Many online shops reach the limits of their shipping systems sooner than later, but the owner doesn’t know about it right away. They may continue to go to the post office multiple times weekly, generate labels individually, and compare carrier prices manually on a website. This method is functional but not for long, by the time you realize it, you are already missing out on potential orders.
However, upgrading your startup shipping operation to one that can handle more volume involves several small, do-able steps. It depends on your current order volume and where you want it to be.
When To Stop Doing It Manually
There is no set number of orders that necessitates the switch, but most businesses find that manual shipping and fulfilling orders becomes too time-consuming for the resources they have available after about 20-50 orders a day. This is usually when an audit can answer that question. How much time per week does shipping take? More time and labor costs than it would require to pay for a software solution or 3PL to take over the work? If the answer is yes, then you’ve already crossed the threshold.
Third-party logistics providers (3PL) manage receiving, storage, picking, and shipping out of your inventory on your business’s behalf – very useful if you’re shipping large volumes or want to free up the space a warehouse occupies, but not always required. For many growing businesses, the right first move is just automating the work they’re already doing in-house more efficiently than they could on a smaller scale.
The DIM Weight Problem Most Founders Don’t See Coming
Shipping carriers not only consider the weight of a package, but also its dimensional weight – a calculation that incorporates the overall size of the package. This means that you may be charged based on the volume of a package, rather than its actual weight, if you are shipping lightweight products in larger boxes.
The solution is simple, yet often overlooked: regularly assess and optimize your packaging. Determine the best box sizes for your typical product orders to reduce void fill. For items that consistently fall into the DIM-weighted category, reducing your box sizes even slightly can lead to significant savings with every shipment you send out.
The Case For Using More Than One Carrier
Depending on one carrier is a recipe for disaster. When demand spikes, Q4 in particular, single carriers reach capacity and begin pushing out pickup windows and surcharging. If you’re with one carrier, you just have to wear that.
A multi-carrier approach allows you to choose the shipment based on cost, speed, and destination. A regional player might offer better last-mile service to certain regions than a national. One carrier might be cheaper for large, heavy items, but the other might be cheaper for small items being shipped across the country. You don’t want to manage for the sake of managing. You simply want an alternative when one carrier becomes less reliable.
This is where many merchants fall over when trying to manage this with multiple carriers. An ecommerce shipping solution interfaces with many carriers through one portal. It compares rates, produces labels, and creates manifests. It doesn’t require you to log in to four different carrier portals. This is the operational key that makes multi-carrier a possibility at scale.
What Your Checkout Is Telling Customers About Your Shipping
Nearly half of online shoppers abandon their cart due to excessive additional costs like shipping, taxes, and other fees. However, it’s not necessarily the shipping cost itself that is the issue, it’s the element of surprise. If a customer reaches the final stage of their purchase only to find an unexpected $18 shipping charge, they will likely abandon their cart.
Real-time rate calculators at checkout generate real-time carrier pricing depending on the customer’s location and the weight of the cart, providing the customer with accurate pricing, so they are less likely to abandon the purchase. When a tiered shipping strategy is implemented, along with free shipping above a minimum order value, a flat-rate for regular orders, and an expedited option for clients ordering urgent shipments, customers can decide for themselves how much they are willing to pay for speed of delivery. A well-considered free shipping threshold can also help increase your average order value.
Building A Returns Process Before You Need It
Reverse logistics is the fastest-growing part of the entire shipping process that most stores don’t think about until it’s too late. Returns cost money – you pay the freight to get the product back, it costs you labor to handle it, and often it has to be inspected before it can be put back into sellable inventory. If that process is not clearly defined, the returned product sits in limbo, customers wait for credits, and you lose the cost of the product and the customer.
How to actually implement that: write a clear return policy that customers can find on your site without looking too hard, have pre-generated return labels or a webpage where the customer can request a return label, and have a defined workflow of what happens when the product arrives at your dock. That last one is the most important. Someone has to be responsible for the inspection, restocking, and disposal of each and every return. If that isn’t happening, the bottleneck isn’t in the shipping – it’s in receiving.
What Scaling Actually Requires
Expansion will not repair a flawed shipping configuration – it will only make matters worse. The successful stores are not successful because they discovered the carrier with the lowest rates, but because they developed the capacity to manage large quantities, carrier downtimes, and returns, without the need for continual manual interference. A solid shipping structure will set you free from daily tasks and allow you to focus on the bigger picture.
