Welcome to Chapter 9 of our order management guide. In this chapter, we will explore the relationship between order management and shipping—specifically, ‘last-mile delivery,’ which is the last step of the shipping process where orders are delivered from the e-commerce seller to the customer.
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What Are the Types of E-commerce Shipping?
There are more shipping options available than you might think. Some may seem similar but have slight differences.
You might not offer all the shipping options listed below because they might not benefit you. You may also know some of them by different names.
- Standard—This is the most common shipping option used by retailers. Depending on the location, delivery can take between a few days and a couple of weeks.
- Flat rate—Cost is predetermined according to package size and weight instead of distance.
- Expedited—For a higher cost, expedited shipping ensures faster delivery than standard shipping. Usually takes 1-3 business days.
- Overnight—For urgent deliveries, overnight shipping guarantees that an order will reach a customer by the following business day. It is often the most expensive shipping method.
- International—When the customer’s address is in another country. This typically costs more than domestic shipping and takes longer.
- Local delivery or pickup—This option allows customers to either have their items delivered to their doorstep within a specific local area or pick up their orders from a designated location, such as a store.
- Same-day delivery—The order should arrive at the customer within 24 hours.
- Two-day shipping—The order should arrive within two days of purchase.
- Table rate shipping—Calculates shipping costs based on a predefined table that considers the order’s destination, weight, or subtotal.
Using multiple shipping methods can be beneficial as it makes your business more flexible and capable of fulfilling more diverse orders.
Last but not least, let’s not forget about dropshipping and cross-docking, which we mentioned in Chapter 5 and Chapter 6, which can also be called shipping methods.
How Are Shipping Costs Calculated?
Various factors determine shipping costs. Businesses will have different negotiated rates with different couriers, such as UPS and FedEx, and should alternate between them depending on which is more convenient and affordable.
Larger companies with many orders can negotiate cheaper rates than smaller ones with fewer orders.
Weight and size are the primary factors influencing shipping costs, so you must weigh and measure the package before getting your shipping rate.
As you’d expect, larger and heavier packages will cost more to ship than smaller and lighter packages. Irregular-shaped packages can also have special rates.
Sellers can use tools like Sellercloud’s 4D Scale to scan and weigh a package and then take the measurements and dimensions into shipping software for the most convenient rates.
You also have to factor in the distance of the delivery and the date and time it needs to arrive. Faster delivery is always more expensive, as are long distances between the seller and the customer.
Lastly, shipping costs are also impacted by the day of the week on which the items are to be delivered. For example, if a delivery needs to take place on the weekend or holidays, it will likely cost you more.
Which Shipping Method Is Cheapest?
Items that will cost you the least to ship will be light, small, and delivered using slower delivery options with a negotiated rate and not sent to difficult or remote addresses or on weekends or holidays.
However, while slower delivery options are usually cheaper, you can risk frustrating customers if the shipment takes too long to reach them.
Many e-commerce sellers seek to maximize the cost of each order to minimize the cost of shipping. Higher-value orders will make shipping more affordable, so you can ship more and spend less on shipping.
You may find this blog post useful: Top 20 Practical Shipping Tips for Small Businesses.
What Needs to Be Done before an Order Can Be Shipped?
So, an order has been made, payment is accepted, and the customer has been emailed confirmation. What must be done to the order before shipping?
Documentation
Documentation should always be provided inside the package with the product. Documentation should include:
- Warranties and guarantees.
- An invoice or packing slip.
It may also include:
- Product instructions.
- Safety information.
Packaging
Items should be packaged before being shipped to the customer. You may need a box to group all the items required for the order.
You will also need materials to pad the product safely so it’s not damaged during shipping.
Too much packaging can be a wasteful expense, but too little can risk the product getting damaged and lead to preventable returns, so you need to find a good balance.
You may also want to include branding on your packaging to make your brand more recognizable.
Branding is not crucial to every company; some don’t use any branded packaging. For example, you may even send through Amazon and use their branded boxes.
Shipping Labels
Lastly, once your package is prepared, you must place a shipping label on the outside so the courier can collect and ship it. You can’t ship without a shipping label.
You receive a shipping label when you buy shipping from a courier. This can be done using your OMS and then must be printed.
The label will have a barcode, which is scanned every time its status needs to be changed. This is done for tracking purposes.
How Long Does It Take for an Order to Be Shipped?
There is no definitive amount of time for an order to be delivered to a customer. A plethora of reasons can delay the time it takes to ship an order.
Typically, domestic e-commerce orders take approximately two to seven business days to reach customers.
Meanwhile, international shipping takes longer and can range between seven to 21 business days, but it can take more time if there are delays.
What Determines How Long an Order Will Take To Deliver?
One of the most significant factors determining how long it will take to deliver to a customer is the distance between your business and the customer—essentially, the distance the shipment will have to take.
If you are shipping during a hectic period, like the holiday season, shipments can take longer because couriers typically handle more deliveries.
If you use faster shipping options, shipments will reach customers quickly. However, shipping delays can always impact the time it takes for a delivery to reach a customer.
Furthermore, shipping overseas can take longer as the order may need to pass through customs clearance and travel a longer distance.
How to Handle Late Deliveries?
Late deliveries are where you put your customer service cap on. Late deliveries are sensitive because they frustrate customers, especially if they no longer need the order.
Furthermore, customers might not return if a delivery is late. If a customer’s return experience is far from easy, they are even less likely to buy anything from you again.
Your business should have a plan for dealing with such situations. As soon as you know the delivery will be late, contact the customer and inform them—you should have email templates for this.
You can do plenty of things to appease a customer for a late delivery.
- Offer them alternative options to receive the product—reschedule the delivery date, or perhaps they will be willing to collect it from a location.
- Compensate them with a discount or throw in something for free.
- If the situation is exceptionally bad, you may want to give the customer the entire order for free.
Once a resolution is reached, contact the customer to ensure all is okay after receiving their order. They will appreciate this, and you will increase their chances of shopping with you again and leaving a positive review.
Want to learn more about inventory management? Then make sure you check out our inventory management guide, too!
Key Points From Chapter 9
You now have a clear understanding of the relationship between order management and shipping.
- There are many shipping methods, each with different benefits and suitable to different scenarios. Some are more costly than others.
- Many factors contribute to the cost of shipping, such as the order weight and size, distance to the customer, the delivery option, and the rates offered by the courier.
- Before shipping, several things need to be sorted—documentation, packaging, and shipping labels.
- Late deliveries need to be handled carefully. It is always best to notify customers beforehand (if possible) and offer something to appease them.
In the next chapter, we’ll cover multichannel order management.