Configuring and managing shipping can be intricate for a business. It represents a significant per-order cost, making it challenging to determine the appropriate amount to pass on to customers.
Prior to setting up shipping, familiarize yourself with various shipping carriers, available shipping rates, and the workings of fulfillment services. Once you grasp the intricacies of shipping in Shopify, proceed to configure your shipping settings, encompassing aspects like shipping rates, shipping zones, and shipping profiles. This comprehensive understanding ensures a smoother and more effective shipping setup for your business.
Planning your shipping strategy
Shipping products to customers incurs costs, and deciding who covers these costs significantly impacts profits and influences a customer's decision to place an order. While your Shopify store provides default shipping rates based on your location and insights from experienced merchants, customizing these rates is crucial for optimizing your business success.
Before commencing sales, determine your preferred shipping strategy and the associated charges. Three primary strategies for presenting shipping rates during checkout include:
1. Flat rate shipping
2. Free shipping
3. Carrier-calculated shipping
Additionally, for customers in proximity to your store, consider offering pickup in-store and local delivery as alternative options. Tailoring your shipping approach ensures a more effective and customer-centric business model.
Dropshipping and fulfillment services
Certain services that assist in sourcing your products may also handle the shipping process directly to your customers. On-demand printing services, for instance, not only print but also handle the shipping for you. Others, like warehouses, provide storage for products you've made or purchased, shipping them to customers on your behalf.
Typically, businesses using dropshipping or fulfillment services collaborate with these services to determine shipping costs, bypassing direct interaction with shipping carriers. For instance, print-on-demand companies may apply flat fees for shipping products to specific regions. In such cases, when you place an order, the service charges you for shipping, not a shipping carrier.
This arrangement eliminates the need for purchasing individual shipping labels, as these services handle interactions with shipping carriers and procure labels on your behalf.
Shipping carriers
Shipping carriers are the services that deliver your customers' orders. Most shipping carriers let you drop off packages to them, and others let you schedule pickups from your own location. Most carriers can also pick up from any warehouse or fulfillment service that you use.
Understanding shipping labels
After you set up your shipping, make sure you know how you'll be purchasing shipping labels, which type to buy, and the considerations for shipping to certain countries.
Shipping labels are attached to a shipment's packaging. They display information that's used by shipping carriers to ensure a shipment is delivered correctly. Most labels contain the following information:
- Recipient's name, address, and phone number
- The sender's address
- A barcode
Shipping labels can also show the following extra information:
- The shipment's order number
- A tracking number
- The date when the order was shipped
- The type of shipping service that was purchased
- The shipping carrier's information
Before you give a shipment to a shipping carrier, you must purchase a shipping label and attach it to your shipment's packaging.
Shipping labels come in various types, primarily differing in delivery speed. The main contrast lies in the time it takes for delivery; for instance, a label promising delivery in 2 days is typically more expensive than one with a delivery window of 7-10 days. Shipping carriers often provide services at different speeds, such as standard (slow), expedited (faster), and overnight (fastest). Note that not all delivery speeds may be available for all locations.
When configuring your shipping setup, align your shipping prices with the desired transit time. For instance, if offering 2-day shipping, you may charge customers more to cover the associated shipping costs compared to a longer delivery window of 7-10 days.
Additionally, labels offer a degree of liability protection in case of damage or loss during shipment. More expensive labels generally come with higher levels of liability protection.
On some labels, you can also purchase additional services for your shipping labels:
- A tracking number - This provides you with a number that you can use to track where your package is during its delivery. You can also provide this number to your customers so that they can see when their package is expected to be delivered. Most faster shipping options come with a tracking number included, but sometimes you can add it to slower methods for a fee.
- Signature confirmation - This lets you request a signature from the customer when the shipment is delivered. This helps to make sure a shipment is delivered to the correct person.
- Proof of age - If you send goods that have an age restriction on them, such as alcohol, then you can add a request for the shipping courier to check the ID of the recipient.
Some services are not available for some shipping labels. If you need a certain service, then make sure you purchase a shipping label that offers that service.
Tracking numbers
Some labels come with a tracking number for you to track the progress of your order. You can give this tracking number to your customers so that they can track their package as well. Most customers prefer to receive a tracking number because it gives them an estimated date when the package will arrive, and helps them feel confident that they will receive their order.
Shipping labels that come with tracking information generally cost more than those without. If you want to offer shipping labels with tracking to your customers, then make sure that you are accounting for higher shipping costs when you set your shipping prices.
If your supplier purchases the shipping labels, then make sure you know which type they are purchasing.
Determine if you need to purchase shipping labels
Depending on how your business is set up, either you or your supplier purchases shipping labels. Generally, whoever is giving the shipment to the shipping carrier is the one who purchases the shipping label. If your supplier purchases the label for the shipment, then they usually charge you for the cost.
Packages and shipment weights
When fulfilling an order, select a package that aligns with your desired package type. Save your preferred package types on the Shipping and delivery settings page or directly on an order's Fulfillment page in your Xduka admin. Given that most carriers determine charges based on size and weight, it's crucial to opt for compact packaging. When purchasing a shipping label for your shipment, the store's default package or a suggested package will be pre-selected, allowing you to change it if you prefer to use a different saved package.
Packages
Package shipment limits are set by the carrier. Girth is the measurement around the middle of the package, and is calculated as 2x width + 2x height. Length is measured on the longest side of the package.
Soft pack
A padded envelope, bubble mailer, or plastic (Tyvek or Poly) sleeve. Packages thicker than 3/4 inches don't qualify for USPS First Class Mail rates.
Envelope
A large, flat envelope no thicker than 3/4 inches.
Flat rate
Flat rate packaging is offered by most carriers. These packages are not priced by size or weight, but rather a pre-determined package size and shipping speed that you've chosen from your carrier's available options.
Carrier packages
Carrier packages are shipping packages available from the carrier with markings indicating that they qualify for special rates or services. These packages can be acquired from the carriers directly. If you use a package that matches the dimensions, but the package isn't provided by the carrier, then your package doesn't qualify for special rates or services.
Free packaging materials
Many carriers offer free packaging to use with specific shipping rates. Although there is no cost for the packaging, you might need to create a free account with the carrier so that they can send the packaging to you.
Understanding and reducing processing time
Processing time refers to the duration between a customer placing an order and the business fulfilling that order. For orders involving shipping, fulfillment occurs when the business hands over the shipment to a shipping carrier service.
Reviewing an order, printing shipping labels, packaging products, and handing over shipments to a shipping carrier collectively contribute to the processing time of an order.
Your level of control over processing time varies based on your business model. In dropshipping, control is limited to choosing suppliers and promptly placing orders. If you handle shipping internally, you have full control—from the speed of packaging to the timing of handing over shipments to your chosen shipping carriers.
Impact of processing times
Faster processing times can offer the following benefits:
- Less expensive shipping:
- Option to choose slower shipping with reasonable timeframes.
- Higher customer satisfaction with quick order receipt.
- Faster inventory turnover, reducing warehousing costs.
- A more efficient fulfillment process minimizes labor costs.
Slower processing times can cause the following problems:
- Support debt as customers seek order updates.
- Risk of unmet customer expectations on delivery times.
- Higher operational costs due to inefficiencies.
Understanding processing times:
- Analyze each step to find ways to make the fulfillment process more efficient.
- Remove unnecessary steps, combine tasks, and optimize for reduced processing time.
Steps to optimize processing times:
Step 1 - Group your products:
- Consider processing steps for each product, grouping those with similar steps.
- For instance, categorize T-shirts, hats, and jewelry into separate processing groups.
Step 2 - Create a list of processing steps for each group:
- List steps for each product group, considering specific requirements.
- Example: Artwork print fulfillment process with detailed steps.
Step 3 - Give each step extra details:
- Include time duration, additional actions, and required materials for each step.
Step 4 - Create processing steps for mixed product orders:
- Develop separate steps for orders combining products from different groups.
- Consider scenarios like packing both a hat and a piece of jewelry in the same order.
Improve your processing times
After you understand your steps to process an order, consider the following way to improve each process:
- Highlight any steps that can be prepared in advance. For example, preparing the box or moving stock from the stockroom to the shipping station.
- Automate any manual tasks as much as possible.
- Find any steps that can happen at the same time. For example, if a step requires you to wait 15 minutes, then consider if a later step could be done during that time.
- Remove any unnecessary steps.
Combine Steps 1-3: