How much should ecommerce order fulfillment and shipping cost for online retailers?

6% shipping and  4% for operations related to warehousing and fulfillment… are pretty typical. 

If you are running much higher than that look into it… of course every business is different.

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How important is shipping to an online retailer?

Getting orders delivered is the last, but perhaps most important step in the online retail process. As an online seller, a whole lot has to go right just to get to the point of shipping the product. So there is a lot riding on the performance of your shipping company – whether you choose USPS, FedEx, UPS, or DHL.

The customer has to find your site – think of all the effort of building a site that converts, and not to mention a lot of SEO and PPC costs.

You have to have a product the customer wants to buy – and it has to be in inventory.

The right products need to be put in the right box by your fulfillment operation – and we all know that doesn’t always happen

…and the shipping company needs to get it delivered on-time.

The first three steps are easiest to manage, because they are most under your control. But once the package is handed off to the carrier all control is lost. If you are shipping dozens, hundreds, or thousands of shipments then it can be impossible to know about problems until the customer tells you about them. To really control the customer experience and be proactive managing problems that can come up during step 4 – you need a tool to give you real time delivery visibility into what is going on with your deliveries. 

How to find the best order fulfillment vendor for your online store

Perhaps the most important thing to look at when evaluating ecommerce order fulfillment centers is to find one that has experience working with online retailers that sell products like yours.

Here are some reasons why:

- the fulfillment center will know how to package the products for shipping in a way to minimize damages and minimize the amount of packing materials needed

- they'll already have boxes in that size which will help keep costs down because they can buy them in greater volumes

- their shelving and racks will be set up to accommodate the size and shapes of your products which makes their operation more efficient and lowers their cost to store your products

Good Videos for Online Retailers from IRCE 2011

http://images.internetretailer.com/IR/IRCE-2011_E-Commerce-Tech-Theater-Details.html#agilone?cid=IRT


Check out the last video from UPS for Shipping Information.
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For Online Retailers looking to outsource order fulfillment.