In this article we’re covering shipping for eCommerce.
When you’re selling products online usually what holds people back from getting started is understanding how shipping works.
They understand where to find products but don’t understand what some of the terms mean when they’re ready to place an order.
Hopefully we can shed some light on the topic here…
What is Shipping?
Shipping is the process of moving products from one place to another. Commonly it would be between a warehouse to the end customer. However shipping can happen between any two businesses or people.
When someone buys a product online the retailer will package the product and give it to a shipping company to deliver it to the customer.
When starting an online business it makes sense to ship products yourself from your own house. It can save you money when you’re starting out slowly. But as the business grows you need to consider holding your products in a warehouse and using a shipping company to handle the delivery of your products.
There are only 3 ways to ship a product:
- Air (Plane)
- Sea (Ship)
- Land (Truck,Train or Car)
The shipping company determines the most cost effective way to ship a product based on where the product is stored and where it needs to go. The cheapest form of shipping is ground shipping but it also takes the longest. Depending on the time of year (like holidays) ground shipping can take up to 10 days. When you’re looking for quick overnight delivery air shipping is the way to go because it’s the fastest. Although you are paying more for faster delivery.
For international shipments you’re only able to use air or sea shipping methods. Shipping product via the air internationally for ecommerce businesses is called “ePacket shipping”. Normally used for products being delivered from China and Hong Kong.
For international deliveries sea shipping the cheapest option but delivery times can range from 10-28 days. But if you want to pay more for shipping you can ship internationally via air and have a package delivered in 3 to 5 days.
Something to consider is that your shipping costs lower when you ship a larger amount of products. Finding a supplier with a low minimum order quantity is not always the best idea. Sending a single international package can cost $5-$7 per unit but if you were to ship 100 units the price can drop to $1 per unit.
When you price your product you need to make sure that shipping costs are included in the price of the product. A general rule of thumb we teach people in our Amazon business course is that your price should be 3x the cost.
For example a unit cost you $3 from the manufacturer so the minimum you should sell the product for is $9 to account for the shipping costs and taxes to import.
Shipping vs Delivery
Shipping is the process of moving products from one place to another via air, sea or land from a factory or distribution center to another. While delivery is typically when the shipping company takes the package to its final destination.
Shipping dates are used to show when a product leaves a warehouse and delivery dates are used to show the customer when they should be receiving their package.
There are plenty of shipping platforms out there and we haven’t tried them all here at Startupbros but a platform we love is ShipStation.
ShipStation offers a huge amount of integrations with major carriers in an effort to save you from shipping and logistics nightmares. You can manage order fulfilments, print labels and track packages without going to multiple websites.
Then you can connect to your your preferred carrier account and do all the business shipping directly from the app. And you can ship both domestic and international….
Something even better is that you can print USPS postage online. All you need to do is create a USPS postage account with Stamps.com. That’s another thing, ShipStation includes the Stamps.com account in your monthly subscription so you don’t incur extra costs. ShipStation has a partnership with USPS and negotiated lower rates!
Wrapping This Up…
Shipping can be complicated but it doesn’t need to be. The goal here is to learn enough to be comfortable and launch your own online business.
If you’re still having problems understanding how to lower your shipping costs and handle international shipping we’re here to help.
Startupbros helps first time entrepreneurs launch their businesses using the lean startup method. That means not wasting any money and watching every cost closely. You can email us if you run into any problems or if you want to ask us more questions.
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