ZippyCart Overview

If shipping products from a web-store will be your first experience selecting a carrier and deciding rates, this document may be of interest.

Shipping products may seem of only minor interest as you design your store, but if sales volume increases, (as you hope it will) you will find that the task of processing orders to be the most time consuming part of your operation. To be ready for that task, you'll need a plan.

Step one in any plan is to gather information. In this article we'll start by looking at the store's products, customers and operation to create a list of issues which may affect the task of delivery from the selling location to the customer.

• Will shipping charges be an income or an expense? Most on-line sellers attempt to match the amount charged to customers with the amount charged by the carrier for each order. This formula treats shipping costs entirely as an expense because no revenue is recovered to pay for labor, supplies and overhead. Other sellers may see the opportunity for additional profit and charge a handling fee or hidden amounts so that the customer pays substantially more than total cost of delivery. This formula treats shipping cost as income because it is 'marked up' like any other product.

  A third method is to treat shipping as a 'neutral' expense. This formula involves adding a small amount to each order to offset labor, material and overhead so that, over time, the income from shipping charges paid by your customers is roughly equal to your actual cost of providing the service.

• How many of products will be drop-shipped. If you are not the person responsible for physically packing and shipping each item you sell, our list of shipping issues becomes much shorter.

• What are the packing considerations for your products? If you are a wholesaler, perhaps many items will arrive already packaged, and you just need to apply a shipping label and send. This is a simple task for single cartons, but how will this affect your shipping cost when multiple quantities are ordered. Will you combine small cartons into a single larger shipment or will multiple packages be shipped to the customer. What about packaging in general? Will you maintain a stock of shipping cartons and supplies or will you rely on re-using cartons from incoming shipments? These issues will have a substantial impact on you cost of shipping.

• What carrier will you use? If you're just starting out, it's tempting to try to shop around for the best price on each order. Rates vary between shipping providers of course, and the variance may be considerable for certain packages with unusual destinations. If your objective is only a few orders weekly, and you have plenty of time, this may be the best method. It may not be inconvenient to take an order to the Post Office one day or to UPS the next.

  Carrier selection is a much bigger issue for the volume shipper. If you begin to process several orders a day, for instance, you may want to create an account with the carrier and have outgoing packages picked up at your location. If your business becomes 'busy,' the time required to load and haul packages around to the different carriers will cause a strain on your time and other, more important, tasks may not get attention. The weekly pickup fee of a few dollars can be a real bargain when compared to the expense of a part-time employee.

• Who and where are your customers? Even if your on-line store is not yet accepting orders, this question should be answerable now. This question is important to shipping since you will want to define policies which appeal to the largest percent of customers. We all know 'you can't please everyone' and this statement will apply to order processing just like other aspects of your business.

  Example: Your primary product is bulk pet food. The weight of this product compared to cost is very high, so much so, it is doubtful your prices will be competitive when the product must be shipped a great distance. A completely different dynamic applies if you are selling pet jewelry as well. The shipping costs for spot's new diamond ear stud is probably very little in relation to the selling price.

  Our example illustrates yet another policy decision, that of combined shipping. Your customer will probably not be too happy if you simply tape the diamond stud to a bag of dog food and ship the cheapest way. Knowing who is likely to buy your products and which products can be combined for shipment is another important aspect of the shipping policy. You will need to consider all these issues if you want a smooth transition from online order all the way to placing the product in your customer's hands.

• How will you handle exceptions? You should decide ahead of time how to handle orders which just don't fit within the policies you've designed. Example: A customer in a remote area can not receive packages from your normal carrier, or, you have a product which is just too big to ship using a parcel service. You may choose to just decline such orders of course, but it may be more profitable to arrange ahead of time to process exceptional orders by phone or through a special section of your store.

Because you can edit the rates used in this calculation, you will be able to create accurate calculations using any carrier. Default rates are provided for both domestic and international shipments, plus, you can easily add custom rates for any destination