How To Build Better Shipping Processes For Ecommerce

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Francois Marchand: Shipping. There are so many options when it comes to shipping your products to your customers. Do you offer free shipping? Same day shipping? Do you offer shipment tracking? Are you using the right shipping products? And are you making sure your packaging is optimal for warehousing and returns? That is a lot to consider.

Welcome to The Ecomm Manager Podcast. Our mission is to help you succeed in your ecommerce journey with helpful, actionable advice from the experts who made it big. I'm your host, Francois Marchand.

Today, I'm joined by Teddy Smith—he's an ecommerce business owner and the Ecomm Manager's expert on ecommerce logistics. We'll be chatting about how to optimize your shipping processes and customer experience and reduce costs associated with shipping. So stay tuned to discover the best practices for shipping and packaging, how to balance speed and shipping costs, and some of the key shipping trends ecommerce managers should be paying attention to.

So Teddy Smith, welcome to The Ecomm Manager podcast. Really happy to have you here today. 

Teddy Smith: Thank you. Thanks for having me. 

Francois Marchand: Teddy, I've mentioned in the introduction that you're one of our expert contributors that you know a lot about logistics, warehouse management, order, delivery, shipping. You're my logistics guy.

So today I wanted to focus on shipping processes, and why don't you give us a little bit of background about your expertise in terms of shipping experience and making shipping experiences better for your own business? Give us a little kind of a nutshell recap of how you've come to be our resident expert at ECM.

Teddy Smith: Sure. So, I mean, I've been working in ecommerce for about 10 years. I started off as more of a management consultant working in ecommerce on the more of a technical side. So we did a lot of re-platforming of ecommerce websites, but also lots of warehouse rebuilds and software integrations for warehouse, warehouses for big brands.

So these are brands like Carphone Warehouse and Argos, which is a UK brand, a bit like Amazon. So I started off doing that and I've also got my own ecommerce brands, which mostly sells on Amazon, but we do also sell our products through wholesale and through our own website. And so for that, my shipping experience is a lot of international logistics, shipping products from China, Vietnam, India, mostly. 

Some of them are from the UK too, and sending them like around the world to different warehouses. And also fulfilling orders from both our own websites and various different marketplaces. So I've got quite a lot of experience in doing these sorts of shipments, both in the UK where I live and also in America and other countries as well.

Francois Marchand: Thanks for the great recap there. I'm going to throw a big question at you. In your experience, what are some common challenges that you've faced as an ecommerce manager? And that would also apply to some of the challenges that ecommerce companies face when it comes to shipping. 

Teddy Smith: Sure. So, I mean, there's different issues or different challenges that people have, usually based on like the size of the business and who they're competing with.

So when I was working with bigger brands, to be honest, a lot of them were just trying to keep up with whatever Amazon were doing and their sort of innovations in the area. Like Amazon were the first people to introduce really effective next day delivery. Like it did exist before, but it was never really done properly.

It was more of a quite expensive add on. Whereas when Amazon brought in Amazon Prime and customers basically got free next day delivery for all their orders or very quick delivery in the US. That really puts a lot of pressure on the other businesses to follow suit. So things like next day delivery, that was one of the problems or the challenges that businesses have, because that's quite difficult to do, unless you're partnering with quite big brands.

I know, for example, when I was working at Argos, next day delivery for them was something that they could do quite quickly because they had warehouses all over the country. But if you're a small brand and maybe you do self-fulfillment, like you ship the items yourself from your own garage.

Well, maybe you ship some museum warehouse partner. The next day delivery could be quite expensive. So that's a challenge that people have. Now there's even things like same day delivery, which not everywhere has, but I've seen it, especially when I was in London, that was something that was happening quite a lot.

And I feel like that's going to be the biggest challenge for people now, because if you don't want to just sell your products on Amazon, then you know you've got to really be offering the sort of this good service in order to keep up with them. Another issue that people have is tracking. So customers really like to be able to track where their orders are coming from.

And a lot of bands do a really good job of this, where you can literally see like the stop on the journey of the delivery driver where it is. And that's an amazing customer experience because if you're at home and you need to go and get milk from the shop and you can see that the guy's five stops away, you might wait and then do that a bit later.

And that gives you a really good customer experience, I think. So tracking is quite difficult unless you're really partnering with one of these big companies like UPS or someone like that, because it's difficult to, give that level of customer experience. And I mean, the main one that is also difficult at the moment is the rising cost of shipping.

It's getting really expensive at the moment. Things like, yeah, I mean, I noticed my own shipping has gone up by about a pound per order over the last year and a half or so, which is quite a lot. It's like a 20% increase or something like that. So it's, that extra money has just got to be eaten by your profit margin, usually, unless you can work out how to increase those prices.

Francois Marchand: Yeah. So it's not just one challenge, it's multiple challenges that you're faced when it comes to shipping, especially if you're a smaller business that doesn't have powerhouse level of an Amazon or a major ecommerce brand with its own kind of delivery options or shipping options and partners and so on. But you want to get your products to your customer as efficiently and as quickly as possible at the lowest cost possible.

So how do you determine what the best shipping option is for your customers? And which options did you implement for your own business purposes?

Teddy Smith: That is a really good question. So it completely depends on the business that you have. And I think it's important to think about what your competition, like especially your direct competition is doing.

Like for example, if you sell, something like iPhone cables or something really small, your customers are going to expect that they can get that product quite quickly and generally they need it quite urgently. Whereas if you sell something like a garden shed, no one's expecting that to be delivered next day.

Like people expect that to be like a bit more of a longer lead time. So it really depends on what sort of products you're selling. So I would think about if you are selling something small and something that people probably are looking for quite urgently, that's when you've got to think about whether you can offer something like next day delivery, or even by using a different fulfillment option, such as 

amazon FBA is a great option for that. I don't want this to sound like I'm just giving an advert for Amazon FBA because it does have a lot of downsides as well, but it's important to think about how you can compete with those shipping options because customers find it really convenient to use marketplaces like that.

Another thing to think about is your products like custom made, or is it ready made? If it's custom made, no customer is going to expect that to be done the next day. That, I mean, if you could do that would be an exceptional customer experience. But people expect that to take a few days to be made or to be put together.

So something like that would impact like what shipping options you would choose. Another thing you might want to think about whether you're going to charge for shipping as well. A good example of this is I was just buying some cricket shoes the other day and the cricket season's about to start in England, so I wanted to get some new shoes for the season.

Now that's quite a niche product and it's not the sort of thing you can just find on like most shops, like even most sports shops don't really sell cricket shoes. So when I bought these shoes, and I bought them, they're the wrong size, and I tried to send them back, and that was really complicated, I had to print something out and send it back.

And for me, I was thinking I probably won't shop from that shop again, because I'm used to having a better customer experience. So they also did charge me for the shipping and I had to pay for it to be sent back. So it really cost me quite a bit more than I wanted to pay, which made me think I'd probably just go to a shop next time.

So if you are thinking about charging for your shipping, you better make sure that experience is really good for the customer. And if you are going to allow returns as well, you should also make sure that process is really good for the customer and really easy. I think essentially having that level of service is really important, much more important than it used to be because you are competing with all these brands who are also competing with big brands like Amazon, who can just do this sort of very easy returns process and very easy shipping process for a very small cost compared to what you can do.

Francois Marchand: I had a similar experience. I just bought some boots, new boots, wrong size. You and I are facing the same issues. And yeah, there was no return slip in the box. I don't have a printer at home. I don't know that many people that do have printers at home. So I couldn't print out the return slip. I ended up going to the store to return it.

It was easier for me to go with a brick and mortar and return it there. So I totally understand what you're saying about. That return experience, you want that to be as efficient as the delivery and the reception of the product. Let's talk about boxes. Let's talk about packaging because that's a big component of the shipping process.

So how do you ensure that your shipments are delivered on time and in good condition? That's a big deal. And what do you do when problems arise?

Teddy Smith: Yeah. So there's a couple of points there, isn't there? So when you've got your packaging, obviously the most important thing is that it arrives there safely. So before you take any sort of aesthetic considerations, you have to make sure the products get there safely.

Now, one of the products I sell is a candle. It's got a glass, it's a glass candle. So obviously that's quite a fragile product to ship. And when we first made our products, we chose prettiness over like sturdiness. And, so we did have quite a few returns for that product. Not as many as we could have done, but we did have a few more than we wanted.

That was a really good lesson for me to learn to make sure that we're really paying attention to our packaging design and making sure it's appropriate for the products we're going to send. Obviously the aesthetics of the packaging are really important depending on the type of product you sell. So, my product is a candle.

It's more of a pretty, a nice product to have. So it has to have really nice packaging. Going back to that previous example, if you sell a garden shed, there's no need to have a nice box. It can come in just a normal as a shed, so think about, yeah, the aesthetics and also the sturdiness.

One other thing I think about is the size of the packaging. It has quite a big impact on the cost of shipping and also warehousing and other costs like that are associated with the product. And I think a lot of people don't take that into consideration, especially if they're new to launching products.

When you sell on Amazon, they charge their warehouse space by the square footage that you use. And if you use a third party logistics warehouse, they'll either charge by the square footage or by the pallets used. So if you've got bigger packaging, then you'll be able to fit less products on one pallet, or they'll also charge via square footage.

So size of that packaging is really important to think about as well. 

Francois Marchand: So what happens when problems arise? So we talked about, costs associated with space. Some issues you might have with the packaging, things get broken, that happens. So the bigger the box doesn't necessarily mean the safer the product although it might help, but it'll also mean it costs a lot more.

So how do you balance that? 

Teddy Smith: Yeah, so when as I said, it's important it's sturdy. So if you have to put things like bubble wrap or extra foam inside to make sure the product doesn't break, that's the first thing you need to consider. But when problems do arise, it's generally, there's a couple of ways to get around it. Firstly, you could have an inspection at source.

So that would be where the product is made. So with me, I use a testing company called QIMA. They are a really well respected testing agency and they'll do things like the drop test. So the drop test is where you get a product and literally drop it on the ground from like, a foot or two feet or something like that and see if it breaks.

And they'll provide you a really good reports about how that packaging is looking after the drop and how it would react to things like it getting damp or, all those sorts of things that could happen during a transit. They'll test for that. That's a really good thing to do and it's not too expensive.

It's usually about $250 to $400 for a day to test it. So if it's your first shipment, you might find that a bit of a, an expensive outgoing. But you know, if you're an experienced ecommerce manager, there's no reason why you shouldn't be doing this. And the other thing is, you can usually get customer feedback and make sure you're acting on it.

Like when I had that problem with the candle, I didn't do the testing as much as I should upfront, but then I started getting returns. And usually in those returns, you can see customer comments. Main thing is you're dealing with them and making sure you're giving the customer a refund and, or at least a good experience about how they can send that product back.

When I speak to a lot of people who have just started out selling, especially on Amazon, they'll get their first refund and they'll say, Oh, what should I do with this refund? And I say, just give them the money back and hope they don't complain because you don't want to get a bad review on your listing because that'll really like affect how other customers see your products.

So it's important to like, look at that feedback the customers are telling you and then act on it in the future. There's two parts to it as well. There's how you send it to the customer. So that could be using Royal Mail or UPS and also how it's protected during freight, and those are two things to look at.

We did cover that quite a lot in the article I wrote about the packaging for ecommerce products. So that would be a good time to plug the article I wrote so that you could check that one out. 

Francois Marchand: Yes. Thank you very much for mentioning the articles. If you're looking for those articles that Teddy wrote about shipping processes, it's also sustainable packaging. We'll put them in the show notes. If you have access to the show notes, you can click on those links. And go read those articles on The Ecomm Manager. It's essential advice from Teddy over here. 

Next question, I guess, is how do we balance the need for fast and free, which is very important when it comes to shipping with the need to keep costs low? I mean, we talked about, the amount of space that it takes in the warehouse and that costs you more. A bigger package will cost more to ship per the option that you choose, whether it's UPS, Royal Mail, other carriers. So yeah, how do you find that right balance between the two? 

Teddy Smith: This is a really hard one because a lot of customers do expect like next day or at least very quick delivery now.

I don't think it's a hundred percent needed, but you have to remember that you are competing with these brands that do have very quick deliveries. I think one of the most important things is, firstly, you could consider using one of these other services. So for example, if you are selling on Amazon through FBA, you can send your stock in bulk, and then at least you're not competing with them because they're doing the shipping for you. I mean, the one good thing about them is they get a lot more traffic than really you're ever going to generate for yourself. So it can be a good way to get lots of eyeballs on your products.

The other thing I would say is with, if you are selling on your own websites, what is really important is the customer service that you're providing from the very start and making sure that the expectation is set with the customer before they place an order. So for example, I was shopping the other day on John Lewis, which is like a sort of a high end department store in the UK. And I was buying quite an expensive piece of electrics, I think it was a vacuum cleaner. So I wanted to know more about the technical aspects of that product. 

Now having really good information on the website in the first place makes me more encouraged to want to buy from that store. And so that kind of gives me quite a lot of customer loyalty because I really trust that they know what they're talking about and they don't just try and sell me a product that is the most profitable for them.

They give me a lot of reviews about exactly how the product works. Now, how that relates to shipping is they didn't actually have next day delivery available. And I probably could have got the same products from Amazon, but having all of this really great information about the products on the website helped me build up the customer loyalty, which kind of took away the need for next day delivery.

Because not always I need next day delivery. So that is a really important part of the process, like the very setting the customer expectations at the beginning. And if you're not going to give next day delivery, or you're not going to give free delivery, for example, make sure it's really clear to the customer upfront so they know that's what it's going to be and don't hide anything from them.

Francois Marchand: I mean, you're right. When it comes to fast/free, that's a great add on. That's a great feature. But if the experience is bad, what did you win? You probably have not gained customer loyalty. You haven't gained a second purchase or an opportunity to upsell to another tier of product. So think about that as an ecommerce manager out there, that the experience that you provide to your customers matters just as much as fast and free. Right?

Teddy Smith: That's true. We talked, we meant you touched on it earlier about the sustainable packaging, having things like that can really set you apart from someone like Amazon who sends products out in very generic packaging. And so if you can provide a really amazing, like customer unboxing experience, for example, with something like sustainable packaging or with free gifts or something like that, that will help build the customer loyalty.

And so whilst the customer might not get free or might not get next day delivery, they'll have a really nice experience of using your brands. And so you're much more likely to want to shop from them in future, even though you don't get the next day delivery for free. 

Francois Marchand: I mean, I go back to, we've been talking about shoes a lot, I feel.

There's another example of a shoe buying experience. Seem to buy a lot of shoes online. But you know, I'm buying a pair of very durable shoes that I know are going to last for a long time. I get the fantastic unboxing experience with like a little handwritten note from the company founder and all that.

I know I'm not going to buy another pair of shoes for maybe a year and a half, two years, maybe three, if these shoes are as durable as they say they are. But when I do, I'm going back to that brand because they provided me such a great experience on a one time purchase. So, yes. And again, we have more details about all the sustainable packaging options and little things to add to your unboxing experience.

Thanks to Teddy on the ECM website, links in the show notes again. I want to ask you before we wrap, Teddy, what are some of the current trends? Okay, we talked about sustainability. That's super important, but what are some other shipping trends that any ecommerce manager today should be paying attention to?

Teddy Smith: So, there's a lot more companies that are starting to offer same day delivery and it's become more expanded. So before it was really restricted to things like central London or big cities where people with bicycles like delivery drivers and Uber Eats drivers or things like that could deliver products on the day to day basis.

But that is expanding quite a lot. There's more companies coming in who are offering that sort of delivery. For example, in Leeds, there's a company, I live in Leeds, which is in North England, and there's a company here that's just offering bicycle delivery same day. And it's like a courier service and it's because a lot of the products are based in warehouses in or around this city. So there's a lot more options coming up for that same day delivery. And if you are selling a product that people might want quite urgently, that could be something to look at as a more like localized service.

And another thing is collection points. So collection points have been around for a while, but there's again there's companies who are now offering collection points, even if you're not using their website selling like such as Amazon collection points. And again, Argos was another one I've spoken about earlier.

They have collection points in the UK. Now that's a really good thing because you can get your product delivered somewhere where it's convenient for you to pick it up. And you get a little code to type it in and pick up the product. And also you can even return the products to that locker, which is a really good thing to do because it means I don't have to go to the shop and get it scanned in.

I can just tell the website I've done it and then go and put it in the box and then it gets locked in. So it's a really great experience. I think you can offer a lot of extra value by providing services like that. Yeah, so those are the two things that I've been looking at, which I think will be the, which are good trends to look into.

Francois Marchand: Fantastic. The locker, like this deposit locker experience, isn't something that we fully, I guess, embraced in Canada. We do have communal mailboxes, but most of the time they end up getting shipped to the local post office pickup point, which isn't optimal. So I'm curious to see if that will become a model here.

That's maybe a little bit more common in Europe and then maybe in the US as well, where you can have products dropped off at different locations that are like privately owned. So yeah, interesting trends, Teddy. We'll keep an eye on that for sure. Before we wrap, anything else that you might want to add about what we talked about today, your experience as an ecommerce manager, or maybe, what's your number one tip for any ecommerce manager to know out there?

Teddy Smith: So the main thing I found that has helped grow businesses is my business and other people I speak to is just to just make sure you're using as many channels as possible to sell your products because you never really know which one is going to be the best one for you. You've got to counter that by not overstretching yourself.

But if you've got enough stock to get in front of more customers, it is worth looking at trying to get products on wholesale for example. I've used fur and ankle store really successfully. And they've really helped to grow the brand. Marketplaces are a really great way to get your products in front of customers who wouldn't have seen your products otherwise.

And also, using a bit more advertising to drive people to your own website so that you can collect more of that customer data. So you're just using as many different sort of platforms as you can to try and get more sales because the more people that buy your products and the more your brand is going to grow by people recognizing your brand.

Francois Marchand: Diversify. Don't put all your eggs in one basket. 

Teddy Smith: Exactly. 

Francois Marchand: Right? That's the lesson here. If you want to grow, make it work in different ways. Teddy, where can we follow your work besides obviously the Ecomm Manager website? 

Teddy Smith: Yeah, so I've got my links on the Ecomm Manager website and also I've got a YouTube channel, which is just my name, which is Teddy AG Smith. And I'm also write a lot at teddyagsmith.com, where I have blogs about ecommerce, Amazon, things like that. Whatever I want to write about, really.

Francois Marchand: Awesome. Thanks for sharing your experience. We'll have you again, I'm sure, because there's so many areas of logistics that we'll want to tackle. 

On that note, I want to thank you, the listener out there, for tuning in to this episode of The Ecomm Manager podcast. We do appreciate your support. If you liked what you heard today, please don't be shy and leave us a review and comment to let us know how we're doing. 

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