Small BusinessCommerceShipping

How to efficiently ship e-commerce orders

Free or next-day shipping? Sustainable packaging or same-day delivery? When it comes to e-commerce shipping, these are just a few of the decisions that can make or break not only your bottom line but also your business’s long-term success.

Based on recent data, more than 50% of shoppers report that free shipping, delivery speed, in-stock product availability, free returns, and quality customer service influence whether they press the “Checkout” button.1

So how can businesses streamline their shipping operations, exceed shopper expectations, and boost customer loyalty?

In this guide, discover helpful tips and strategies to optimize your e-commerce shipping process.

Understanding e-commerce shipping basics

First: What is e-commerce shipping? E-commerce shipping refers to the fulfillment and delivery of items that are purchased online.

Before we dive in, here are some shipping-related terms to know:

  • Fulfillment. The internal process of receiving, processing, and shipping customer orders.
  • Carrier. The shipping company responsible for physically transporting packages.
  • Tracking. How a customer can monitor a shipment's progress in real-time, including its location and estimated delivery date.

Factors like shipping speed, cost, and reliability may influence how customers perceive a retailer’s online shopping experience. Therefore, unexpected delays, high shipping fees, or damaged goods can lead to dissatisfaction and decreased customer loyalty.

According to a UPS survey, 90% of customers said fast and reliable shipping plays a role in their satisfaction with a purchase.2 At the same time, personalized shipping — for instance, choosing the arrival day and tracking packages — is just as important, with 87% of customers reporting that they’d be more likely to buy from a specific retailer that provided these options.2

Shipping strategy selection

Choosing the right shipping strategy can impact both profitability and customer satisfaction. Here's an overview of common options:

  • Flat rate shipping. Customers are charged a fixed shipping fee, regardless of the order's size or destination. This method can be ideal for businesses with consistent product sizes and weights.
  • Free shipping. More than two-thirds of shoppers won’t purchase from a retailer that doesn’t offer free shipping,3 so this strategy can be a powerful marketing tool to attract and retain customers. Businesses often absorb the shipping costs or build them into product prices. This option may work well for companies that want to boost sales, compete with larger e-commerce sites, or when the product's margin can accommodate the cost.
  • Real-time carrier rates. This strategy calculates shipping costs based on factors like product weight, dimensions, shipping location, and chosen carrier. It can provide accurate, real-time pricing to customers. It’s suitable for businesses with varied product sizes and weights or those who want to pass on accurate shipping costs to customers.

Learn more about choosing the right shipping method.

Packaging and labeling

No customer wants to open their package and find a damaged product. To safeguard items during transit and help prevent breakage, consider these tips:

  • Choose the right materials. Opt for sturdy, appropriately sized boxes or envelopes that match your product's size and fragility. Utilize cushioning materials like bubble wrap or packing peanuts to protect items.
  • Clear, informative labels. Create shipping labels with legible, accurate recipient information and return addresses. Include tracking numbers for easy monitoring.
  • Make it fun. Packaging may be the first physical interaction customers have with your brand, so make it memorable. Consider adding unique touches like branded tissue paper, thank-you notes, or quirky stickers.

Shipping carriers and services

With approximately 41% of retailers citing unreliable carriers as a challenge, it’s important for businesses to do their due diligence when picking a shipping company.2

The choice ultimately depends on your business’s specific needs, budget, and shipping destinations. Meanwhile, platforms like PayPal often collaborate with multiple carriers, which may simplify the shipping process by providing various options and competitive rates.

Take a closer look at shipping pricing strategies here.

Order fulfillment process

Order fulfillment involves several key steps. Here’s a general breakdown:

  1. Inventory is received and stored.
  2. You receive and verify an order placed by a customer.
  3. Locate and retrieve the ordered items from your inventory.
  4. Carefully package the products, ensuring they are secure and protected.
  5. Attach shipping labels and any necessary documentation to the packages.
  6. Hand off the packages to the chosen carrier for delivery.

Technology can play a vital role by automating tasks, managing inventory, and providing real-time tracking. Implementing software solutions and barcode systems can streamline the order fulfillment workflow, enhancing accuracy, speed, and, ultimately, customer satisfaction.

Shipping cost management

Looking to control shipping costs? Here are some strategies that may help:

  • Negotiate rates with potential carriers. Some small businesses may be able to secure discounted rates based on shipping volume.
  • Optimize packaging to reduce dimensional weight charges.
  • Offer a range of shipping options to customers and consider setting order value thresholds for free shipping eligibility.
  • Absorb shipping costs in product pricing by including a slight markup on items. This approach allows for the appearance of free or reduced shipping to customers, which can be a powerful incentive for sales.

Tracking and customer communication

Real-time tracking offers customers visibility into the status and location of their orders. By communicating shipping updates via email or SMS, including estimated delivery dates and any potential delays, businesses can foster trust and loyalty.

Encourage customers to track their orders through user-friendly interfaces, and promptly address inquiries and issues. Explore more tracking and shipping best practices.

Returns and customer service

Even after an order is delivered, the shipping process isn’t quite over. Handling returns, exchanges, and other shipping-related issues, such as damaged products or wrong items, is a critical part of the cycle.

A hassle-free returns process may include clear return policies, pre-paid return labels, and a straightforward online return portal. Timely refunds or exchanges and responsive customer support are essential, too.

By prioritizing an easy and efficient returns process, e-commerce businesses can not only resolve issues swiftly but also turn dissatisfied customers into loyal ones.

Shipping is fundamental to your e-commerce

A small business may only be as strong as its shipping process. From picking the right carrier to fulfilling orders and creating a memorable unboxing, every step is an opportunity to impress your customers.

Don’t stop there: Check out more articles about e-commerce strategies and best practices.

Was this content helpful?

Related content

Sign Up for the PayPal Bootcamp

In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.

*Required fields.

We use cookies to improve your experience on our site. May we use marketing cookies to show you personalized ads? Manage all cookies