Issues with shipping processes are a major challenge for eCommerce businesses. No matter how awesome your product is, it does not do any good to customers, or for that matter, to your company and its investors, until it reaches its destination and the customer is able to use it. For example, even if customers write glowing reviews of your products, you will not get a perfect five-star rating if multiple customers experience delays in receiving their orders, received the wrong shipment, or found that the items were damaged by the time they opened the package.Â
It is only possible to scale your eCommerce business once you have found a way to ship the right orders to the right place in a reasonable amount of time and at an affordable price. Therefore, working out the logistics of shipping processes and overcoming the challenges of shipping orders at scale will give you access to a wider client base.
In This Article:
In this article, you will learn about the best practices for shipping your products to customers in the United States and throughout the world. You will learn how to ship your products quickly while bearing in mind labor costs and workplace safety. You will find out how software that offers data analysis and other services can provide useful information and boost your company’s performance when it comes to fulfilling orders accurately and quickly.
What are Shipping Operations?
Shipping operations are a series of processes that eCommerce companies must undertake in order to ensure that shipments reach their destination on time. Successful management of shipping operations requires a high level of expertise. Any problems with warehousing, inventory, or supply chain can cause your company to lose assets of great value. It takes a lot of knowledge and energy to manage shipping operations in an effective manner. Whether yours is a passion project, small business that ships a few packages by post each day, or a huge conglomerate that ships crude oil to many countries around the globe, shipping operations are among the most important aspects of your company’s success.
4 Main Stages of Shipping Operations
The details of shipping operations vary from one industry to another and across professional fields, but they all contain the same four basic steps. All across the board, regardless of your nationality and the types of products you are shipping, this is an overview of the four main stages of shipping operations, and the role that each stage plays.
Picking
Warehouse picking is when a certain team of workers in the warehouse, known as pickers, retrieve the correct items from storage in the warehouse and prepare them for packaging and shipment. The benefits of increasing the efficiency of your warehouse picking processes are many. You must meet the needs of your customers while ensuring that the condition of your warehouse is safe for workers. For example, you must provide them with clothing that provides adequate protection if they will be working near hazardous chemicals. Warehouse picking activities provide an important link between production and the next phase in your shipping system. Many warehouse picking software solutions are available, and if you choose the right one this will ensure that the pickers in your warehouse can just follow an easy-to-navigate menu so that they can retrieve the right products and provide accurate documentation.
Packing
In all but the smallest organizations, warehouse picking and packing are two separate systems. It is best if your warehouse is able to coordinate them, in order to use its resources, such as equipment and people, for example, drivers, most efficiently. Ensuring that you have the correct links between warehouse packers and other personnel will have a big impact on the health of your eCommerce business.
Labeling
Ensuring that all of the packages have the correct labels is important enough that you should designate labeling as a warehouse process separate from packing and shipping. If you do not have the correct SKU number or address on the package, all kinds of problems can arise with trade rights, customs, and delivery, even under ideal market conditions. Labeling sounds like it is just a minor part of eCommerce order fulfillment, but if questions arise about the contents and destination of a shipment, then tracking the package will be much harder than it needs to be, even with today’s technology.
Shipping
Supply chain logistics literature contains more information about shipping than it does about many other supply chain processes, especially because of the risks associated with it. Once your products are on a ship sailing on the open sea, you have little control over what happens to the freight until it reaches the next port. If there is a problem with navigation or with a vessel or vessels involved in the transportation of your cargo, then the problem can quickly escalate into a crisis. No matter how much you trust the shippers and carriers in your fleet, you should always carry insurance on every container you ship.
Difference Between Local vs International Shipping
The four main steps of shipping operations are the same whether you are shipping products domestically or internationally, but some differences also apply. For example, you must respect the laws and regulations of every country to which you ship products. This can mean some added expense, but it is worthwhile for the purpose of expanding the scope and geographic range of your business.
Local Shipping
When you only ship products locally, you have more power and control over the process. You can comparison shop for the carriers with the best prices and choose packaging materials based on environmental sustainability. If all of your customers are local, you can ship your products through UPS, the postal service, or DHL. You can even use local couriers if all of your customers are within the same metropolitan area.
International Shipping
If you ship products to Canada, the United Kingdom, France, or other foreign countries, then your shipping operations will be more complex. You will need to account for customs and tariffs in planning your timetable and budget for shipping.
What is eCommerce Shipping Software?
eCommerce shipping software is any computer application or mobile app that enables you to manage the shipping operations of your products. Most warehouse management software suites come with shipping operations features.
5 Tips to a Successful eCommerce Shipping
For successful eCommerce shipping, follow these five tips:
- Think about the cost of the entire process, not just the cost of shipping. It is important to look at the big picture when trying to reduce the costs of your eCommerce operations. For example, it costs less to maintain one warehouse than two, but if your customers are located throughout the country, you could reduce the times and costs of shipping if you have more than one warehouse. Likewise, inventory spoilage eats up a lot of money. The problem could be that you are ordering too many units of items with a limited shelf life instead of simply paying more to ship the items that you have. You should also weigh the costs of keeping less square footage of warehouse space against the fact that it costs less to order items in large quantities, even if it means that you need more space to store them. Strategic use of third-party storage in multiple locations could help you reduce shipping costs and other expenses, but only if you plan carefully.
- Analyze the data related to your shipping operations. The best warehouse management software and eCommerce software enable you to evaluate the effectiveness of shipping and other eCommerce operations based on many different metrics. If you are not looking at data, then you are simply adjusting your strategy based on guesswork, which is not helpful to your company or your customers. When you think you have identified one trouble spot, adjust one variable in your eCommerce operations and then run the data again several months later to see how your change has affected the rate of inventory spoilage and stockouts, the average number of miles traveled per hour, and the money your company gets per person per hour of warehouse picking, among other metrics.
- Automating processes will reduce errors. No matter how quickly you ship products and how short a distance they travel, you will always lose money if customers return products or the items never reach their destination, requiring you to ship a replacement item. Automating processes such as order tracking and the documentation of warehouse putaway and picking can improve the accuracy of order fulfillment.
- Worker safety should be a higher priority than speed or cost. Saving money should not be your only priority. All of the money you save by improving your speed and accuracy will go to waste if workers get seriously injured in warehouse accidents because you will have to pay their workers’ compensation claims, plus fines to the Occupational Safety and Health Administration. Safety should always come first.
- Reevaluate your shipping operations strategy at least once per year. A successful eCommerce shipping strategy has a lot of moving parts. Analyzing your eCommerce shipping operations strategy is not a one-time deal. The supply chain and your customer base are always undergoing changes. You should analyze the data on an ongoing basis to help your company adapt to recent developments. For example, how is your company adjusting to the fact that in-person retail shopping is easier now than it was in 2020, and yet consumer prices have been consistently high for several years? When you look at any company that went out of business after enjoying a prolonged period of success, you can almost always attribute the cause to the company’s failure to adapt to a certain change in technology or in market conditions. Reviewing your operations strategy, including shipping and fulfillment, can help you prevent your company from going the way of Blockbuster Video. Even if you have software that collects data on an ongoing basis, you should still pause every year to look at the trends of that year and the past several years and adjust your plans accordingly.
Key Takeaways
Your eCommerce business is only as successful as its shipping operations. eCommerce shipping software can help make your organization streamline its shipping operations and become more efficient.
Shipping Operations FAQs:
These are some common questions that eCommerce business owners ask about shipping operations.
What is Dropshipping?
Dropshipping is a supply chain management where the seller does not keep its own merchandise on its own premises; sometimes, the seller does not even have a warehouse. Instead, a fulfillment house stores the merchandise, and the seller coordinates with the fulfillment house to fulfill the orders.
What are 3 Methods of Shipping?
The three methods of shipping are land, sea, and air. Which one you choose depends on which products you are shipping and the location of their destination.
Should Shipping be Included in the Cost of Goods Sold?
For tax purposes, businesses in the United States should not include shipping in the cost of goods sold.
