Editorial Team
7 min read
When it comes to eCommerce, online customers have always had high delivery expectations. Though many consumers turned to eCommerce as a lifeline during the pandemic, the convenience and ease of shopping online have made this the preferred way to shop for many for a long time. Today, even customers who live within driving distance of a store now expect swift and free delivery.
Unfortunately, many small businesses are failing to deliver—pun intended—a great shipping experience to their customers. And, more than 70% of customers say they are unlikely to return after a bad delivery experience. So, it’s important to consider how this part of the shopping process could be impacting your customer retention rates.
In this guide, we’ll break down important shipping costs you should factor into your business planning, how to create a shipping policy for your customers, and some tips for accepting returns that won’t break the bank.
How to make a shipping policy
Before we dive into the logistics and costs of shipping to your customers, let’s explore how to create a shipping policy that clearly states what customers can expect when they order delivery from your store.
A shipping policy outlines the procedures and rules your business follows for shipping products to customers. It should be clear, concise, and easy to understand–and it should include the following information:
- Expected delivery times: How long will it take for their order to arrive?
- Shipping costs: How much will it cost to ship their order?
- Shipping methods: What shipping methods are available?
- Payment and tracking information: How can customers pay for their order and track its progress?
- Shipping restrictions: Are there any restrictions on what can be shipped?
- International shipping: Is international shipping available, and how much does it cost?
The shipping policy should be prominently displayed on your website so that customers can easily find it. It should also be updated regularly to reflect any changes in shipping procedures.
As you write your shipping policy, look to other merchants for inspiration. For instance, Clover merchant The Cupcake Collection has a comprehensive shipping policy page with a step-by-step infographic of what customers can expect—crucial for fragile, perishable goods. Milk Jar Cookies has a similar page that includes options for curbside pickup, local shipping in Los Angeles, and nationwide shipping.
How small business shipping costs are calculated
Nearly all shipping-related expenses are based on variables such as distance, weight, volume, and delivery speed. That said, most carriers use some combination of the pricing models below. As a business owner, it’s important to choose the right solution for your products and customers.
1. Order weight
This rate is based on the total weight of your order. Because distance is irrelevant, there may be opportunities to save money when shipping items outside of your geographic region.
2. Item quantity
As the name suggests, this rate is based on how many total items are in the shipment. Merchants that sell identically sized products often use this rate for its simplicity.
3. Flat rate
Favored by major carriers, this rate ignores weight or distance if shipping domestically and focuses solely on the dimensions of the package.
4. Real-time rates
This is the most comprehensive of all shipping rates, since it factors in weight, dimensions, speed, where the package originates, and where it is ultimately going.
Tips and shipping options for small business owners
Many small business owners lack the resources to manage all their shipping needs in-house. Fortunately, there are platforms and providers that can help streamline the process. For example, there are online companies that offer reduced shipping rates and discounted small business postage options.
Clover’s restaurant and retail point-of-sale solutions are equipped to help you not only accept all payment types, but also quickly launch your online shop and manage your inventory from one dashboard–with one payment processor. Clover’s POS system works with a number of shipping and labeling software integrations in the Clover App Market that can help streamline the packaging and postage process. Try some of these options:
- Shipping & Labels App connects your carriers, orders, payments, and tracking in one dashboard, plus the ability to generate shipping labels from your Clover device.
- Delivery Driver gives you better tracking of your delivery orders by assigning a driver to an order, great for local deliveries and managing your employees.
- Delivery Fee allows you to create a pop-up for every order which will require the employee to either add a preset delivery fee or state that the order is not a delivery.
- Skipcart Delivery adds on-demand and same-day delivery to your business.
These apps and others tend to focus on streamlining the order preparation before it ships. As you consider how to move the product from your store or warehouse to its final destination, consider working with multiple carriers to get you more negotiating power and control.
If you’re overwhelmed by all the details and rates, let someone else worry about storing, packing, and shipping orders. Using a third-party logistics provider may mean less profit from each sale, but outsourcing can free up valuable time for other aspects of growing your small business.
Tips for enhancing the customer shipping experience
Your customers may not know whether you signed up for flat-rate shipping or outsourced the job to a third-party logistics provider, but it’s still important to provide customers with a positive delivery experience–while choosing the most cost-effective shipping for your small business.
Common strategies for achieving this include:
- Providing free shipping for all orders over a certain value
- Offering multiple delivery options based on service speed
- Using branded and eco-friendly packaging
- Adding tracking so users can follow their orders in real time
- Offering world-class support in the event of returns or exchanges
Managing returns and exchanges
Since the pandemic, customers have been more likely to over-order items and return the ones they don’t need. The average rate of retail returns reached just over 16% in 2021, meaning that more than $761 billion of merchandise ended up back in stores and warehouses.
No business owner wants to lose a sale–especially if the owner already covered the original shipping costs out of pocket. However, one of the best ways to handle returns is to simply pay for the full cost of shipping back the items at the lowest rate that makes sense.
Moreover, this policy should be front and center. An estimated 55% of eCommerce shoppers abandon their purchases when extra costs are too high, such as shipping costs and an inflexible return policy.
What should go into your returns policy?
Like your ecommerce shipping policy, your returns policy should be clear and upfront. “It’s important to keep your returns and refunds policies simple. Customers do not want to jump through hoops if something doesn’t work out for them,” says Vladimir Gendelman, the founder and CEO of Printwand, a custom printing and promotional item business.
Your returns policy should align with your standard shipping policy and answer the following questions a customer may have:
- How does a customer have to return the product?
- What conditions must be met for a return? (e.g., the product must be in its original condition and with the original packaging)
- How does the customer initiate a return? (e.g., by contacting customer service, filling out a return form, etc.)
- What form of payment will be used for refunds?
- Who pays for return shipping?
- What items are not eligible for returns?
Ultimately, your returns policy must work for your store. Even if you decide not to accept returns, making that decision transparent will prevent customers from getting upset. Magnolia Emporium, a curated home decor, gift, art, and gourmet shop in Charlotte, North Carolina, says, “We actually solved that [problem of designing a good return policy] by not offering any returns. Printed right on our Clover receipts. [We] have tried many options over the last several decades and this is the only thing that works correctly.”
As you figure out how to accept returns, you’ll also need a way to issue refunds. Clover’s POS system runs your refunds fast, even on orders with multiple payment methods. And, there are apps—like Customer Loyalty Accelerator—you can use to offer store credit.
Whether your business is virtual or physical, your customers now expect free and fast delivery. To learn how our point of sale solutions can help streamline some of the shipping process, schedule a free demo with a Clover Business Consultant today.
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