How 2-Day Shipping Works and Why You Should Offer It
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. Considering their lower order volume and lack of fulfillment infrastructure, the big question is, can small businesses compete with the giants?
Well, the answer isn’t straightforward. But we can tell you it’s not impossible. In this article, 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 essential to your eCommerce strategy.
The Benefits of 2-Day Delivery
How can you benefit from two-day deliveries? Here are some ways two-day delivery can provide a business advantage:
Meet Customer Expectations and Boost Loyalty
Many customers expect two-day shipping ability from all online businesses thanks to Amazon. Whether you like it or not, two-day shipping is a must. If customers don’t receive their items within two days, they may not return to your business again.
On the flip side, consistently delivering within two days shows that you’re a reliable online business. If you keep fulfilling your two-day delivery promises, customers are more likely to continue shopping at your business.
Reduce Lost Sales and Cart Abandonment
There’s something undeniably thrilling about waiting for a package to arrive in the mail, especially when it comes to last-minute holiday gifts or items that just can’t wait. We’ve all experienced that sense of urgency, and it’s no wonder that slow delivery speeds can be a deal breaker for many eCommerce platform users.
In fact, a snail-paced shipping process can lead to customers abandoning their carts, causing businesses to lose out on potential sales. However, the simple solution of offering two-day delivery can work wonders. This speedy promise not only eases the minds of those eager customers but also makes them much more likely to hit that “purchase” button, knowing that their precious items will be in their hands in just a few days.
Gain Another Selling Point
Fast shipping speed is marketable. If you promise two-day delivery and consistently fulfill it, you can make it a selling point. Writing something like “free two-day delivery” on your marketing materials can attract attention and increase clicks. More clicks mean more people visit your online store, potentially increasing your sales.
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 it 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 usually vary between two shipping methods: air and ground. Each shipping method has different advantages and disadvantages, so let’s dive in:
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 far from fulfillment centers. Of course, airborne 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. You may use your delivery vehicles or rely on an external shipping carrier, depending on your logistics approach. Ground shipping is easily the cheapest delivery model, and you can offer free two-day delivery without hurting your bottom line.
It’s a harsh reality for many businesses that ground shipping isn’t suitable for delivering orders to remote areas far from fulfillment hubs. If you don’t have fulfillment centers spread across many regions, offering 2-day delivery via ground shipping can be next to impossible.
How 2-Day Shipping Grows eCommerce Businesses
A report from EtailInsights revealed that there are 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. Add tags and banners to all your ad copy, 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 will likely 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 of faster deliveries.
Stop Losing Sales to Amazon
Many online shoppers now regard Amazon’s free two-day shipping as standard. According to Metapack’s report, 27% of shoppers will choose the retailer with the best delivery option. Unless you sell an exclusive product, you’ll likely lose customers to the eCommerce giants.
Should You Offer 2-Day Shipping?
Yes, offering two-day shipping to as many customers as possible would be best. 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 price of a 2-day shipping program.
- Type and amount of mailable items you are shipping
- Peak period on the delivery calendar
- Time and day delivery shipments are scheduled
- Delivery carrier and service used
- Zip code for the location of origin
- Zip code and destination addresses
- 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. It’s essential to know your customers well. That way, choosing locations near them will be a breeze and save you money in the long run. You could even offer one-day or overnight shipping to customers living closer 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. If you cannot manage multiple fulfillment centers, 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 Options
Below are a few shipping methods you can use if you’re planning to start two-day shipping:
DIY: Negotiate Shipping Discounts With Carriers
If you handle fulfillment in-house, you’ll have to take the goods to your preferred carrier. The top carriers, such as FedEx and 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 on time. This arrangement allows sellers to leverage distributed warehouses and reduce shipping costs. You get to retain customer information since all orders will pass through.
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 considering 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 fit 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 prices 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 doing in-house fulfillment for their orders. If you have small order volumes, USPS offers the best value for money as a shipping option. Some services like Priority Mail Express have a money-back guarantee if your products don’t arrive on time.
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 deliveries, or fuel.
For small businesses sending large packages that weigh 70 pounds or more, UPS is the most cost-effective option. Unlike USPS, this is because it doesn’t have a size limit for its services.
UPS can pick up your package from your office or warehouse for an additional fee. 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 your chosen service.
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 needing help with customs clearance, DHL also has brokerage offices worldwide.
Do your customers need 1-3 delivery speeds? FedEx is one of the most reliable choices for businesses where prime delivery speeds are the highest priority. 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 reasonably 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 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 different from second-day delivery, which means that the order must reach the customer within two days of being placed.
Note that this should also be distinct from 2-day shipping, which typically means the order should reach the customer within two business days of 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 – instead, it means they’ll receive it within two business days once the item is shipped to them.
For instance, fulfillment center workers must 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 attracting 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 need help handling the complexities of order fulfillment and expedited shipping. Thus, outsourcing your fulfillment services to a specialist company or another company with great logistics prowess makes excellent 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 likely to remember that they bought the item from Amazon than 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 nationwide, lowering last-mile delivery costs. We help sellers fulfill orders from 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.
Outsourcing your fulfillment needs to a 3PL company is the best way to remain competitive. If you can partner with the right logistics company, you can offer guaranteed two-day shipping and enjoy all the benefits of it.