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What’s More Important: Shipping Cost or Speed?

Selling products online makes it easier to reach consumer across the world. With this comes the necessity to ship your products to anywhere they have an internet connection and lead to difficulties fulfilling orders. Third-party fulfillment services have the expertise in these areas and by using these services you can ensure that your products reach your customers far and wide.

When comparing different services for fulfilling online orders you will find a variety of options. It is important to notice that in most cases fast shipping does not come cheap. Low-cost options have their own shortcomings as well. Both have their own merits and flaws but it important to consider these things in terms of your own product and its market. This way you can determine which option is the best for your business.

Customers Prefer Faster Shipping

There are many instances where it would be appropriate to pay the extra money for fastest shipping options. This is especially true when additional shipping and handling costs can be passed on to the customer. Research has shown that the majority of consumers are willing to pay extra for shipping so long as it will get them their products quicker.

In markets where prices are uniform, offering faster shipping options could be what differentiates your product from the rest. In this case, profits can be increased by increasing your market share, even if it means lower margins on individual sales. The higher volume will also give you leverage when negotiating your freight agreements for better cost on future shipping. Be sure that your higher demand is not just a bubble since there can be penalties for dropping below a certain volume. Proper planning and feedback remain critical even when using a third-party service.

When selling products on a marketplace such as Amazon, customers can narrow their search specifically by delivery times. Products that are seasonal, brand new, or very trendy will come with an expectation from the customer to receive the product as quickly as possible. In all of these situations, a fulfillment service can assist with meeting this quick demand without much need for scaling your operation.

If you find yourself selling in a market where the option for fast and free shipping is available from most of your competition, it may be necessary to offer these options as to not lose business. This can be difficult if you are having to use a third-party delivery service while fulfilling your orders individually. Using fulfillment services can help to lessen this with access to lower freight costs than individual operations normally have available to them.

People Shop Online to Save Money

The fastest option to receive goods or services is to visit the location they are sold at and purchase them on-site. Online surveys have shown that there are two leading reasons people claim that they shop online. The chief among these is the cost savings they see by purchasing products online.

This shows that people are fine with some amount of delivery time for products, so long as they feel they are getting the best deal on it.  Although there is a clear preference for the fastest shipping option, the thrifty shopper will forgo a speedy delivery if it means substantial savings.

Consider this when thinking about your own shipping times. If you have a customer base that prefers the lowest cost option regardless of delivery times, it is better to use a shipping service that will offer the lowest cost instead of the fastest delivery times.

Other situations where the fastest shipping option may not be the best way to go are for products that are shipped on a recurring basis. When your product’s demand is easily forecasted, proper planning can save large amounts in shipping costs. This strategy is mostly used when shipping products to wholesalers or other distributors.

By planning deliveries in advance, the longer shipping time will not upset customers’ expectations. In this way, you can forego the high cost of fast shipping while still satisfying your customers’ desire to receive their products in a timely fashion.