eCommerce Delivery 101

Offering low or free shipping and delivery options can be a great way for brands to attract customers and increase sales, especially for smaller low-value products.

Here are a few tactics that brands use to offer competitive delivery options while still making a profit:

1.????Partner with shipping carriers: Most shipping carriers offer discounts or incentives for businesses that use their services regularly. By partnering with a carrier, you can reduce your shipping costs and pass some of the savings on to your customers through free or reduced costs.

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2.????Use flat-rate shipping: Rather than charging for shipping based on the weight or size of the order, you could offer a flat-rate shipping fee for all orders. This makes it easier for customers to understand the shipping cost, and it helps you control your shipping costs.

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3.????Build costs into the product price: One way to offer low or free shipping and delivery options is to build the cost into the product price. This way, the customer pays for shipping, but they don't see it as a separate charge at checkout.

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4.????Offer free shipping over a certain order value: This incentivizes customers to spend more to get the free shipping, and it helps offset the shipping cost for lower-value orders. Providing product bundle options is a quick way to help customers meet this value while cross-selling your products.

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5.????Optimize your product and packaging: Optimizing your product and packaging is an important consideration when reducing shipping costs. This could mean using lightweight materials, reducing the size of your packaging, or streamlining your product design to minimize the cost of shipping.

By considering these tactics and finding the right balance between offering reduced or free shipping while maintaining a healthy profit margin, brands can successfully offer free shipping even for low-value products while still making a profit.

Direct to customer sellers:

You will need to select a partner courier company that makes delivery easy and affordable for small e-commerce companies.

Many courier companies do this by offering a single, flat-rate pricing model for deliveries. This means that businesses can easily calculate the delivery cost for each order without having to worry about additional fees for weight or size. This can help reduce the delivery cost for businesses and make it easier for them to offer free shipping or low-cost delivery options to their customers.

Another way they make delivery easy and affordable is by offering a variety of delivery options, including standard, express, and same-day delivery. This allows businesses to choose the delivery option that best fits their needs and budget, giving customers more flexibility in how they receive their orders.

They are companies that provide a range of additional services, such as returns management and order tracking, to help businesses streamline their delivery process. In addition, they partner with a variety of different couriers to offer delivery services to a wide range of customers, no matter where they are located.

For businesses using platforms like Shopify, Magento, or WooCommerce, these companies offer a range of integrations that allow orders to be automatically sent from the e-commerce platform to the parcel management system. This saves time and reduces the risk of errors, as orders are processed automatically without manual intervention.

Once the orders are received, they provide your businesses with real-time tracking information so that you can see exactly where your packages are and when they are expected to arrive. You can also access detailed reports on their deliveries, including delivery costs and delivery times, which can help them to monitor their delivery performance and make improvements where necessary.

Additionally, many of these companies provide a range of tools to help businesses manage their deliveries more effectively, such as creating custom labels, generating return labels, and tracking deliveries in real time. This helps businesses streamline their delivery process and provide a better customer experience.

Marketplace Sellers

When it comes to selling on Amazon, there are a number of costs to consider. First and foremost, there are the fees associated with selling on the platform, such as the monthly subscription fee, referral fees, and fulfilment costs.

For every item sold, sellers pay Amazon a percentage of the total price—including item price, shipping cost, and any gift-wrapping charges—or a minimum amount, whichever is greater. Referral fees are in addition to selling plan fees.

Currently, Amazon charges a monthly subscription fee of $39.99 for their professional selling plan, which allows you to sell an unlimited number of products. In addition, Amazon charges vary by product category. All categories and fees can be viewed here

In terms of fulfilment, Amazon offers two options for sellers: fulfilment by Amazon (FBA) and fulfilment by merchant (FBM). If you choose FBA, Amazon will handle your products' storage, shipping, and customer service in exchange for additional fees. These storage fees fluctuate with seasonality; e.g., the storage fee for standard-size beauty and cosmetics products is $0.75 per cubic foot from January to September and $2.40 per cubic foot from October to December.

If you choose FBM, you'll be responsible for storage and shipping, but you'll have more control over the customer experience and may have lower costs overall.

Takealot, a popular South African marketplace, is another great option for brands looking to sell their products online.

Similar to the Amazon model, Takealot charges a commission fee on each sale, which is a percentage of the sale price. This fee is generally around 15% for most product categories, but it can vary depending on the specific category and other factors. Their fee calculator can be found here

In terms of fulfilment, Takealot offers two options for sellers: fulfilment by Takealot and fulfilment by the merchant. If you choose fulfilment by Takealot, they will handle storage, shipping, and customer service for your products in exchange for additional fees. The cost of these services will vary depending on the size and weight of your products and other factors.

Whichever route you choose, ensuring your shipping and delivery solution doesn't eat into your profit margins is essential. Therefore, it's important to carefully evaluate each of these costs and factor them into the final price of your product. You'll also want to consider the price of competing products, the target market for your product, advertising costs and the profit margin you want to achieve. By taking these factors into account, you can set a competitive price that reflects the true cost of producing and selling your product.