Blueprints / Diary of a Startup / Getting Started

Diary of a Start Up – Part 7: Shipping Providers & Technology Solutions

In PowerRetail’s seventh chapter of its Diary of a Start Up series, John Debrincat helps buddig e-commerce businesses choose a shipping provider and technology solution.

As we have discussed previously, shipping is a key reason for customers to abandon their sales on an online store. Looking at the issue as a store owner, it’s not just about lost sales (although of course this is very important), but about the amount of effort and cost associated with shipping and returns. In an online store that processes a reasonable number of transactions a day, picking, packing, shipping and then handling returns and refunds can be very human resource and time intensive.

Shipping in a timely manner is and important aspect of customer service and customer service is the key to getting return buyers.

Customer service – Or After-sales means future sales

A customer decides on a product in your store and buys it. This is an important step towards success in e-commerce.  The next steps that decide whether a one-time customer becomes a loyal patron are still pending. Unfortunately, many online merchants overlook customer care and the provision of after-sales services – and lose many customers as a consequence. At the same time, it is very easy to keep customers satisfied after a purchase and keep them coming back to your store.

Prompt order confirmation and transparent tracking

After the actual buying process the customer should automatically receive a confirmation e-mail, including all order-related information. In a well constructed online store this confirmation e-mail is generated automatically and sent to the customer. Make it clear to your customers that you are available to lend assistance even after sales, by offering them several options for getting in touch with you at any time.

Fast and complete delivery

Fast delivery of ordered products is extremely important for the long-term success of your store. You must ensure that customers receive their orders within the promised delivery period. Nothing angers customers more than delivery that is late, incomplete or faulty.

Accommodating guarantee and active complaints management

A claim for warranty or an exchange is a situation that can occur time and again. This supposedly critical situation offers the online merchant a substantial opportunity that is often not taken. You can now put your customer-orientation and friendly service to the test. Be accommodating, proactive in your communication, friendly and open – your customers will be grateful and shop again at your store.

The same holds true for customers who complain to you. Take these customers very seriously and actively manage complaints from customers. Opportunity also lies in the complaint – the chance of solving a previously unknown problem.

Periodic customer surveys

Carry out customer satisfaction surveys at regular intervals. This is the only way you can continuously improve your store and service, and serve your customers even better and satisfy them. You can carry out the survey online or send a written questionnaire to the addresses in your customer database.

You can increase the number of completed and returned survey forms by offering an attractive incentive, e.g. a drawing for a prize among all returned forms or a special discount in combination with a time-limited coupon for a specific product.

Additional after-sales services

The customer buys a product in your store. If you stay on the ball now you have a big chance of making a regular customer out of this one-time customer. How? Surprise him with extra services. You sell technically-demanding products? Give your customer access after the sale to additional, useful information such as FAQs, documentation, spare parts lists, explosion drawings, downloads, etc, related to the product that he bought from you. In combination with other customer relationship activities such as periodic newsletters, loyalty discounts, customer accounts and addressing the customer personally, you will be able to sustain increased customer satisfaction, long-term loyalty to your store and thereby the amount of turnover per customer.

Objectives:

Choose shipping provider. (Information on freight companies was correct at the time it was written but please confirm details with the individual companies referenced.

Prerequisites:

Understand your product mix. Specifically, understand what your smallest item weight will be, what your average order weight will be, and what your largest item weight will be. Also take into consideration if you have any “ugly freight” such as oversized, dangerous goods, and unpackaged items. FYI – even iPhones and laptops are considered dangerous goods because of their batteries!

Understand what your integration and technological requirements will be, as most carriers in Australia are average in what they can provide on that front when dealing with them directly. Ensure they are compliant with leading technological solutions.

Tasks:

Choose the right carriers for the right type of products:

  • Postage ‐ Australia Post
  • Carton Couriers
  • Sensitive Couriers
  • “Ugly Freight” Couriers
  • Pallet/Bulk Couriers
  • Specialist Couriers
  • International Couriers

Tips/Notes on the different types of Carriers:

Postage Australia Post

Best at: Light Products such as CD’s or Books. Very Competitive if using eParcel.

Retail rates are very average, but convenient for receivers.

Standard Post DOES NOT have tracking, and if you add the extra cost for tracking, it’s cheaper to send via courier!

Carton & Satchel Couriers

Recommendations:

AAE – Great Satchel Offerings, especially at 1 & 3kgs. Flat Rate Australia Wide.

Hunter Express – Consignments include 10kgs, almost flat rate to 90% of the population

Fastway – Unbeatable Local Deliveries, No‐Re‐Delivery Fees, Great Satchel Rates too

Allied – Warranty Included up to $17,500 of value.

Bluestar– Good Range of Services (Express, Sensitive and great rates)

Sensitive Couriers

Recommendations:

NEWAY, Capital, Bluestar, Allied Pickfords, Grace Removals

“Ugly Freight” Couriers

Recommendations:

Capital, Grace Removals, Allied Pickfords.

Pallet/Bulk Couriers

Recommendations:

Bluestar, Northline, Concord Park or Wettenhalls.

Specialist Couriers

Recommendations:

Vehicles: Autotrans or CEVA, Animals: JetPets

International Couriers

Recommendations:

Smaller Items best by DHL GLOBAL MAIL or TNT SPRINGMAIL

Larger Items are very lane specific, with large degrees of price variability. Ideally use a combination of all carriers through either an aggregator or reliable Freight Forwarder

Best way to access all the above in a single location is through an aggregator (e.g. Temando).

Also means you don’t need to worry about opening accounts and you can avoid all the hidden fees.

Traps:

  • Ensure you read the fine print when dealing directly with carriers – especially TNT and TOLL.  There are a lot of hidden fees (minimum spends, on forwarding fees, remote surcharges, etc.). These companies often lure you in with attractive rates, and then slam you with all sorts of other fees.  Be aware of “annual rate reviews” as often they can put up prices considerably.
  • Often the larger carriers will tell you “that they can do anything” – THIS IS NOT THE CASE.  Often they are very good at a particular niche like AAE with Satchels, and Fastway with local deliveries.
  • Avoid using a single carrier – if they drop the ball, your whole business can stop.
  • Some carrier options (such as eParcel and TNT) lack the technological capabilities for complex logistical models.
  • Many carriers (such as StarTrack) only do business to business.

Objective:

Choose a technology solution to automate your orders and ensure business scalability.

Prerequisites:

Have chosen your fulfilment strategy, pricing model and carrier mix.

Tasks:

To automate your processes and ensure scalability by choosing the right technology.

Tips:

Review the technologies available. If you have a larger online store with warehousing and multiple locations then consider an Enterprise Resource Planning (ERP) solution that will integrate all your business capabilities into one system (e.g.  SAP Business One):

Integration Tools

  • Available Shipping Modules in CMS and e-commerce platforms
  • Some CMS Platforms may be limited to having only .CSV or XML Export abilities
  • Ideally clients should not have to manually enter data.

Dispatch Systems

  • Single Carrier (i.e. AAE Freight Master, Toll Connect, etc.)
  • Multi Carrier (i.e. IFS, Supply Master)

Aggregators (e.g. Temando)

  • A good way of accessing all various technologies easily.
  • Compatible with all dispatch systems, CMS modules and ERP modules.
  • A good way of connecting everything together.

TRAPS:

  • No Australian carriers have any CMS modules for shopping cart integration.
  • Even if they did, it is architecturally impossible to have more than one carrier at checkout as you would need to build so much business logic to determine when they would be used
  • Be aware of the hidden label costs and data charges for some of the multi carrier dispatch systems ‐ they can often cost you more then they save you in convenience.
  • The siloed design of dispatch systems means they lack any cloud based connectivity, and limits potential fulfilment models. They can only used in for direct fulfilment models or in conjunction with other technology if more complex models are desired.

If you are starting an e-commerce business for the very first time, be sure to check out entire Diary of a Start Up Series:

John Debrincat

Article by

John Debrincat is the CEO of eCorner, an Australian specialist e-commerce solutions provider he founded in 2004. He has almost 40 years of experience in business and the Information Technology Industry in the Asia Pacific. With a strong partner network including Netregistry and Commonwealth Bank; and over 1,000 customers including Getprice.com.au, Dick Smith Electronics, brandsExclusive, Aegon Direct Marketing Services and Weight Watchers eCorner has developed to be a key e-commerce provider.

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