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Holiday Shipping: Service Levels – Everything you Need to Know

The holiday season is a time when consumers are more sensitive to the additional costs like service levels, which can impact your profits.

A good delivery time at the right cost or even free could mean the difference between abandoning your cart and an additional product added to satisfy the threshold for free shipping.

The holiday season is a great opportunity to rethink the cost and delivery options you offer for customers, while preserving the margin you want to achieve for selling.

Making this mix right leads to more sales, higher margins, and a better service for your customers or, more simply it’s a happy holiday season for both the buyer and seller!

Strategic Decisions

If you’ve not evaluated the efficiency of your shipping services in the past, it’s a good idea to start doing so prior to the Christmas rush. Here are some smart decisions to think about:

Free shipping threshold:

If you don’t currently offer free shipping, you might consider giving it away for orders over a threshold. The best general rule of thumb is to set your shipping threshold to be at least a bit higher than the current average value of your order (AOV).

Before you implement this change, consider the impact that it will affect your profit and then determine the rise in AOV or conversion needed to justify the impact. If you aren’t able to see the increase you can adjust the threshold, or even try a different model.

Flat rate

If you’re looking to reduce costs but don’t want to pay to take advantage of free shipping Consider a flat rate shipping, which is best when the majority of orders are shipped at a low expense ($5-$17). You’ll need to think about the effects to determine if it’s the best option for you.

Saturday delivery:

Think about offering delivery on Saturdays to customers who pay an extra cost. Or consider it as a standard present for customers at Christmas time.

In this case it’s a good idea to determine the additional costs and make sure that you are able to absorb them or take them back elsewhere. Also, you can think about USPS in which Saturday delivery at no cost is normal. In certain instances, USPS can deliver on Sundays, which is particularly important to Amazon sellers.

Returns:

No-cost, simple, no-questions-asked returns are now the norm in eCommerce , and with good reason According to an article written by ReadyCLOUD, approximately a third of the items sold online are returned, showing the importance of an unambiguous return policy.

Furthermore, “over 63% of customers read the product’s online returns policy prior to making a purchase. If return shipping costs are assessed 81% of customers tend to not consider a subsequent purchase and 81% of customers would prefer a simple returns policy that is simple and has no cost for return shipping.

Timing

Consider how you would like to communicate–and how strongly you’d like to commit to cutting-off dates (the deadline on which a buyer is able to place an order using a particular shipping method and expect to receive their package within the specified time).

You should be able to fill them up with your expected order processing times to ensure that you effectively meet deadlines.

We suggest publishing cut-off dates that you feel comfortable with , and then taking whatever steps necessary to achieve them.

Preparations

If you’ve made the decision to make modifications to your service levels for shipping You’ll have to make one or more of the below preparations:

Selling platform

Discuss your updated or new shipping options on the appropriate pages in your web store(s) and integrate any necessary computation rules in your sales platform. 

Calculate your ideal “order by, for delivery by” dates for each service level and put them on at minimum, your home page, your cart as well as the checkout page.

Be aware that products with specific shipping requirements might have particular deadlines for orders and stock-outs could make an on-time delivery unattainable Therefore, you should include the proper disclaimers , and think about reviewing the levels of your security stock for items that are in high demand.

Shipping operation

Make sure your workflow for shipping is current to reflect any change in packing, packing or labeling. For instance, if more packages will be delivered to USPS and you need to complete an end of day USPS Scan Form may be needed.

It’s also an excellent idea to track your order processing times closely when you are nearing your scheduled “order by” cut-off deadlines to reduce the chance of not meeting any deadlines.

It’s an excellent idea to prepare a contingency strategy in the event that something goes wrong and you are forced to send gifts that don’t reach you in time. 

If you’re launching refunds for free the first time around, make certain that your processes are in place to handle the anticipated growth in number.

Monitoring: 

Create reports via your selling and shipping platforms to enable you to measure the performance of your brand new shipping options against the models you created during the strategy phase.

Specific Actions

If you are able, select an unpopular day before the holidays to begin implementing the new model of shipping options. As this model becomes utilized by customers:

Monitor business case metrics

Make use of your selling platform’s analytics and reporting features to keep track of the metrics related to business cases (AOV and conversion) you were hoping to improve because of this initiative.

Monitor shipping metrics

Utilize your platform’s analysis and reporting tools to track metrics that affect the efficiency and the customer satisfaction with the new system, like time-to-delivery, Saturday deliveries and Saturday deliveries, no-cost returns, etc.

Read More : Amazon FBA 2022 Sellers Guide

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