The following guide discusses all essential aspects of the shipping process, its workings, entities involved, shipping process flowcharts, best practices for e-commerce shipping, important shipping considerations, e-commerce shipping costs, and more. So, let’s get started.
What is the Shipping Process?
The shipping process in the e-commerce industry involves all steps, from receiving a customer’s order to organizing it for last-mile delivery. Various factors like order management, carrier relationships, and warehousing are involved in shipping an order to customers.
The shipping process can be classified into three primary stages:
i. Receiving the order
ii. Processing the order
iii. Fulfilling the order
Let’s understand these stages in more detail.
The Stages of How Shipping Works
The stages of the shipping process influence how rapidly and precisely you can prepare a customer order and get it directly shipped to its destination. The following section discusses each stage in detail.
Stage 1: Receiving the order
After receiving an order from the customer, you must ascertain that you have sufficient inventory to process that order. For that, you need to work with your supplier or manufacturer and receive inventory at a warehouse or send it to a fulfillment center if you collaborate with a third-party logistics (3PL) company.
You can streamline the process of receiving an order from customers by employing an order management system or inventory management software to synchronize to your e-commerce platform.
Stage 2: Processing the order
This stage involves authenticating order data and ascertaining that the data is accurate. For example, you may need to verify data like shipping addresses, shipping documents, etc. Moreover, you need to ensure sufficient inventory stock of the ordered items.
A huge part of this process is accomplished using automation and technology to accelerate order processing. Subsequently, the order status is updated in real-time, and finally, the customers are informed that their order is processed.
Stage 3: Fulfilling the order
This stage begins after the order is processed. It involves choosing the appropriate items for the order and organizing them for shipping.
The common order fulfillment options for e-commerce businesses are self-fulfilling orders and drop shipping. However, the most famous option for all e-commerce businesses is to outsource fulfillment to a 3PL (third-party logistics) partner. A 3PL looks after the whole e-commerce fulfillment process. For example, it looks after packing boxes, warehousing, preparing picking lists, shipping orders, etc.
Stage 4: Customer receives order
The final stage involves ensuring successful order fulfillment to the customer’s destination. This stage focuses on maintaining the delivery deadline and ensuring the safety of goods.
Who’s Involved in the Shipping Process?
The shipping process involves a shipper who processes and prepares the order to be shipped. It also involves the carrier, which looks after the last-mile delivery process. Occasionally, a 3PL is involved that works as an intermediary between the carrier(s) and the e-commerce business.
Let’s go through the details of each entity involved in the shipping process.
- The shipper
The shipper is an individual or company that processes the customer’s order and prepares it for shipping. It can be a third party that manages fulfillment and shipping on behalf of your business.
- The carrier
After the order is shipped, the carrier is responsible for delivering it safely to the customer’s destination. When orders are in the carrier’s control, you can use order tracking to inform customers about the shipping process status. Hence, they can stay aware of their orders’ estimated delivery dates.
- 3PLs
A 3PL provides inbound and outbound logistics services. Partnering your e-commerce business with a 3PL means that the 3PL company looks after shipping orders from the fulfillment center (the place where inventory is stored).
3PLs also share powerful bonding with shipping carriers. They can negotiate rates that eventually assist merchants in decreasing shipping costs and offer various shipping options to their customers. After the order ships, the merchants can observe and manage all orders from one dashboard. Furthermore, they can keep customers in the loop on each stage of the shipping process.
- The warehouses
The warehouse shipping process primarily involves fulfillment centers or physical warehouses that store inventory until it has to be delivered to the next point. The next point can be the end consumer, a retail store, or another distribution hub.
An e-commerce retailer, a brand, a 3PL, or other parties can operate these warehouses.
Typically, the warehouse shipping process covers the following tasks.
- Receiving inventory,
- Storing inventory,
- Picking and packing orders after they are placed,
- Allowing carriers to pick up the packages from the facility to finish the warehouse shipping process.
Shipping Process Flowcharts
How you fulfill orders and ship them depends on the following factors.
- What’s the product volume?
- How many fulfillment locations are available?
- Do you use a shipping platform that can collect order information from all places you sell?
The following section discusses different shipping process flow charts.
Basic shipping process – no shipping platform
This shipping process flowchart is suitable for e-commerce sellers who use a straightforward shipping process with low order volume and without shipping software.
Basic shipping process – with shipping platform
It is suitable for e-commerce sellers who require a more efficient shipping process to sell their products on multiple channels and expect growth in order volume.
Advanced shipping process – no product information
It is appropriate for online sellers who don’t obtain product dimensions and weights from their selling platform. Hence, they have to calculate those parameters on a per-order basis in the shipping platform.
Advanced shipping process – with detailed product information
It is suitable for e-commerce sellers who work on precise product weight and item dimensions derived from their selling platform. Hence, they don’t have to compute those parameters individually per order.
Daily deal shipping process
Daily deal sellers adopt a unique shipping process for the following reasons.
- High volume,
- The requirement to swiftly and efficiently process the order,
- Peak order fulfillment of identical items.
Monthly subscription shipping process
Monthly subscription sellers adopt a simpler shipping process flowchart due to recurring orders.
Shipping returns process
Generally, returns are the least admirable facets of the e-commerce industry. Adopting a robust return flowchart can streamline and optimize the shipping process.
Best Practices to Follow for E-commerce Shipping
If you are confused about how to improve the shipping process, the following section will help.
- Assemble a great team
The success of shipping operations depends on its team. Shipping is the only process that establishes the physical interaction between the e-commerce business and the consumer. So, having an effective team in place can solve various issues that may arise in the shipping process. Moreover, the right team can guarantee successful order deliveries and fulfillment.
- Set the right goals
In addition to product delivery, e-commerce companies should understand the goals they want to achieve via their shipping operations. These goals can include
- Increasing conversion rates and repeat order rates via a reliable delivery experience,
- Improving brand awareness through branding on shipping packages.
- Choose the best shipping strategy
You must develop a shipping strategy that aligns with business objectives. Shipping is crucial in all e-commerce businesses. So, it is vital to understand the events’ results in the shipping process. Businesses should understand which shipping partners, shipping methods, and shipping policies work the best for their growth. These decisions depend on the target market, product type, and customers’ geographical location.
Knowing the following factors simplifies your choice of the best shipping strategy.
- Free in-store pickup
It implies that customers physically collect their orders from the store. Customers need to select the store and the “Free in-store pick up” option when placing their order online. Typically, orders get ready within two hours. Customers need to wait until they receive a pickup notification email. Subsequently, they can reach the store to pick up their items.
If customers prefer somebody else to pick up their order, they can call the store to inform them about the name of the alternate pickup person. That new person has to carry a copy of the notification email and a photo ID.
- Same-day delivery
Customers usually expect the order delivery on the same day if the store is nearby. Your business should have an alternate shipping technique to cater to such customers. Same-day delivery is possible with hyperlocal delivery. In fact, it directly delivers to the customers within a few hours. Moreover, it adopts a short route and tries to deliver quickly.
The same-day delivery of products like groceries, medicines, food, personal care items, clothes, etc., is possible with hyperlocal delivery. As soon as the order is placed, the rider is assigned who will come and pick up the orders from your store. Finally, it delivers to the customers. You simply have to assign your product to the invoice. It is important to note that hyperlocal delivery is the most feasible option for businesses when it comes to same-day delivery within the city.
- Live rates
Offering live rates to customers can cover your costs and offer cost-effective shipping options. Live rates decided by a carrier inform customers of the reasons for the shipping costs. When using the “live rates” option, the costs will swiftly vary according to the package’s weight and destination.
You can partner with multiple couriers and provide the customers with a tabular comparison of live shipping costs. So, you can lure the customers into comparing and choosing the cheapest option. On the other hand, you can negotiate with your courier partners to provide affordable shipping rates for shorter destinations.
- Free shipping
Free shipping is one of the greatest benefits you can offer your customers. However, you must make sure it doesn’t overload your business. If you decide to offer free shipping, make sure you have a backup.
Add a threshold order value when offering free shipping. Leading courier companies like Ninjavan, XDE, LBC, DHL, J&T, Lalamove, etc., offer free shipping only if customers shop for a certain minimum value.
- Flat rate and table rate shipping
Free shipping may not be feasible for all businesses. The other two alternatives are flat rate and table rate shipping.
Flat rate shipping means the business offers one shipping price irrespective of the order value. It charges a flat rate across a particular zone. Hence, when customers visit your store and enter their pin code, they can only view a standard shipping cost.
Table rate shipping enables store managers to optimize the shipping process and incorporate rule-based methods to calculate the absolute shipment fee. It incorporates customized pricing and is categorized to focus on each facet of the order individually. As the name implies, all the shipping rules are designed on a table. Hence your business can easily understand, revise, or remove them when required.
- Mixed and alternative strategies.
You can mix various strategies to analyze what works best. Mixing and matching shipping options helps you to balance your promotional opportunities and revenue simultaneously. For example, you can offer free standard shipping on your products and also levy charges on expedited shipping.
An alternative strategy involves offering standard and overnight shipping (with in-store product pickup) to run a retail store.
Important Shipping Considerations
You must focus on the following shipping considerations to improve your shipping process.
- Shipping goals
The key reason many businesses enter the e-commerce world is to generate more revenue. You must look for a shipping partner that aligns with your business goals. Set realistic goals and deadlines to fulfill them.
- Collecting great reviews
Feedback is crucial for every business. The customer reviews for e-commerce stores are often posted online. Smart online shoppers always go through reviews before purchasing. So, it is vital to work with a shipping company that can deliver products timely.
- Method of Delivery
Determine whether you want to deliver locally or follow the steps and proceed with overseas shipping. You must also understand the differences between standard delivery and express shipping. You should then try to cover this in the shipping information during checkout.
- Choosing a Courier
Make sure to choose a courier that offers reliable shipping service at a cost-effective price. You can choose from local courier companies if your customers are within your country.
- Packaging
Product aesthetics is vital when it comes to a satisfactory shipping experience. So, the product must be attractively packaged using quality packaging material. Make sure to prevent shipping delays by keeping all essential packaging materials in hand. You can print your store’s labels inside and outside the package.
- Costs
Communicate with your partnered e-commerce shipping service to estimate the courier’s cost for deliveries. You must consider international shipping costs if your customers live outside the country.
Generally, overseas shipping is more expensive and trickier than local shipping. You must consider customs fees and other expenses to ship products internationally.
Calculating E-commerce Shipping Costs
The following two factors help you calculate e-commerce shipping costs accurately.
- Package size and weight
Firstly, you must know your products’ weight and size. It helps you use an effective pricing strategy for your shipping process.
Let’s understand this with an example. Suppose most of your products have similar weight and size. So, you can choose per-item shipping costs depending on the zones of the customers. This strategy helps you to calculate flat rates for shipping.
- Origin country and destination
Determining the origin country and destination gives a clear picture of how the shipping process would proceed. Shipping within the country costs less than international shipping.
E-commerce Packaging Options
One of the important factors determining customer satisfaction is the packaging. If the products are not packed properly and attractively, customers will not like to buy from your e-commerce store again. Here are the best e-commerce packaging options to consider.
- Choosing your packaging
E-commerce packaging is not limited to boxes and bags. Various packaging materials are available to give an impressive look to your brand. For example, you can customize packaging materials like poly mailers, custom printed cartons, pouches, garment bags, and custom packaging tape to complement your brand’s identity.
- Custom packaging
If your e-commerce business delivers plenty of packages to your customers, it is better to have custom mailing boxes and envelopes. These materials put a remarkable impression of your brand in the customers’ minds.
Mailers are not only customizable, but they are versatile too. The envelopes can be custom printed and prepared in coextruded plastic. Moreover, custom boxes and mailers can be decorated with hot stamping, embossing, interior printing, and spot UV.
- Eco-friendly packaging
It is important to use eco-friendly packaging materials to strike a balance between product safety, presentation, and sustainability. The brown corrugated board contains more recycled content. So, it is the most eco-friendly packaging material.
How to Track E-commerce Shipments and Returns?
The shipping process is incomplete without tracking shipments and returns. The following points help you to track e-commerce shipments and returns.
- Order management
Tracking the shipments means you need to keep consumers informed on the accurate delivery status of their orders. The buyer should be able to retrieve the order details at the click of a button and access important order details like estimated delivery date, dispatched status, in-transit status, and shipped status.
- Tracking packages is a must
The following aspects justify the importance of tracking packages in the shipping process.
Ensures customer satisfaction
The secret of a successful e-commerce business is prioritizing and fulfilling customer expectations. You must facilitate customers with visibility and clarity of their ordered items. Tracking packages keep the customers informed about all essential details of their order. For example, it keeps them informed on when an order is accepted, dispatched from the warehouse, in transit, etc. These timely updated details relieve customers’ queries and confusion.
Cost-effective
Providing online tracking to customers cuts down expenses on unnecessary services. For example, timely updates and tracking ensure your business need not dedicate time and effort to handling their queries. It provides the customer with a comprehensive overview of their order. No extra effort, labor, or time is involved.
Quickly resolves issues
An effective tracking system helps swiftly pinpoint and resolve any issues that might arise in the shipping process. For example, issues may arise during picking, packing, dispatching, shipping, and delivery. It is impossible to resolve customer issues without an effective tracking system. Also, it will harm your business reputation.
Valuable business insights
Tracking shipments and returns allow an e-commerce supplier to maintain a record of all the order summaries in one place. This information can further enhance your business functioning and help to recognize the weak points.
- Determine your return policy
Using a return policy simplifies tracking e-commerce shipments and returns. E-commerce stores often have to deal with customer service, understand why customers return the products and manage order replacements.
An unbiased return helps to develop trust with your customers. Your return policy must be easy to understand and include clear guidelines, restrictions, and allowances. It should also mention the conditions under which customers may return items.
Conclusion
The shipping process is inevitable to ensure flawless delivery of goods to the customer. It not only guarantees customer satisfaction but also streamlines your business operations. It indicates all the stages involved in shipping and any improvements needed.
What is a logistic process?
Logistics is a process of transporting either raw materials or finished products from one point to another. Two key functions of this process are transportation and warehousing.
The major types of logistic processes are Outbound Logistics, Inbound Logistics, Reverse Logistics, and Third-Party Logistics (3PL).
The prominent logistics efficiency metrics are Shipping Time, Warehouse Capacity, On-Time Delivery, Order Accuracy, Transportation Cost, Inventory Turnover Ratio, and Damaged Products.
What are shipping documents?
Shipping documents are documents required for shipping in the import or export business. These documents are the records, certificates, and forms required to receive the delivered products. They help provide fast customs clearance.
Typically, shipping documents include invoices, packing lists, lading bills, and insurance documents. Both declaration forms and shipping documents must be duly signed by customs and submitted by the exporter within 21 days from the date of exports.
What is the freight shipping process?
Freight shipping is transporting large shipments of goods domestically or overseas through sea, land, or air. Those shipments bigger than 30 inches x 30 inches x 30 inches or weighing more than 150 pounds are called freight.
The freight shipments can be floor-loaded or loaded over a truck on pallets. The freight forwarders streamline the freight shipping process. They are individuals or organizations that negotiate with multiple carriers to consolidate the delivery of goods from the manufacturer to the customer’s destination.
How to improve workflow speed in the shipping process?
The following tips will help you improve workflow speed in the shipping process.
i. Calculate shipping cost depending on the dimensional weight – Instead of weighing every package, you can calculate shipping costs by a generally accepted approximate weight depending on the volume. This approach saves your fulfillment team time.
ii. Warehouse automation – When fulfilling your orders, you must invest in time-saving technologies like RFID/ barcode scanners, warehouse automation technology, and fleet tracking apps.
iii. Consolidate frequently paired items or similar items in the warehouse – You can increase the work efficiency of your packaging team by organizing every essential within easy reach. iv. Simplify product packaging – Custom packaging helps you to build your brand. But it can also slow down the shipping process because of the unique materials and efforts required for packaging. So, try to cut the unnecessary shipping process steps wherever you can.
What are the best packaging practices in the shipping process?
The following list shows the best packaging practices in the shipping process.
- Use envelopes or boxes for business products.
- Use bubble wraps for safeguarding delicate products.
- Use side loaders or easy-fold mailers to pack books and other similar products.
- Use poly mailers when shipping lightweight non-fragile products like handkerchiefs, socks, etc.
- Use ribbons, craft papers, personalized notes, and more for branded packaging.
What are the things to consider before choosing good shipping software?
Good shipping software helps your business print labels, compare shipping rates, integrate your sales channels, automate notifications, and more. You must consider the following things before choosing good shipping software.
- Inventory management,
- SMS/Email tracking,
- Bulk order processing,
- Easy processing of undelivered orders,
- Return order management,
- Shipping insurance,
- Integration with your sales platform,
- Analytics for shipment monitoring.
