Are you planning on starting an eCommerce business?
Aspiring eCommerce entrepreneurs often think about what products they want to sell.
They plan their marketing strategy even before they launch their business. They keep an eye on every eCommerce trend there is!
But most aspiring eCommerce entrepreneurs forget one thing: how to deliver products.
There are many large online marketplaces. But do all these marketplaces have the same shipping speed as Amazon’s Prime Delivery?
Your delivery options, shipping fees, and how you ship your products will be the differentiating factor between landing a sale and losing a sale.
Here’s the best way to deliver products for your business.
Prepare Mailers Beforehand
The first step is to have enough mailers for your products. When you choose your products, you want to think about what mailers you’ll need for them.
For example, can you send them in a small or large manila envelope? Do you need larger boxes? What size boxes will you need for bulk orders?
You want to also prepare your packaging material.
This will include safety items such as bubble wrap, styrofoam peanuts, or foam padding. You’ll also need enough stock of packaging tape.
You should also learn more about certified mailing labels. These labels help you send certified mail, which is an affordable option and requires confirmed delivery.
It shows consumers that you care about your delivery and not just making sales.
Calculating Basic Shipping Fees
The next step is to determine your shipping fees. Your first step is to estimate your profit per product.
Let’s say you bought a book from a wholesaler for $10. You decide to sell this on eBay which takes $3 in fees and commission. Let’s say it costs $1 for the mailer and $4 for shipping via USPS.
Your total expenses for this one book is $18. As such, you need to charge your customer over $18 to earn a profit.
But how much should your shipping fees be for this book?
As a general rule, you want to assume that customers hate paying for shipping. Your markup should be on the book and not on shipping.
You can choose to charge exactly $5 for shipping (mailer + shipping cost). Or, you can try to push it up to $6 or $7. But anything higher will deter your customer.
Focus on raising the price of the actual book above the $10 that you paid for it.
If you sell one type of product then you can consider flat rate shipping.
For example, most books will have similar weights and dimensions. As such, you can charge a flat rate with a markup of up to $2 from your shipping expenses.
At times, the flat rate might not be sufficient. In such a case, don’t increase the markup on your shipping expenses.
Increase the markup on the product. So an 8×11 hardcover book will have a higher markup than a 6×9 paperback book.
Expedited Shipping Fees
What about offering expediting shipping to your customers?
Many eCommerce sellers wait for their business to grow before they offer this service.
However, to compete in the big leagues you must offer this service from the get-go.
Many customers are willing to pay extra for expedited shipping. As such, you have more leeway with placing a markup on these shipping fees.
For regular shipping, as discussed, you don’t want to go above a $2 markup. With expedited shipping, you can try to markup up to $5.
An alternative option is to only offer expedited shipping for costlier products. You might not want to offer expedited shipping for a book. But you might want to offer it for a jewelry set.
Every eCommerce entrepreneur should know the mantra that free shipping is always a welcome option.
Customers want to pay for the product. They hate paying sales tax if applicable. Paying shipping fees is even more frustrating.
As discussed in the introduction, free shipping is one reason why Amazon stands apart from its competition.
But how do you offer free shipping without hurting your profits?
You have to offer a great markup on your product. Free shipping is so alluring that a customer will pay for an expensive product.
Let’s say your overall expenses for buying and selling your product is $25. You should have a markup of at least 80% if you want to offer free shipping.
So you’ll sell this product for $45 and your profit will be $20. This is a great profit to keep without having to charge for shipping.
As with expedited shipping, you might be safe in keeping free shipping only for expensive products.
Another option is to offer free shipping if your customers spend a minimum amount on their total order. The minimum amount should add up to 80% of the profits of all products.
Free shipping is also an option if your customers are local. If customers are within our near your warehouse’s zip code, don’t charge shipping fees at all!
Best Carriers to Deliver Products
The next step is to look at the different carriers to deliver products to your customers. The easiest option is to use USPS which is the preferred option for most smaller eCommerce retailers.
However, you want to look for private carriers as well.
These are often better for faster shipping and delivery. UPS and FedEx are the best choices for domestic delivery within the US.
For international delivery, you can choose a service such as DHL.
You can also get creative with choosing your carriers. In your community, there might be local courier services you can use. Ask them about their delivery speeds and their requirements.
For example, some private couriers focus on delivering lighter and smaller packages. Others will focus on larger and heavier packages.
You can also hire contractors to deliver local packages. These contractors will pick up packages from your warehouse to deliver products to local addresses.
Start Your eCommerce Business Today
Now that you know how to deliver products for your eCommerce business, you can start your online retailer today.
Start with planning your shipping fees and delivery options first.
Once you’ve calculated costs and determined delivery speeds, you can then work on other aspects of the business.
You’ll find that this makes it easier to run the business. With low shipping costs and fast shipping, your small store will compete with the large retailers in no time!
You can find more great business articles and advice on our website.