How to Handle FREE Shipping?

September 24th, 2009
by

What should online retailers keep in mind when considering offering free shipping?

Free shipping is the third step in this transportation pricing progression.  The first was package specific rates and the second was flat rates.  Free shipping is one of the most popular tactics being employed by online retailers and it’s very popular with consumers. 

There are two varieties: free shipping with no strings attached and free shipping if you reach a certain purchase threshold ($25, $50, $75, or $100).  Your primary consideration in offering free shipping is profit margin.  If you’re selling a line of products that afford you a sizeable margin you may be able to lower your margins by eating the shipping cost with the hope of gaining enough additional business to end up with more total profit.  If your operating margin doesn’t afford you this option you might still be able to offer it at a certain purchase threshold.  The answer will be different depending on your product line and price points but overall from a marketing perspective free shipping has been shown to greatly improve conversion rates. 

Of course, if you lose money per item by offering free shipping, then improved conversion rates will just mean you lose more money faster!  But as a last thought on this topic let me leave you with a real online retailer story that you’ll want to consider whether you’re considering free shipping or already offering it.  An eTailer was offering free shipping and decided to see what would happen if he implemented a $1.99 flat rate.  He was surprised to find that his conversion rate was unchanged.  He continued to increase the rate until he saw his conversion rate begin to fall which was in the $4 to $5 dollar range.  The lesson learned; that customers are looking for a great deal not exactly the best deal.  In this case they felt that a flat $3 rate was just as good as free shipping. That was $3 that went directly to his bottom line on each and every order.

Tags: , , , , ,
Posted in Packing and Shipping Tips, What's New | 1 Comment »

UPS – Shipping a Large Variety of Products?

September 10th, 2009
by

When you have a large variety of products, a range or flat rate is difficult to estimate, at least for new online retailers. 

Online retailers need accurate shipping rates but find it hard to do so given the variety of destinations.  How can one get a better fix on the shipping costs quoted so that online retailers’customers don’t get ugly surprises?

UPS has a tool that can help with obtaining real time rates.  The tool is called the UPS Rate and Service Selection Tool.  The UPS  Rates and Service Selection Tool returns rates for available UPS domestic and international services.  And the rates provided include all applicable shipping surcharges such as the fuel surcharge and delivery area surcharge.  The online retailer will need to provide the package information for each product (weight, length, width and height) and as mentioned before, make sure these are the package characteristics not the product characteristics. 

The customer will simply need to provide their destination zip code to generate the rate.  Some online retailers ask for this information as soon as the customer enters the site while others request it once a shopping cart is checked out.  Since most online retailers’ customer addresses tend to be residential you’ll want to ask your customer to input not only the zip code but also the street information in order to determine whether it’s a residential or commercial delivery and assign the appropriate rate.

Tags: , , , , , ,
Posted in Packing and Shipping Tips, What's New | No Comments »

What Shipping Rate to use for Single Packages?

September 3rd, 2009
by

Previously we established that it’s best to include total package weight when determining the shipping rate for single packages, but small online retailers also want to know if they should build shipping rates specific to each package weight or if they should use one rate for a range of weights such as 0-5 pounds $10.00?  And what if weight doesn’t vary much or amount to much as is the case for some clothing?

UPS recommends that the answer goes back to the general principle that simpler is better and a range is usually simpler than specific weight rates. 

There’s risk here however.  Risk that your shipping cost may be less than the actual and you’ll end up eating cost or that your shipping cost is way too high and so you may lose some customers who see your shipping cost as too high given what they think their product weight is.  The greater the range that you build the greater the risk will be.  If you do choose to go with a range try to keep your shipping rate at the midpoint of the range.  On a 0-5 pound range, go with a 3 pound rate.  You’ll lose money on 4 and 5 pound orders but make money on 1 and 2 pound orders.  Over time you may observe that your orders are skewing towards the higher or lower ends of the range and you can adjust your rate accordingly.  Keep in mind also that in calculating your average rate you’ll need to take into account not only the average weight but also the average zone. 

You can take this a step further if you’re selling a very narrow variety of products or products that don’t vary much in weight such as CDs or lingerie.  If this is the case then you should consider a very simple flat rate for all shipping.  Industry experts agree that this far more appealing to consumers than providing product specific rates.  It also enables you to communicate shipping costs immediately to shoppers on your home page.  If you’ve got a competitive flat rate you’re going to have significantly less shopping cart abandonment than if you don’t.

Tags: , , , , ,
Posted in Packing and Shipping Tips, What's New | No Comments »

UPS Charging for Shipping Categories

August 27th, 2009
by

Online retailers are most concerned about what, or how, should I charge for any shipping category?  Should the online retailer calculate shipping based on the product weight or add something for packaging?  What does my customer expect?

UPS does not normally give advice but it’s understandable that online retailers think of UPS when pondering these “what/how should I charge” questions. 

Definitely online retailers should be charging the cost of the package shipping not the product shipping.  Consumers understand that packaging materials add weight and they’re fully expecting that total weight to be what the shipping cost is based on.  If you’re in a drop ship scenario you need to make sure that the shipping costs quoted by the supplier are the actual shipping costs not based on the product weight. 

If you’ll be housing your own inventory and packing yourself then you’ll learn over time what percentage over the base product weight to use in order to calculate an accurate shipping weight.  If you’re just getting started make sure to give yourself a generous cushion in order to protect yourself from taking losses early on.  Remember in the case of sites like Amazon.com to use the shipping rates they allow. 

Some cardboard boxes can weigh anywhere from half a pound to four pounds.  Another item to keep in mind is the actual cost of the materials themselves.  Some shippers take that cost into account in pricing the product while others add as separate handling fee to cover those costs.  Which is better?  The general rule is that simpler is better.  While it’s nice to have lower purchase price, consumers don’t like to see additional charges they’re not expecting.  While they’re certainly expecting a shipping charge they may be turned off by a handling fee, perceiving it to be your means of generating additional profit.  If you’re drop shipping you’ll need to understand what your supplier’s practices are and determine whether or not they help you.

Tags: , , , , , ,
Posted in Packing and Shipping Tips, What's New | No Comments »

Need to ship Internationally? Ask UPS

August 20th, 2009
by

An area that isn’t overlooked but where online retailers are is international shipping.  Customers want to know how to ship internationally, how to determine whether it makes sense for them given the additional costs and risks, and what restrictions they need to be aware of. 

Probably the most intimidating business area is international shipping.  But the opportunity to grow your business by moving into the international sales arena is tremendous.  The U.S. Small Business Administration found that companies engaged in international trade:
• Are 20% more productive
• Produce 20% greater job growth than non-exporters, and
• Are 9% more likely to stay financially solvent

With two-thirds of the world’s purchasing power located outside the U.S., exporting could help you expand from a U.S. market of 300 million to a global market of more than six billion.

UPS has worked both to make it easier to get started and easier to manage the ongoing process.   There are two main areas:�
1. Understanding country specific regulations and requirements
2. How to ship

1. Understanding country specific regulations and requirements
Governments typically restrict or prohibit specific commodities from import/export depending on what they are used for, who they are going to and their quantity/value.  But these country specific trade regulations can vary widely by country.  For instance, are there any special restrictions on exporting a shipment of 100 calendars from the U.S. to Vietnam for resale?  In fact, in Vietnam, it is illegal to import foreign calendars for commercial purposes.  Or, is a shipment of a box of business cards from the U.S. to Germany considered a “document” or “non-document” shipment?  This is an important question because document shipments are typically duty-free.  Actually, a shipment of business cards into Germany is considered a document shipment, but there is a fifteen card limit.  How is someone supposed to be aware of all of these country restrictions?  While the wide array of rules for global trade can seem overwhelming, UPS provides tools, like the Country Regulations tool on UPS.com, which makes it simple to determine what specific rules apply to any origin and destination country that UPS serves.  The Country Regulations tool simplifies the process of determining prohibited/restricted commodities, documentation requirements, value or weight limits or any other country specific regulation for importing or exporting all around the globe.

2. How to ship
Whether you are shipping at UPS.com or on a stand alone Worldship shipping system, the international shipping process is not much different than a shipment to someone within the U.S.  The first step involves selecting the appropriate UPS international delivery service.  UPS offers guaranteed time-definite and day-definite international delivery services that can meet your budget and scheduling needs. And UPS delivers to more than 200 countries and territories, so you’re sure to find the international shipping service that’s right for you.  In order to determine the appropriate service to meet your needs, you’ll want to determine the shipment cost and delivery time.  With an international shipment, you’ll need to determine not only the shipping charges, but also any applicable duties and taxes based on the country you’re shipping to.  UPS provides free tools like TradeAbility that can help you estimate the “landed cost” (i.e., cost of your international shipment including duties and taxes) of your shipment.  Because the importers typically pay the duties and taxes, it’s important to be able provide your customer with an accurate estimate of the charges they’ll be responsible for.  Setting expectations on duties and taxes owed can prevent “sticker shock” for the importer and can help reduce refused or even abandoned shipments. Once you’ve selected the shipping service and reviewed any country specific regulations, you’re ready to prepare your shipment, which consists of creating a label using a UPS shipping system and following UPS package guidelines to avoid delays.  Now it’s a matter of getting the shipment to UPS by either dropping it off at The UPS Store or a UPS Drop Box, or you can schedule a pickup online or call 1-800-PICK UPS.  After tendering your package to UPS, you can monitor the progress of your shipment on ups.com or with Quantum View®. You can receive proactive notifications of your shipment status, as well as view and print proof of delivery along with an image of the recipient’s signature using UPS Signature Tracking®.

UPS has created a microsite (i.e., a mini-website) dedicated to providing you with all of the tools and information you need to take your business outside the U.S. with UPS.  It’s online at www.ups.com/international.

Tags: , , , , , , ,
Posted in Packing and Shipping Tips, What's New | 9 Comments »

Are ‘Returns’ a Problem? – Not with UPS

August 13th, 2009
by

Are you struggling to manage returns?

UPS has determined that online retailers like the UPS returns portfolio and the tactics it offers. But UPS has also determined that often online retailers haven’t thought through a returns policy that reflects a specific customer service strategy. Also, since returns impact a variety of departments or functions (customer service, finance, warehousing and marketing) the online retailer may not realize the total adverse effect returns are having on their business. Instead they’ve just defaulted to what they feel most competitors do – 30 day returns, call for a return authorization number, and ship it back.

UPS recommends that online retailers use their returns policy to differentiate their business from their competitors.

UPS asked Forrester Research to study the marketplace in order to develop a structure that helps the online retailer do just that – develop the strategy that’s right for their business. The study shows what online retailers in general think about returns and contrasts that with what consumers are looking for. But most importantly, the study uses those findings to generate a framework that online retailers can use to determine what approach makes the most sense for them. That approach may include different returns policies for different products or even different policies for different customers. UPS has retail customers that employ the standard 30 day process for some products while dispatching UPS to pick up and return more valuable products and even return others overnight. Those customers have put significant thought into what makes the most sense given customer service, product cost, and/or product obsolescence considerations.

And the result is a returns strategy that’s become a competitive advantage online retailers both in terms of customer satisfaction and cost control. If your resulting returns policy gets a little complex, UPS has the options to take care of you. You can
• Arrange, create, and deliver your return shipping label to your customer and have UPS collect the item for return
• Pre-print return labels that can be included with your original outbound goods
• Have the return label mailed directly to your customer
• E-mail the return label directly to your customer
• Create and deliver a commercial invoice with the return label to your customer
• Process single or multiple piece return shipments
• Associate your own reference numbers with the item being returned
• Enable your customers to get approval and print return labels directly from your web site

For a complete review of our returns portfolio just go to UPS.com and look for returns under our business solutions portfolio of services links. If you’d like to download your own copy of the Forrester study just go to whiteboard.ups.com and you’ll find it in the library.

Tags: , , , , , , ,
Posted in Packing and Shipping Tips, What's New | 2 Comments »

UPS Helps with Better Customer Service

August 6th, 2009
by

Are you looking for ways that UPS can help the online retailer to provide better customer service other than just providing the ever popular driver?

UPS provides visibility.  If you’re a startup eTailer shipping packages you’re going to find yourself spending time on the phone answering “where’s my package” calls.  You’ll take the customer’s number, track the package, and get back to the customer via phone or email.  Quantum View Notify ® lets you send proactive e-mail notifications of key shipment events so you can keep yourself and your customers informed about the status of their packages. That’s valuable package information coming to you and your customers, when you need it, eliminating the time spent tracking your packages over and over again. 

UPS also provides the UPS portfolio of Returns solutions that customers can tailor to achieve balance between cost and customer service.

Tags: , , ,
Posted in Packing and Shipping Tips, What's New | No Comments »

When to add new products and find a wholesale supplier

August 4th, 2009
by

Colette Marshall was just interviewed on eBay Radio by Griff.  He asked several great questions about refreshing your product lines and introducing new products to sell.  The main question is how do you approach coming up with those new product line ideas and finding the supplier for it , especiallly before the holiday selling season?

Here’s what Colette Marshall responded:

1) At what point should an online retailer start thinking about refreshing their product lines and introduce new products?

The answer is all the time.  As an ecommerce retailer, we’re always looking to provide our customers with what they’re looking for. You should be constantly looking at trends and trying new product ideas.  It’s best to do it before the Holiday season so that you know what are going to be some best sellers in the holiday season. Also in the holiday season,you’re going to get very busy so it’ll be a little more difficult to add on new product items. It’s best to introduce new products consistently throughout the year.

For those of you who are just beginning, when you’re doing your product sourcing find a supplier with a wide variety of complimentary skus.  When you’re ready to start adding products to your eBay store, auctions, Amazon, or Yahoo Store, then you’ll already be set up with a supplier you can work with. This is the fastest way.

If you already have a supplier, but their selection is not big enough or you’re not finding what you’re looking for then the same idea still applies. Try to find a supplier that has a wide range of skus to select from.

Now sometimes you’ll be focused in a micro niche where your product is very specific.  Usually in this case you’re going to be dealing directly with the manufacturer. There may not be a wider selection to choose from. There is no problem with this. You will just need to manager yourself so that you can deal with multiple dropshippers and wholesale suppliers.

2) Do you have any tips for sellers to help them identify what to add to their eBay store or add to their listing options?

The easiest place to start first is your eBay Store or your current Auctions.  Ask yourself:  what will compliment this product?  For example, if you sell a themed dog bowl is there a matching cat bowl.  If you sell a coffee maker, are you selling coffee mugs.  If you sell furniture, are you selling the products to keep that furniture clean or in its best condition.

From a product point of view, you can look at your current suppliers catalog or inventory and see what they provide that will compliment what you’re selling.   What you want to try to avoid is selling motor cleaning supplies next to kitchen appliances.  Focus on adding products that are within the same niche.

A great tip for the holidays is to see if you can make anything into a bundle. For example, the furniture you are selling – can you include the 1st months’ cleaning supplies?  Can you make a pet gift basket of a collar, bowls, a leash and a pet toy.

Most importantly keep an eye on trending. Now that’s a whole seperate conversation, but basically you want to keep an eye on what are people talking about in your niche. You want to be ahead of the game so that you’re one of the top sellers in the forefront when customers come looking for those product.

3) Is there a place to find out more information?

WorldwideBrands.com is currently running a free webinar series at www.Sourcingforindependence.com. We’ve got a great webinar coming up with Lisa Suttora about how to understand product trends and what’s different this year with sourcing for the holidays.  It’s free to register – just go to www.Sourcingforindependence.com and sign up there.

Tags: , , , ,
Posted in dropshipping, What's New, Wholesale Product Annoucements | No Comments »

UPS: Easy Reconciliation for Transportation Invoices?

July 30th, 2009
by

Do you want to avoid the hassle of reconciling transportation invoices each month?

As your online reteil business grows there are several ways UPS can help you view, manage, and pay invoices.  With the UPS Billing Center, PDF Invoice, and UPS Billing Data, you have your choice of viewing your invoices online, viewing and downloading a PDF image of your invoice, or downloading a raw data file For customers whose bill analysis and reconciliation is a quick scan of their invoice, they can use the UPS Billing Center.  The Billing Center provides access to invoices online, and lets you download a pdf copy of the invoice, which is an exact replica of the paper invoice.  Once you have reviewed the invoice, the Billing Center allows you to quickly pay your bill electronically.  For customers that have more rigorous and more time intensive analysis and reconciliation processes, UPS Billing Data is extremely powerful in helping customers reduce the hassle associated with reconciling UPS bills.  UPS can deliver your invoice information in a raw data file, available in a CSV, XML, or EDI format, that can be integrated into other systems to help quickly analyze and reconcile UPS bills.  We also provide a piece of software, called the UPS Billing Analysis Tool, which can be used with the CSV file to create over 30 reports to help customers analyze their data.

 What this means to customers is that UPS Billing Data can help streamline financial analysis related to UPS transportation charges (for both small package and LTL) to the point where there is very little manual involvement.  If you’d like to read the story of a customer who significantly reduced their time reconciling and analyzing UPS bills, or see a demo on our entire electronic billing portfolio, you can visit www.whiteboard.ups.com and go to the billing solutions room.

Tags: , , ,
Posted in Packing and Shipping Tips, What's New | 1 Comment »

UPS: Integrate Shipping with Order Entry?

July 23rd, 2009
by

Do you want to integrate shipping with order entry so as to avoid rekeying information from your order entry system into your shipping system?

Shipping integration is one of the primary ways UPS helps online retailer streamline their business processes.  After all, you don’t go into business to become a shipping manager.  We want to smooth these processes so that you can spend more time doing what you really enjoy – growing your business. Just think of the amount of time spent rekeying order information into the shipping system as volume grows.  Then think about the number of key entry errors resulting in bad addresses, returned product, and customer dissatisfaction.  There is an integration solution for you regardless of your system.  These solutions generally fall into two categories:

1. First there are multiple do-it-yourself ways in which you can integrate UPS Worldship with your business, with each way reflecting the needs and realities of your processes and systems

2. The second is to use our UPS Ready Program partners to provide you with the software, integration and the know-how to streamline your shipping and other business processes

The UPS Ready program has multiple provider types that can assist you.  There are Application providers that provide ERP and other business management systems.  And there are also are providers who deal with complex integrated shipping systems.  All of these systems have UPS functionality built right into them.   And if you have an existing system, the UPS Ready program also has certified technology providers who will work with you to integrate UPS.

Then, of course, we also have relationships with eCommerce marketplace providers like eBay and Yahoo which also have UPS integration baked right in.  For more information on these and more integration options our viewers should visit www.ups.com/upsready.

Tags: , , , , , ,
Posted in Packing and Shipping Tips, What's New | No Comments »

« Older Entries
Newer Entries »