Should You Offer Free Shipping? A Data-Driven Answer

Should You Offer Free Shipping? A Data-Driven Answer

Feb 12, 2019 | Blog, Warehouse Management Software

From ShipHero – The Top Pick Among Warehouse Management Software Companies

In the vastly competitive world of e-commerce, it can be a challenge to stand apart from the crowd. With limitless options available at their fingertips, consumers are always looking for the lowest price and the greatest value. As a business owner, you must walk the fine line between offering competitive prices and still keeping your head above water in terms of margins.

When it comes to grabbing the attention of consumers and converting them into paying customers, it is sometimes the little things that matter most. While most business owners understand the importance of branding, marketing, and advertising when it comes to improving sales, many underestimate the true value of offering free shipping.

You may be surprised to learn that high shipping costs are attributed to an astounding 55% of abandoned carts. So, the answer is clear — offer free shipping, and the sales will come, right? Well, it’s not that simple.

Keep reading to learn more about the pros and cons of offering free shipping and how to effectively make it work for your business without going bankrupt.

What’s So Great About Free Shipping?

One of the greatest benefits of shopping online is that it is incredibly easy to compare prices. Amazon, Jet, and even Google want to show you the highest rated products, at the lowest prices, with the least expensive (or free) shipping options. With so much competition out there, e-commerce stores need to find ways to convert visitors into paying customers and to keep those customers coming back.

That’s where free shipping comes in.
Free shipping is a huge benefit for customers, and it is often the deciding factor between one site and another. Though shipping is free for the customer, however, they are not free for the merchant, and those costs can add up quickly. That’s why you see so many websites offering free shipping for a minimum spending amount – the sale of those add-on items helps the company recoup the costs associated with shipping the order.

To give you an idea of just how powerful offering free shipping can be, consider recent research that showed 58% of shoppers will add additional items to their cart in order to qualify for free shipping at a set dollar amount. Not only that but shoppers will also spend 9.4 percent more when they need to meet a free-shipping minimum. So, while you may still be eating the cost of shipping yourself, by using free shipping strategically, you’re able to generate more revenue from it.

The Psychology Behind Free Shipping

The question any e-commerce business owner wants to know is, “Does free shipping really work?” The benefits for the customer are obvious, but how do you actually make it work for your business without dipping into your margins too much? The first step in answering this question is learning about the psychology behind free shipping.

First and foremost, it must be mentioned that free shipping is rapidly becoming the norm. Consumers are less likely to think of it as an option and more likely to think of it as a staple. Everyone from giant online retailers like Zappos and Wayfair to department stores and small businesses have begun to offer free shipping. For many of those companies, free shipping is only available for customers who meet a spending minimum but, for others, all orders ship free.

What’s the psychology behind the free shipping strategy? It all comes down to the consumers perceived value of shipping. Prior to purchasing, a customer determines the overall value of their purchase by performing quick subconscious math, weighing the costs and benefits associated with buying the product. If shipping ends up being too expensive for an item that we could just as easily get at a nearby store, the math doesn’t add up and the cart is abandoned.

Another reason why free shipping is so powerful has less to do with the shipping part and more to do with free part. According to Dan Ariely, Professor of Psychology and Behavioral Economics at Duke University, people change their behavioral patterns when something free comes along. In his book, “Predictably Irrational”, Ariely gives us a real-world example of the power of free in action. When Amazon introduced free shipping on some of its European sites, the number of orders increased dramatically. However, not in France. That is because instead of being reduced to zero, the shipping price in France was reduced to only 1 franc (about 10¢ USD). Yet this minor cost was enough to prevent a jump in sales.

How Free Shipping Is Typically Used

Though free shipping is everywhere, companies use this tactic in various ways. Here are some of the different free shipping techniques you’ll typically see in action:

  • Free shipping on all orders – no qualifications or restrictions.
  • Free shipping for members or subscribers only.
  • Free shipping on orders that meet a minimum threshold.
  • Free shipping on qualifying items.
  • Free shipping to a brick-and-mortar store for pickup.
  • Free shipping for buying during a certain window.

Every e-commerce store is different, so the free shipping policy you select will be unique to your company. You’ll need to find the right strategy that keeps your customers happy, that drives sales, and that helps you recoup the costs for offering the program.

What Are the Benefits for Your Company?

Though the idea behind free shipping is sound, it isn’t fool-proof. There will certainly be times when the customer simply isn’t interested in adding more items to their cart to qualify for the discount. There are also cases where the additional revenue from those add-ons doesn’t actually cover the cost of shipping. Additionally, and most importantly, free shipping may fail to work if the consumer isn’t in the right phase of the buying cycle.

The buying cycle begins when the consumer becomes aware of a need that must be filled. Next, the consumer considers ways (products) to meet that need and starts to assess the pros and cons of different options. Eventually, the consumer settles on a particular product and makes the purchase. Free shipping comes into play during the final stage of this process – the purchase. If the consumer isn’t ready to make a purchase, the lure of free shipping may not be enough to close the sale.

On the other hand, when free shipping DOES work, it provides several benefits. Here is a quick summary of the potential benefits free shipping has to offer for e-commerce business:

  • Increase in sales – We’ve already covered the fact that offering free shipping increases sales, but how exactly does it do it? For one thing, offering free shipping leads to a reduction in cart abandonment – it helps push potential customers over the edge to close the sale. It can also set your company apart from the competition and increase perceived value.
  • Increase in ARPU – Average revenue per user (ARPU) is heavily affected by free shipping policies, especially when you set a minimum spending threshold. In a way, free shipping is an upsell technique you can use to increase the size of an average customer’s order.
  • Increase in loyalty – Offering free shipping makes your customers happy, and a happy customer is more likely to come back. When you offer free shipping as part of a loyalty or membership program, it helps to increase repeat sales. Just take a look at what Amazon Prime has done to increase loyalty in the Amazon marketplace.

Free shipping is a tool e-commerce businesses can use to increase conversion rates and keep customers coming back, but it is not a perfect system. Keep reading to understand how to make it work for your shop.

How to Make Free Shipping Work for You

If implemented properly, free shipping could make a big difference for your business. You’ll need to design a free shipping policy that suits your business and ensures that you recoup the costs of shipping on most orders.

Here are some simple steps to follow when designing a free shipping policy for your business:

  • Calculate how much you need to sell to recoup the cost of shipping. Spend some time running the numbers to see whether you can make up the money you lose by covering the cost of shipping yourself. This will help you determine whether you can offer free shipping for all orders or if you need to add some stipulations such as a minimum purchase.
  • Decide on a minimum purchase threshold. If you run the numbers and see that you could be losing too much money by offering free shipping on all purchases, consider adding a minimum spending threshold. By requiring customers to spend a hypothetical $50 or $100 to qualify for free shipping, you can guarantee that your profit margin on those orders will be higher and consistent.
  • Use free shipping as an incentive during short-term campaigns. If it simply isn’t feasible for your site to offer free shipping all the time, you can still use it as a promotional tool for short-term marketing campaigns. Seasonal sales and new product releases are excellent opportunities to drive sales and adding free shipping as a bonus can boost sales even further.
  • Consider offering free shipping on certain items. If your business sells a wide variety of products, the profit margins are going to be different for different goods. You can choose to offer free shipping only on items where the profit margins line up or on items you want to sell more of.
  • Offer free shipping as a benefit for membership, subscriptions, and loyalty programs. Membership and subscription programs are a great way to get repeat business, but you need to offer your subscribers benefits – free shipping is a good one.
  • Limit free shipping offers to returned items. If you’re not in a position to offer free shipping on all of your orders, offering it for returns is still a step in the right direction. It gives your customers peace of mind knowing that if they are unhappy with the product, it won’t cost them anything to return it.
  • Use free shipping as a loss leader. The definition of a loss leader is a product sold at a loss to attract customers. However, it can also be applied to free shipping. For example, if you owned a subscription based e-commerce business, you may find that offering free shipping on the first order may increase conversions. Whereas you can make up the cost of shipping due to the higher average lifetime value of the customers (since they’re recurring orders).

Any of these free shipping strategies might work for your business, but you’ll have to take the time to choose the right one. To give you an idea what these strategies look like in action, here are some statistics from companies that have successfully implementing a free shipping strategy:

  • According to research published by CNBC, offering free shipping on returns (a policy offered by Zappos) boosted sales by 357%.
  • Red Door saw a 90% increase in sales after establishing a minimum purchase threshold – free shipping on orders over 75%.
  • Research from Marketing Land revealed that 9 out of 10 customers were more likely to do their shopping online when offered free shipping. Of those, about 30% made weekly purchases.
  • According to David Bell of Wharton University of Pennsylvania, customers find a free shipping offer with an average savings of $6.99 to be more appealing than a product discount worth $10.

As you can see, there are many ways to work free shipping into your business plan. It may take some work to find the right tactic, but it is definitely worth implementing.

Simple Tips for Implementing a Free Shipping Strategy

Now that you have a better understanding of the psychology behind free shipping and the benefits of offering it to your customers, you may be wondering where to start. Here are some simple tips to help you implement a free shipping strategy for your online business:

  • Calculate your free shipping threshold. This number should be close enough to what your average customer typically spends but enough to cover your costs. To determine this number, look at data from your last 6 to 12 months of sales to find the sweet spot between setting your spending threshold too high and setting it too low.
  • See what your competitors are offering. Though the most important thing is to make sure you’re not losing money, you also want to see what your competitors are doing because you want to give potential customers a reason to choose you over them.
  • Do a test run before committing to a free shipping strategy. You don’t have to commit to any free shipping tactic right away – you can run a promotion for two to four weeks to test out your free shipping policy and then evaluate the data to see what works best given your unique e-commerce scenario.
  • Don’t forget about returns. Returns are a necessary evil in the world of e-commerce, and it is your challenge to find the balance between keeping your customers happy and keeping your business alive. Think about the options such as free returns, customer-financed returns, or a flat rate for customer returns.
  • Once you settle on a free shipping policy communicate it clearly. Customers want to know exactly what they’re getting when they make a purchase. Think of it less like a policy and more like a marketing tactic. Make sure everyone that lands on your site is well aware that you offer free shipping.
  • Work the cost into your product prices. If you really want to offer free shipping but you can’t afford to eat the costs yourself, you might be able to work the cost (or at least some of it) into your product pricing. Just make sure you don’t go so high that you lose out to your competition.

Though including free shipping on your e-commerce store has the potential to increase sales and customer loyalty, it might not be right for your business at this time. If your profit margins are already low, for example, adding free shipping to the mix may cut your profits even more or negate them entirely.

The Bottom Line

Free shipping is an excellent marketing tool that has led to incredible benefits for many e-commerce businesses. Before you tack on a free shipping policy for your own business, however, you need to weigh the pros and cons – you also need to think practically about whether it will work and how to implement a free shipping policy.

When considering a free shipping policy, there are three questions you need to answer:

  1. Are your margins high enough to cover the costs?
  2. Will you still be making a profit once all costs are covered?
  3. How do you plan to use free shipping as a marketing tool?

Answering these questions will help set you on the right path toward determining whether free shipping could be a beneficial tool for your company. If you decide that it is, take the time to choose the best policy and follow the tips you’ve received here to start implementing your policy.

Need great software to run your warehouse? ShipHero is a leader among warehouse management software companies. See what we can do for you here.

How to Scale Your Ecommerce Business Efficiently & Effectively

How to Scale Your Ecommerce Business Efficiently & Effectively

Jan 17, 2019 | Best Practices, Blog, Warehouse Management Software

The world of ecommerce is a fickle one. At times, it seems completely random which sites survive, and which do not. In reality, however, it is the sites that plan ahead and take steps to keep up with the growth of their business that are the most likely to succeed.

The primary goal of any business is to grow, though there are certainly smaller goals you want to meet along the way. In the very beginning, for example, your first goal might be to break even – to start seeing positive cash flow after covering startup costs. From there, you want to see steady growth on a month-to-month basis and over the course of the year.

Ecommerce sales totaled $1.3 trillion in 2014 and are expected to grow by nearly 250% to a total of $4.5 trillion by 2021. If you hope to capture a slice of that pie for yourself, you need to set a strong foundation, build momentum, and prepare for future challenges. In this article, we’ll go into depth about the best ways to scale your ecommerce business both efficiently and effectively.

Start Strong with a Firm Foundation

Though most ecommerce businesses start out small, you should always be thinking and planning ahead. With each business decision you make, ask yourself, “Is this strategy scalable?” This is particularly important when it comes to things like choosing your inventory and with creating and implementing a digital marketing strategy.

Here are some other tips to follow in the early days of your ecommerce business to ensure that you have a solid foundation on which to build:

  • Set goals for 1, 3, 5, and 10 years. As your shop grows, you’ll find yourself making decisions that will impact the future of your business – having specific goals set at different intervals can act as a guide to help you make the decision that is best for your business.
  • Determine how you will measure your company’s progress. Annual revenue is a good measure of sales, but it doesn’t reflect profit or progress. Take the time to identify your Key Performance Indicators (KPIs) so you can track your business’s progress month-over-month and evaluate how different growth strategies pan out.
  • Write a solid business plan. You’ll need a business plan in order to guide the success of the business within the first year. This plan is not only key for starting any new business but also projecting what hurdles you’ll have to overcome in the future as well as keeping you accountable.
  • Run the numbers before you commit. Before you start buying or manufacturing inventory, you need to know that your sales will be enough to cover your costs. Create a cash flow spreadsheet and run the numbers to see how much revenue you can expect, what your monthly fixed costs will be, how much you’ll be spending on inventory, etc.
  • Identify your target audience and build your brand. Gather information about your demographic and develop your brand to appeal to that audience. Having a strong brand identity will help guide you in future endeavors such as implementing a digital marketing strategy and choosing where to expand in the future.
  • Build a strong website. Your website is going to be the mode that drives your sales, but it is also a tool for driving traffic. In addition to creating your sales pages and landing pages for any outbound marketing, you’ll also need content to help drive search engine traffic (inbound marketing).

First Steps to Build and Retain Momentum


Building your initial website can end up being easier than you might think. Particularly with the multitude of tools at your fingertips, such as Shopify. What is not so easy is turning that website into a successful, profitable, and scalable business. Though annual worldwide ecommerce sales are in the trillions, many new shops close their doors within the first few years. In order to scale your business for long-term growth, you’ll need to start out by taking certain steps to build and retain momentum. Here are 3 things you need to do:

1. Create a Strong Digital Marketing Campaign

Your website is the infrastructure for your online business, but you’ll never make any sales if no one sees your page. A strong digital marketing campaign is the key to building your online presence, driving traffic to your site, and converting visitors into paying customers. Here are some simple online marketing tips to get you started:

  • Do some keyword research. Before you start marketing, you need to do some research to identify the strongest keywords to reach your target audience. Ubersuggest is a great free tool that can help guide your research.
  • Create an automated email campaign. Not only is email one of the easiest ways to communicate with customers, it also provides ecommerce businesses with the highest return on investment. According to a study by Campaign Monitor, for every dollar spent on email marketing $44 is made in return.
  • Personalize it. The internet is continually becoming a dynamic place where it reacts to our actions. For example, the ads you see on your social feeds from websites you just visited. Make your ecommerce store a personal experience for customers and they’ll be more likely to convert. This can be as simple as adding a “click to chat” bubble on the homepage or as advanced as sending them a reminder email when they leave something in their shopping cart.
  • Implement a loyalty program. Depending on what industry you’re in, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. Consider implementing a loyalty program to keep your customers engaged and give them a reason to shop with you again.
  • Optimize your site for mobile devices. You may not be surprised to learn that mobile internet traffic has outpaced desktop traffic. However, what is surprising is the fact that the search results for the same queries on mobile versus desktop searches are often different. This comes down to whether your website is mobile optimized or not. Get the upper hand for your ecommerce business in the search results by making sure your website is optimized for all mobile devices (phones, tablets, etc).
  • Create content and build authority. One of the best ways to build trust with your customers is to establish your business as an authority in the industry. You can build trust by offering high-quality, informative, and relevant content on your site. Don’t limit yourself to print content either, use photos and videos as well. The process of using content to market your business is called Content Marketing.
  • Connect with your target audience. The power in digital marketing comes from being able to connect with your target audience in a more personal way. No other form of marketing does this better than social media. Social channels like Facebook, Instagram, and Twitter give you the ability to connect, engage, and grow your business in a more personalized matter. Whether you’re simply building a following on social channels or using their ad platforms to connect with your demographic, you should invest time and energy into your social media strategy.

When it comes to ecommerce, digital marketing is not a one-and-done strategy – you’ll need to keep at it if you want your business to grow. There is no harm in starting out small but, as your business grows, you’ll want to start expanding your marketing strategy with it.

2. Switch to Third-Party Logistics (3PL)

In the early stages of your business, you might be able to handle order fulfillment yourself or with a limited staff. As you start scaling your business, however, you’ll need to decide whether you want to invest in your own warehouse space or if you want to outsource the order fulfillment process to a 3PL provider.

A 3PL is a third-party logistics provider who takes over one, some, or all of the aspects of your order fulfillment processes. Hiring a 3PL means that you will no longer be responsible for storing your inventory, picking and packing your orders, arranging shipment with different carriers, and handling returns. This will free you up to focus on the other things that will help you scale your business.
If you do choose to run your own warehouse, it is critical to choose the right warehouse management software.

3. Develop Excellent Customer Service

When it comes to running a successful ecommerce business, the quality of your product matters greatly. What matters even more, however, is customer satisfaction. When it comes to the scalability of an ecommerce business, word of mouth marketing is gold. This all comes down to the ecommerce buying cycle. The buying cycle looks like this:

Since ecommerce products are not tangible, like they are in brick-and-mortar retail stores, the cycle is often time more drawn out. Consumers spend more time making a buying decision because they cannot see the product in person and because there are some many choices available to them. The way you can tackle both of these obstacles is by offering customers supreme customer service.

Take for example Zappos, the world’s biggest online shoe store. In 1999, before ecommerce really became mainstream, they were able to convince people to buy shoes online. How? Through incredible customer service. In fact, Zappos encourages their customer support team to make a connection with all customers. To put this in perspective, their longest customer support call clocked in at a whopping 10 hours and 51 minutes.

Every business is unique, so the steps you need to take to build your initial momentum may be different than the steps another company needs to take. Keep reading to learn some simple ways to start scaling your business in order to retain that momentum.

6 Ways to Scale Your Ecommerce Business


As we mentioned in the beginning, building and implementing a strong digital marketing campaign is the best way to establish an online presence and to start obtaining customers. As your business grows, you’ll need to think about logistics and how best to maximize efficiency while minimizing costs.
Here are a 5 ways to do it:

  1. Evolve your marketing strategy. Over time, your business is going to grow and with that growth comes change. Upon achieving certain milestones, you should take a closer look at your current customer base and check to make sure that your marketing strategy is finely tuned to targeted that audience.
  2. Optimize your order fulfillment strategy. Whether you’re filling orders in-house or you’ve hired a 3PL, make sure that your order fulfillment strategy is designed for cost-effectiveness as well as efficiency. If you do have a 3PL partner, set aside time each year to talk to them about things such as your growth and how they can work to help.
  3. Consider expanding into a new market. If you are already working with a 3PL, expanding to new markets could be a fairly straightforward process.
  4. Upgrade your technology. As your business grows, that could mean potentially hundreds, if not thousands, of new SKUs. Your initial ecommerce platform might not cut it at a certain point. Invest in technology that helps automate your business — whether that means upgrading from SquareSpace to Magento or simply finding a new project management app.
  5. Keep an eye on your competitors. One of the best ways to scale your business is to fill a niche that your competitors have left open. Study your competition to understand what they’re doing right and, more importantly, what they’re doing wrong. Look for unmet needs by reading their customer reviews to get a sense of how you can fill in the gaps they’re missing.

Don’t feel like you have to implement all of these ideas at once. In fact, some of the ideas on this list might not work for your business at all. It is your job to know your business and to understand its potential – only you can decide how best to achieve your long-term goals and what tools and strategies to use along the way.

There are no guarantees in the world of ecommerce – a business that is thriving one day could tank the next. Though you cannot possibly predict every little thing that could affect your business, it pays to be thorough in the planning process if you hope to scale your operations down the road. Think carefully about building a strong foundation to create momentum in the early days of your business and always keep working to maintain that forward progress. Good luck!

ShipHero is one of the top providers of warehouse management software for ecommerce companies. See how we can help you here.

Cyber Monday 2018: Which Carriers Shipped the Most & Where it Went

Cyber Monday 2018: Which Carriers Shipped the Most & Where it Went

Dec 4, 2018 | Blog, Fulfillment

Every year, consumers drag themselves out of a post-Thanksgiving stupor to hit the stores for Black Friday. With some stores now opening as early as noon on Thursday and offering online promotions through the following Cyber Monday, Thanksgiving has become one of the biggest commercial holidays of the year.

According to Amazon, the five shopping days starting with Thanksgiving itself, nicknamed the “Turkey 5,” broke U.S. records this year with consumers purchasing millions more products than they had the year before. Adobe Analytics experts have revealed that e-commerce sales alone hit a record $8 billion this Cyber Monday alone, making it the biggest shopping day in U.S. history.

Sales figures are the most obvious way to capture a glimpse of the commercial significance of holiday shopping days like Cyber Monday, but it paints a limited picture. To grasp the true scope of this shopping extravaganza, it is interesting to view the shipping data for Cyber Monday purchases.

Let’s take a closer look at some of the sales data for Cyber Monday 2018 and how it correlates with data from the top shipping carriers in the U.S.

A Deeper Look at Cyber Monday 2018

While some families spend their post-turkey hours settled into their easy chairs watching Thanksgiving Day football or sleeping off their third helping of pumpkin pie, others load the kids into the minivan as soon as they finish their last bite and head out to hit the mall.

And then there are the online shoppers. Those savvy savers who avoid the long lines, taking advantage of holiday deals from the comfort of their La-Z-Boys.

According to Adobe Analytics, Thanksgiving Day shopping totals about $3.7 billion online with Black Friday sales totaling over $6 billion. The real money is spent on Cyber Monday – what Adobe has dubbed “the largest shopping day in US history.” John Copeland, head of Marketing and Customer Insights at Adobe announced that Cyber Monday sales topped $7.9 billion with $2 billion coming in from smartphones, an all-time high.

Financial figures aside, Amazon recently released a report of the types of products that sold on Cyber Monday 2018. Across the “Turkey 5,” Amazon customers alone ordered more than 180 million items. On Black Friday alone, customers ordered over 4 million toys and electronics through the Amazon mobile app and customers around the world purchased more than 18 million toys and over 13 million fashion items over the course of the weekend.

Not only did Cyber Monday 2018 reveal a record number of sales, but Akamai has released data on conversion rates for mobile and desktop devices. Conversion rates for mobile devices averaged 2.72% with desktops averaging around 5.12%. Bounce rates were up as well, with mobile devices bouncing 34.71% and desktops 25.74%.

Cyber Monday Shipments by Carrier

Every holiday season, retailers and customers rely on shipping carriers to get their purchases where they need to go. Shipping carriers hire countless seasonal employees and offer extra initiatives like Sunday delivery to help manage the increased load. They also release shipping deadlines to help consumers make sure their domestic and international shipments arrive in time for the holiday.

During the holiday season as a whole, shipping carriers struggle to keep up with the growing number of holiday sales and the challenge peaks on major shopping days like Cyber Monday. While private carriers like FedEx and UPS shoulder a significant portion of the holiday load, the United States Postal Service takes the biggest piece of the pie.
Here is an overview of the percentage of Cyber Monday 2018 shipments divided by carrier:

  • USPS – 56%
  • FedEx – 20%
  • UPS – 9%
  • First Mile – 9%
  • DHL – 6%

Cyber Monday Shipments by Country

Though Cyber Monday is widely regarded as an American commercial holiday, online purchases made on this day travel around the world. According to 2018 Cyber Monday shipping data, the majority of purchases made in the U.S. were shipped domestically but another 9 international shipping destinations made the list. Here is an overview of Cyber Monday 2018 shipments divided by country:

  • United States – 94.62%
  • Canada – 2.34%
  • Great Britain – 1.26%
  • Australia – 1.03%
  • France – 0.26%
  • New Zealand – 0.15%
  • Ireland – 0.06%
  • Japan – 0.03%
  • Singapore – 0.03%
  • Korea – 0.02%

Cyber Monday Shipments by State

The beauty of online shopping is that customers can purchase from any online store no matter where they are physically located. Some states carry a larger piece of the pie, of course, based on factors such as population and demographics. Here is an overview of the percentages of Cyber Monday 2018 shipments divided by state:

  • TX — 13.50%
  • CA — 11.30%
  • NY — 6.20%
  • FL — 5.40%
  • IL — 4.70%
  • PA — 3.40%
  • OH — 3.10%
  • GA — 3.10%
  • NC — 2.70%
  • NJ — 2.60%
  • MI — 2.50%
  • VA — 2.40%
  • WA — 2.30%
  • TN — 2.10%
  • MA — 2.10%
  • IN — 2.00%
  • MO — 1.90%
  • AZ — 1.90%
  • CO — 1.90%
  • MN — 1.60%
  • OK — 1.60%
  • AL — 1.60%
  • MD — 1.60%
  • LA — 1.50%
  • SC — 1.40%
  • WI — 1.40%
  • KY — 1.30%
  • OR — 1.20%
  • UT — 1.10%
  • IA — 1.00%
  • CT — 1.00%
  • AR — 1.00%
  • KS — 0.90%
  • MS — 0.80%
  • NV — 0.80%
  • NE — 0.70%
  • WV — 0.50%
  • ID — 0.50%
  • NM — 0.40%
  • NH — 0.40%
  • ME — 0.30%
  • HI — 0.30%
  • DE — 0.30%
  • ND — 0.30%
  • RI — 0.30%
  • MT — 0.30%
  • SD — 0.30%
  • DC — 0.20%
  • WY — 0.20%
  • AK — 0.20%
  • VT — 0.20%

Each year, more brick-and-mortar businesses close their doors or take their sales online to meet their customers where they are. Modern technology has made it easier than ever for consumers to find the products they want without setting foot outside the comfort of their own homes.

As holiday sales break records year after year, however, one thing remains constant – someone has to deliver those millions of purchases. Shipping carriers make use of modern technology themselves to streamline the shipping process, and they take steps to prevent holiday delays as much as possible. FedEx hires 55,000 seasonal employees each year, and UPS hires some 100,000 over the period of several weeks while also increasing hours and extending shifts for regular employees to manage the increased holiday load.

The world of consumerism is constantly changing, and it falls on the shoulders of shipping carriers like USPS, FedEx, and UPS to carry the burden of that change. Even as the world changes, however, U.S. consumers will still expect their packages to arrive on time and shipping carriers will do their best to meet these demands. 3PL software companies like ShipHero help your business find the best and cheapest carrier shipping options.

*Data based on an analysis of over 100,000 shipments during Cyber Monday 2018.

In Conversation with Eric Godshall of Nashua Nutrition

In Conversation with Eric Godshall of Nashua Nutrition

Jun 14, 2018 | Blog

Nashua Nutrition began humbly in 2003, in a 350 square foot nutrition store inside a local gym. Today, it is a booming, multimillion dollar company housed in a 15,000 square foot facility. We sat down with owner Eric Godshall to discuss their success

  1. How did Nashua Nutrition get where it is today?

Nashua Nutrition’s core customers were gym members who liked the convenience of purchasing reasonably-priced, nutritional products at the gym.  While running the small store, our founder Glenda Godshall worked hand-in-hand with a nutritionist at the gym to help people improve their eating habits and lose weight.  She used a line of medical-grade food products as part of the nutritional regime, which allowed clients to eat regularly while reducing their caloric intake and speeding up their metabolism.  As Glenda continued to counsel those seeking to lose weight, she realized how many individuals were misinformed or uneducated about safe, sustainable weight loss.

So, she decided to build a website to advertise these high-protein, medical-grade products to those struggling to lose weight.  It wasn’t long before the website was generating substantial traffic, and people from all over the country were purchasing the products online.  As business grew, Glenda brought in several more lines of medical-grade nutritional products, as well as bariatric-specific vitamins, which enabled Nashua Nutrition to become a “one stop shop” for weight loss and bariatric needs.

  1. How have you approached marketing and growing sales?

In our early stages, we relied heavily on PPC ads (Google, Bing, etc.). It also helped that we focused on providing the lowest price and superior customer service!  Additionally, to remain competitive in our rapidly growing market, we have started adding value to our customers’ experience through social media, informational blogs, and loyalty programs. By implementing these programs, we are becoming a weight loss and bariatric resource for information as much as an ecommerce store.  When a customer comes to our site to receive valuable information, they are more apt to purchase from us. We want our customers to be loyal to us as much as we are loyal to them.

  1. What have been your challenges, and how did you adapt as Nashua Nutrition grew?

As I imagine is typical of any small business, we’ve had our fair share of challenges and obstacles. They’ve ranged anywhere from restrictive vendor policies to not having adequate space for expansion.  When we started to outgrow our warehouse, we would try to minimize the floor space needed. This was done by staggering our ordering, optimizing our box deliveries, and getting creative on stock picking locations.  When we would hit an obstacle, we always found a way to adapt to the situation. Constant monitoring of our industry, it’s trends and competition, have allowed us to keep in touch with our customers’ needs and fulfill them to the best of our ability.

  1. Have you noticed any change in customer expectations when it comes to shipping orders over the past several years?

Absolutely.  With the invention of Amazon Prime, customers are expecting to get free shipping and 2 day delivery. In order to try to compete in the Amazon world, we have lowered our free shipping minimums and use expedited shipping methods when it makes sense.

  1.   You recently moved and now have a new warehouse along with a store. What made you choose Shiphero?

We realized that the systems we were using were antiquated and were not allowing us to work efficiently.  Since we moved to a much larger location, we knew that our existing methods and software wouldn’t work. We were looking for a single system that could handle all aspects of our warehouse and order fulfillment.  After much research we came across ShipHero which turned out to be the perfect fit for our company.

  1.  Is there a particular ShipHero feature that has been especially helpful for you?

There are 3 core features that have greatly increased our efficiencies and savings:

  1. Shopify Integration for Live Inventory: Previously, we had disparate systems that didn’t “talk to each other.”  This required us to constantly monitor inventory levels manually. If we saw something was running low, we would have to put a counter on an item in an effort to prevent overselling.  This was a time consuming and often inaccurate process. Now that we have ShipHero, our inventory is live so there is no longer a need to manually add counters to our inventory. And, with the new reserve functionality, we have a buffer to prevent any potential backorders.
  2. Picking Efficiencies: Before ShipHero, we were using a server-based WMS system and used our point-of-sale to scan our products out of inventory.  Our pickers had to pick orders individually (which involved walking throughout the warehouse to pick a single order). Now, with Shiphero we are batch picking 8 orders at a time; using iPads and Socket Scanners; and snaking through the warehouse just once.  Our picking errors have dropped dramatically, and the pick rate has increased substantially. Before ShipHero, we were able to ship about 325 orders in a day.  Since using ShipHero, we are easily shipping 475 a day – with time to spare.  We estimate that with our current resources, we will ship 600-700 orders in a day.
  3. Shipping Rate/Carrier Shopping: Before ShipHero, we almost exclusively used FedEx for all shipments over 1lb. USPS was only used for Priority Mail items under 1lb, which was only a few packages a day.  Since implementing ShipHero, we are utilizing the “Cheapest” rate functionality to save on shipping charges. Now, we are sending approximately half of our order via USPS and saving money on each shipment.
  1.  What’s your vision for the next 2 years? How will you expand your business?

To continue expanding our product offerings as well as our sales channels.  We see some major shifts in the weight management industry and we plan on being on the forefront of these changes.

  1. What advice would you give ecommerce merchants that want to scale their businesses?

Keep up with current technologies.  By using newer technology such as ShipHero, we have been able to greatly increase our efficiencies and cost savings.
Eric & Glenda Godshall combined their skill sets and founded Nashua Nutrition.  Both Eric and Glenda have a strong interest in fitness, weight management and exercise in addition to Business Management degrees.  With Eric’s prior IT experience and Glenda’s nutritional counseling experience, the husband and wife team built Nashua Nutrition into a market leader in the weight loss and bariatric consumer segment.

Why Ecommerce Businesses Should Sell on WalMart Instead of Amazon – our advice featured on Home Business Magazine

May 8, 2018 | Best Practices, Blog

Originally posted on Home Business Magazine

Small business owners are faced with a difficult decision when it comes to reaching a larger audience online: either they can invest valuable resources in marketing in order to drive customers to their ecommerce store, or they can opt to sell on marketplaces where customers go already.

There are several marketplaces that retailers can utilize in order to reach new customers and increase their online sales. These range from targeted niche platforms such as Jane or Etsy, to all-encompassing behemoths such as Amazon, Walmart and even Ebay. While most of us are aware of Amazon and Walmart’s online presence, Amazon undeniably dominates ecommerce. However, Walmart has been investing millions to improve it’s online marketplace and is the most likely outlet to compete for Amazon’s clients. Still, many retailers default to using the Amazon marketplace without considering Walmart as a viable option to sell their goods.

However, there are several downsides to going this route. Amazon not only charges the retailer to list the items (unless the seller plans to post fewer than 40 listings), but they also take a percentage from every sale made. These costs can quickly add up, especially if a seller lists a large number of products on the site.

Another drawback is the issue of returns. Amazon makes a profit just from the items being listed and sold, so if a customer returns an item, it is at no cost or loss to Amazon. Amazon has built an experience aimed at the customer, not the seller, making it difficult for sellers to manage customer expectations, even when it comes to a returns policy that favors the customer. This means that customers are able to return items months after they purchased them – sometimes for no discernible reason – at the expense of the seller.

Many retailers have also encountered cutthroat competitors on Amazon, who often resort to a myriad of unscrupulous practices in order to derail others successfully selling similar products. These range from posting bogus negative reviews to undercutting a competitor on price by offering counterfeit items. These practices run rampant largely because Amazon has such a low barrier to entry into it’s marketplace. Sellers don’t go through any kind of screening process in order to participate, needing merely to sign up prior to listing their products.

These are just a few reasons that many retailers have started to look elsewhere to post their listings – and one viable platform is the revamped Walmart.com. Walmart.com is the third largest internet retailer and it’s ecommerce sales are projected to surge 40% this year. The retailing giant has also spent billions on ecommerce fulfillment centers and boasts over 110 million unique visits a month. And, many retailers will find that the Walmart marketplace is simply a better place to sell their products. Here’s why:

  • Walmart doesn’t charge a listing fee. Amazon charges $39.99 a month just for retailers to list items (individual seller listing less than 4 items accrue this charge, however) Both marketplaces do charge ” referral fees” for each item sold, averaging around 15% depending on the item.
  • Less competition. Walmart has a drastically smaller product selection compared to the “Everything Store,” which also means that sellers can enjoy a less crowded marketplace with fewer competitors. In fact, retailers with products in less popular categories find that they sometimes have the room to themselves – a luxury tat.
  • Their screening process ensures reputable sellers. While it is infinitely easier to sign up and sell on Amazon’s marketplace, Walmart’s more involved admission process also helps weed out any of those cutthroat sellers who resort to unethical practices in order to derail their competition. Admittedly, the screening process takes time and effort, but the payoff is worth it for those who want to sell alongside creditable retailers.
  • Retailers have more control over returns. While Amazon favors the customer and requires sellers to adhere to certain guidelines when handling returns, Walmart allows retailers to determine how they want to deal with product returns. This allows sellers the opportunity to resolve the issue and to reduce the number of returns resulting from fickle or unnecessary customer whims. While Amazon will require retailers to issue a full refund without gathering any information from the customer and doesn’t require the buyer to return the item, Walmart allows sellers to ask the customer to return the product prior to offering a refund, or to resolve the issue in other ways.

Admittedly, the Walmart audience doesn’t entirely overlap with Amazon’s. Depending on your product, this can be the determining factor for whether or not you use Amazon’s marketplace to sell your items or opt for affiliating with Walmart. However, retailers whose products are buried under thousands of competing products will find the newcomer’s space amenable to increased sales and reduced competition.