Let’s face it, we’re spoiled. The more we, as customers, get into the eCommerce revolution the more we expect not only great selection and value from the comfort of our own home, we also expect great speed in getting our purchases.
Amazon has pushed speed and efficiency as important factors and its customers agree.
In this article we’ll look at why fast shipping matters and how to get it, regardless of what kind of Amazon seller you are.
The Reasons You Need Fast Shipping
It is not only customer expectations that benefit from fast shipping. It’s proven that your business metrics improve as well.
Fast – and ideally free – shipping increases conversions, average order value (AOV), marketplace benefits and customer loyalty.
Let’s take a look at these points
Customers are more likely to buy from fast shippers because they want instant gratification. The reasons for this can be multifaceted – of course they want the thing they are buying asap, but also getting something free and fast gives that sense of VIP treatment. Free and fast shipping has been show to increase conversion rates up to 300%
Average Order Value (AOV)
Fast and free shipping with a threshold motivates customers to add more items to their shopping cart. The customers want to get to the free threshold and will add items to get there. Often they will add even more because they see they’ve already reached free, so why get something else!
Amazon likes sellers who sell. The more you sell, the more they like you. Because free and fast shipping increases conversions it has a direct effect of pushing you upwards in 2 key areas:
- Organic Search – more conversions is proven to help with search ranking.
- Winning the Buy Box – fast delivery directly impacts winning the buy box
Jeff Bezos coined this term ‘The Flywheel Effect’ which is a positive cycle for your business in which customers return, unprompted, to buy from you because they had a great experience. Features like 2-day delivery greatly motivate people to return to you, especially if you are selling consumables that need to be replaced.
How To Provide 2-Day Shipping
Here let’s look at the 3 basic scenarios – merchant fulfilled, marketplace fulfilled, and 3-rd part fulfilled.
This involves using your own space and pick, pack and posting your own orders. There are pros and cons to this.
You have control over the entire fulfillment process, from how much inventory you store and the shipping carriers used to where you invest money and cut corners.
Seller Fulfilled Prime Badge
If you can maintain service level agreements, you may be eligible for marketplace fast tags through your in-house fulfillment.
You need a lot of space to maintain inventory and have a good area to efficiently pack and store while waiting for pickup.
You pay for all fulfillment costs, including warehouse space, insurance, wages, heating, cooling, shipping, and packaging.
Marketplace Fulfillment i.e FBA
FBA of course is the easy option, but is not without it’s drawbacks. It can be unreliable, and you are without recourse if it is. It can also be expensive.
On the upside, often the shipping fees are less than what you as an independent can negotiate. Also is the benefit of being part of Amazon Prime, which gives a boost to sales.
Third Party Fulfillment
Outsourcing 2-day deliveries to a fulfillment company involves handing over your entire fulfillment process to a fulfillment service, including storing, picking, packing, and shipping.
It is a lot like using FBA, but just with a different company.
As always, there are pros and cons.
The major con is the cost, which can be higher than either FBA or MFN, depending on the products you are selling. Also be away that some third party fulfilment services may not be able to scale with you! Stay on top of this as you grow.
The major pro is if you are also selling in other marketplaces like Walmart or eBay you can use the same company to fulfill.