Develop The Perfect Shipping Model For Your Marketplace

You’ve launched your digital marketplace. You’re ready to sell your products to a waiting customer base. The first 100 orders arrive and you’re excited to send them out for to delivery, only to discover that you don’t have an adequate shipping solution to make 100 on-time deliveries. Instead of creating a poor customer experience with unreliable shipping, you should instead develop a strategic shipping model that establishes good habits, runs seamlessly, and allows you to focus on building your digital marketplace, rather than worrying about the on-time delivery of each purchased item.

Factors To Consider In Your Shipping Model

There are many factors that you will need to carefully consider as you develop a shipping model that is conducive to continued company growth. Together, the following factors will work in unison to create an environment of on-time deliveries and satisfied customers.

#1. The Logistics Capabilities Of Your Chosen Delivery Partner

You can have the best products for your chosen industry, but it will mean nothing if you can’t transport your goods to market. The following questions will help you to understand the logistics capabilities of your chosen delivery partner.

  • Can they ship products internationally and domestically?
  • Do they have a reliable mode of transportation in each geographic area or are they relying on third-party transporters?
  • Trucks, vans, airplanes, bike messengers? What are the actual modes of transportation used by the carrier?
  • How will the carrier take into account seasonal fluctuations or inclement weather?

Through flexibility and multiple contingency plans, your chosen carrier should have the solutions needed to successfully transport your products to market. Finally, you should select a carrier that provides open and honest communication. After all, your customers don’t really care if it is your responsibility, or that of your chosen carrier, all they care about is receiving their purchased goods on-time and without damage.

Related: 3 Skills to Help Prevent A Failed Marketplace

#2. The Location Of Your Customers

The beauty of a digital marketplace is that you can reach customers around the globe. The simultaneous challenge of the digital marketplace is that you need to understand where the majority of your customers are actually located. In other words, if you are based in the United States and your customers are predominantly based in North America, then you wouldn’t want to choose a shipping carrier that excels at international shipping. Instead, you would want to work with a carrier who is in the same country and ideally time zone as your customers. From operating at similar business hours to speaking the same language and understanding cultural backgrounds, the benefits of working with a carrier who is in the same geographic region as your customers are insurmountable.

#3. The Delivery Cost Associated With Different Locations And Shipping Timeframes

This factor is incredibly important to the success of your digital marketplace. You need to select a delivery service that is economically equipped to meet your shipping needs. To select your carrier, consider the following factors:

  • The size and number of packages that need to be shipped on a daily, weekly, monthly, quarterly, and yearly basis.
  • The type of material that you are shipping. In this vein, you should also consider the types of materials used to package your products.
  • The distance that you will be shipping your products and materials. Once again, this is where carrier and customer location is a large contributing factor.
  • The length of delivery time that you will be offering to customers in various geographic regions. For example, will you be offering same day, next day, 3 – 5 days, or longer delivery options?
  • Will your shipments require time in warehousing or quarantine? This is a particularly important consideration if you are shipping products internationally.
  • Will you be sending multiple types of shipments and is there an associated cost difference?
  • The cost of services. This is perhaps the most important factor that you will need to consider. How much will your shipping costs eat into the profit of each product sold? Make sure that you calculate the latter cost for each shipping scenario so that you can accurately understand the maximum amount of money that you can spend on shipping, while still maintaining a high-profit margin.

Related: Growing Marketplaces: When to Hire Experts

The Bottom Line: Save Money, Deliver On-Time, And Create A Happy Customer Base

A shipping model is a must if you want to save money, deliver your products on-time, and create a happy customer base. In the ideal world, you will be able to find an integrated transportation company in your local area who can handle each aspect of your delivery needs. The latter solution will greatly simplify your billing, streamline communications, and reduce the time you spend on shipping matters. However, there is one word of caution; don’t trade quality for convenience. It is better to have multiple shipping carriers than it is to sacrifice the quality of service provided by selecting only one solution. By carefully considering the above four factors, you can select the carrier(s) who will help you to navigate the tricky waters of domestic and international shipping.

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