Shipping 101 - an introduction to shipping strategies

Joana Morais
Joana Morais
  • Updated

Introduction

In this article, we highlight the basic aspects to consider when creating your shipping strategy and show all shipping options available to use with Onport.

Shipping Strategy

A shipping strategy is how you define getting your products from the vendors to your customers. 

A good shipping strategy may be the difference between profitability or loss and have a major impact on your business success. Shipping costs can have a huge impact on your business budget. Your shipping strategy is key to the growth and success of your business.

Here are  a few things to consider when building this strategy:

Shipping Integrations

What to consider:

  • Will you provide labels to your vendors?
  • Will you provide live carrier rates at checkout?

Onport integrates with several shipping aggregators such as Shippo, Shippypro, Shipstation, Easypost, and Postmen.

If you decide to provide labels to your vendors or to provide live carrier rates at checkout, you will need a shipping aggregator.  

If you wish to provide live carrier rates at checkout, the only aggregator that provides this option is Shippo. If you only wish to provide labels to your vendors, all other options will be suitable.

Shipping labels

What to consider:

  • Will you provide labels to your vendors?

Depending on your strategy, you may or may not provide labels to your vendors. You have the option to generate shipping labels for your vendors at a rate defined upon generation moment or previously defined by you.  Providing labels centralizes shipping operations, giving you better control over the shipping process and customer journey - more control over delivery time, what carriers are used, and overall shipping experience. 

If you decide not to provide labels to your vendors, there's no action needed.

Charging your customers at checkout

What to consider:

  • Will you be charging your customers for shipping?
  • Will you charge at cart level or vendor level?
  • I will not charge my customers at checkout! 

By providing free shipping to your customers, you won’t need to handle any shipping costs at checkout.

  • I will charge my customers at checkout at a cart level!

You can charge your customer a fixed amount per each order they place, regardless of the amount of products they’re buying.

  • I will charge my customers at checkout at a vendor level!

You can charge your customer per set of products from each vendor at checkout. If they have 2 items from 2 different vendors, they’ll be charged an amount accordingly. 

Invoicing vendors for shipping

What to consider:

  • Will you charge your vendors for shipping? 
  • Will you be paying your vendors for shipping? 
  • I will charge my vendor for shipping!

It is possible to charge your vendors for shipping, especially when as a Marketplace, you provide shipping labels. Whether it is a predefined fixed rate or the value paid by your customer, the vendor will be invoiced to compensate for this cost.

  • I will pay my vendors for shipping!

You can agree with your vendors for them to ship orders at their own rates and pay them a set cost for each shipment.

  • I will retain all shipping all shipping income!

Whereas your rates are set up in Onport or your e-commerce platform, the shipping income can be retained by you, the Marketplace, therefore no shipping income is paid out to vendors. 

Shipping rates

What to consider:

  • Will you ship worldwide or to specific countries?
  • Will you ship at cart level or vendor level?
  • Cart level - Cart level shipping rates are simple - you decide which amount your customer should pay at checkout regardless of the number of products/origin. You can decide the amount to charge based on a price you know you will not incur revenue loss.

  •  Vendor level -Vendor-level shipping rates are set up by defining a specific price to charge your customer at checkout per vendor. Depending on your vendor’s location, you may decide on different prices to not incur any revenue loss. The next options shown can be applied at a vendor level: 

    • Live Carrier rates - Live Carrier rates are dynamic rates provided by the carriers in real-time using a shipping integration. Depending on the item weight and shipping route the available carriers and respective prices will show live at checkout, allowing your customers to choose their preferred option. If needed, you’ll be able to filter carriers, and service levels and choose from the best match or cheapest option when setting up this rate.

    • Price-based - Price-based shipping rates are easily set up by defining price brackets on what you want to charge your customer at checkout. The price bracket options are endless and you are the one who can define the best pricing according to the checkout revenue.

    • Weight-based - Weight-based shipping rates are very similar to the price-based ones. You can easily set them up by defining weight brackets on what you want to charge your customer at checkout. The weight bracket options are endless and you are the one who can define the best pricing according to the product’s weight.

    • Zones - The most advanced shipping strategy is by Zones. You can define shipping rules by geographical zones and restrict rules to a specific set of countries to which you deliver. The options are endless and you can choose the best option depending on the countries you want to ship to.

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