search

eCommerce Tips & Trends

The Magento Merchant’s Guide to Shipping

Learn the enterprise best practices for online shipping in 2021 from this comprehensive guide.
The Magento Merchant’s Guide to Shipping
Ian Heinig

By Ian Heinig

 

March 8, 2021

It’s best to approach your shipping strategy as a means to customer success. In other words, an effective shipping strategy is both cost-effective for merchants and rewarding for customers.

A quality shipping experience is the cherry on top of your customer relationship. By contrast, shipping disappointments can reverse the goodwill you’ve worked to cultivate. This makes optimized shipping processes a cornerstone of success in eCommerce.

Technology is increasingly essential to an effective shipping strategy. Logistics and shipping are complex processes, after all, and it helps to have an extra set of hands. An ideal shipping solution offers shipping automation, direct access to logistics partners, and flexible features to help you scale internationally.

Leading platforms like Easyship and ShipperHQ have emerged to help merchants succeed at every step. These comprehensive tools simplify and streamline the shipping process for both you and your customers.

Download the guide

Download The Guide

Provide your email and we'll send you a digital copy so that you can easily refer back to it later.

Some merchants take the ‘walk before you run’ approach to shipping. For example, starter brands often rely on single couriers and offer free shipping on all orders. Over time, however, eCommerce leaders differentiate themselves with more sophisticated offerings that capture both greater margins and share of loyalty.

Table of Contents

Chapter 1: Pick the Right Shipping Couriers

As a merchant, you trust shipping couriers to deliver packages to customers.

A variety of couriers exist, including international express couriers like FedEx and UPS, postal services, or smaller regional couriers. Additionally, you can use multi-courier solutions available as part of shipping platforms to gain additional shipping options. We’ll discuss in detail the differences between single and multi-courier solutions in section four.

Consider these seven factors when choosing a shipping solution:

1. Competitive rates: Shipping costs vary by product type, weight, dimensions, destination, and more. Every courier sets different prices based on these factors. An ideal shipping partner offers the cheapest rates for your shipment specifics.

2. Coverage: Where are you shipping and which couriers get you there? Shipping internationally requires the use of express couriers or multi-courier solutions.

3. Reliability: Does the courier service have a good reputation? Are they slower during the holidays? How’s their coverage for cross-border shipping?

4. Speed: Some shoppers want expedited shipping while others are willing to wait. Express couriers provide the fastest deliveries but at a premium.

5. Flat rate shipping: Free shipping is popular but it’s not always cost-effective. Flat rate shipping isn’t based on weight or volume, meaning it can help you predict your shipping costs if your shipment size will vary.

6. Insurance: All couriers offer insurance up to a certain threshold. These amounts vary by courier and by item.

7. Package tracking: The world is big and sometimes packages go missing. Moreover, porch piracy is on the rise. Monitoring items en route helps to ease shopper’s anxieties, reduce customer service requests, and promote customer loyalty.

Using a Courier Comparison Tool lets you quickly compare providers along these key factors.

Every courier offers different benefits and drawbacks. USPS, for example, is cheap and reliable but slows during the holidays, or from unexpected events like Covid. By contrast, FedEx or DHL are more expensive but offer faster, total coverage around the world despite disruptions.

Ask yourself – Where are your customers? Which courier best allows you to service customers? Does a prospective partner offer the features your customers want?

As you weigh cost versus speed, reliability against features like package tracking and insurance – remember that shipping is a form of customer service. With customer experience now a key differentiator among brands, investing in customer success pays dividends.

Multi-Courier or Single Courier Strategies?

Single courier shipping strategies are straightforward but limited. They’re a great way to learn the ropes but fall short on what most enterprises need long-term.

Multi-courier shipping strategies, though, enable you to ship worldwide with access to affordable solutions from checkout to the last mile. Though historically complex, new technology has simplified this more sophisticated approach. With the right software, merchants gain tailored solutions for any need, whether it's cheap shipping, expedited delivery, order tracking, or a hybrid of all three.

Pro Tip: Software Solutions Offer Access to Multi Courier Networks
Easyship gives merchants access to 250+ courier solutions via established courier accounts. Access discounted rates up to 70% off, with no minimums required.
ShipperHQ allows you to streamline shipping options and manage all your logistics providers in one place with 50+ parcel and LTL freight carriers worldwide.

Multi-Courier Shipping Enables Global eCommerce

Multi-courier solutions are the gateway to affordable international shipping.

According to the research firm Statista, cross-border sales grew 42% from January to May 2020, outpacing domestic sales and generating higher revenues by margin.

As global eCommerce booms, multi-courier solutions are vital for enterprises looking to scale into international markets. This is because the cheapest rates on shipping often require access to regional courier services not available domestically.

Shipping platforms let you compare couriers by price, delivery time, and more to find the best rates, as seen below.

These software also display flat rate shipping for lowered costs, plus tracking and insurance options that customers want.

Whatever your exact needs, multi-courier shipping offers a set of tools to streamline operations and reduce costs.

Chapter 2: Consider Shipping Internationally

The coronavirus pandemic proved to be an accelerating force in global eCommerce. With online sales continuing to boom, retail opportunities in emerging markets are further amplified. Data confirms that consumer behaviors are shifting toward online purchasing.

This positions cross-border shipping as a key growth lever for enterprises going forward. That said, cross-border shipping is more complex than domestic shipping. Here’s what you need to know to succeed with cross-border shipping.

6 Factors to Consider When Establishing Cross Border Logistics

1. Courier coverage: Last mile delivery solutions vary by market. Unlike single-courier solutions, multi-courier networks offer affordable rates and efficient delivery timelines in all regions.

2. Variable import taxes and duties: Each country assesses duties and taxes on imported goods. This raises costs and complicates checkout for customers.

3. Cost management: International shipping can appear cost-prohibitive, especially if you’re used to offering free domestic shipping. Shipping software allows you to set shipping rules to provide global customers with shipping options at checkout. This improves conversions and opens up additional revenue streams while ensuring cost-effectiveness on every order.

4. Customs documentation: Cross-border shipments must clear customs, which means extra paperwork. The most important document is the commercial invoice, which describes the shipment for customs officers. Shipping software like Easyship automates customs declarations on your behalf for a smooth customs clearance process.

5. Shipping restrictions: Check that you can import your goods into your target market. Use resources like Easyship’s shipping guides by country which list restricted items, or visit the official customs page for your destination country prior to shipping, as these restrictions change frequently.

6. Global warehousing: Storing inventory in foreign warehouses reduces the cost of international commerce. Using third-party service providers (3PLs) in your destination country also reduces customs fees and last mile delivery costs.

Shipping platforms like Easyship and ShipperHQ were created specifically to streamline cross-border shipping. Seen below, shipping from the US to Canada is as easy as scrolling pre-negotiated rates and picking what you need.

Shipping from the US to Canada Quote


Sorted by cost and speed, these easy-to-use dashboards make strategizing for affordable shipping a painless process.

As you can see, selling cross-border is as simple as leveraging the right tools for global shipping.

Pro Tip: Use a Shipping Rate Aggregator
Calculating shipping rates for individual shipments is both inefficient and tedious. For this reason, most merchants use free tools like a Cross-Border Shipping Calculator. This makes short work of identifying the best shipping rates by country, a key step in crafting an affordable cross-border shipping strategy.

Chapter 3: Account For Import Duties and Taxes

Accounting for import duties and taxes is a key step in crafting a cross-border shipping strategy.

A customs duty is a tax imposed on goods shipped across international borders. Customs officers assess duties and taxes using the shipping label, commercial invoice, and other required documentation.

Different goods are subject to different duty and tax amounts, which vary by country. This means that your customer’s total cost of shipping, or the landed costs, depends on what you’re shipping, and where. Before a package can clear customers, all import duties and taxes must be paid – either by the merchant or the customer.

Your options for paying customs duties are twofold:

  • Deliver Duty Paid (DDP): Duties and taxes are paid before the package arrives at customs. This means the shipment won’t be subject to additional fees and will pass through customs more quickly. The chosen courier transports the package from customs to the customer.
  • Deliver Duty Unpaid (DDU): Duties and taxes still need paying. The customer pays all costs to receive their item. DDU shipments are forwarded to a customs broker who collects the required amount from the customer upon delivery.

Think twice about passing duty fees along to customers. According to Baymard Institute, 50% of shoppers say the main reason for cart abandonment is unexpectedly high shipping costs.

To avoid blowback, show customers the fully landed, or total, shipping costs at checkout. Doing so requires you to use automated checkout experience solutions, like those included in shipping software. For example, Easyship automatically calculates the fully landed shipping costs per item at checkout.

With buyers expecting transparency from their favorite brands, merchants are increasingly pressed to offer cost-adjusted checkout experiences. Doing so reduces customs fees, facilitates timely delivery, and contributes to a worthwhile overall experience.

How Import Duties and Taxes Are Evaluated

Import duties and taxes vary by country, shipment category, and other factors.

To calculate import duties and taxes, multiply the taxable value of your shipment by the duty percentage of the destination country. Here are a couple of key terms to know as you calculate duties and taxes:

Taxable value is assessed based on the value of the shipped goods, which varies by country, and may include other amounts. When you ship internationally, you encounter two valuation methods for goods:

1. Free on Board (FOB): The taxable value is the value of the item. In the case of sea freight shipping, FOB also includes the cost of transportation loading from boat to land. Air freight, though, is exempt from the added transportation costs. This is the best option when shipping goods that run the risk of triggering additional costs at customs, as FOB is a prepaid flat rate. This added coverage incurs slightly higher rates, though.

2. Cost, Insurance and Freight (CIF): The taxable value includes the item value, the cost of any insurance and transportation to the final receiver. Delivering goods via CIF may result in added customs fees that must be paid by customers, so CIF is best used when you’re sure items will clear customs.

Customs Tax Calculation Example

Seen above, CIF valuations tend to be more expensive and can add up quickly as you scale. You can simplify these calculations by using an import duty calculator.

Pro Tip: Use a Free Duty and Tax Calculator to Determine Fully Landed Costs
With import duty and taxes varying so widely, it’s most efficient to use an Import Duty and Tax Calculator to find these costs. This helps you avoid unforeseen fees that sink conversion rates, but also ensure your packages breeze through customers without hangup.

Chapter 4: Warehousing and Third-Party Logistics

The hallmarks of effective warehouse and logistics partners are reach and flexibility. In other words, ideal partners exist nearby your customers, thus enabling you to move inventory into different geographies as needed.

At scale, merchants outsource warehousing to global third-party logistics companies (3PLs) to increase efficiency and customer retention at once. On average, 3PLs can process 8x more shipments per day than other fulfillment solutions.

Faster processing times equal faster deliveries and happier customers. In the era of warp-speed delivery, outsourcing with a 3PL is often the correct strategic choice. These partnerships allow you to reliably accelerate delivery times, even if you lack Amazon’s economies of scale.

Merchants may contact 3PLs directly to get the best rates. However, it's more common to access these distribution networks via shipping software, which partner with 3PLs and offer their services via an all-in-one platform. An added benefit of this approach is access to multi-warehouse networks, which, as you scale, can be savings multipliers.

Whatever your choice, outsourced warehousing offers a bouquet of key benefits, seen below.

9 Benefits of Warehouse Outsourcing for eCommerce

  • Proximity to customers: Being closer to customers unlocks faster and cheaper shipping rates, both domestically and internationally
  • Faster deliveries: Local warehouses offer same-day dispatching
  • Quality control: Full-time packers oversee your well-protected packages
  • Reduced costs: Negotiate handling fees to save money on every shipment
  • Pricing clarity: Set fixed rates to provide exact shipping costs at checkout
  • Increase efficiency: 3PL partnerships require fewer labor hours and storage space
  • Streamline delivery: Avoid damaging disruptions with a distributed team
  • Avoid customs snafus: Fulfill orders in the destination country to save money and ensure timely delivery
  • Lower transportation costs: It’s smart to keep a warehouse nearby your manufacturer, if applicable

How to Choose Your 3PL

1. Location: Using a warehouse nearby customers shortens delivery times, cuts costs, and helps you avoid taxes and duties.

2. Services: Evaluate the 3PL’s Service Level Agreements (SLA) on receiving, fulfillment, and returns with an eye for volume.

3. Technology: Look for a partner whose tech is compatible with yours. The more automation, the better.

Chapter 5: Optimize The Checkout Experience

All your efforts in marketing and sales build to the moment when people click “purchase.” Optimizing checkout is pivotal to maximizing your returns, revenue, and customer satisfaction.

Checkout optimization is the process of improving your eCommerce checkout flow in order to increase conversions. The majority of merchants have much room to improve in this area.  According to Baymard Institute, more than one in five (21%) of U.S. online shoppers have abandoned an order due to a “too long or too complicated checkout process”.

Checkout optimization can be a challenge because customers expect a seamless, yet option-rich experience. Retailers should aim to craft an intuitive and user-friendly point of purchase that exceeds expectations.

Amazon sets the standard in eCommerce, making their order flow a good benchmark. Retailers can parallel Amazon’s experience by offering key facets of its checkout, including:

  • Showing delivery dates
  • Minimizing data input with auto-fill text
  • Offering alternate payment methods
  • Proving an option for guest checkout
  • Offering alternative pickup or delivery options
  • Offering multiple shipping options

Shipping options are a core friction point for shoppers, both in terms of price and delivery. According to a ShipperHQ survey, 82% of shoppers prefer to shop with stores that show delivery dates at checkout. Even more, 45% of shoppers say they’d be willing to pay more to see these dates.

Pro Tip: Provide Lives Rates for Maximum Accuracy
Showing dynamic rates provides multiple benefits, including more accurate shipping rates and delivery dates. Moreover, live rates significantly decrease the losses retailers take on shipping by allowing them to charge the right rate, every time.

To reduce cart abandonment, retailers need to be transparent and detailed about shipping costs. The most effective way to provide these accurate and transparent shipping rates is by customizing rates for each order.

Automated, tailored rates provide a bevy of benefits to both the merchant and customer. Because each rate accounts for factors like origin, destination, shipment contents, and more, they provide unparalleled accuracy in rating. This allows merchants to charge customers the right amount without worrying about unexpected fees later in the shipping process.

These tailored rates can also help in less obvious ways, such as by validating address types to ensure applicable fees, like residential surcharges, are applied. Additionally, they account for shipping restrictions that could otherwise be missed and cause problems with deliverability or compliance, using customized shipping rules.  

For example, if you’re shipping an order with dangerous goods, such as lithium batteries, your shipping rules need to account for this before rates and methods are shown at checkout. You might also have compliance requirements to meet when shipping internationally. Whatever the scenario, having a tool that automatically accounts for each facet of the process will increase accuracy and transparency, and in turn, customer satisfaction.

Shipping solutions like Easyship and ShipperHQ make it easy to offer tailored shipping rates. These platforms auto-calculate shipping rates based on the relevant shipping factors using shipping rules. Using a flexible shipping management tool, merchants can also:

  • Easily configure a long-term shipping strategy

Retailers can choose which carriers to work with, which delivery methods to offer, and customize each option to account for factors unique to their store and individual orders.

  • Use shipping as a marketing tool to stay competitive

By providing an Amazon-like experience at checkout, merchants can drive conversions and retention. Retailers can also create promotions to offer shipping discounts at any time, and customize who sees them and specify requirements like cart thresholds.

  • Be upfront about delivery dates

Beyond simply offering a carrier-estimated delivery date, retailers can provide customers with custom-calculated dates that account for details like address type, lead times, blackout dates, carrier availability, and more.

  • Improve shipping margins by automating processes

By eliminating manual processes within their operations, retailers will experience fewer delays and mistakes during fulfillment. With fewer overcharges, undercharges and delays, retailers can minimize revenue lost through shipping.

Pro Tip: Try Enhanced Checkout for an Amazon-like Experience: Show customers exactly what will ship when with Amazon-style Split Shipping, available with Enhanced Checkout. You’ll also get expanded support for alternate delivery options like BOPUS and time slot delivery, and detailed order information to speed up fulfillment.

4 Case Studies in Checkout Optimization

The following stories reflect just how essential a seamless yet choice-rich checkout experience is to eCommerce success.

1. Ostrich Pillow

Ostrich Pillow Checkout Optimization

Ostrich Pillow needed more couriers to service its growing customer base in the APAC region, and pivot from crowdfunding into full-time eCommerce. Using Easyship provides the ability to grow sales by unlocking sales regions and deep courier discounts. These capabilities unlocked a 62% reduction in shipping costs plus a 148% increase in customer satisfaction.

Read more.

2.  Victoria Beckham Beauty

Victoria Beckham Beauty Checkout Optimization

Victoria Beckham Beauty, a posh UK cosmetics brand, uses Easyship to integrate their fulfillment center and seamlessly manage orders from their store dashboard. This led to increased conversion rates and fewer abandoned carts.

Learn how. Easyship’s helped merchants of all sizes and verticals grow.

3. Dive Gear Express

 Dive Gear Express Checkout Optimization

Dive Gear Express uses ShipperHQ to give buyers better delivery options, manage their free shipping program and provide dynamic rates at checkout. Handling all of this with ease greatly increases their conversions.

Read more.

4. Donald Russell

Scottish butchery Donald Russell uses ShipperHQ to manage shipping rules and show clear delivery dates at checkout. Syncing their delivery calendar with ShipperHQ has helped reduce service calls, in turn, boosting revenue and customer satisfaction.

Read more.

Download the guide

Download The Guide

Provide your email and we'll send you a digital copy so that you can easily refer back to it later.