7 Tips for Choosing the Best Carrier
The challenges and importance of logistics are often underestimated or overlooked in ecommerce. Sellers tend to get every part of their ecommerce setup ready and then settle for an average or below average carrier because of cost or other constraints. Choosing the correct carrier for your business can be a make or break decision. So here are 7 tips to choose the best suited carrier for your business:
Naturally, the most important component when choosing a carrier service is the pricing. If the offer doesn’t match your budget, it’s a no go. However, as a business owner you have to be reasonable, especially if you are a new business with no track record. As much as you want to get the price down, it’s important to understand that carriers are businesses too and want the best for their business. There are 3 main things that influence the price of shipping:
- Weight of the product
- Size of the product
- Distance of delivery
Different carriers have different shipping charges based on the three factors above. Pretty much all carriers charge by weight, distance, and size, but their breakdown of charges may differ. So when considering a carrier service, the first thing to look at is your product range and consumer base. Are your products heavy or large, or are they both heavy and large? Are you shipping domestically or internationally? Cross-border shipping may cost a lot more if your products are heavy or large.
Aside from the three main factors, there are usually additional charges for security, delivery lead time, insurance, etc.. So take your time and table out the breakdown of each carrier service before making a choice.
Next on the list is is carrier limitations. Depending on the size and type of carrier, each might have its own limitations. Similar to pricing, the three main limitations a carrier may face are with weight, volumetric size, or destination/distance. Depending on your product range, you will need to seriously take into consideration these limitations.
If you are familiar with the online shopping experience (well you should be if you are a business owner), you will find that sellers engage with different carriers depending on the product because of such limitations. Sometimes, the carrier service is even selected by the marketplace or platform themselves based on the limitations. So based on what you are selling, plan your delivery service.
- Lead Time
Delivery lead time is probably the second most important aspect to logistics after pricing. According to Amazon, up to 46% of customers abandon their shopping cart because they are not happy with the shipping information provided, which include the price and delivery lead time. That’s almost half of your potential customers! For cross border logistics, customers understand that it will take a longer period but it has to be competitive. Choose a carrier that can offer you that competitive lead time, and are able to partner with other local or international carriers that can deliver according to the desired lead time. As an avid online shopper myself, I’ll tell you that one of my key checkout points is the delivery lead time.
Most carriers offer basic security, but there a few that offer added assurance and of course with added security comes added shipping costs. Local and International Express delivery services normally have better security than local mail services; which is why local mail services are usually cheaper. Deciding whether or not you need the added security will again depend on:
- The type of product that you are selling; whether it is expensive and needs the added insurance
- The delivery range. Cross border logistics will likely need more secure carriers.
One of the worst things that could happen for your business is your parcel not being delivered due to negligence by the carrier, because you will end up with two really bad-for-business outcomes; unhappy customers and additional cost to cover the losses.
- Quality & Sustainability
The quality and sustainability of your selected carrier service go hand-in-hand. Ensure that your carrier runs on a system that is sustainable, and subsequently able to maintain the quality of your customers’ delivery experience. Most carriers have no problem delivering if the business is small, but once you start scaling you will have to think about sustainability. Part of being a sustainable carrier is the ability to offer competitive prices and have a good reputation with other sellers from the same marketplace. Use that information as your guideline.
Maintaining the quality of service includes providing both good customer and b2b support. A carrier that only has either or neither will eventually become difficult to work with.
As mentioned earlier, reputation of a carrier service is important. Before you engage with any carrier, research their reputation with marketplaces, other sellers, and customers. Customer feedback may sometimes be exaggerated and they may have over the top expectations, but they are more often than not honest. Besides, it’s customer satisfaction that matters the most.
- Asset or Non-Asset
Last but not least, there are generally two types of carriers:
- Asset: These are carriers that own the means for delivery, from warehouses to freight transportation; trucks, motorcycles, etc., to equipment for fulfilling delivery. They are normally more well established and have a good running system.
- Non-Asset: These are carriers that run the operation but without the assets. This means that they usually engage with third-party contractors to provide them with equipment or means, or certain services. Potentially hard to control because there are more parties involved, so things can get messy.
Take your time and do a proper research to compare carriers that are available for you. Remember that a huge part of making a sale is ensuring that the goods reach the customers safely and within their expectation.