Ecommerce Shipping and Fulfillment: A Complete Guide

Introduction

If there's one thing that makes ecommerce, well, e-commerce, it's shipping. Whether you're a small mom-and-pop store or a behemoth like Amazon, the shipping part of the equation is one of the most important pieces to have figured out.

Hey everyone, my name is Dan, I'm a co-founder of Unbound Merino, an e-commerce business built right here on Shopify. When we launched back in 2016, the first major challenge we had was the complexity that surrounded the shipping of our products. There are so many things to consider in order to have a sound shipping strategy from costing to pricing to product packaging to shipping carriers, tracking, and insurance.

So sit back, grab your notepad, because today I'm going to share some pointers and considerations that I wish I knew when we were in the early stages of launching our business. For more simple, actionable tips to grow your online business, make sure you subscribe to Learn with Shopify so you don't miss out on future releases.

Understanding Shipping Rates

The first thing you're going to want to consider with shipping is, quite obviously, the shipping rates the customer is going to pay. The cost of shipping from a customer’s perspective can make or break the sale. As with everything, I always encourage entrepreneurs to get out of their own heads and into the customers'. Think like them. Imagine you're a customer on your own website and you finally decide to make that purchase. The price of shipping is the final thing the customer has to agree to before hitting that order button.

Setting Your Shipping Rates

What are you going to charge? Will you pass the entire shipping cost onto the customer, set a flat rate, offer free shipping and eat the cost yourself, or bake the shipping price into your product price? Shipping rates are a strategic decision. You need to balance keeping your sale profitable and keeping the customer happy. In the world of Amazon Prime, many customers have incredibly high expectations around shipping.

Before setting customer shipping rates, you need to figure out how much it costs you to ship. You need to know how your orders are going to be packaged, the weight, the dimensions, and the destination.

Using Shipping Apps

Because Shopify has many apps to help with shipping, this whole piece is quite easy. It just takes a bit of setup. We at Unbound Merino use Desktop Shipper. The way such apps work is you input the packaging dimensions just once and each product on your store will have its weight input into the system as well. The app then calculates the shipping price automatically and prints you a label from carriers like USPS, Canada Post, FedEx, and DHL.

Starting to Ship

Consider that shipping might seem simple in theory but can be complex in practice. You'll become more efficient as you go. To help you get started, we’ve provided a list of shipping calculators with e-commerce shipping rates for some of the largest and most popular couriers.

Once you're set up, revisiting the shipping price question is crucial. You know the costs, but what will you charge the customer?

Trial Runs and Starting Up

If I could go back in time, I’d create fake packages of similar size and weight to our real ones and print real labels to test the whole process. This trial would have taught us a lot and set us up better. We made countless mistakes by not charging enough to cover expensive shipping costs, not knowing shipping times, and not knowing about the great shipping apps available on Shopify.

The Role of 3PL

Many successful Shopify stores use third-party logistics services (3PL). A 3PL is where you store your inventory, and they handle the shipping process for you. Using a 3PL can be cheaper if your package doesn’t contain multiple items and can lead to faster shipping. The best reason to use a 3PL is it allows you to focus on sales rather than fulfillment.

However, there are cons. For us, the pick and pack rates per order make 3PLs cost-prohibitive. Further, we lose control over the customer experience. We can't include personalized notes or gifts as easily and lose some branding control. Therefore, sometimes it’s easier to start by shipping your own products.

Streamlining with Shopify

Shipping is a make-or-break experience for customers, but fortunately, Shopify offers tools to simplify the process. Shopify Shipping can save up to 88% on UPS, DHL, and USPS rates. You can fulfill orders, track packages, and manage other aspects from one place.

If you want to try using Shopify, they offer a free 14-day trial. Just click on the link in the description to get started.

Conclusion

I hope this was helpful as you start your journey into entrepreneurship. At Learn with Shopify, we aim to provide knowledge you need to succeed. If you have questions, leave them in the comments. For more actionable tips to grow your online business, subscribe to Learn with Shopify so you don’t miss out on future releases.

Thanks for reading, and I’ll see you in the next one.

Keywords

Ecommerce Shipping
Shipping Strategy
Shopify
Shipping Rates
Third-Party Logistics (3PL)
Shipping Apps
Desktop Shipper
Packaging
Shipping Label
Fulfillment
Trial Runs
Customer Experience
Shopify Shipping Discounts

FAQ

Q: How critical is shipping in e-commerce? A: Shipping is one of the most critical aspects, as it can make or break a sale from a customer's perspective.

Q: What should I consider when setting shipping rates? A: Consider whether you will pass the entire cost to the customer, set a flat rate, offer free shipping, or incorporate shipping costs into the product price.

Q: What shipping app does Unbound Merino use? A: Unbound Merino uses Desktop Shipper for handling shipping.

Q: What are the benefits of using a 3PL? A: Benefits include potentially lower shipping costs, faster shipping, and allowing you to focus on sales rather than fulfillment.

Q: What are the drawbacks of using a 3PL? A: Drawbacks include potentially higher costs if shipping multiple items per box and less control over the customer experience.

Q: How does Shopify help with shipping? A: Shopify offers discounted shipping rates, streamlined fulfillment, and the ability to manage shipping, customers, and inventory from one place.

Q: How can I test my shipping process before going live? A: Create fake packages and print real labels to simulate the shipping process and identify potential issues.