Chapter 2 Prepare Your Shipping for the 2020 Holiday Season
The holiday season may officially begin on Black Friday, but for many ecommerce businesses the majority of holiday planning happens in late summer. Once Labor Day rolls around, you’ll want to be fully immersed in the research phase. Before you can order your Q4 materials and inventory and make the appropriate changes to your website, you need to have a plan. Most successful businesses start reviewing the previous holiday season as soon as they can to map out the next holiday rush.
1. Audit your current shipping plan
Plan early and assess your current shipping strategy. Your shipping strategies directly impact consumer satisfaction and their decision to purchase again in the future. However, consumers don’t always separate carrier function from your brand’s function. To the customers’ point, it’s all behind-the-scenes to them. The customer’s concern is that their package safely reaches them. Admittedly, shipping can be nerve-wracking—for customers and merchants alike—and it’s your ultimate goal to make their experience as seamless as possible.
2. Prepare and properly manage your inventory for holiday buying
Once October hits, you need to start ordering supplies like boxes, tape, labels, and bubble wrap. Your inventory should be ordered, and your warehouse strategy needs to be in place. Familiarize yourself with any new software you will be incorporating into your workflow—selling channels, inventory management solutions, CRMs, and shipping software.
3. Optimize checkout for shipping
Making the buying process intuitive and easy-to-navigate is crucial for getting customers through checkout. A website redesign is one way companies pull in more customers during the holiday. However, creating a new homepage, or even a holiday landing page, may not be a cost effective strategy. Luckily, there are other, quicker options available to you that can help increase cart conversions without risking narrowed profits.
If you are choosing a new selling channel or building a new website, make sure the platform offers mobile site themes. Customers continue to pivot towards buying from mobile devices. In fact, off the record $7.9 billion spent on Cyber Monday, $2 billion was from mobile devices. Capitalizing on this growing trend of mobile optimization is important during the busy holiday season. Having a way to grab these customers’ attention and offer a mobile shopping experience will grow your sales.
4. Understand what extra shipping fees will be included in your overhead
During the holiday season you’ll inevitably incur extra costs. With ordering more inventory, more supplies, and more demand you’ll need to prepare financially. As we’ve gone over earlier, there are a variety of customer expectations around shipping costs and estimated delivery times. Instead of a one-size-fits-all approach or inundating your customers with too many shipping options, offer two or three shipping options.
Offering free shipping with a cost-effective order minimum threshold is the most common approach businesses to take. Consider options like “Free shipping for orders over $75.”
Unless you sell items that greatly vary in size and weight, domestic shipments don’t usually fluctuate too much from shipment to shipment. For instance, “$5 shipping on any domestic order.”
5. Consider tracking for holiday shipments
Whether you use our tracking emails or your marketplaces, the link to track the package will usually take your customer to the carrier page. And we all know who the page belongs to—the carrier has their logo, their name, their links, their everything all over that tracking page. Why? Because they know your customer is going to visit it multiple times.
No more sending your customers away from your business to the carrier’s page. Instead, you’re sending them to a page featuring not just a map showing where their package currently is, but one with your logo, your website, and your social media pages. It even has your return policy and support contacts! The branded tracking page is a way to make your business—no matter the size—look bigger and better.
Identify the Best Shipping Option for Your Store
Keeping an organized warehouse during the holiday season will keep your operations running smoothly. As the holidays ramp up, your business needs may change. Work hours extend later into the night, workers with desk jobs may have to pivot to the warehouse, and you can run out of space. Having a plan in place before Black Friday for how to deal with the influx of orders is crucial.
1. Handle shipping in house
For many ecommerce merchants, keeping shipping in-house is the obvious choice. However, there are a few things to consider before deciding whether in-house fulfillment is the right option for you
- More control of your shipping process.
- Easier communication between fulfillment and customer support team.
- Lower cost than a 3PL.
- No need to integrate with a 3PL System.
- Extra cost, including labor and warehouse storing.
- You’ll spend less time on growing your business.
- You might not have as much knowledge about shipping and logistics compared to a specialist company.
2. Outsource shipping and fulfillment with a third-party logistics provider (3PL)
Increased order volume comes with added costs. Instead of devoting a lot of time and money to making your facility and team ready for the holiday rush, outsourcing surplus stock to a fulfillment company may be the best option. Consider outsourcing your fulfillment services to a third party (3PL).
Working with a third-party fulfillment service can sound intimidating, but as long as you do your research and look at customer reviews, you can easily find one that is trustworthy and aligns with your business.
3. Outsource shipping with a dropshipper
Dropshipping is an ecommerce business model where the retailer doesn’t physically house the products they sell. Instead, they buy their inventory from a third-party manufacturer, and the manufacturer either ships the items to the end-customer or sends the stock to a dedicated dropshipper.
- Affordable and easy to get started: Since you aren’t housing or fulfilling the orders yourself, you can save some overhead costs. All you have to pay for upfront is the cost of manufacturing and warehousing fees. Typically, the picking fees are only applied once an item is sold.
- Requires a smaller warehouse: Whether you are just starting out in ecommerce or are growing beyond your current warehousing and staffing needs, dropshipping allows you to operate with a smaller warehouse and workforce.
- Lower profit margins. Dropshipping has additional fees, and using dropshipping can reduce the profit margins you might see if you were housing/fulfilling products yourself.
- Finding the right supplier: A lot of what makes a dropshipping business successful is finding the right supplier. Profit margins are low for dropshipping. And if you use models like a subscription wholesaler, you’re effectively paying a middleman that takes even more of your profits.
There are many tools to work with dropshipping workflows: Platforms like ShipStation allow you to manage orders for items in your warehouse or at a dropshippers.
Sell More This Holiday Season with a Great Shipping Strategy
Preparing for the holiday rush takes planning, thorough research, and extra work throughout the whole year. From setting a timeline for buying supplies and inventory, to ramping up your warehouse team, holiday prep takes a lot of energy. An effective holiday shipping strategy will allow you to effectively navigate the busiest time of year and increase sales.
1. Make shipping a selling feature
As ecommerce sellers, we’re in a new gold rush. While you can strike it rich, so can the new competition entering the market every day. Online sellers spend significant resources finding and attracting customers. But these efforts are wasted if they don’t buy. A lot of companies overlook a key piece of the consumer’s journey—delivery. However, delivering packages should not be taken lightly. Shipping is the final touchpoint a customer has with your brand.
2. Offer free shipping
Shipping impacts shoppers in a big way. Meeting customers’ shipping needs help convert more sales. During the holidays, customers shop around to find the best deals. Offering products at the lowest price isn’t always enough to attract customers. If your items are affordable but shipping charges inflate the cost too much, you run the risk of cart abandonment.
What do consumers really want in the great debate between fast and free?
Free shipping is obviously preferred. But it is expensive. Unless you are shipping USPS First Class Mail for small packages, free shipping can hurt your profit margins.
3. Provide expedited delivery
The holiday season reinforces shopping trends while also changing them. The cart options that customers most want are still present, but customers also want additional options. For instance, free shipping is a standard option most customers want. However, fast shipping is especially crucial during the holidays. During the holidays, customers tend to prefer premium shipping options to deliver gifts. Purchasing gifts for other people elicits more urgency from buyers.
There are a few possible reasons for this. Perhaps customers see premium shipping options as another component of the gift. Customers may worry that more economical shipping options run a greater risk of damage to the products. But, the major factor for expedited shipping during the holiday season is the fear of a gift arriving after Christmas.
Offer Same-Day or Next-Day Shipping
Same-day and next-day shipping doesn’t mean a customer receives their order the same day they place it. Instead, same-day and next-day shipping mean that you ship an order out of your warehouse within 24 hours of the customer placing the order. Quickly shipping your orders out elevates your brand’s image. If you can effectively do this, there’s less of a need for third-party fulfillment companies.
Here’s a few ways to quickly ship:
Optimize Shelf Space
Making sure your shelf space or warehouse is organized during the holiday season is one of the most important things you can add to your holiday to-do list. There are multiple ways to organize your inventory, but one of our favorites here at ShipStation is known as ABC analysis.
What is ABC Analysis?
ABC analysis is a way of organizing your inventory into 3 segmented categories, A, B, or C. Ideally you would keep your top performing products closest to your packing area, helping minimize the amount of traffic in the warehouse. Utilizing ABC analysis will help shorten the time it takes to fulfill orders. Category A represents the most valuable products Category B represents your middle of the road products Category C represents where most of your overstock lives.
Use a Shipping Software
Using a shipping software like ShipStation helps get orders out the door—particularly during the busy season. Printing multiple labels at once greatly reduces the amount of time it takes to fulfill your orders. Instead of individually entering each order’s shipping data in order to print a label, combine orders into a single batch and print their labels together. Additionally, creating packing slips and pick lists for the orders further expedites the picking process. Shipping softwares also make it easier to pick orders from multiple selling channels at the same time
If you’re looking to outsource your shipping department, there are a few good providers to look at.
UPS Express Critical
UPS offers UPS Express Critical, which delivers both light and heavy packages domestically and internationally. They are able to do so via ground and air travel, ensuring that each delivery is made by hand to the intended recipient.
FedEx SameDay provides reliable delivery within hours of ordering time-sensitive packages. Cross-country delivery is also available every day of the week in all 50 states.
4. Deliver an incredible unboxing experience with great packaging
Packaging is no longer just ‘packaging’ for a product—it loops into your customer experience. While many businesses consider custom packaging as an added cost, and look for ways to minimize it, smart companies consider it as a scope for branding and developing loyal customers.
Packaging is the first physical point of contact between your product and your customers. Brand packaging conveys a lot and is key to a positive first impression of your brand.
5. Win back customers with easy holiday returns
Returns may not strike you as a way to increase business since returns are not the desired outcome for a customers or merchant. But knowing a company offers easy returns is a massive selling point for many consumers. To attract customers from your competitors, offer more hassle-free returns. This is particularly important during the holiday season. Buying for other people can be tricky and your customers want to make sure that the recipient is happy with a gift, even if that requires an exchange.
Unlike brick and mortar, ecommerce shoppers are unable to physically hold or try on purchases. As ecommerce becomes ever present in how we shop, customers expect ecommerce returns to be as free and easy as in brick and mortars.
Here’s a few ways we recommend you offer shipping.
30 Day Return Policies
This is a standard return policy for many retailers. While it can cause some holiday gifts to miss their return windows, extended warranties are an easy way to extend the return period further.
Another potential return policy is to set a specific returns date after the holidays are over. For example, orders placed from mid-November to Christmas could be returned from mid to late January.
Returns can be hard. Offering straightforward returns is a great way to encourage customers to purchase. One way is offering self-service returns. Self-service returns allow your customers to initiate a return without contacting the seller. With just a few clicks and a little information, a customer can initiate a return.
Looking at your holiday planning through the right lens is important for having a successful peak season. Make sure you understand how customers’ buying habits vary this time of year, including higher than average mobile shoppers. An efficient workflow is crucial, so use these tips and tricks to get your business ready for what might be the busiest holiday season yet.
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