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Jake Rheude - Red Stag Fulfillment

3 Proven Strategies to Make Expedited Shipping Possible

by Jake Rheude - Red Stag Fulfillment
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Some innovations influence consumer trends on a phenomenal scale. Take sliced bread, for example, which greatly increased the demand for bread overall.

If we stopped to think about what made expedited shipping the standard, we might set our sights on Amazon Prime. When the megacorp made fast shipping highly accessible, they set a new normal for consumer shipping expectations. Now, customers expect even small-scale retail brands to provide fast shipping options.

Unfortunately, offering expedited shipping is a challenge, especially for small-to-medium-sized businesses. There are logistical challenges involved, and the costs can hurt your profit margins.

However, there are ways to implement expedited shipping sustainably. You might not be able to pull off same-day delivery, but 2-day shipping should be manageable with the right strategy.

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Why is expedited shipping important?

Customer experience is one of the most critical brand differentiators today, and meeting consumer shipping expectations is a key part of delivering optimal experiences.

Consumers value same-day delivery options because of the convenience, and many consumers are willing to pay more for expedited shipping. Faster shipping options can ultimately boost your bottom line in many different ways. Here are a few of our favorites.

Reduce cart abandonment

A consumer research report revealed that nearly half of customers abandon their carts because of unsatisfactory delivery options. "Unsatisfactory" means something different to each consumer. For example, curbside pick-up rose in popularity during the pandemic era, so lacking it may hurt your standing with these shoppers.

Additionally, many consumers have come to expect two-day or overnight delivery options. Failing to provide these options could cost you the sale. So, to meet rising consumer delivery expectations, providing expedited shipping options (at reasonable rates) is important.

Customer satisfaction drives repeat sales

Most ecommerce brands are familiar with the importance of driving repeat purchases. Convincing an existing customer to buy again is far cheaper than converting a new one. But, some retailers don't realize how significant the difference is.

Bain & Co's cost-saving report spotlighted the importance of repeat purchases, revealing that businesses could increase profitability by 75% by boosting retention by 5%.

When it comes to the customer experience, consumers aren't too forgiving about shipping delays, so it's important to prioritize successful expedited shipping. By keeping customers satisfied, you can drive repeat purchases and increase your bottom line.

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1. Enforce minimum spend thresholds

When businesses consider expedited shipping, two primary concerns tend to hold them back:

  • The logistical complications, i.e., if they have the workforce, network, and resources to offer expedited shipping.
  • The costs involved.

These two challenges are often intertwined. Brands that optimize their fulfillment process can typically offer expedited shipping and cut back delivery expenses. But, offering same-day or even two-day delivery isn't cheap, so you might want to consider enforcing minimum spend thresholds.

By setting a threshold, you can drive average order value (AOV) up and offer expedited shipping without digging into your profit margins. Additionally, setting a minimum threshold helps identify customers willing to invest more in your brand — the kind of loyal customers you'd want to keep around.

2. Distribute inventory across multiple fulfillment centers

Strategically distributing your inventory across a network of fulfillment centers is the most effective way to scale your logistics. With multiple centers located near to your key customer bases, you can deliver orders faster thanks to shorter delivery routes.

However, using a network of fulfillment centers invites overhead costs, so it's important to weigh your options. You'll have to pay more for warehousing and the extra human resources, but you'll save on delivery costs thanks to the reduced distance.

There is a way to minimize your overhead costs and get the most out of a distributed fulfillment network, which brings us to the next strategy.

Two People in Warehouse

3. Outsource to a 3PL provider

Outsourcing to a third-party logistics provider gives you access to their network of fulfillment centers, saving you from paying heft overhead costs. Of course, you do have to pay to work with a 3PL provider, but established fulfillment partners help increase your bottom line in the long run.

Third-party logistics providers help businesses offer expedited shipping by optimizing fulfillment processes and scaling operations as you grow. Here's how they do it.

  • They're tech-enabled and leverage automation. Leading 3PL providers use technology, including the internet of things (IoT) and automation rules, to streamline fulfillment processes and reduce the time taken to fill orders. Additionally, their inventory management software forecasts demand, so you can stock trending goods in advance to prevent supply chain disruptions.
  • Their teams are highly skilled. Unskilled teams are more prone to making costly mistakes, like pick and pack errors, which are detrimental to customer retention and your bottom line. But hiring your own team of fulfillment experts is expensive. By partnering with a 3PL, your brand can work with logistics experts without incurring high costs.
  • They scale according to your needs and grow with you. Demand fluctuates year-round, usually peaking during the holiday season. When businesses manage their own logistics, they may face fulfillment challenges according to market conditions. However, a 3PL partner scales with you; if your fulfillment needs peak abruptly, more personnel will pitch in until the storm is over. Additionally, as your business grows, a 3PL partner scales with you. You won't need to hire more personnel or manage more warehouses (they'll take care of that for you).
  • Cost-effective inventory distribution. By teaming up with a logistics partner, you can benefit from their fulfillment network without paying high overhead costs. Your business benefits from shorter routes and faster shipping times.
Person Checking Checklist in Warehouse

Quick recap

Global supply chain disruptions have caused severe fulfillment challenges this year, but unfortunately, consumers still expect expedited shipping options. Consistently providing fast delivery is a logistical challenge that many businesses face, but you can leverage known strategies to offer expedited shipping without digging into your profits.

Enforcing a minimum spend threshold helps secure your margins, and distributing your inventory across multiple fulfillment centers increases your fulfillment speed. However, if you lack the personnel or expertise to manage expedited shipping logistics, you might want to consider outsourcing to a trusted 3PL partner like Red Stag Fulfillment.