Category: Warehousing

It doesn’t matter what you sell; the only way to achieve long-term growth in your e-commerce business is by gaining the trust of your customers. And the easiest way to build credibility in their minds is by providing a comprehensive shipping policy. 

Think of it as an essential part of your overall shipping strategy. You can set customer expectations and ensure a positive shopping experience by providing a detailed shipping information page on your website. If you want to revamp your existing shipping policy or create one from scratch, we have collated all the essential information you need to get started. Read along!

P.S.: Don’t want to face the hassle of creating the policy from scratch? Get the free shipping policy template right away. 

What is a shipping policy?

A shipping policy is a detailed document or webpage highlighting an E-commerce company’s rules and procedures when delivering products to its customers. It covers essential information such as shipping rates, shipping times, shipping carriers, returns & refunds, packaging methods, etc., with utmost clarity. Shipping policies help set expectations for shoppers, ensure consistency and transparency in shipping practices, and protect the business from liability issues.

Why does your E-commerce business need a shipping policy?

A well-designed shipping policy positively impacts the customer experience and reduces returns. Here is how it achieves that – 

Prevents misunderstandings regarding shipping costs

By including precise details about the shipping process, a shipping policy eliminates the possibility of any delivery-related confusion, misunderstandings, and last-minute surprises. More importantly, customers will understand their final shipping fees before their purchase. This means they will be less likely to abandon their carts, a plaguing issue faced by most e-commerce sellers today.

Recommended read: 17 Best Abandoned Cart Email Examples With Key Takeaways

Keeps customers informed about the delivery time

A shipping policy lets customers stay informed about their orders by offering details on expected delivery schedules and tracking options. This way, customers can anticipate the arrival of their packages, prepare for possible delays, and have an idea of the maximum wait time if such delays occur.

Sets expectations for refunds, returns, and exchanges

A comprehensive shipping policy outlines the process of initiating refunds, returns, and exchanges. For instance, it could cover details such as the conditions under which customers are eligible for refunds, the processing time for return or exchange, any fees associated with the process, etc. 

Provide legal protection to your business

A clear and well-written shipping policy can protect your E-commerce business in case of legal disputes. For instance, by setting out the terms and conditions of shipping, you can defend your business against customer complaints. Also, by highlighting the conditions under which a refund is valid, you prevent the abuse of the returns policy. 

5 Things to include in your shipping policy

While a shipping policy can include numerous components, there are a few important ones that should not be missed. Including them will ensure that your customers clearly understand your shipping process. Here are five such components that should be part of your shipping policy –

Shipping rates & cost

Provide your customers with a clear understanding of the shipping costs associated with their orders. Make sure to outline any flat fees, weight-based fees, or other charges that may apply, as well as any minimum order requirements for free shipping. It’s important to be transparent about your shipping rates and to make sure that they are fair and reasonable. 

Shipping mode and delivery time

Highlight the different shipping modes available to customers, including the estimated delivery time and associated charges. This will help customers make an informed decision based on their urgency in receiving the product. Again, provide accurate delivery details and be upfront about any factors that may affect delivery times, such as weather or holidays.

Restriction on shipping (if applicable)

If you have geographic restrictions on shipping to certain countries or regions, specify that clearly so that customers are not disappointed at the time of order placement. 

International shipping

If you offer international shipping, your shipping policy should highlight the additional costs and fees associated with international orders, such as import duties and taxes. You should also include a statement on who is responsible for these additional fees. Also, have the estimated delivery times and any restrictions for international shipments communicated in your shipping policy. 

Missing or lost packages policy

Even though you are not responsible for packages getting lost (in most cases), it is your responsibility to guide the customers when something like that happens. Include the contact information of the department and steps customers can take to report a missing package and file a claim. 

Shipping policy page examples you can learn from

It’s always good to look at some real-life shipping policy examples before you are ready to draft your own.  Here are three ecommerce brands that have nailed their shipping policy – 

Plum Cosmetics

What did we like about this shipping policy?

The entire shipping policy has been formatted as FAQs, with all the answers compressed by default. It has made the shipping policy skimmable. Also, you can find the answer to your specific query instantly without having to go through the entire shipping page. They have also clearly segregated the shipping policy into three buckets: Shipping, Returns, and Cancellations – making it even more reader-friendly. 

Farida Gupta

What did we like about this shipping policy?

They have elaborately highlighted every possible element of their shipping process, from what they do to expedite your order in case of delays to whom you should contact in case of damaged products. They have also used screenshots and images to make it easily understandable to the readers. They also have a search bar on the page for users to check if delivery is available in their location. 

Nirwaana

What did we like about this shipping policy?

Since they ship both within India and to other countries, they have covered the shipping processes involved in both these categories separately. They have also clearly pointed out who is responsible for paying the import taxes or duties for their orders. The brand has also mentioned the countries that they currently ship to. 

Use this free shipping policy template

Here is a downloadable shipping policy template for your online store. Edit, modify, and use them as per your needs. The section marked in blue is meant to provide guidance on how to approach the template. You can delete it from the template when you copy it. 

Shipping Policy Template – Google Docs

Where is the best place to display your shipping policy 

When it comes to shipping policies, your primary goal is to make them as accessible as possible to customers. This will ensure that there is no scope for confusion in the minds of customers while placing an order. Here are 5 sections on your website where you can place your shipping policy links to make it easily findable – 

Website announcement bar

A website announcement bar is a banner that appears at the top or bottom of your website. This banner can be used to convey important information about your business, including key aspects of your shipping policies. Many e-stores use this real estate for high-priority shipping-related information, such as shipping discounts.

A link in your website footer

Your footer is probably the first place your customers will scan for the shipping policy. Why? Because that’s where the links to all customer support pages, such as contact us, social media handles, and FAQs, can be found. Most modern websites place a shipping policy link in the footer, if not anywhere else.

Product page

Your product page is where customers learn more about your products before purchasing. While browsing through the product page, customers might end up having several questions about shipping and delivery. Many times, shipping aspects like time of delivery and shipping cost will determine whether they buy from you or not. Consider adding a line or two about your shipping policy on the product details page or a pop-up communicating the shipping policy like how Farida Gupta, an Indian apparel brand, did.

FAQ page

Your Frequently Asked Questions page is where customers go to find answers to various questions they have, including shipping. So it makes complete sense to include various components of your shipping policy in the form of QnA to help customers understand your shipping process better. For instance, check out how boAT has displayed its  policy below.

Delivery option labels

If you offer multiple delivery options like standard shipping and express shipping,  label your shipping options to include the delivery times and costs to help customers select without needing to go through the entire shipping policy. You can display the label on both the product and the checkout page. 

Talk to a fulfillment expert about shipping

The foundation of any good E-commerce business is based on the right choice of shipping partners who can manage its entire lifecycle, right from warehousing to last-mile delivery. At ANS Commerce, we are committed to providing our customers with the best end-to-end E-commerce management services. 

We are the preferred E-commerce partner for 100+ brands in India and have helped them achieve both short-term growth and long-term sustainability. To know more about us and how we can aid in your shipping process, book a demo now!

Shipping Policy FAQ

How frequently should you update your shipping policy

It is recommended to update your shipping policy every 5-6 months or whenever you make a change to your shipping methods, costs, or timelines.

Are shipping policies legally required?

No. A shipping policy is not legally required. However, most businesses create one because it is highly beneficial for both customers and the brand. It establishes your e-store as a trustworthy one. 

Here’s a fact— as an E-commerce business, regardless of your size, you must deal with the unglamorous yet critical task of shipping. Ensuring that shipments are handled effectively is essential both for the satisfaction of its customers and the company’s success.

And shipping isn’t free. You need to pay the standard shipping charges if you use any courier service to deliver your products safely and timely. 

But customers don’t like extra shipping charges.

In fact, extra costs are the number one reason why customers abandon carts during check-outs.

The best part— shipping doesn’t need to be expensive. There are ways you can use to save money on shipping without compromising anything.

And in this article, we’ll discuss strategies E-commerce businesses can use to reduce shipping costs, but first, let’s understand some basics.

What is shipping cost and what does it cover?

Shipping expenses encompass all expenses involved in transferring a product from a shelf or warehouse to a customer’s doorstep. These expenses comprise, but are not restricted to:

• Expenses of boxes, packaging, tape, and labels, 
• Cost of fuel, tolls, and other transportation expenses,
• Expense of hiring a worker to select, pack, and dispatch the item, 
• Insurance expenses against damages or loss during transit, 
• Fee charged by a courier to retrieve and transport the item, and 
• Expenses of import/export charges when shipping internationally.

How to save on shipping costs?

You can’t ask the customers to pay the shipping costs without annoying them. After all, no one likes to pay extra for anything.

This is where a few tips come in that can help you reduce the shipping costs, making it a win-win for both customer and the seller.

Here are a few ways you can save on shipping costs-

Decrease the shipping distance

The more the shipping distance, the more are the charges. Want to know why that is so? Here are the reasons why the shipping distance influences the shipping cost-

Fuel costs: Shipping carriers charge based on the distance the package travels. The more the distance, the more fuel the carrier will need to use to transport the package, resulting in higher fuel costs and ultimately, higher shipping costs.

Handling costs: Longer shipping distances also mean more opportunities for packages to be mishandled, lost, or damaged. With more handling points along the shipping route, the shipping carrier will need to increase the amount of labor and time required to transport the package, ultimately resulting in higher shipping costs.

Customs fees: When shipping internationally, customs fees are charged based on the value of the package being shipped. Longer shipping distances can result in higher customs fees due to the increased value of the package being transported.

Now that you know how distance influences shipping costs, here are two things you can do about it:

Strategically choose your warehouse’s location: The nearer it is to your customer base, the lower will be the shipping charges.

Set warehouses in all four directions: Chances are you’ll have customers from around the country. And if so, you should set up warehouses in all four directions so that the shipping distance could be less no matter where the order is coming from. 

Weigh your packages and reduce dimensions

Sending heavier packages usually costs more, except if you’ve chosen flat-rate shipping. If you’re handling the shipping process from your home, it’s a good idea to get a postage scale. This will help you know the exact weight of each package and calculate the shipping cost more accurately. 

It’s also a good idea to try and make the package as small as possible. Some shipping companies charge based on the size of the box used for shipping. This means the bigger the box, the more are the shipping charges. So by using smaller boxes, you can save a lot of money.

Here are other things you can do to reduce the weight and dimension, and ultimately shipping cost: 

• Use corrugated boxes for packaging your products. Corrugated boxes are lighter and stronger than usual cardboard boxes. 
• Create custom packaging with smaller dimensions to fit your product, rather than using bubble wraps and air pillows to secure your product during transportation 
• Use the “ship in own container” strategy, meaning use the product box for shipping. No need to pack it inside another box. 

Negotiate for discounted shipping rates

Small E-commerce companies are usually under the impression that they need to ship hundreds and thousands of boxes per month to be eligible for discounts from shipping companies. However, that is not true. 

Shipping companies offer discounted rates even to small businesses that sell 100 packages a month. But the trick here is to contact these shipping companies and speak with their representative about the business. Explain the shipping needs, projections and volume and negotiate for a better shipping rate. 

Some logistics providers also offer discounted rates for loyalty to only them. But keep in mind to contact multiple shipping carriers and get the best rate possible. 

Don’t stick with one, consider building multi-carrier strategies 

During the initial stage of the business, finding and sticking with one shipping company seems easy. It helps in streamlining the decision process and ticking off an item from the task list. However, this might be doing more harm than good.

A multi-carrier strategy means staying on top of the rates for multiple shipping companies. Yes, there is a lot of work involved in researching, requesting quotes and maintaining data on the same. However, the benefits of a multi-carrier strategy offset the time involved. Here are the benefits:

• Greater negotiating power – Keeping up with the services and prices of multiple shipping companies offers business owners more negotiating power. When a carrier knows that businesses are in the market for rates, they might offer a better rate to stay competitive.
• Choosing the right carrier – Not all shipping carriers similarly handle products. Some might be better than others. Eg, in handling fragile items. Therefore, having multiple carriers ensures that businesses choose the right carrier for the right product.
• Offsetting risks – No one can predict the future. Similarly, no one ever knows when a shipping company’s service goes bad. In that case, a multi-carrier strategy helps in switching from one shipping company to another without compromising on the quality of customer service.

Switch from boxes to poly mailers

If you’re selling small, non-fragile items like clothing then rather than using boxes for shipping, you may want to consider using mailer envelopes or poly bags. This option is way more cost-effective because the smaller dimensions take up less space on delivery trucks, which can save you money. 

Plus, using these types of packages usually requires less packing supplies, such as tapes and bubble wraps, which also can help you save bucks. If you have different combinations of products that you need to ship, it may be helpful to think about using different sizes of poly mailers. This way, you can easily accommodate different orders and make shipping more efficient. 

Stay on top of shipping carriers pricing changes

Every year, the big shipping carriers hike up their shipping rates as part of the general rate increase (GRI). These increases can vary depending on the carrier, service level, weight, and other factors, but on average, they tend to be around 5% (although during the pandemic, we’ve seen higher increases). 

On top of these rate increases, carriers may also add surcharges during peak times, like the holidays and Q4, when there’s a surge in shipping. They may also add other surcharges annually, such as large package surcharges or signature required surcharges. 

Unfortunately, there’s no way to avoid these rate increases and surcharges. You’ll either need to include them in the shipping fee you charge your customers, absorb the costs, or find another way to offset them.

Encourage your customers to place orders early

During peak seasons like holidays or festivals, it is important to encourage the customers to place their orders early to ensure they receive their packages on time.  

Shipping companies often enforce a cutoff time for placing orders to ensure the packages are delivered on time. Post the cut-off, they would charge a higher shipping fee to guarantee on-time delivery. 

Therefore, communicating to customers adequately to place orders early to avoid high shipping fees will help you prepare for the peak season with minimal hassle. 

Choose provider with pickup and delivery services

Choosing a shipping partner that offers pickup and delivery services can be very helpful in multiple ways. For example, it can save you time, effort, and money by eliminating the need to travel to a carrier location to drop off your products. This can also offer you more flexibility with shipping times, as you can schedule a pickup at a time that works best for you. 

Additionally, pickup and delivery services can boost your overall efficiency by allowing you to focus on other aspects of your business. Also, providing faster delivery and greater convenience to your customers can also lead to better customer service, which can ultimately lead to increased satisfaction and loyalty.

Choose to package provided by the carrier

Most shipping companies offer small businesses certain boxes and envelopes for either free or at discounted prices. If you still need to buy supplies like boxes, bubble wraps, air-fill, etc., you can buy in bulk to get at discounted rates.

Don’t let the investment stop you from providing good packaging. After all, if anything happens to your products while shipping, it will ultimately be your loss.

Pass on the charges to customers

Yes, your customers aren’t going to be happy if they need to pay shipping charges. However, if you use the right way, you can still pass on the charges to your customers. 

Here are a few ways you can pass on the charges to your customers without losing them-

Show empathy

Before jumping into offering help or an explanation, take a moment to listen attentively. You’ve probably been in a similar situation yourself, where the cost of shipping made you hesitate to buy something you really wanted. It’s totally understandable to acknowledge this frustration before moving on to any solutions or explanations.

Explain the reasons behind the prices

Customers may not always understand the intricacies of shipping, so it’s important to explain things clearly. The easiest explanation, assuming it applies to your situation, is that you’re only passing on the actual shipping costs to the customer. 

Different shipping services offer varying levels of speed, reliability, and coverage, so it’s helpful to share information about your shipping partners and why you’ve chosen to work with them. Ideally, you should add a comprehensive shipping policy page on your website that you can direct customers to for more details. 

If the customer is in a location that’s more expensive in terms of shipping, or if they’ve chosen a product that’s more costly to ship, it’s useful to share that information with them as well. Being transparent about the costs can help to build trust and prevent any misunderstandings.

Provide direct comparison

It’s better to provide context for your shipping prices to alleviate any concerns that customers may have about being overcharged. Comparing your shipping prices to that of your competitors can be a great way to reflect that your prices are fair and competitive. 

Another useful strategy is to link directly to the shipping provider’s page, so customers can see the base shipping price for themselves. This way they’ll know the real prices and will also not feel annoyed while paying for the shipping costs. 

Share your approach

Providing explanations for why your shipping works the way it does can be helpful for some customers. For instance, separating the shipping cost from the product cost can become a part of your transparency values, which can build trust with your customers. 

Moreover, if you’re using more expensive shipping because it results in fewer damaged products, you can emphasize how this decision benefits the overall customer experience. This can be a great selling point and let customers feel confident in their purchase, knowing that the product will arrive in good condition.

Offer alternative options

Offering ways for your customers to reduce their costs or get more value for their money is a great way to enhance their shopping experience. Some examples of ways to do this include: 

• Offering discounts at certain times or for certain types of customers. 
• Providing bundles or bulk purchase options to reduce the per-item shipping cost. 
• Allowing customers to pick up their orders at a local store, if that’s an option. 
• Suggesting lower-cost product alternatives that may be similar to what the customer is looking for. 

While addressing shipping complaints one-on-one is sometimes necessary, you can reduce the number of such inquiries by having a clear and comprehensive shipping policy page on your website. This can help customers answer their own questions and feel confident in their purchasing decisions.

Partner with fulfilment centers 

You don’t have to do it all by yourself. There are companies like ANSCommerce that can take care of the entire shipping process and get your products delivered to your customers in the best way possible. All you need to do is focus on the production part, and your logistic service provider will manage the rest. 

Spread across India, we provide fully equipped storage facilities with cutting-edge warehouse management systems (WMS) and order fulfilment capabilities: pick, pack, dispatch, and return management. On top of this, we have partnerships with all major national carriers, and you’ll get the most favorable rates in the market. 

Of Course, this is not all; as India’s best E-commerce enabler, ANS Commerce offers end-to-end solutions to manage your online business-from performance, marketing, and marketplace management to warehousing & logistic services! 

To know more about how ANS Commerce can help you with warehousing and logistics support, book a free consultation today!

The strategies mentioned above are proven ways to help small businesses save money on shipping while improving their delivery times and boosting their customers’ experience. Thus, whether you’re just starting your business or looking to optimize your existing shipping processes, employ these tips to take your business to the next level.

Your E-commerce business is growing rapidly, and you’ve started to run out of space to keep the stock intact. Or, your current setup isn’t helping in terms of location and is hindering your team’s efficiency, and you are on an explicit hunt for better storage solutions.

Whatever the reason, if you are seriously searching for a suitable warehouse storage facility for your business and are already foraging options—you’ll need to consider many factors before making the final decision. And the crucial factor that’ll come into play would be accounting and measuring the total cost that’d go into renting a warehouse and comparing alternate options to see what would work best for your business.

This article will help you weigh through the warehousing costs and calculations in-depth and the alternative solutions associated with it—to help you make the right decision. Keep following:

Components of Warehouse Cost

It is no secret that landowners and brokers often make renting a warehouse complex by using complex jargon instead of plain English to communicate their pricing options. But in reality, warehouse cost is based on three main criteria – the floor area (square footage), base rental rate, and estimated operating cost. 

The Floor Area 

The floor area depends on how much space you need for your business and is usually measured in square footage. The area you use for inventory impacts the cost of renting a warehouse.

Note: You can further cut down costs on warehousing by optimizing and making the best use of the available vertical space—reducing total rental costs, big time.

Base Rate

The base rental rate is the amount you’ll pay the landlord, excluding additional operating costs. A base rate is usually charged per square foot on a monthly, quarterly, or yearly basis—as per your lease agreement.  

Operating Expenses

There are two types of operating costs you’ll need to consider before renting a warehouse – Triple Net Lease, also known as Net Net Net (NNN), and Common Area Maintenance (CAM) fees. 

1. Triple Net Lease (NNN)

Net Net Net, also known as a triple net lease, refers to the property taxes and insurance fees that you, as a lessee, are supposed to pay besides the base rent—since you are responsible for all the operations happening at the rented property.

2. Common Area Maintenance

Common Area Maintenance (CAM) is the maintenance costs passed down from the landlord to the lessee. Maintenance fees include everything—from management to maintenance of the commercial property. 

How is Warehouse Rent Calculated

Did you know in the financial year 2022, the average warehousing rent was 258 Indian rupees per square meter per month in Pune, which was ranked the most expensive among all major cities in India? We’re breaking down the calculations below into three different rental options: monthly rate, quarterly rate, and annual rate–to help you better estimate the warehousing costs specific to your brand:

Monthly Rental Rate

Let’s say your business gets billed every month for warehousing and assume the following:

The storage space you use for warehousing = 1000 sq ft

The base rate = Rs 50 per sq ft per month

NNN = Rs 20 per sq ft per month

Adding up the base rate and NNN (Rs 50+Rs20), you’ll see that your total asking lease becomes Rs 70 per sq ft per month. Just multiply this amount by the square footage of storage, i.e., Rs 1000 X Rs 70= Rs 70,000.

This means you would become liable to pay Rs 70,000 as rent every month at the chosen warehousing space.

Quarterly Rental Rate

 Let’s assume the following for quarterly rental rates: 

Storage space you use for warehousing: 1000 sq ft

Base rate: Rs 100 per sq ft per quarter

NNN: Rs 50 per sq ft per quarter

Adding up the base rate and NNN(Rs100+Rs50), you’ll see that your total asking lease becomes Rs 150 per sq ft per quarter. Just multiply this amount by the square footage of storage, i.e., Rs 1000 X Rs 150= Rs 1,50,000.

In this case, you would become liable to pay Rs 1,50,000 as rent every quarter or Rs 1,50,000/12 = 12,500 per month. 

Annual rental rate

Let’s say you choose the option of yearly billing for warehousing and assume the following:

Storage space you use for warehousing: 1000 sq ft

base rate: Rs 200 per sq ft per year

NNN: Rs 100 per sq ft per year

Adding up the base rate and NNN(Rs 200+Rs100), you’ll see that your total asking lease becomes Rs 300 per sq ft per year. Just multiply this amount with the square footage of storage, i.e., Rs 1000 X Rs 300= Rs 3,00,000.

This means you would become liable to pay Rs 3,00,000 as rent every year for the chosen warehousing space.

Generally, annual billing gives you the most beneficial rate structure, and you’d definitely want to consider this before choosing a warehouse.

Apart from this, make sure to ask your landlord about the additional expenses you might incur, such as electricity, HVAC maintenance, and other operational & repair expenses. 

Is Renting a Warehouse Your Only Option?

The simple answer is ‘No.’ Renting a warehousing space is not the only option. While buying your own warehouse can seem very alluring, it’s certainly not possible for most E-commerce brands to make this big of an investment. 

You’ll not just become responsible for the maintenance and upkeep of the warehouse but will also be trapped to pay off huge amounts of down payments. 

Alternatively, many businesses work with trusted third-party logistics (3PL) providers if renting or owning a warehouse becomes out of the question. 3PL does all the heavy lifting on your behalf by taking care of all your storage and warehousing needs while being cost-effective. 

Partnering with third-party logistics providers gives you the flexibility to focus on more important things and take care of all your logistics requirements end-to-end.

If you are looking for warehousing and logistics solutions for your E-commerce business, work with the best in the business. We at ANS Commerce provide fully equipped warehouse facilities across India with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities – pick, pack, dispatch, and return management. 

To know more about how ANS Commerce can help you with warehousing and logistics support, book a free consultation today!

Recommended Read: 

1. E-commerce Warehousing 101: Everything You Need To Know
2. What Are E-commerce Fulfillment Services And How To Choose One?
3. Shipping Labels 101: A Beginners Guide On How to Create a Shipping Label

The holistic E-commerce process involves more than just making a sale— it includes everything, from product development to marketing, operations, fulfillment, and more.

But do you know what’s the most challenging of them all— Order Fulfillment.

The reason is that as an E-commerce store, you need to be careful about inventory management and fulfilling the orders in time without compromising the quality.

Failing to do that can hamper your business profitability significantly.

In fact, if an order fails to reach its destination within two days of the estimated delivery date, 69% of shoppers are likely to avoid shopping from that retailer. This is why meeting and exceeding customer expectations is crucial.

And in this article, we’ll cover everything about E-commerce fulfillment services. Starting with the definition. 

What is E-Commerce Fulfillment?

E-commerce fulfillment is the end-to-end process of fulfilling an online order. It involves managing inventory, picking products from the warehouse, packaging them securely, and shipping them out on time to the customer’s specified destination.  

Here are the steps of E-commerce order fulfillment: 

Types Of E-commerce Order Fulfillment Models

Here are the types of E-commerce order fulfillment methods that you can choose from-

In-house order fulfillment

Assuming the responsibility of E-commerce fulfillment in-house can be a wise decision in some cases. By managing the process in-house, brands can earn a higher profit margin on each sale and maintain complete authority over the process. However, it requires substantial initial investment and recurring expenses. 

Even though managing the fulfillment process by yourself will provide you with better control over the process and quality, it can be complex and tiresome as the business grows and orders increase. Here are some reasons to avoid maintaining order fulfillment by yourself,

1. High upfront costs: In-house e-commerce fulfillment requires a significant initial investment in equipment, software, and personnel, which can be a barrier for smaller businesses. 
2. Increased workload: Managing the entire fulfillment process in-house can be time-consuming and labor-intensive, potentially detracting from other important aspects of the business. 
3. Logistics complexity: Managing the logistics of e-commerce fulfillment requires expertise and knowledge that not all businesses may possess. 
4. Risk of errors: With in-house e-commerce fulfillment, there is an increased risk of errors such as shipping delays, incorrect orders, and inventory management mistakes, which can result in negative customer experiences and damage the business’s reputation.

Third-party fulfillment

Under the third-party fulfillment model, E-commerce brands delegate the responsibility of inventory storage and transportation to a third-party provider. While the business retains control over the product quality, the expenses associated with shipping and handling are passed on to the external vendor.

When you opt for a third-party fulfillment model, you get the following benefits:

Reduced upfront costs: Outsourcing E-commerce fulfillment can save businesses a significant amount of money by eliminating the need to invest in equipment, software, and personnel required for managing the fulfillment process in-house. 

Access to expertise: Third-party providers specialize in E-commerce fulfillment, which means that they have the necessary knowledge, expertise, and resources to handle the entire process efficiently and effectively. 

Scalability: As the business grows and order volume increases, third-party providers can easily scale up their operations to accommodate the growing demand without requiring additional investment from the business. 

Streamlined logistics: Third-party providers typically have established networks of warehouses and distribution centers, which can help reduce shipping costs and streamline the logistics of e-commerce fulfillment. 

Time-saving: By outsourcing e-commerce fulfillment, businesses can focus on other critical aspects of the business, such as product development, marketing, and customer service, which can help drive growth and profitability. 

Lower risk of errors: Third-party providers are experienced in managing the e-commerce fulfillment process, which can help reduce the risk of errors such as shipping delays, incorrect orders, and inventory management mistakes, resulting in a better customer experience.

However, just like any other model, there are a few disadvantages to this too. Here are some of the difficulties you might face while working with a 3PL service provider: 

Communication challenges: Coordination between the business and the third-party provider can be challenging, particularly if the business requires real-time updates on order status, inventory levels, and delivery tracking. 

Dependency: Outsourcing E-commerce fulfillment can create a dependency on the third-party provider, making it difficult for the business to switch providers or bring the fulfillment process back in-house if necessary.

Additional costs: While outsourcing E-commerce fulfillment can save on upfront costs, businesses must pay for the services provided by the third-party provider, which can add up to a significant expense over time.

Dropshipping

Dropshipping is a retail fulfillment method in which a store doesn’t keep the products they sell in stock. Instead, the store acquires the product from a third party and arranges for it to be shipped directly to the customer. Consequently, the seller is not responsible for handling the product directly.

This method is often adopted by startups and small businesses seeking to sell products without incurring substantial upfront costs. It is easy to start and has low overhead costs, although profit margins are generally lower due to the additional costs of working with a third-party supplier.

 

Why do you need an e-commerce fulfillment service provider?

If you are contemplating partnering with a third-party E-commerce fulfillment service provider, here are a few reasons for you: 

You don’t have the fulfillment expertise in-house

Managing inbound and outbound logistics can be challenging, and running an E-commerce business requires managing multiple interconnected processes. From managing orders and inventory to preparing for peak seasons, fulfillment companies have the expertise to handle it all. 

A single fulfillment center can handle operations for numerous E-commerce businesses and ship millions of orders regularly. This extensive experience and high volume make them valuable strategic partners. 

Moreover, fulfillment companies can help E-commerce businesses achieve greater efficiencies in various areas, such as negotiating lower shipping rates with carriers and strategically placing their inventory to reduce delivery time and costs.

You aren’t prepared to handle larger volumes during peak seasons

For many E-commerce businesses, demand can fluctuate greatly throughout the year, with peak seasons often resulting in a surge of orders that can be difficult to manage. 

Fulfillment providers have the capacity and expertise to handle these fluctuations, ensuring that businesses can meet customer demand without having to worry about the added complexities of managing inventory and fulfillment operations during busy times. They can scale their operations up or down depending on demand, making it easier for businesses to manage inventory levels and avoid stockouts. 

You can’t compete with Flipkart & Amazon in fast delivery

Amazon has already set a standard for a fast and reliable delivery time, and keeping up with this standard is a huge challenge for small businesses.

Today’s customers are busy and look for instant solutions. They don’t want to wait for days just to receive their orders. This is why most fulfillment partners have strategically placed fulfillment centers around the country, which can help businesses make faster delivery at lower shipping costs.

You are not using the right technology

Another advantage of using an E-commerce fulfillment service provider is that they have access to advanced technologies and systems that may not be available to individual businesses. These technologies can be used to streamline the fulfillment process, reduce errors, and improve overall efficiency. 

For example, fulfillment providers use warehouse management systems (WMS) to keep track of inventory. WMS can help manage inventory levels, process orders automatically, and reduce errors caused by manual data entry. Making managing a warehouse much easier and more efficient.

You’re unable to focus on strategic tasks

Using an E-commerce fulfillment service provider can free up time and resources for businesses to focus on more strategic tasks, such as product enhancement, marketing, and customer service. 

For example, a business focusing more on product development can launch new products to the market more quickly, leading to increased revenue and market share. Similarly, a business investing more in marketing activities can drive greater awareness and demand for its products, leading to increased sales.

What to Look For When Choosing an E-commerce Fulfillment Service?

Now that you understand the benefits of having an E-commerce fulfillment service, you should also be able to pick the right one. There are several fulfillment services available in the market, but choosing the wrong one can negatively affect your business and revenue. To pick the right one, here are a few key points that you need to keep in mind-

Location of the fulfillment center

Customers expect speedy shipping, and the proximity of the fulfillment center to the customer is a crucial factor in achieving this. The closer the warehouse is to the end customer, the shorter the distance the products have to travel, resulting in faster deliveries. 

When selecting a fulfillment partner, it is essential to consider the location of their fulfillment warehouses. Identify areas from where you are getting maximum orders and ensure that your fulfillment partner has warehouses in those locations. 

Additionally, if your business operates globally, it is vital to confirm that the fulfillment company offers global shipping before partnering with them. 

Shipping speed/ Speed of delivery

With the arrival of Amazon Prime’s two-day delivery speeds, fast shipping has become the norm, and customers now expect faster delivery than ever before. And if you don’t stand on this expectation, you may start losing money in no time. 

This is where a fulfillment partner comes handy. 

A good fulfillment company should have streamlined and effective fulfillment processes that ensure quick delivery to customers. 

Features of order fulfillment software

As an E-commerce business owner, you already have a lot on your plate, with various digital tools, applications, and platforms to manage. The last thing you need is to add another software that is slow, disorganized, and difficult to navigate. That’s why it’s crucial to research not only the fulfillment company but also the order fulfillment software they use. 

Different fulfillment companies use different order fulfillment software, each with its own features and capabilities. It’s essential to understand your business needs and goals and select a fulfillment partner whose software aligns with them. Additionally, you want to ensure that the order fulfillment software is easy to implement and use daily, saving you time and reducing the risk of errors.

Customer support

Although fulfillment companies aim for perfection, errors can occur during fulfillment and shipping, such as damaged, lost, or stolen packages. However, the support provided by the fulfillment company during these situations can significantly impact the customer experience. 

Fulfillment companies offer various tools and guidance to help E-commerce businesses and depending on the order volume, a dedicated account manager or a team can support the business. Transparency and visibility into the fulfillment company’s performance should also be expected. 

Branding & packaging options

With the vast number of E-commerce businesses in competition, it’s crucial to stand out and make a lasting impression on customers. Sending generic brown boxes won’t do the trick anymore. This is where branding options from an order fulfillment company can make all the difference in building a strong brand and generating buzz for your business. 

Personalization is key to engaging modern consumers, and a custom-tailored and exciting user experience can create loyal customers who return to your business. Neglecting branding potential when selecting a fulfillment partner can be detrimental to your user experience, especially when 89% of digital businesses invest in personalization and 51% of digital marketers prioritize it as their top goal. So, choosing a fulfillment company with branding options can help create a positive, memorable experience for your customers and drive business growth.

Return management

It’s crucial for a fulfillment center to not only ship products, but also provide returns management, as approximately 30% of online orders are returned. While some returns are unavoidable, a reliable fulfillment company should work with you to reduce controllable returns through better forward logistics. 

Additionally, your fulfillment partner should offer software that enables you to identify “serial returners,” customers who frequently make purchases only to return them. By identifying these customers, you can adjust your marketing strategies to prevent unnecessary returns. For instance, you may choose not to send promotional emails to these customers during sales or email them after the purchase with positive reviews from satisfied customers to increase their confidence in their purchases. A fulfillment company that helps you reduce controllable returns and identify serial returners can significantly benefit your business by improving the customer experience and reducing costs.

Evaluating order fulfillment services: 14 questions to ask

As the owner of an E-commerce fulfillment center, it’s important to choose the right e-commerce fulfillment service provider that meets your business’s needs. However, it can be difficult to know where to begin or what questions to ask. Here are some key questions to ask while evaluating fulfillment service provider for your business: 

Picking And Packing Questions

What kind of products do you ship?

If your products are bulky or weighty, choosing a fulfillment service provider specializing in handling such items is crucial. They will offer you the most appropriate guidance on how to pack and ship your products with utmost care. Conversely, a fulfillment center that predominantly handles large items may not be ideal for smaller products, delicate merchandise, or hazardous materials. Selecting a fulfillment center that caters to your product type is prudent, as this can significantly lower your packaging and shipping costs.

What value-added services do you offer?

Having a warehouse that offers kitting services can be a valuable addition to your E-commerce business. Fulfillment services for E-commerce can involve customized labeling or just-in-time assembly to enhance the value of your merchandise.

What are your customer service practices?

It’s important to ensure that the fulfillment service partner has efficient systems in place to promptly address customer inquiries.

Fulfillment Cost Questions

What is the charge for setting up accounts and integrating sales platforms?

It’s crucial to inquire about all fees associated with your account from start to finish. Concealed fees can transform an initially reasonable quote for fulfillment services into an expense that could harm your business.

Who pays for fulfillment mistakes?

Does the fulfillment center provide any guarantees in case of incorrect packing or shipping of an order? Do they waive fulfillment and shipping fees in the event of an error? Such a guarantee is a good indicator of a high-quality e-fulfillment provider.

What is your policy on inventory shrinkage (loss of products from warehouse)?

Beforehand, determine the shrinkage allowance. A first-rate E-commerce fulfillment warehouse will offer an inventory guarantee, shielding you from expenses related to inventory shrinkage and damage.

Shipping Cost Questions

Do you offer shipping discounts?

As most fulfillment service providers are volume shippers, they may be eligible for reduced shipping rates from freight companies. Make sure that you are receiving the benefit of such discounts.

Do you offer international shipping?

While you may currently sell exclusively to domestic customers, why restrict your future prospects? The E-commerce industry has vast potential for global sales. Opt for an e-fulfillment provider that can assist you in elevating your online store to the next level.

What is your system for shipment tracking?

Ensure shipment notifications are sent directly to both you and your customers and contain tracking numbers. This will allow you and your customers to monitor the shipment and address any issues that may arise.

How fast can you ship my orders?

Inquire about the fulfillment provider’s ability to deliver to at least 70% of the country within two days or less. Additionally, ask about the order turnaround time, such as whether they can ship orders received by a specific cutoff time on the same day. 

Questions Related To Maintenance & Technology

Does your warehouse have backup power?

Customers in other regions anticipate their orders to be delivered on schedule, regardless of your fulfillment center’s circumstances. They are unconcerned about any blizzards or power outages. It’s important to inquire about the last time the fulfillment center tested their backup systems. A generator that is not functional will not be beneficial when faced with severe weather conditions.

What inventory management and inventory control services do you offer?

To prevent inventory shrinkage, seek out a fulfillment center that offers real-time inventory management. This method is more precise than periodic spot-check inventories.

Do you have ISP backups in place?

Although the power may be functioning, an internet outage can render a warehouse inoperable. Without the transmission of orders from your E-commerce sales channels, orders cannot be shipped. It’s crucial to ensure that your E-fulfillment service provider employs multiple ISPs, guaranteeing uninterrupted internet service.

What are your security procedures?

This pertains to both internet security and the protection of your merchandise. Determine the controls that the fulfillment service  provider implements for access to sensitive and confidential information. They should also perform employee background checks and utilize security cameras to deter theft.

Experience the best fulfillment service with ANS Commerce

As India’s best E-commerce enabler, ANS Commerce offers end-to-end solutions to manage your online business-from performance marketing and marketplace management to warehousing & logistic services-we provide it all! 

Spread across pan India, we provide fully equipped storage facilities with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities: pick, pack, dispatch, and return management. 

To know more about how ANS Commerce can help you with warehousing and logistics support, book a free consultation today!