Pick, Pack, Ship: Preparing eCommerce Shipping & Fulfillment Like A Pro
Spending time and money to pull and package orders is certainly a necessary part of doing business. But nothing says you can’t look for ways to make the “pick, pack, and ship” process faster, more efficient, and less expensive.
How much are you spending to pull together customers’ orders? How much do you invest in terms of staff time and in packing materials as you move those orders out the door? You may be comfortable with your answers now, feeling like you’ve got order fulfillment under control. However, as your eCommerce business grows, you may find that you’re not so satisfied with the amount of resources you’re investing to pick, pack, and ship orders each day.
If you’re ready to start shipping customers’ orders more safely and efficiently, read on.
Table of Contents
What Is The Pick, Pack, & Ship Process?
Each word has its own simple meaning:
- Pick refers to pulling products off your physical warehouse shelves
- Pack means preparing the products for shipping to customers
- Ship is the process of sending the package out for delivery
In eCommerce, when those three words are put together, they refer to an order fulfillment system that can save growing businesses time and money — and increase customers’ satisfaction by speeding up shipping and reducing errors.
Some eCommerce platforms, like Shopify, offer integrations vendors can use to improve processes in-house. For others, improving pick, pack, and ship processes will mean working with a third-party logistics company. Often referred to as 3PL, third-party logistics specialists take over the process of fulfilling orders on your behalf. You send inventory in bulk to your partner’s warehouse and then follow up with instructions as customers submit orders that need fulfilling.
Naturally, as with any third-party provider, a pick, pack, and ship specialist doesn’t do this work on your behalf for free. You can expect to pay warehouse fees as well as fees for each order fulfilled. The expense of shipping will be your responsibility too. So, with these added fees, can pick, pack, and ship services really save you money?
In a word, yes. Although the service may not be suitable for small vendors with a limited product line and low volume of shipping, larger eCommerce businesses can save big by partnering with a third-party to fulfill orders. There are no set benchmarks or milestones that will tell you when it’s time to consider making a change. But if you’re starting to wonder if your eCommerce shipping system needs an upgrade, the answer may be that the time has come to consider changing the way you fulfill orders.
Choosing Your eCommerce Shipping Methods
The first two components of pick, pack, ship are fairly standard. The third part — ship — includes many variables that will appeal to different types of customers. So it’s worth taking time to understand more about shipping options. Most online shoppers have become accustomed to free and fast shipping, but sending every package out for overnight delivery is not a realistic option for most eCommerce businesses.
Your best bet is to offer a range of shipping options, each with a different delivery time frame and cost to shoppers. Be sure to include an option for free shipping, and make delivery with that option as fast as you can afford. Remember, you can adjust prices slightly upward on your products to offset (if not completely cover) the cost of free shipping, or you can set a minimum purchase size to qualify, so you encourage customers to buy more. Explain all the options to your customers in a clear, straightforward shipping policy.
Here are common shipping options you should offer:
- Two-Day: Thanks to Amazon Prime, two-day delivery has become the gold standard for eCommerce shipping. Even more important, your customers want this shipping option to be free. Data show that free or reduced-price shipping is a top motivator for both returning customers (40%) and first-time buyers (31%). Offering fast, free shipping doesn’t have to demolish your profits, though, so long as you use smart shipping strategies to keep the costs in check.
- Same-Day: Sometimes, customers absolutely need a product right away, or at least as soon as possible. If they’re willing to pay for it, are you prepared to offer same-day delivery? If you do, be sure to check with your shipping carrier so you’re aware of and can communicate the true cost to interested customers. You’ll also need to know specific cut-off times, so you can communicate the order deadline for same-day delivery.
- Overnight: Some customers who balk at the price of same-day delivery may be willing to pay for next-day service. The most popular delivery services, including USPS, UPS, and FedEx, offer the service, with clear prices outlined. If you’re going to offer this as a shipping option, you’ll probably want to make sure your online store has real-time shipping information enabled, even if you have to purchase a plugin to make it available.
- Expedited: Sometimes referred to as “express,” expedited shipping simply means faster than normal. To use one example, USPS Priority Mail guarantees shipping times of one to three days. USPS Priority Express provides guaranteed one- or two-day expedited service, for an extra charge. Customers who want their deliveries faster than your usual shipping time can choose this option and pay a surcharge to make up the difference in price. Just be sure to list the prices upfront, so customers know what their choices will cost them.
Packaging for Cost Efficiency In eCommerce Shipping
Cost-effective shipping is by no means “cheap” shipping. You should never automatically choose the cheapest option when you’re planning out your shipping packaging materials. For one thing, improper or inadequate packaging will almost certainly lead to damaged products and disgruntled customers.
Aim to select shipping materials that best protect your products. Only then can you can look into reducing the expenses related to your shipping costs. Here are two of the best strategies for reducing shipping costs:
1) Look for packaging that fits your products snugly.
Using an appropriately sized package can reduce costs in two ways. First, it reduces the amount of filler material that you’ll need to use inside of the shipments. Second, it reduces dimension-based shipping expenses. Make sure to stock a variety of sizes, shapes, and styles of boxes and mailers so you can package each order properly.
That might mean using bubble mailers for small products that don’t need a lot of padding, rigid cardboard mailers for flat products, Kraft mailers that you can fold into different sized packages for flexible options, cardboard boxes in a variety of sizes, and cardboard poster tubes for large paper products. Check your primary shipping carrier’s size regulations, so you can make sure you’re choosing packages with dimensions that will keep your shipping costs down. For example, if you can package in containers that fit your carrier’s flat-rate restrictions, you’ll save money and simplify the shipping options you present to customers.
2) Use a filler material to reduce impacts.
Filler material fills the empty space around the products in the box and protects the products during shipping. Your choice of filler material will depend on the product’s fragility and your brand’s stance regarding environmental impact. Whether you choose bubble wrap, air pillows, packing paper, peanuts, molded Styrofoam, or Instapaks, shop around to save money with bulk purchases. Uline Supplies, Amazon, and PackingSupplies.com all offer a good selection.
Using Packaging To Strengthen Your Brand
Once you’ve selected a variety of packaging materials for your warehouse, you can begin considering how you’ll carry your brand over into your packaging. Online stores use packaging to further their brand.
You want your customers to have an “unboxing experience.” Customers should feel like they’re unwrapping a gift when they open your packages. If you have the resources available, you can purchase branded packaging materials. If that’s too expensive, look into purchasing a sticker creator that can print your brand logo.
Branded inserts are another excellent way to extend your brand. Here’s what you can consider including in your shipments:
- Packing Slips & Receipts: You should include these in every shipment. Make sure your packing slips display your company logo and contact information. It’s also a good idea to include return information on your packing slips.
- Thank You Notes: Thank you notes are by no means a necessity, but they are a nice touch. Hand-written is best.
- Coupons For The Next Purchase: Turn your one-time buyer into a loyal customer by including a coupon code with an offer of free shipping or 10% off the next purchase.
- Marketing Material About Upcoming Products: If you have a new product series coming out, let your customers know! Allow your brand to shine through.
You can choose to include any combination of these inserts at different points in your marketing campaigns.
Pick & Pack Fees Plus Calculated Shipping Rates
Now that we’ve covered the basics of shipping, let’s refocus on the pick and pack portion of fulfillment. You can see that giving customers the options they expect for shipping, combined with all the packaging choices available, can make what seems like a fairly simple process into something a little more complicated.
When your shipping volume hits a certain level, that complication may multiply to the point where you consider outsourcing warehouse functions like pick, pack, and ship. There’s no magic number that tells you when you’ve reached that point. It depends on your shipment volume, your staffing levels, your profit margin, and your warehouse needs. If you’re not sure you’re ready to outsource fulfillment, it’s still a good idea to learn about the options, so you’ll be ready to act when you decide the time is right. And, you may discover in the process that the benefits outweigh the costs.
As you consider the pros and cons of working with a partner service to pick, pack, and ship for you, make sure you’re considering the true costs of keeping the work in-house. That includes what you’re paying to maintain warehouse space and the staff to do the work. Added costs may include fees to your partner, costs for shipping products to the partner warehouse, and pick-and-pack fees, which are usually calculated per-item.
The calculations you make will be unique for your business.
Shipping costs are another factor that can influence your decision. Because bigger warehouses ship in high volume, they may have negotiated lower shipping fees that they can pass on to their own customers — that’s you! Because so many variables affect shipping rates, it’s impossible to show you exactly what you could expect to pay for a typical shipment. The variables that affect shipping rates are as follows:
- Distance (Shipping Zones)
- Package Dimensions
- Dimensional Weight (Determined by volume divided by a set variable)
- Shipping Carrier
- Shipping Speed
- Flat Rate Shipping Options
With so many factors to consider, you’ll have to determine for yourself which packaging methods and shipping carriers work best for your business. These resources will give you access to shipping calculators that take into account a shipment’s weight, dimensions, shipping speed, and destination. They will help you make an informed decision about which carrier you should use for your fulfillment:
- USPS calculator
- UPS calculator
- FedEx calculator
- Dimensional Weight Calculator from RedStag Fulfillment for FedEx and UPS rates comparison
If you’re interested in shopping around for a fulfillment partner that offers pick, pack, and ship services, remember that you can look without committing to a decision. Take your time, compare your options, and be prepared to reevaluate your decision after you’ve tested it out for a reasonable amount of time.
Pick, Pack, Ship: FAQs
Is Pack & Ship For eCommerce Right For You?
Every merchant has a different shipping strategy, and it depends on their business model and industry. As you research shipping options, don’t be afraid to find your own shipping approach through a bit of trial and error. You should give your business a shipping tune-up every year or so, for the best results. Purchase and test a variety of packing materials to see which make the most sense for your products, and dig into shipping rates to get a good understanding of future expenses.
Look into signing up with a pick and pack partner, too. If you decide that’s not the right route for you to take at this point in time, you may be able to find a lower-cost solution to your shipping needs by using shipping software to automate at least some shipping-related tasks.
Shipping is an integral part of your eCommerce business. How you pick, pack, and ship customers’ orders to them is a make-or-break moment for your business, and you do it countless times each day. So don’t be afraid to invest some time into reviewing your shipping policies and procedures. It’s worth it!