Offering diverse shipping methods boosts sales – simply put, customers in 2021 expect shipping options that cater to their need for fast deliveries. Studies show that 46% of customers list the speed of delivery as their motivation to buy from a marketplace vs a retailer; 44% did not complete their order due to the estimated delivery time. In the same survey, 28% of customers were willing to pay for expedited shipping.
All this means that offering expedited shipping in your eCommerce business impacts your consumers’ willingness to buy your products. However, retail fulfilment processes that include expedited shipping incur both the benefits and the costs of managing it. In this article, we discuss:
- What expedited shipping is
- How expedited shipping compares to other methods
- The costs and benefits of expedited shipping
- Strategies for including it in your eCommerce fulfillment strategy
What is Expedited Shipping?
Expedited shipping does not refer to a set-in-stone delivery time. It simply means that these orders take priority over standard deliveries. Expedited shipping times vary depending on the carrier and conditions such as the distance and item location.
For instance, an expedited package could arrive overnight if standard shipping would have taken two days. Over longer distances, a 5-day delivery may be expedited to 2-3.
Expedited shipping methods cost more than standard shipping due to how carriers accommodate the smaller delivery window. They have to use different transports, consolidate shipments, or employ longer shifts for their delivery staff, all of which costs money.
It is important to note that expedited shipping is not the same as express shipping, which delivers packages even faster, as discussed below.
Expedited Shipping Compared to Other Methods
Due to how your business’s profit margins shift depending on the delivery methods you offer, we compared expedited shipping with other methods to help you plan your fulfillment process accordingly.
When reading the below estimates, note that shipping time should be calculated based on the time from when the order was shipped, not from when it was received.
Standard vs Expedited
Standard shipping is almost always the customer’s (and business’s) cheapest method of delivery. Standard shipping typically takes between 3-7 business days.
Expedited shipping may be offered even by companies who promise standard deliveries within 2-3 days. In that case, customers would expect that paying for expedited shipping shifts the timeline to overnight or same-day delivery. It all depends on what the business chooses to offer.
Express vs Expedited
Express shipping is often confused with expedited shipping due to the similar-sounding words, but it is a faster option compared to expedited and is therefore more expensive for both the business and the customer. Express deliveries usually arrive in 1-2 days.
Note that like expedited shipping, express shipping does not guarantee a certain shipping time. The distance of the order can still affect it, though it will be faster than standard or expedited methods.
Next-Day vs Expedited
An eCommerce business sets its own standards when it comes to delivery times. This is why terms like “standard,” “expedited,” and “express” can indicate varying delivery windows. Some businesses are able to offer 2-day shipping as standard. For that business, paying for expedited shipping implies that the item will come even sooner.
Due to Amazon Prime normalizing a 2-day delivery cycle, many businesses feel pressured to offer the same. They know that 25% of customers refuse to order an item without an option for same-day delivery.
By offering a premium shipping service like 2-day or next-day shipping, an eCommerce business can prevent those customers from abandoning their purchase in a world where Amazon remains the biggest threat in the industry. It has a set delivery window compared to expedited shipping.
The Costs of Expedited Shipping
Three factors determine the cost of expedited shipping: the travel distance of the order, the weight of the package, and the carrier you use. Since the first two are fixed costs, here is a brief breakdown of the cost of providing expedited shipping by carrier, including UPS, USPS, and FedEx.
UPS offers expedited shipping services that provide shipping guarantees by the day, including same-day, next-day, two-day, and three-day. These are faster than standard shipping times, or UPS Ground deliveries, which generally take 5-7 business days to arrive.
USPS offers Priority Mail Express, which somewhat confusingly is their equivalent of expedited shipping. Prices for these overnight deliveries start at a flat rate of $24.70, so long as the package is under 70 pounds in weight. Therefore, for businesses that ship many small packages, USPS offers the most affordable option.
According to their site, they guarantee Priority Mail Express deliveries to arrive by 10:30 AM the next day. They offer USPS tracking and insurance services if you need them.
FedEx also offers expedited shipping in several varieties, including:
- FedEx Express Saver
- FedEx Express Same Day
- FedEx Expedited Freight
FedEx Express Saver is the equivalent of 2-day shipping. Businesses can choose between morning and afternoon deliveries, which can be useful when delivering to businesses rather than residences. Their same-day delivery guarantees its services with a money-back guarantee.
Their Expedited Freight service offers rate calculations, labels, and scheduled freight pickups on an expedited basis, so long as the shipment weighs less than 250 pounds.
Both FedEx and UPS also offer international expedited shipping services, which speed up not only delivery but customs procedures as well. According to their sites, they guarantee international package deliveries within 1-3 business days with these services.
Tracking Expedited Shipping
Expedited shipping orders can be tracked using the systems on each of the major carriers. Since expedited shipping orders are costly, it is advantageous to keep tabs on their estimated delivery times.
In the event that something goes wrong, you can use order tracking to have your customer service solutions get ahead of the problem rather than lag behind it.
Benefits of Expedited Shipping
Despite the costs, expedited shipping can offer eCommerce businesses several benefits, including:
Reduced cart abandonment
In 2021, according to studies conducted by Baymard, 19% of customers abandoned their cart due to slow delivery times. Offering expedited shipping allows your business to retain customers who expect Amazon-level fulfillment times.
Increased Customer Lifecycle
By meeting expectations for delivery times, you will turn one-time purchases into long-term repeat business. Remember that 48% of eCommerce purchases come from repeat customers.
A negative experience with delivery times will prevent your customers from returning. Likewise, conversion rates improve when more and faster delivery times can be offered.
Deliver Perishable or Expensive Items
For some businesses, expedited delivery is a necessity, rather than a luxury. Businesses that ship perishable food items stake their customers’ satisfaction on delivery times since food can spoil, go stale, thaw, or become otherwise undeliverable without expedited shipping.
Likewise, businesses that sell expensive or fragile merchandise want to reduce transit time to reduce the chances of something happening to the shipment.
Strategies for Offering Expedited Shipping in Your Business
Even knowing that expedited delivery is a valuable addition to your fulfilment process, you will be noting the expenses required to use it. To maintain the speed of your deliveries without sinking your profit margins, consider these strategies.
Use Multiple Fulfillment Centers
As an eCommerce business, you are familiar with shipping zones. The more zones that a delivery must cross, the more expensive it is to ship.
Shipping from multiple fulfillment centers can strategically place merchandise within a shorter distance from your customers. Not only will it be easier and cheaper to ship because of shorter distances but you will also be able to use ground shipping methods more often, which are far cheaper than air shipping.
Charge Customers for Expedited Shipping
Studies show that nearly 90% of consumers are willing to pay extra for expedited or same-day shipping. This means that in many instances, you can safely pass the cost to them.
By charging for expedited shipping, customers’ expectations will be even higher for the deliveries to arrive promptly. Communication is key so that customers are not surprised by extra shipping costs at checkout and kept up-to-date with their order’s tracking info.
Alternatively, you can require customers to pay a minimum amount in their cart before allowing them to select expedited shipping at checkout. For businesses that hope to offer this desirable service for free, this spending threshold is a must.
Utilize a 3PL
A third-party fulfillment service can offer many ways to easily integrate expedited shipping into your business’s fulfillment process. Their relationship with carriers can help you secure discounts for commercial shipping. Their knowledge of shipping technology and warehouse organization can support your fulfillment process or, alternatively, provide you with one.
3PLs like eWorld Fulfillment integrate with eCommerce business solutions to better manage your fulfillment centers. They reduce shipping costs for expedited deliveries as well as give merchants access to affordable fulfillment services, which include options for expedited shipping.
Expedited shipping is costly but remains necessary to understand in an eCommerce market driven by convenience and fast delivery times.
Though it can be difficult to add to a fulfillment process alone, a 3PL that is experienced in the shipping processes of major carriers can help you integrate expedited shipping into your business strategy to increase customer loyalty and curb abandonment before it starts.