Leverage Ground Shipping While Maintaining Shipping Speed
by Jillian Voege
With more pressure to provide fast shipping in order to compete with Amazon and other big retailers, smaller ecommerce players are seeing their shipping bills skyrocket. If the expectation is to get an order within a few days as opposed to a week or more, that pushes businesses without Amazon's robust fulfillment network to rely on express air shipping. And of course, since Amazon provides free 2-day shipping with Amazon Prime, customers are also getting conditioned to getting this newfound fast shipping on the cheap.
Of course, as a business owner, there's no such thing as "free" shipping. Someone pays in one way or another, whether it's your business eating the higher shipping cost or your customer getting higher prices to account for expensive shipping. With the increased expectations of ecommerce, the pressure could put a squeeze on your margins, which makes it even harder to grow your brand.
This is why it's important to get creative with your business operations and start thinking about how to cut costs without sacrificing service. In terms of shipping, the best and most simple way to do this would be to increase the reach of your fulfillment capabilities. For instance, if you're basing your fulfillment out of one center, you can get away with standard ground shipping to customers around it, but you might have to resort to express options for customers further away. But if you have multiple fulfillment centers - whether it's through splitting inventory through different warehouses or using ship-from-store - you can use standard ground shipping in a much wider swath of your customer base.
Most 3PLs have different warehouses for you to leverage, and if you have retail locations, you can also use ship-from-store to turn them into de facto fulfillment centers. Of course, when you split inventory across different locations, you increase the complexity of your inventory management. This is why it's also important to maintain accurate inventory visibility across all your different stock locations (and it's just good operations to maintain inventory accuracy in general).
It's also important to choose fulfillment centers in the right locations. Do a quick analysis to see where most of your customers live, then set up fulfillment centers around those areas to ensure that standard ground will be the default option for most of your customers.
In general, more and more is expected of you as an ecommerce business. If the current expectation is to receive a product within a few days of ordering without paying a premium shipping price, it's still important to keep up with those expectations. Because the cold truth is, if you can't meet their expectations, they'll go to someone else who can.