6 Things to Consider for Your Shipping Strategy
October 28, 2021
The Bolt Team
Transcript of the ThinkShop sessions “How to Accelerate Sales Through Fast Shipping”, hosted by Megan Brabender, Account Executive at Deliverr.
Alright, let’s talk about how you can accelerate your sales through fast shipping.
Shoppers Expect Fast and Free Delivery
So starting off, why do shipping times matter? Whether we like to admit it or not, Amazon has really conditioned buyers to expect fast and free delivery. It’s become the norm over the last five years since they started rolling out the Prime program. And those expectations really skyrocketed in 2020.
Today, 99% of customers are expecting it. They want it, they need it, and if they get to the end of the checkout process on your site and see that they have to pay maybe an additional $3.99 to get their item in 3 to 7 standard business days, they’re going to leave their cart and go to a competitor or Amazon to get it faster. Speed is very important to them, but they’re also already paying for the item so they don’t want to pay for shipping as well.
Free and fast shipping is a huge brand differentiator, but not every company has the partner or the internal resources to execute on fast shipping. That’s where competitors come in to steal those sales.
97% of consumers see fast shipping as a determining factor on whether or not they’re going to actually check out on your website. 46% of consumers are straight up expecting it. These stats are from 2019 and likely even higher now in 2021. If your shoppers can’t get that item fast and they can’t get it free, they’re going to go somewhere else, leave their cart abandoned on your site, and purchase from a competitor or Amazon.
6 Things to Consider When Determining Your Shipping Strategy
So how do you develop a fulfillment strategy that appeals to your shoppers and also fits into your business processes? There are six different aspects to consider:
- The technology: You want to think about your existing tech stack, the processes you have set up, and the integrations you will need. You need to understand the information your potential fulfillment solution provides and how that information is communicated back into your existing processes. You have to vet if the vendors will do the implementation for you or if they require you to do the implementation on their behalf. And of course, you need to understand how much lead time there is going to be between switching over to their solution and actually getting your first orders fulfilled
- The warehouse: Another aspect is the warehouse. How many warehouses does the vendor utilize in their network and where are those warehouses located? This is important because it all depends on where your buyers are located and what’s going to fit best with how your inventory is dispersed into their warehouses.
- The pricing model: The warehouse model you decide on will really impact your pricing. Some vendors are charging setup costs, some are charging an inbound fare or receiving fee, or you may be paying for each order, whether it’s in a specific zone or a fixed fulfillment fee for the entire country. You’ll want to make sure you understand those pricing models before you’re going to sign a contract and are locked into a one-year or a five-year term.
- The geographical breakdown: You need to understand where your buyers are located. Say you are a company that is selling winter jackets. You’re not going to want to place your inventory in Florida and California. Yes, you’d be on each coast but your buyers are likely located in the north where it’s colder, so it’s going to be pretty pointless to store your inventory on each coast and pay to send the inventory across the country to your buyers. Before you settle on the geographic locations of the warehouses, you also want to determine how you want to ship it. If you want to offer fast shipping, you will probably have to get it on a plane. But you’ll also have to pay for that transportation, which is more expensive than ground. But if you are going to do ground shipping, it will have to be a last mile model or it’s going to be a slower delivery time.
- The scalability during peak times: You also have to consider scalability during peak times. This one is actually my favorite and a lot of people don’t think about this when they’re going through their evaluations. 2020 is a great example. The pandemic brought a lot of waves in ecommerce last year, and even Amazon had to start putting restrictions on the inventory amounts and frequency of inbounds that were being sent into their network due to capacity. So understanding how quickly and effectively your vendor can continue to fulfill your orders and receive your volume on time is a huge factor that you want to consider through these different evaluations.
- The shipping speed: Last but certainly not least are the two-day shipping tags. Offering fast and free shipping is beating out a lot of your competitors as shoppers really expect to receive their box within a couple of days – and for free. If you offer that, you want to get the inventory close to the buyer, so if that buyer is located where the inventory is located, they’re going to be eligible for free next day delivery. This is actually also good for companies and merchants, because they’re paying less to deliver these items because it is last-mile handling. It is a fixed rate and it is often cheaper than you would think when you enter the world of fast and free delivery.
Turn Shipping Into Your Competitive Advantage
So the key takeaways to think about if you want to can accelerate your sales through fast shipping. Don’t let your company size deter you from evaluating the best fulfillment options. I’ve worked with merchants that are doing one order a month and merchants that are doing 1000 orders a day. This should be something that every single fulfillment company or every single merchant is looking at, because this is how you grow your sales. And ideally, look for a partner that can run trials to prove their solution meets your requirements in real life.
Ultimately, in the new world we are living in, post and during a pandemic, we are way more reliant on ecommerce shopping than ever before, and in order to be competitive in this environment, you need to set yourself apart and differentiate your brand. And the best way to do that is to give the buyers what they want: fast and free delivery.
Want to learn more? Watch the full webinar.
Megan Brabender, Account Executive, Deliverr
Megan has spent her career in the retail and ecommerce world selling SaaS and fulfillment technology solutions. First, she helped onboard new merchants onto marketplaces and transitioned to specifically focusing on Deliverr Fast Tag solutions for DTC websites and social sites such as Facebook and Instagram. Now, Megan builds referral pipelines and onboards Deliverr’s mid-market and highest volume merchants. She is excited to help ecommerce companies drive more revenue through fast shipping.
Large online marketplaces like Amazon have trained consumers to expect products delivered to their doorsteps within 1-2 days at no extra cost. As a result, millions of sellers on other marketplaces are falling behind, unable to cost-effectively deliver products to their customers within 1-2 days. Our mission is to enable any seller, regardless of size, to delight their customers with fast and cost-effective fulfillment.