5 Things To Consider When Planning Your eCommerce Delivery Strategy

Blog5 Things To Consider When Planning Your eCommerce Delivery Strategy

5 Things To Consider When Planning Your eCommerce Delivery Strategy

You put so much effort into making sure your customers have an amazing experience by taking the right product images, tweaking your product description, and setting up a reliable payment solution, all with the goal of leaving your customers happy. But with shipping, it feels like you are handing your brand over to a stranger. However, it does not have to feel that way – getting familiar with and choosing the right shipping solution will ensure the smooth running of your eCommerce.

When planning an eCommerce delivery strategy, it’s crucial to focus on efficiency, cost-effectiveness, and customer satisfaction.Here are five key considerations:

1) Distance to destination

Distance is the primary factor influencing shipping costs because the farther a package needs to travel, the more resources (time, fuel, labor) are required to transport it. Delivery companies often use distance-based pricing models, where rates increase as delivery zones expand from the origin point. Partnering with local delivery companies to optimize costs and minimize the price impact on customers is one way to improve the chances of success for your online shop.

2) Product size, weight & sensitivity

Product size and weight are critical to delivery rates because bigger products require bigger vehicles to move just as heavier ones would. For example, the size and weight of a phone differ from a television. This essentially affects how the product should be shipped and delivered as well as the cost. 

Product Sensitivity can also impact the delivery process and as a result, may need to be treated with more care from the vehicles used to deliver to the person handling them. For example, bread can be delivered via motorcycles but it is often not a good idea to deliver cakes with motorcycles. The more sensitive a product is the more it will cost to deliver it because of the nuances involved in moving the product

3) Delivery urgency

Urgency plays a crucial role in determining delivery rates, as faster shipping requires more resources and coordination. Same-day delivery, for example, comes with higher costs because it involves immediate processing, local fulfillment, and express transportation to meet the tight deadline. This urgency demands more labor and logistical precision, often resulting in premium charges to cover the expedited service.

On the other hand, options like next-day or two-day delivery are less expensive but still carry a higher price than standard shipping. While these services are faster, they allow for a slightly longer window for processing and transit, making them more affordable than same-day. By offering various shipping speeds, businesses can cater to different customer needs, allowing shoppers to balance cost with the urgency of receiving their orders.

"When developing an eCommerce site, offering guest checkout is recommended to reduce cart abandonment, which averages 74%. Requiring account creation can deter customers and lead to higher abandonment rates."

4) How carriers deliver your products

Delivery company riders are crucial because they interact with your customers. They can be the difference between a happy customer who will recommend your brand to others and a livid customer who will be super angry with your brand. What are the best delivery services or carriers for your unique needs? Here are some options UPS, FedEx, DHL, Gokada, GIG, Courierplus, Max and Ace.

5) Flexible shipping options

Shipping costs always have an impact on customer decisions because customers are always looking for the best deals. High shipping costs can lead to cart abandonment. Offering free or low-cost shipping is a powerful incentive, but you must balance this with operational costs. Consider offering multiple shipping options like standard, expedited, and same-day delivery. Flat-rate shipping can simplify pricing for customers.

How to make free shipping more profitable for your business

Offering free shipping to your customers will improve your conversion rate. Guaranteed! But, can also can kill your profit margins if you are not careful. So, how do you make free shipping profitable?

The steps are:

Compare your conversion with and without the free shipping offer. You need to test how much making the offer will lift your conversion rate. If offering free shipping won’t raise conversion, there is no point going through all the trouble.
Increase the minimum order value required for free shipping – for example, if the number of items a customer need to purchase to access free shipping was 2 items, increase it to 5 items and test the improvement in margin. This is the most obvious way to save your margins while offering free shipping – it “forces” customers to spend more to get free shipping and helps to raise your margins.
Monitor the kind of improvement you will get by offering free shipping only on select products where it is profitable or where you know the shipping cost is low.
The last “trick” in the bag is to increase all your product prices to compensate for the loss you take on free shipping, and see how your profit compares. For example, if you sell a Ready to wear dress for 4,500 naira and shipping cost 1,500 naira, add the shipping fee (1,500 naira) to the cost of the dress – now you sell the dress for 6,000 naira with free shipping. That way it is a win win for you and the consumer.
Understanding all the variables and evolving your shipping strategy with your growing business is vital to its long term growth and success. When you think you have it figured out, do not let it go stale – reevaluate every six months to make sure you are delivering the absolute best possible service and experience for the best possible price to your customers.

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