Today’s shoppers want the convenience of buying online with the gratification of getting their orders ASAP. And you can’t blame them. Giants like Amazon and Walmart have set the norm for the eCommerce industry by offering their customers two-day and even same-day shipping options.
As a small retailer, you risk losing your customers if you can’t guarantee their ‘inalienable right’ to expedited delivery. Studies have shown that 26% of online shoppers abandon their carts due to slow shipping and 53% consider delivery time an essential factor when evaluating their orders.
The most intriguing part of the puzzle is that customers expect expedited shipping but still crave free deliveries, with 75% of U.S. shoppers expecting free shipping. The big question is, is it possible for small businesses to compete with the giants, considering their lower order volume and lack of fulfillment infrastructure?
Well, the answer isn’t straightforward. But we can tell you it’s not impossible. In this guide, we let you in on the most important things you need to know about two-day shipping and how you can offer it to your customers.
What Does 2-Day Shipping Mean?
When you offer two-day shipping, you deliver consumer purchases within two days of the order. Today’s online consumers tend to be impatient, so two-day shipping is an essential part of your eCommerce strategy.
How Does 2-Day Shipping Work?
Depending on the seller, two-day delivery can be two business days or two full days. And the time can start counting from either the order cutoff time or the checkout time.
For example, Walmart uses two business days and an order cutoff time model. So, if a buyer places an order after the cutoff time on Friday, they can expect to receive their order on or before Tuesday since Saturday and Sunday are not business days. On the other hand, some other companies start counting the days once the order is packed, not minding whether it’s a business day.
Whichever the model, deliveries eligible for two-day shipping are typically coordinated between two shipping methods: air and ground shipping.
Air shipping entails using an airplane or jet to transport packages from the warehouse or fulfillment center to the customer. It’s mainly used for international shipping or shipping to customers who live very far from the fulfillment centers. Unsurprisingly, air shipping costs can be pretty steep, making it almost impossible to offer free two-day shipping to customers.
Ground shipping uses vans, trucks, or cars to move orders from the fulfillment center to the customer’s doorstep. Depending on your logistics approach, you may use your delivery vehicles or rely on an external shipping carrier. Ground shipping is easily the cheapest delivery model and you can offer free two-day delivery without deepening your bottom line.
Unfortunately, the method cannot be used to deliver orders to locations far from your fulfillment centers. If you don’t have fulfillment centers spread across your home country, offering 2-day delivery via ground shipping can be next to impossible.
How 2-Day Shipping Grows eCommerce Businesses
A recent report from EtailInsights revealed that there are currently 2.1 million online retailers in the United States alone and this number is expected to grow in the coming years. If anything, this stat tells you that eCommerce businesses have become just as competitive as brick-and-mortar retail, if not more. You’ll need to stay on top of your game to thrive in the space as a business owner. Here are a few ways two-day shipping can boost your eCommerce business
Keep up With Shoppers’ Expectations
On average, online customers feel three days is an acceptable waiting time for an order. Once your delivery time exceeds three days, your customers will likely leave you for businesses that offer faster delivery. However, you’ll have a better chance of retaining your customers and expanding your customer base if you offer two-day shipping.
Improve Conversion Rates and Make More Sales
Your ads become more attention-grabbing if you include a promise of expedited shipping. You can add the tags and banners to all your ad copies, including emails, paid ads and social media posts. When you do this, get ready for a considerably improved conversion rate and more sales.
Get Better Retention Rates
Customers who get their orders on time are likely to make a repeat purchase. Moreover, you can offer 2-day shipping as part of a paid membership program like Amazon Prime to offset the costs associated with faster deliveries.
Stop Losing Sales to Amazon
Expedited shipping is one of Amazon’s core selling points. Many online shoppers now regard Amazon’s free two-day shipping as the standard. According to Metapack’s report, 27% of shoppers will choose the retailer with the better delivery option. Unless you sell an exclusive product, you’ll likely lose your customers to the eCommerce giants if you can’t match their shipping times.
Should You Offer 2-Day Shipping?
Yes, it would be best if you offered two-day shipping to as many customers as possible. It’s the easiest way to reduce cart abandonment and order cancellation rates. However, two-day shipping for all orders can be detrimental to business, especially if you plan to keep the shipping costs low.
If expedited delivery costs are too high, you can offer two-day shipping alongside other options and leave the decision to the customer. Another helpful strategy is restricting the service to a select group of customers like Amazon Prime.
Typically, How Much Is 2-Day Shipping?
The cost of shipping within two days depends on several factors. Here are some things that affect the cost of availing of a 2-day shipping program.
- Type of mailable items you are shipping
- Peak period on delivery calendar
- Time and day delivery shipments are scheduled
- Delivery carrier and service used
- Zip code for the location of origin
- Zip code for the destination
- Dimensional weight
- Package characteristics (e.g., hazardous materials, fragile items)
Also, note that the cost that a seller charges customers for two-day shipping can vary because of factors like fulfillment fees and channel costs.
Fulfillment fees are the cost that a company or individual seller may incur for packing, processing orders, stocking inventory and shipping. These fulfillment fees in turn can also vary based on pricing models, orders placed and additional services like individual packaging.
This explains why when you order an item for two-day shipping from an online marketplace, the cost may be more or less than ordering the same item directly from the item manufacturer’s site.
How to Keep 2-Day Shipping Costs Low
Two-day shipping doesn’t come without extra costs. If you’re not careful, you could lose all the gains you’ll make from offering two-day shipping if the costs eat too deep into your bottom line. And transferring the total cost to customers isn’t a viable option. As mentioned earlier, your customers want their delivery fast and free! The best you can do is to keep the shipping cost as low as possible. Here are some tips that can help:
Use Ground Shipping
Ground shipping is the easiest way to keep shipping costs low while delivering fast. However, it can only work if the fulfillment center is close to the customer. Since most of your customers are likely to come from big cities, your fulfillment centers should be located in urban centers.
If you cannot achieve a wide distribution of fulfillment centers, you may restrict the fast shipping option to customers within a specified destination zip code. You could even offer one-day or overnight shipping to customers close to your fulfillment center.
Offer 2-day Shipping to Customers on a Membership Plan
Even with Amazon’s logistics prowess, only Amazon Prime members enjoy guaranteed two-day shipping. You can also work on a similar model for your eCommerce business. When you offer this perk to customers on a membership plan, more customers are likely to join and the subscription cost may offset some shipping costs.
Leverage Distributed Warehouses
Operating from just one warehouse or fulfillment center will severely restrict your two-day delivery capabilities. Even if you cannot manage more than one fulfillment center, you should consider partnering with a 3PL company. You’ll be reducing the transit time of customers’ orders and ensuring faster delivery.
Examples of 2-Day Shipping
Below are a few shipping methods you can use if you’re planning to start two-day shipping:
DIY: Negotiate Shipping Discounts With Carriers
You’ll have to take the goods to your preferred carrier if you handle fulfillment in-house. The top carriers such as FedEx and the USPS have two-day shipping plans you can subscribe to. If your business is big enough, you could even get them to pick the packages up from your warehouse with shipping discounts.
Outsourced: Partnering With a 3PL
Online sellers that choose this option store their inventory at the third-party logistics company’s fulfillment center and the company ensures it’s shipped out on time. This arrangement allows sellers to leverage distributed warehouses and significantly reduce shipping costs. What’s more? You get to retain customer information since all orders will have to pass through you.
Best Shipping Options for Small Businesses
If you’re a small business looking for affordable, fast shipping providers, these are some of the best options you can choose from.
If you’re thinking of going for flat-rate shipping, USPS has pre-made boxes in sizes ranging from small to large, each with a different price. If your items can fit in the pre-made boxes, you may consider offering them as a parcel service option.
Because of its pre-made box fees, flat-rate shipping through USPS will also help you accurately estimate your shipping costs ahead of time. This means you won’t be surprised by extra fees and end up losing money.
USPS is also a top choice for those who are doing in-house fulfillment for their orders. Many small businesses experience inconsistent monthly order volumes or low order volumes, so they end up doing their own order fulfillment. If you have small order volumes, USPS offers the best value for money as a shipping option.
USPS offers free pickup services from your home or office, with tracking services and up to $50 insurance for most parcels. There are also no surcharges for Saturday deliveries, rural or resident delivery, or for fuel.
For small businesses sending large packages that weigh 70 pounds or more, UPS is the most cost-effective option. This is because it doesn’t have a size limit for its services, unlike USPS.
For an additional fee, UPS can pick up your package from your office or warehouse. It also has two-day and three-day delivery shipments, guaranteed day ground delivery and international shipping services to over 220 countries and territories.
While DHL is smaller than UPS, FedEx and USPS, it’s one of the best options for international shipping. DHL can ship your customers’ orders to 220 countries and territories. It also has an easy-to-use quote calculator that can help you choose the best shipping rate and delivery times for orders, depending on which service you choose.
DHL typically estimates costs based on the destination country and your items’ dimensional weight. Fragile or costly items can get either cargo or freight shipping insurance, depending on which applies to the order. For those who need help with customs clearance, DHL also has brokerage offices around the world.
Do your customers need 1-3 delivery speeds? For businesses where prime delivery speeds are the highest priority, FedEx is one of the most reliable choices. FedEx has overnight shipping, same-day shipping for cross-country deliveries and two to three-day shipping.
FedEx Express may have fewer locations than UPS, but it’s still fairly easy to find a location for dropping off shipments. FedEx Express also offers priority international deliveries, tracking and insurance for shipments up to $100. This gives international customers the peace of mind they need to place orders from your small business.
2-Day Shipping FAQs
Below are answers to some frequently asked questions about two-day shipping:
What is second-day shipping?
Second-day shipping is when a company or seller ships the order within two days of it being placed. It is not the same as second-day delivery, which means that the order must reach the customer within two days of the order being placed.
Note that this should also not be confused with 2-day shipping, which typically means that the order should reach the customer within two business days from its shipment out of the fulfillment center.
Is 2-day shipping actually two days?
2-day shipping doesn’t mean the customer will receive the package within 48 hours of placing the order – rather, it means they’ll receive it within two business days once the item is shipped to them.
For example, fulfillment center workers will need to pick, pack and label an order before it’s ready for shipping. So, if the customer places the order late, it may not be possible to ship the order on that day. In such cases, the two days will start counting the next day. For companies that work only on weekdays, the two days will not begin counting until Monday if the order is placed on Friday evening.
If the seller drops off the package at the post office, two-day shipping will mean two days after the seller drops off the package. In some contexts, two-day shipping may suggest that the seller will get the order in the mail within two days. If you’re ever in doubt, you should ask your seller or service provider to explain their interpretation of two-day shipping.
What is the Amazon Prime Effect?
The Amazon Prime Effect refers to the two-day shipping service that most online customers now expect. Amazon set the expedited delivery standard via its Amazon Prime service. Prime customers typically get their goods within two days of placing the order.
Is 2-day shipping guaranteed?
Two-day shipping isn’t always guaranteed because it hinges on many factors, including the shipping carrier, days of operation, cutoff time, weather and additional factors. Many online sellers only use two days as a delivery estimate. However, some sellers are bold enough to provide a money-back guarantee if your order does not arrive within two days.
Even in cases where the seller provides a money-back guarantee, they still leave room for mishaps such as missing or stolen packages or lousy weather. You shouldn’t hastily provide guarantees around two-day shipping as an online seller. However, you should try to uphold your promises as much as possible.
What is the benefit of offering free 2-day shipping?
The main benefit of offering free two-day shipping is that you attract many customers. However, you should know someone will have to pay for the free shipping and supplies, and that person is you.
If it doesn’t make sense for your margins, you could be better off dropping the idea. Or, better still, offer it to a small subset of customers that may exceed a minimum purchase threshold or have subscribed to a particular service.
How To Offer 2-Day Shipping
Most small businesses cannot handle the complexities of order fulfillment coupled with expedited shipping. Thus, outsourcing your fulfillment services to a specialist company or another company with great logistics prowess makes great sense. Below are a few outsourcing options you can consider.
Fulfillment by Amazon (FBA)
Fulfillment By Amazon is available to a select group of Amazon sellers. To become FBA-eligible, you have to meet some preset criteria. Once you meet the requirements, your customers can expect guaranteed two-day shipping and could even upgrade to one-day shipping for a small fee.
The downside to Amazon FBA is that the service is only available for orders placed on the Amazon marketplace. Unfortunately, you won’t have the contact information to remarket to your customers. Amazon could even use your order information to build competing products; there’s nothing you can do about it.
Furthermore, you’ll incur considerable seller fees, despite Amazon using its branded packages for shipping. In essence, you have little control over the customer experience, and shoppers are more likely to remember that they bought the item from Amazon than that they purchased from you. In summary, it’s not a great option to boost brand visibility.
ShipHero is a third-party logistics (3PL) company with fulfillment centers across the country, lowering last-mile delivery costs. We help sellers fulfill orders on their business websites, third-party marketplaces and other sales channels.
When you partner with ShipHero, you’ll get guaranteed two-day shipping that doesn’t come with all the negatives of FBA. You’re also likely to pay less on deliveries and you can distribute your inventory across the numerous fulfillment centers in the country to save on shipping costs. If you want to scale your fulfillment operations and gain access to powerful 3PL software without breaking the bank, there’s hardly any better option than partnering with ShipHero.
Offering fast and cheap delivery options is now central to attracting and retaining online customers. Unfortunately, many small businesses don’t have the logistics capabilities necessary to match the expedited delivery services provided by eCommerce giants like Amazon, Walmart and eBay.
The best way to remain competitive is by outsourcing your fulfillment needs to a 3PL company. If you can partner with the right logistics company, you’ll be able to offer guaranteed two-day shipping and enjoy all the benefits of it.
Learn how ShipHero can help you offer 2-day delivery by clicking the button below to contact our team.
About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With over 5,000 brands and 3PLs relying on us daily, we’re here to help with all your logistics needs.
Let us know how we can help you today by scheduling a call HERE.