit.

The shipping carriers also need to claw back this cost. So they start making cuts to their operations. In the end, you the consumer end up paying for this as your items don’t arrive on time or your items suffer damage through mishandling.

If you use smaller online retail stores then you will usually end up paying more for the items that you purchase to cover the free shipping costs. A small company does not have the economies of scale and it certainly cannot afford to absorb shipping costs.

So when you see free shipping offers in the future bear in mind that this is a marketing tactic to get you to stay with one online store over another. Someone will be paying for this and even if it is not you then you could end up suffering from the quality of your deliveries.

Free shipping is a myth and very few things in this life are free. You may find that you can find the same items cheaper in another smaller online store, and even with the shipping costs, you will still save money. So our advice to you is not to just accept that free shipping offers are the best deal. At the end of the day, someone has to pay and usually it is you.

DigitalGlobal.com – Buyers just want to see the bottom line, and that is not always easy, and not always possible, as an owner, there are costs involved in running an eCommerce business such as platform, cost of goods, payment processing fees, hosting, taxes, and misc costs of business; We cannot simply run an effective business if we have to pay all these fees, and most of the time, fees are already added into the product purchase, but not in our case; Our goal is to be as transparent as possible, but if you leave the site because you did not want to pay a sales tax that we have to submit to the state, then we understand, and I hope you will return to our site in the future.

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How to Know if It Is Time to Change your eCommerce Platform.

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Your eCommerce Platform

Migrating to a new eCommerce platform is widely considered to be a costly and time-consuming practice that carries a significant level of risk when not carefully managed. It’s that fear of what could potentially go wrong—like lost sales or taking a hit to organic search rank—that hold merchants back from switching eCommerce platforms.

However, putting off the inevitable can cost you more than the unknown.

It’s absolutely possible to safely change eCommerce platforms without having issues—much like it’s possible to safely juggle chainsaws.

It’s scary, but, if you know what you’re doing, there’s very little to worry about. Merchants who settle with “Well, it works right now” are really questioning whether it’s a good idea to open themselves to vulnerability during the process of change.

The answer is a resounding yes, as long as it’s happening with purpose. Chances are good, if you’re considering a replatform, then there’s a reason for it.



How do I know I need to change my eCommerce platform?

Replatforming happens a lot more often than you’d expect. According to data from Forrester Research, most eCommerce stores replatform every two to three years and for a variety of reasons, such as:

  • The need for new features and functionality
  • Inadequate integration, such as stalled omnichannel strategies due to platform limitations
  • Cost-prohibitive improvements
  • Struggling to keep up with competitors within the market
  • Platform and server stability issues

For some merchants, the decision is obvious, looming, and not up for negotiation due to severe infrastructure issues impacting growth and revenue.

For others, the choice is more difficult because things aren’t technically “broken.” The eCommerce platform is working “good,” but they know they could benefit from improvements. It’s easy to get trapped by “good.”

“Good” is not good enough, and settling for “good” will only leave you stuck on a decaying eCommerce platform.

“Good is the enemy of great,” wrote Jim Collins, author of “Good to Great.” “And that is one of the key reasons why we have so little that becomes great. We don’t have great schools, principally because we have good schools. We don’t have great government, principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life.”

Consider these questions if you think a replatform is necessary:

  • Are spikes in consumer traffic impacting store load times and the speed of checkout?
  • Does your team have to frequently put together patches or code workarounds to fix problems?
  • Have your developers responded with “We can’t do that” on more than one occasion regarding feature requests and necessary updates?
  • Are you regularly devoting resources to maintaining your current platform rather than on innovation and growth?
  • Do updates require cumulatively more dev work as time goes on?
  • Has the security or PCI compliance of your eCommerce platform ever failed?
  • Is your support team being inundated with questions and complaints about website and checkout functionality?
  • Does your developer shrug over most functionality suggestions and requests from consumers because it can’t be done on your platform?

eCommerce is booming and continuing to grow. Consumers now do more than 50% of their shopping online. As more consumers make the change, the technology for supporting businesses continues to evolve and improve.

If you answered yes to some of the questions above or can relate to any of the following reasons to replatform, then the time to make the switch is already upon you.

You’re behind the times on features and integrations.

You’re behind the times on features and integrations.

It can be a cause for alarm when business growth requires more integration with third-party platforms and new systems, but your eCommerce platform won’t integrate, or it requires a significant workaround without no guarantee that it will work consistently.

Avoid relying on DIY or patchwork integrations on an aging eCommerce platform. The risk of losing customer data and orders is simply too high

You’re struggling to keep up with competitors.

Plugins and shopping cart expansions, alongside custom developed functionality, can greatly enhance the shopping and checkout experience. Competitors operating on the latest eCommerce platform have access to far more opportunities to improve the customer experience.

It can be frustrating to go from a thriving eCommerce brand to falling short on KPIs as orders and revenue begin to taper off. With competitors offering lower prices, faster shipping, better social proof, personalized customer engagement, and more responsive customer service, you need to make a decision about replatforming to stay relevant.

You’re struggling with scaling your business.

Business growth means more consumer demand for your product. That also means an increased load on your platform and the servers it operates on. As demand increases, your platform must be able to handle the increased capacity, pushing orders to internal and external fulfillment models.

Beyond order handling, you need a platform that is scalable and capable of improved channel management. This includes features that allow you to differentiate consumer segments, and then market to them appropriately.

Your scalability will stall when your platform has aging mobile functionality and lacks features for customer contact management, multivariate testing, acquisition and retention marketing, and detailed operational and merchandising reports.

Average transaction value is down, and abandonment is up.

Average transaction value is down, and abandonment is up.

An aging eCommerce platform can take longer to serve content, complete cart additions, process payments, and get customers through checkout. Slow processing and load times, especially on mobile, can have a profound impact on your business.

One Google survey revealed that 52 percent of consumers are less likely to engage with a business after a single bad mobile experience.

According to Google, 52% of mobile customers are less likely to return to a business if they have a bad experience. Similar data from Invision revealed that 88% of customers (mobile and desktop) won’t return after a bad experience—and they consider slow load time bad user experience.

Just a one-second delay in page response can result in a 7% drop in conversions and a 13% drop in customer satisfaction.

If your cart abandonment rates start to climb alongside bounce rates, and your average transaction value begins to drop (frustrated customers won’t want to keep shopping for additional products) it’s time to consider replatforming to a more stable eCommerce platform.

Conclusion

Your eCommerce platform shouldn’t be difficult to maintain—ever. As time goes on, your business should be running smoother. You shouldn’t be trying to scale around your team spending increasingly more time trying to manually process orders, handle customer issues, fix bugs, patch up integrations, and, essentially, duct-tape your online store together.

Replatform is a major initiative, and it takes some planning. It comes with risk. However, there’s no greater risk to your business than remaining on a platform gradually decaying from beneath you and guaranteed to (continue to) break.

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