Key Points:
- Twenty-four percent of customers prioritize delivery speed when shopping online and will cancel an order if shipping speeds are too slow
- Major couriers, including USPS, FedEx, and UPS, offer next-day delivery services
- Today, 90% of online retailers offer a next-day shipping option, but at an extra cost which can be up to four times the cost of standard shipping
Delivery times are a major consideration in eCommerce. Customers are increasingly demanding quick shipping, while retailers have to balance express courier services with costs. In fact, 24% of customers prioritize delivery speed when shopping online and will cancel an order if shipping speeds are too slow. This is when next-day shipping can come in handy.
Of course, this type of express shipping comes with higher cost implications, which can still leave customers dissatisfied - they want quick delivery at low cost. Walmart next-day shipping, along with Amazon and Target’s express shipping services, have raised the online order fulfillment bar with affordable or free fast shipping. This means smaller online retailers have no choice but to try and find competitive delivery solutions.
Easyship can help you with this by finding the best rates for next-day shipping. With a collection of over 250 cost-effective couriers, you’ll be able to find a range of useful fulfillment solutions, including affordable express shipping.
In this article, we’ll look at exactly what next-day shipping is, how much it costs, and what you need to consider before you start using it.
Table of Contents
What Exactly is Next-Day Shipping?
Next-day shipping is a fast package delivery service that guarantees that your items will be shipping and delivered within 24 hours. The demand for next-day delivery is being felt across the eCommerce industry because customers want to have their packages delivered within the shortest time possible at a reasonable fee.
eCommerce giants like Amazon, Walmart, and Target are leading the pack with next-day deliveries. Next-day shipping for Amazon is available for members with an Amazon Prime subscription; Walmart's next-day shipping is available with no membership fee, while Target has a free 24-hour shipping program for its loyalty cardholders. This has forced other retailers with no choice but to compete. Faster delivery time at a low cost can mean the difference between winning a sale or losing it.
How Much Does It Cost?
There is no one-size-fits-all when it comes to next-day shipping costs. Several factors, such as package dimensions, package weight, shipping distance, and delivery timeframe, come into play when determining shipping cost for both domestic and international delivery.
All the major couriers, including USPS, FedEx, and UPS, offer next-day delivery services. Next-day shipping USPS is available with Priority Mail Express; FedEx next-day shipping is available with FedEx Standard Overnight, FedEx Priority Overnight, or FedEx First Overnight; UPS next-day shipping is available with UPS Next Day Air Early and UPS Next Day Air.
Let us look at approximate costs for the major carriers when sending a 10in x 5in x 5in 2lb package from Brooklyn to Miami.
| Courier Service | Cost |
|---|---|
| USPS Priority Mail Express | $46.20 |
| FedEx Standard Overnight | $60.80 |
| FedEx Priority Overnight | $78.57 |
| FedEx First Overnight | $110.34 |
| UPS Next Day Air Early | $114.74 |
| UPS Next Day Air: $84.51 | $84.51 |
3 Things to Consider With Next-Day Shipping
Next-day shipping comes at a cost, and it has warehousing challenges and some environmental concerns that you should consider when shipping orders to your buyers with this option. Here are some things to consider.
1. The real cost to retailers
Today, 90% of online retailers offer a next-day shipping option, but at an extra cost which can be up to four times the cost of standard shipping. However, high shipping costs are a major turnoff for consumers and can result in your losing sales from customers who don’t want to pay extra for fast shipping.
The average next-day shipping cost for a retailer with one distribution center is about $27 per package! The cost decreases by more than 60% - to around $10 - for a retailer with 10 distribution centers. But for eCommerce giants like Amazon with many distribution centers at strategic locations, their 24-hour shipping cost is under $5!
eCommerce retailers with a few strategically located fulfillment centers will only be able to reach 11% of its customers in a day with ground shipping. Giant retailers like Amazon can reach more than 91% of their buyers in a day through ground shipping, which makes it easier to offer next-day delivery with Amazon Prime subscription only. To keep up with this, other smaller retailers have to resort to air shipping, which can make costs skyrocket.
Next-day delivery is, therefore, an expensive proposition for most retailers; they are being forced to subsidize the cost of this to fight for customers and keep up with the fierce competition.
2. Warehousing challenges
The location of your warehouses will impact your ability to provide next-day delivery to your customers. Amazon understands this very well; that's why they have an expansive warehouse network across the US.
This not only enables next-day shipping for Amazon by allowing the company to get great shipping rates with major carriers but also allows them to ship numerous orders very quickly.
According to a McKinsey study, you need 20 distribution centers to be able to compete with Amazon. A company with one distribution center has to ship orders across 5-6 shipping zones on average, which not only causes delays to the end consumer but also erodes the retailers' profit margin due to higher shipping rates. But very few companies can afford the lease obligations and overhead costs associated with running distribution centers in different locations.
To provide next-day shipping to your customers, you need to leverage strategically-located warehouses through a partnership with warehouse providers in key locations so that you can reduce the order delivery time and delivery costs.
By integrating their fulfillment networks with reliable third-party fulfillment companies, many online retailers will be able to keep up with customer demands for faster delivery at low cost, which is increasingly becoming the new normal in the eCommerce retail space.
Easyship can help with this as we have a large network of warehouse partners around the world that can help you offer competitive express shipping to your customers.
3. Environmental issues
More and more retailers are turning to faster delivery options to keep customers hooked, but this comes at a cost to the environment. Studies have shown that carbon emissions can be reduced by up to 90% when groceries are consolidated and delivered to customers instead of going individually to grocery stores.
However, when there is a demand for items to be delivered immediately, it becomes very challenging to consolidate items and deliver them in one go. This reverses the efficiency and environmental benefits of consolidated deliveries.
Next-day shipping means that only a few packages will be dropped off at each point. This means more trucks carrying a few items will be on the road, leading to higher greenhouse gas emissions. In fact, a van making only a handful of deliveries creates up to 35 times more carbon emissions than a fully-loaded delivery can.
Is Next-Day Shipping Right for Your Business?
eCommerce giants Amazon, Walmart, and Target have raised customers’ expectations with next-day shipping. Although it’s not cheap to offer this service, it may be a useful long-term strategy for your online store. It can help you compete with next-day shipping from Amazon (or other big retailers) and keep your customers happy.
Do some research to see if any couriers can provide next-day delivery services that can work for your business. If you’re unsure about how to find the right service, why not have a chat with the team at Easyship? We have access to over 250 affordable courier solutions, including express services, and can help you find a shipping method that works for you!
Next-Day Shipping FAQ
Does next-day shipping include weekends?
Yes, next-day shipping includes weekends. However, some restrictions apply for Sunday delivery depending on the courier.
How is next-day delivery possible?
Next-day delivery is possible with the help of an aircraft and nearby warehouse/ distribution centers.