How is it that online retailers can afford to offer Free Shipping?

If you are an online retailers you probably have asked the question. "How do so many of my competitors offer free shipping on customer orders?", which is then followed by the thought.  "How can I compete with free shipping offers?"

There are a few ways online sellers are able to provide discounted or free shipping, but unfortunately the reality is there are NO free shipping service options with Fed Ex or UPS or the USPS or anyone else. So, whether your business is a high volume shipper, small ecommerce start-up, or growing ecommerce retailer there is no such thing as free shipping for anyone.

 What large shippers do get, that most small companies typically do not, are significant discounts on UPS/ Fed Ex  published rates. In addition, if a company is shipping a very large amount of the same size packages there is often the chance to get preferential rates in those circumstances.

Clearly if you are a small online retailer you are at a real disadvantage because you are without the leverage to negotiate better rates with FedEx or UPS. But in the end, just like your business, the big online retailers are covering the cost of shipping with the margins in their products.

What to do about it as a startup or small online retailer? Obviously it is paramount to figure out ways to minimize shipping expenses because these are costs that are not going away no matter how big you get. The cost to an online retailer of managing inbound freight and other logistics expenses are a matter of scale as well so make sure to be managing shipping costs for larger product moves as well. This includes the right ecommerce shipping software as well.

Consider alternatives to FedEx or UPS by looking at the options offered by the USPS. Many companies find that options like a Flat Rate Priority Mail box are a good way to reduce costs. FedEx and UPS charge hefty residential, extended delivery area and fuel surcharges that hurt the economics of shipping Business to Consumer (B2C).

More distance equals more cost so your shipping location is directly correlated to your shipping costs. The densest population centers in the US are located in Northeast part of the country. If you are shipping from San Francisco to customers in New York, the cost could be double or more than the cost to ship to New York from a location on the east coast. Another advantage the big guys have is the volume to ship from multiple points within the US. They can service most of the country with a bunch of cheaper ZONE 2 or 3 shipments (short distances), as opposed to expensive ZONE 8 shipments (long distances) going cross country by having multiple warehouse locations to ship from. In the end it does take volume to make it worthwhile to set up multiple shipping points around the country.

Many 3rd party ecommerce order fulfillment warehouses will pass on their volume discounts with FedEx/ UPS, so consider outsourcing your order fulfillment and shipping. Your operation will potentially benefit from the scale and volume of all the customers shipping from that fulfillment center, not to mention the other costs and headaches of managing your own fulfillment.

How can an online retailer connect their shopping cart to a third party warehouse?

For ecommerce e-tailers, perhaps the most important steps to begin working with a third party ecommerce order fulfillment is to connect your shopping cart/ ecommerce platform to the fulfillment center. You need a way to send the orders that come into your online store to the warehouse for packing and shipping. 

The order data you will send to the fulfillment center contains information like customer name,  shipping address, the method to ship (USPS Flat Rate, FedEx Air, UPS Ground, etc.) and the sku's and their quantity. 

After an order had shipping, data will then also be sent back to your ecommerce/ logistics software from the fulfillment center such as shipping confirmation number and inventory updates.

The data exchange can happen a number of ways.

API – Most ecommerce software programs offer an API plug in that will connect directly with the fulfillment company's warehouse management system (WMS). The WMS is the system that controls all the operations within the warehouse including inventory, pick tickets, shipping, etc. This may require some custom programming.

FTP, via Email – Order files (as a csv, txt, xml etc) can typically be created automatically from a shopping cart program and placed on an FTP site and then imported into a WMS. The files can also be emailed. This can be completely automated end to end or may involve some manual file handling depending on how it is set up.

Web Portal – For lower volume clients, some prefer to enter the orders manually via our web portal.

When you are evaluating third party fulfillment centers make sure you discuss how the exchange of order information will work right at the outset. Some fulfillment centers may be limited in how they can work with certain ecommerce platforms so it is important to know that up front.

Internet Marketing and Search Engine Optimization for Trucking and Logistics Companies

As an example, if you are a trucking company that specializes in frozen food distribution, then you want your name to appear in Google's Search Engine Results Page (SERP) when customers are looking for the type of services your company offers. SEO is the process of creating and positioning your site to rank well on Google's search pages - organically. If someone goes to Google and searches on "frozen food logistics" you want to be the first company that potential customer sees on the page. This is internet marketing for transportation companies.

You will notice there are other listings at the very top and right margin of the Google results pages. Those are ads that companies pay for to be located in those areas. Each time someone clicks on one of those links it is costing the company $.50 to several dollars for the privilege of a user clicking on their link. Organic search like we are talking about here is the process of getting your site to rank high on the page without paying any of Google's pay per click fees. 

So what is Google looking for to rank your company highly as a logistics software company, or as an ecommerce order fulfillment provider? There are two main things: relevant content on the site related to the search terms and site credibility, which means there are other sites with "backlinks" to your site. Backlinks are a type of "social proof" that other website are linking to your website because it is credible and worthy.

So what to do? Figure out what "keywords" your customers are typing into Google that relate to what services you are selling and add related content to your site in the form of blog posts or new pages that will show Google you have authority on those topics. Then, work to get backlinks to your website from other credible websites. This can be done by responding to blog and forum posts and getting your website address out there. Both these strategies are complimented by a well executed logistics social media strategy.

These two ideas are just barely scratching the surface of ways to improve SEO for your site. The benefits of ranking well with Google are almost priceless, yet easy to achieve when executed properly.