Shipping is a big deal to people who buy auto parts online and to people who sell auto parts online, and for good reason: Shipping costs (and delivery times) can make or break an online transaction. Consumers often cite shipping costs and delivery time as their primary objections to buying parts online. Likewise, e-tailers often struggle to manage shipping costs and various logistics associated with getting orders out the door.
The good news is that shipping options for ecommerce companies are better than ever. Thanks to the continuing rapid growth of ecommerce, a variety of tools and options are available to etailers. This post will run through the best practices in ecommerce shipping, as well as offering some advice on minimizing costs and reducing wait times.
Understanding The Differences Between Shipping Companies
There are 3 shipping companies that you need to know about, and each has their strengths and weaknesses.
The US Postal Service, which is great at delivering smaller parts for an unbelievably low cost. USPS is the price leader for smaller packages in general, even if these packages are sent via priority mail. They’re also great for international shipping, with a global distribution network that is still unmatched. If there’s a downside to the USPS, it’s that their delivery times have some uncertainty and their package tracking systems aren’t quite up to the same standard as UPS or FedEx.
FedEx, which built its reputation on exceedingly fast delivery, is steadily gaining a reputation for affordable ground shipping (and thus is eating into business that traditionally belonged to UPS). FedEx has also begun offering something called SmartPost, which utilizes the FedEx system to get the package to the post office, with the postal service managing the actual delivery to the consumer’s home. Finally, FedEx still offers excellent expedited shipping, and their delivery times are usually very accurate. If FedEx has a downside, it’s that e-tailers are often surprised by fees tacked on to standard costs.
UPS is known for offering affordable ground shipping, and in many situations UPS offers the best all-around pricing for auto parts retailers. Still, pricing can be negotiated with both UPS and FedEx, so it would be a mistake to assume UPS is always cheaper. Finally, just like FedEx, UPS can charge e-tailers surprise fees.
Which Shipping Company Is Best For Auto Parts Retailers?
So, which shipping company is best? It depends.
The costs and convenience of using each shipper are very much dependent upon your volume, your location, and your staffing levels. Generally speaking, our clients utilize UPS and USPS, as they offer a good balance between low cost, convenience, and delivery times.
To figure out which shipping company is best, ask yourself:
- What is the average weight and size of your packages? The more you know about your ‘typical’ shipments, the more accurately you’ll be able to compare each provider.
- What are the biggest and smallest items you regularly ship? Again, knowing these stats can help you choose.
- What countries do you typically ship to, if you ship internationally?
Once you know these stats, call and talk to all three shipping companies. Odds are good there’s a local rep that will come to your office and help you figure out how to use their services best.
Finally, don’t overlook fulfillment tools that check pricing. TrueShip, ShipWorks, ShipStation, ShipWire etc. all offer systems for both checking pricing and helping with fulfillment.
NOTE: We didn’t talk about DHL here mostly because few of our clients use it, and because it’s rarely mentioned in the context of ecommerce shipping. However, DHL is an international shipping company, and if you’re shipping parts to Europe or elsewhere, DHL is definitely worth checking into.
Trim Your Packaging And Save
With the advent of “dimensional weight” shipping, it’s not just the weight of your part that matters. It’s also the size of the part or – more precisely – the size of the package.
All shipping companies will “ding” you if your package is large relative to its size, which means you need to streamline the size of your packaging as much as possible. Using a leftover medium-sized box to ship out a shift knob or oil filter is a waste of money, as the size of that box will inflate your shipping costs. It’s almost certainly more cost-effective to find a box that’s just big enough to fit your part.
ULINE is one of many companies that offers an incredible array of boxes, mailers, etc., with excellent pricing for bulk orders. If you frequently find yourself shipping parts in oversized boxes, order some correctly sized boxes from ULINE (or someone like them). The cost of the boxes is often smaller than the surcharge you’ll pay UPS, FedEx, or USPS.
TIP: Be sure to read our article about essential shipping supplies for ecommerce, which includes some advice about right-sizing your packaging and cutting weight.
Implement A Same-Day Shipping Policy
There are two very good reasons to offer same-day shipping:
- Consumers value same-day shipping. If the consumer knows that their order is going to get picked, packed, and shipped today (assuming the part is available), they’re more likely to buy.
- Same-day shipping helps enforce discipline. Efficiency in your fulfillment operation starts with discipline – if you or your team takes an afternoon off here or there, it can cause a pile-up.
Without a same-day shipping policy in place, it’s tempting for your fulfillment team to put off pick, pack, and ship until the end of the day (or even the next morning). But what happens when an unexpectedly large volume of orders comes in? The fulfillment team falls behind, and then they either a) let orders pile up or b) rush things out and make mistakes.
If there’s a same-day shipping policy in place, and the cutoff time is 3pm (a typical time), it’s harder to fall behind. It’s also easier to get the fulfillment team some help if the order volume is large. The key is to hold staff accountable to the same-day shipping policy, and to make sure they have sufficient resources so they can meet their deadline.
Always Offer Multiple Shipping Options During Checkout
If cost is the first shipping concern a consumer has, shipping time is second. Your customers are often ordering parts because they need them, so it’s a good idea to help customers get their parts as quickly as possible. Offering next day shipping is smart, but if that’s not feasible, 2-day shipping is all but a necessity.
Most auto parts retailers offer next day and/or 2-day shipping, ‘ground’ shipping (with a 3-5 business day delivery time estimate), and then some sort of freight option for large items. Additionally, it’s a good idea to evaluate special shipping options for Alaska, Hawaii, U.S. Territories, and military bases, and perhaps offer a special shipping option just for them.
Lastly, when it comes to international shipping, consult with the shipping companies about best practices based on the countries you typically ship to.
Speaking of International Shipping, Proceed With Care
Offering international shipping can give you a leg up on your competitors, but it’s often difficult, confusing, and expensive. If you want to tap into the international market, make sure you do your research. It might be best to start with countries such as Mexico and Canada, which are relatively simple to ship to. Between tariffs, taxes, and duties, not to mention filling out the proper customs declarations paperwork, it can become a huge headache if not done properly.
Also, keep in mind that some part manufacturers and/or suppliers have restrictions on what countries you can sell to. There are also some U.S. regulations that come into effect depending on what you’re shipping and where it’s going.
As mentioned above, international shipping can be very profitable. But it requires a lot of specialized knowledge, knowledge that is usually only earned “the hard way.”
Don’t Forget About Tracking and Returns
Shipping isn’t over when the item leaves your shop – there’s still tracking and returns/exchanges to consider. It’s generally a good idea to track every shipment, as the cost of tracking is small compared to the cost of sending out a replacement item because the first item was lost (tracking proves delivery and reduces reports of losses).
As for returns, make sure your return/exchange policy and process is stated clearly on your website. Many of the problems in ecommerce fulfillment relate to a misunderstanding about the return process – consumers didn’t expect to have to pay a restocking fee, didn’t realize they had to pay return shipping costs, etc. If you detail your return/exchange policy with care on your website – and make the Return Policy page easy for consumers to find – the odds of having a customer service complaint are low.
Shipping is Hard, But It’s Also A Great Source Of Profit
Shipping is one of the more challenging aspects of running an ecommerce website, but if done right, a good shipping policy can boost sales and deliver some incremental profit. Many of our clients earn a solid margin on both the parts they sell and their shipping charges. The keys to success:
- Understand what you’re typically shipping out the door, in terms of weight, size, and frequency
- Understand the differences between shippers, and how those differences impact your costs (and don’t overlook software that will help you maximize your efficiency)
- Implement policies and practices that minimize costs and maximize efficiency, like right-sizing your boxes and filling orders same-day whenever possible
- Research international shipping carefully and proceed slowly…international sales can be a great source of incremental revenue, but they can also be a source of substantial losses if managed incorrectly
- Make sure your shipping and return policies are clearly and concisely explained on your website – this will help you avoid most customer service issues and complaints.
- If you charge for shipping, mark up your shipping rates! We can’t emphasize this enough – if you can get away with charging for shipping, increase the quoted rate 20-30%.
Like we said, mastering shipping and fulfillment is hard. Still, it’s incredibly important to ecommerce success…if you haven’t put much thought into improving your shipping processes, odds are good you can improve your business by investing some time and energy in this area.