Understanding Shipping and Handling: Complete Guide for 2021

Shipping and handling can be a huge headache for businesses -- but it doesn’t have to be! Read on to learn how to master this concept, cut down on costs, satisfy your customers, and grow your e-business as a result. 

What’s the Difference Between Shipping and Handling?

Despite having heard the phrase “shipping and handling” thousands of times, do you even know what they both mean? As it turns out, shipping and handling are not the same things. Shipping includes the cost of postage and transportation used to get the package from its origin to its destination. Handling, on the other hand, includes the labor costs involved in preparing the order for shipping from the warehouse, such as packing, label generating, and loading. 

As you can see, shipping relates to the actual transportation of the package from place to place, whereas handling refers to the labor that has to occur before it’s able to be shipped. Obviously, most business owners want to keep these costs as low as possible so as to not eat into their profit. At the same time, you don’t want to cut corners that might leave you with dissatisfied customers. So how can you balance out these priorities effectively? 

How to Develop a Shipping and Handling Strategy for Your Business

Every business needs to devise a shipping and handling strategy -- and each one will be unique depending on the goods being shipped, where they’re being shipped from, how they need to be shipped, etc.

Here are a few things you need to consider when coming up with a shipping and handling strategy for your business:

• Your Products: The first thing to consider when coming up with your shipping and handling strategy are the products that you’re shipping out. 
  
  
• For example, some products require special storage and shipping conditions, such as hazardous goods, climate-sensitive products, or products that are very fragile, very large, or overly heavy. Shipping out delicate glass vases will look very different from shipping out t-shirts. 
  
  
• Another consideration involves the actual price of the products you’re selling. If your products are particularly cheap, the shipping and handling may end up costing as much as the item itself -- so you’re going to want to minimize these costs as much as possible for inexpensive items. 
  
  
• The last product-related consideration relates to the demand of your products. For example, if you have a business that experiences high seasonal demand for specific products, you will likely have to adjust the handling process throughout the year to keep up with demand during busy times while not wasting money on resources you don’t need during slow times.

• Your Capabilities and Resources: The second thing that you need to consider when coming up with your shipping strategy are your capabilities and resources. Shipping and handling costs for a small business that you run completely from home will look quite different from the costs for a bigger business that has been able to outsource to a third-party logistics company. 
  
  
• It’s always a good idea to start off with self-fulfillment if you’re a small business just getting started. That way, you can directly control the handling costs by avoiding them completely since you’re going to be the one doing all the handling. 
  
  
• If your business grows to the point that you can no longer do it all yourself from home, you’re going to need to reevaluate this strategy by either outsourcing, renting warehouse space, or even building your own warehouse. At this point, you will have less control over the handling costs as the process will clearly have to involve more steps that involve more people. 

• Your Geographic Location and Your Customers’ Geographic Location: The third thing that you need to consider when coming up with your shipping and handling strategy relates to location -- both yours and your customers. 
  
  
• When you’re doing self-fulfillment when you’re just starting out, you probably won’t have much control over your geographic location. After all, you live where you live, and you probably won’t want to pick up your entire life and move just to be in a more ideal shipping location for your business. That being said, it might be a good idea to focus on more local sales while you’re using this method in order to limit shipping costs that tend to increase based on distance. 
  
  
• If your business ends up growing to the point that you need to choose a location for warehousing and shipping, that’s when you’ll really need to be strategic. For example, you can choose to go with a central location. You could also choose to go with one location on each coast or one in each region of the country. 
  
  
• International shipping is another consideration. This can cost you a pretty penny if you’re not careful! If a lot of your business is coming from overseas, you may want to consider partnering with a global fulfillment company that has locations all over the world in order to help cut down costs. 

How to Choose the Best Packaging for Shipping Your Products

With all this talk about products, locations, and manufacturing, it’s easy to forget about packaging. That being said, packaging plays a huge role in the shipping and handling process and is definitely something that you want to choose carefully in order to make the entire process easy from start to finish. 

Here are some things to consider when choosing your packaging in order to help cut down on shipping and handling costs:

• First of all, the overall goal of your packaging should be to get your products from point A to point B safely. If your products are heavy or fragile, you’re going to need to choose packaging that can withstand the weight or protect the product during the shipping process. 
  
  Overall, we recommend going with corrugated packaging that can insulate your products to keep them in one piece. Corrugated packaging is also very durable and strong, so it can be used with heavier items provided you get the right flute size. At the same time, corrugated cardboard is still lightweight and won’t cost you a fortune to ship by adding extra weight to your packages. 

• Second, you’re going to want to have packaging that you can easily store and then assemble. This means going with packaging that stores flat and doesn’t take up much space. It also means going with packaging that is easily assembled and isn’t overly complicated to put together. 
  
  
• Finally, you’re going to want to have packaging that also doubles as a marketing mechanism. The best way to do this is through custom packaging. Using custom packaging is a great way to set yourself apart from the competitors by using packaging that directly aligns with your brand rather than a boring old cardboard box. 
  
  If you’re not sure if custom packaging is something you can do, reach out to the experts at Box Genie! They specialize in custom packaging and can help you choose the right products, design them, and order any packaging extras that you might need along the way. 

How to Entice Customers With Shipping and Compete With the Big Guys

Shipping and handling is one thing that many small businesses struggle with when they’re just starting out. It can be quite difficult to compete with the big guys that are able to offer free two-day shipping. In fact, it’s very common for customers to add things to their cart online, only to later abandon the cart once they see how much shipping and handling will cost them. So how can you avoid losing customers over shipping and handling concerns? 

The obvious answer is to offer the customer free shipping. However, it can be difficult for small businesses to eat this cost. Instead, you may want to slightly increase the price of your products to allow for free shipping and handling. Another option involves offering free shipping over a certain order value to ensure that you’re not losing money. 

If you aren’t able to offer free shipping, you may want to offer flat rate shipping. This option works best if your product line doesn’t have much variety in terms of sizes, weights, and special shipping considerations. This option also helps to ensure that you don’t overcharge or undercharge your customers on shipping that can be difficult to estimate. You may also need a certificate of mailing.

Wrap Up

Now that you’re an expert -- it’s time to get shipping! As you can see, there’s a lot more to this process than just throwing a label on a box and sending it out. In order for your business to really be successful, you need to be really strategic about your shipping and handling processes.

Sources:

1. PACKAGING — A BRAND'S MOST IMPORTANT MARKETING TOOL | White & Black
2. The Top 4 Reasons Users Abandon Their Carts and What to Do About it | Shopify
3. Free shipping has become an expectation for most shoppers | Bizwomen