Shipping for Crowdfunding Campaigns
Last week, we were at the San Francisco chapter of Hardware Massive, a meetup for hardware startups where our own Laura Behrens Wu shared some best practices around how to make shipping painless for crowdfunding campaigns. Here is a short video of the key takeaway from her talk:
From handling your first batch of shipments to a full ecommerce store, here are the key takeaways for any crowdfunding campaign to note.
First Batch Fulfilment
Do not over promise perks
Adding more perks means that there’s more customization that needs to go into the picking, packing, packaging, and shipping. For each physical item you add, it’s more time for customizing fulfillment for each package at the other end and more possibilities for error. Consider non-physical perks like discounted pricing or something digital.
Although there may be demand, the logistics of getting your product to international customers can be a nightmare, and cause some poor customer experience. Somethings to consider: customs, taxes, expensive shipping rates, and long shipping times.
If you must go international, first limit your product to just a few countries, and explore how you’re going to ship. For more information, visit our guide to international shipping.
Be aware of how packaging affect the shipping cost
Carriers charge for shipping by 4 things: speed, box dimensions, weight, and distance between to/from addresses. Unfortunately, the only part that can be easily changed are box dimensions – luckily it can significantly decrease shipping costs if optimized.
Box dimensions come into play for carriers who use ‘dimensional-weight’ to calculate pricing – this includes most major carriers such as UPS and FedEx. It uses an estimated weight that is calculated from the length, width and height of a package. Carriers bill based on the higher of the actual box weight or the dimensional weight.
For instance, the FedEx formula for DIM weight in 2017 is:
L x W x H / 139
So if you sent a package with FedEx Ground within 150 miles zone:
Exploring other options such as poly-mailers (plastic envelope liking things) or flat rate boxes (where it’s a few set sizes and it’s a flat rate to send anywhere)
Incorrect addresses can become a very expensive problem quickly. Many don’t realize that
UPS/FedEx charges $10+ per address correction – that is when they have to adjust the address to deliver it. USPS will return the shipment, and you’ll have to resend at your cost.
Use address verification tools and send an email prior to shipment to confirm that it’s still the right address for the supporter can be very important. For more information, read our post about the importance of address verification.
When you’re shipping out your first batch of packages. Try sending them yourself. You can get a deeper understand of what it takes to pack things together, the space you could be saving in your boxes, shipping prices etc. This way, if or when you decide to go with a 3PL or a warehouse, you’d have the data and experience to understand how to find one that meets your needs.
Shipping for eCommerce
It’s very enticing to offer free shiping, but it’s important to do it strategically. At the end of the day, it’s not really free, and has to come out of the margin somewhere.
Many ways to provide free shipping without taking it out of your margins:
Free shipping for purchases over a certain dollar value:
Only offer free shipping with a minimum purchase value. One way to determine this threshold is to calculate your current average order value and set the free shipping minimum slightly above it, forcing the customer to add at least 1 more item to the cart in order to qualify. By doing this, you reap the benefits of a free shipping promotion but only have to cover shipping costs for your best customers.
Just be careful not to set your threshold too high. If your average order value is $50 and you set your free shipping minimum at $90, you’re not offering enough savings to counteract the increased spend by the customer.
Free shipping on specific items:
Offer free shipping with the purchase of a specific category or brand of items. For example, you could offer free shipping with the purchase of a mug or free shipping on Nike shoes. This is a great way to promote new items or clear older inventory.
Free shipping as an option:
You don’t have to offer top-tier services for free. According to a survey by UPS, up to 50% of shoppers will choose a slower transit time to qualify for free shipping, and 83% of them are willing to wait an additional two or more days to get free shipping.
The key is to be transparent about transit times for various shipping options so the customers can select the shipping that’s best for them. It’s fine to offer ground shipping as your free option as long as the estimated delivery time is clearly presented. For more information, see our post on how to use free shipping to drive sales and save money.
Communicating order status can improve your customer experience even after they leave your website. Customers start calculating transit times the moment they click “buy”. According to a survey by Shippo, although 41% of buyers are ok waiting up to 7 days for delivery, 69% of online shoppers expect the items to ship within 24 hours. Take advantage of the tracking data to communicate and delight your customers.
Plan for success from the get go for your crowdfunding campaign, and for the business. Don’t leave shipping to until the last minute. Turn it into a tool to delight your customers and drive sales from the very beginning of their customer journey.
Shippo can help you do that with our multi-carrier dashboard and API. You can access a global network of shipping providers from one place, verify addresses, compare rates, print shipping labels, and track shipments.
Shippo is a multi-carrier API and web app that helps retailers, marketplaces and platforms connect to a global network of carriers. Businesses use Shippo to get real-time rates, print labels, automate international paperwork, track packages and facilitate returns. Shippo provides the tools to help businesses succeed through shipping.