How E-Commerce Startups Can Compete with Amazon Shipping (and Win)
Although it may seem like ages ago, many of us remember what an ordeal it was to order products that were unavailable in our local stores. Back then, free shipping wasn’t a thing. Two-day shipping was exorbitantly expensive and reserved for nearly-forgotten birthday presents for the notoriously hard-to-please grandma. And if we needed pedestrian items like lightbulbs or toothbrushes, we would pencil in an immediate trip to Walmart.
Fast forward years later, and we are not only ordering these items online, but Amazon Prime members can expect to receive them in two days with no shipping charge. With Prime, it seems that we can order nearly anything and have these items land on our doorsteps in two days or less. As a result, most of us are guilty of abandoning our carts on other sites after discovering that a) shipping isn’t free and b) it could take five to seven days to receive our orders. Why would we want to pay extra and wait when we can just click on our Amazon app and receive the same product within two days?
This common consumer behavior is supported by the fact that sites offering “free shipping” reduce abandoned carts by 36 percent.
And this means that it is now essential for e-commerce startups to offer free, fast shipping. But while this seemingly unreasonable demand may strike some as an insurmountable challenge, there are several things that entrepreneurs can do to get their orders out quickly and at low cost.
Businesses need to minimize the time between the order received and the shipping label on the box. When dealing with higher volume orders, it’s important to:
Influence the customer’s perception of speed
As soon as an order is shipped, the email with tracking information should be in the recipient’s inbox. Even if the order itself doesn’t arrive in two days, the knowledge that the product was shipped immediately will influence the shopper’s perception of shipping speed. The positive experience of knowing the order was shipped and the expectation of when the order will arrive increases the possibility of the customer returning for further purchases.
Get a shipping rate quote for each order
Shipping costs can vary widely among the different carriers, so it benefits business owners to search for the best price. If shipping many orders that are similar, then you may benefit from group shipping methods based on the order type. If handling orders that have a variance of line items, manually rate quoting each order can be time-consuming, which in turn causes orders to become backlogged. Instead, you should choose an optimized platform or program to quickly determine the cheapest option without holding up the order fulfillment process.
Build shipping costs into the order
It’s even possible to make money using this tactic, especially if the cheapest option among shipping carriers was chosen. Business owners can also review reports on how much was charged for shipping versus how much was actually paid. Typically, most WMS (warehouse management system) solutions provide these shipment reports that chart the historical performance of orders that were shipped out.
Reduce the steps required to fulfill orders
Entrepreneurs tend to use paper pick lists to manually fulfill orders. However, this can be a slow and error-prone process, especially if the warehouse is disorganized or pickers are unfamiliar with the warehouse layout. Instead of paper pick lists, go digital. The best way to improve order fulfillment speed is to incorporate barcodes. Barcodes eliminate the guesswork involved in picking and packing orders and drastically reduce fulfillment errors.
If a company has a wide selection of products in a warehouse that has aisles and shelves, it’s extremely important to organize inventory (and if possible) use technology to optimize picking routes. This reduces walk time, and again further eliminates potential mistakes when picking items for orders.
Use precalculated weights to simplify the packing process
Generally, the cost of shipment is determined by either the weight or the package it’s shipped in (or both, depending on what the order is and where it’s going). While using scales at the time of packing seems like a logical step to determine the weight of the order, there are solutions that allow you to set the weight according to the product’s SKU or the weight and shipping method of each type of shipping container. This method, combined with a rate quote comparison for each shipment, will allow you to achieve a more efficient shipment cost per order when weight needs to be accounted for.
Create magic when a customer receives their order with surprise and delight
It’s definitely a challenge to beat Amazon’s speed and free shipping; and even if an entrepreneur is running a very efficient operation, it will still be a benchmark to reach. So, what else can a growing e-commerce startup do to compete?
They can add an additional element of experience for customers by personalizing the order. If the owner is using Shopify as the e-commerce store, it’s possible to determine if the customer is a first time customer or has ordered before. Some WMS solutions provide automation rules to set personalized notes or even to add a free product to the order based on what is contained in the order, or the profile of the customer. This personal touch makes a big impact on the customer, and is often more valuable than the expected shipment that arrives a little bit earlier.
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