chapter 2

Shipping and fulfillment can be one of the most challenging aspects of building an ecommerce business. The reason it’s so complicated is because there’s a lot of variables that need to be considered and everyone’s approach to shipping and fulfillment will be slightly different.

Your shipping and fulfillment strategy will depend on a combination of a multitude of factors. Some of those factors include:

  • Your brand

  • Where your products are shipping from

  • Where your products are shipping to

  • Your average order value (AOV)

  • Your product margins

  • Your product's weight

  • Preferences for tracking and insurance

  • Carrier preferences

  • Customer shipping preferences

  • Product costs

  • Product restrictions and regulations

  • Customs and duties

Not to worry though, with the help of this guide you’ll tackle each element so that you can make the best decision for your business and your customers.

Shipping Strategies

When you’re starting an online business and choosing a shipping model, you’ll have several major options to choose from:

  • Ship Yourself (Starter) - Shipping from home. Writing labels. Walking to the post office.

  • Ship Yourself (Intermediate) - Shipping from home. Automated label printing. Package pickup from your courrier.

  • Fulfillment Warehouse - Orders are automatically received and shipped from a fulfillment warehouse.

  • Dropship* - Orders are shipped directly from a dropship partner on behalf of your brand. You never purchase inventory upfront or hold inventory yourself.

*Dropshipping is not only a shipping and fulfillment model but also a business model. This guide will not focus on businesses that are utilizing the dropshipping model. For more information on dropshipping, please see The Ultimate Guide To Dropshipping.

When you begin your new business, it’s usually a good idea to begin by shipping your initial orders yourself. This allows you to better understand the many elements that come into play when shipping products and further help you refine operations and better control your brand while you scale your business.

Stages of Shipping Growth

The average online business, provided there are no major external factors involved, will go through several stages of shipping and logistics growth.

  • Launch - In this stage, you’re likely receiving just the occasional order sporadically with no real consistency.

  • Consistency - At this point you’re getting consistent orders but they are still limited. This may be a few orders per day or approximately 20+ orders per week. Regardless, there’s some consistency and predictability to the orders.

  • Growth - In the growth stage, orders have picked up and shipping and fulfillment is now taking a large chunk of time to manage. There is a growing volume of orders and the need for services to help streamline operations. Shipping may feel chaotic at this point.

  • Scaling/Infrastructure - In the scaling/infrastructure stage, there is a very high volume of orders and the need to build infrastructure or work with a 3rd party fulfillment warehouse to manage shipping.

Shipping Fundamentals Conclusion

Now that you understand the challenges of shipping and fulfillment, the three strategies for shipping your products and the four stages of shipping growth, it’s time to get started building your shipping mix. In the next chapter, we will look at your different options for charging customers for shipping.

 

Next chapter

3. Charging Customers

6 min

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