Ability to ship the ordered goods reliably, safely and on-time is very important for any online store. US had organized shipping companies (FedEx, UPS) well set-up before ecommerce revolution came. In India, it is the other way: ecommerce boom has pushed the players in courier/shipment market to offer these services at the level expected by the consumers and merchants. Established players in this market are: Aramex, DTDC, First Flight, Blue Dart, Gati and Indian Post. Most of these companies have specialized offers for e-commerce companies to address their shipping, packaging, and warehousing needs. Additionally, since Cash on Delivery (CoD) is so prevalent in India, most of these services also offer support for CoD as a payment mechanism. On the other hand, the state of shipping is still not advanced enough to meet the needs of large players. Hence large e-commerce companies like flipkart and Jabong have their own shipment solutions.
While basic services offered are same across the board, there are certain parameters on which a shipping vendor should be evaluated when you are looking for one. We will discuss some of these parameters here.
- Price – Prices are quoted in slabs of weight and for slabs of distances. Quoted prices will vary depending on the volume a store can offer them. Typical price of shipping is about Rs. 40-100 per 500 gms (including fuel surcharge). Look at the slabs you are offered, any hidden charges which are not specified upfront (like fuel surcharge).
- Pick-up and drop – Depending on the volume on your site, you may need pick-ups to be flexible and frequent. Not all shipping companies are flexible to suit your needs (since they have to manage their own logistics which assume certain pick-up times).
- Return logistics – If your goods can be returned by the customer for some reason, you need manage this. Most shipping vendors offer this service, but the way it is offered vary a lot. In some cases, vendor will pick-up from customer, in others customer has to go to their office. Make sure you research the companies to select the one that most closely aligns with your return policy.
- Packaging – This is a value added service that some shippers provide (for example, Aramex). Depending on the kind of product you sell, packaging could be significantly different, and complex. So one option (at least to start with) could be outsource packaging, to the company that ships your goods. Packaging is also an important branding and cross-selling tool, so a right balance needs to be struck between in-house and outsourcing options.
- Insurance – If you ship expensive items (more than Rs. 500), it is a good idea to purchase insurance. Insurance could be obtained from the shipper themselves (for example, DTDC charges 2% of the value for insuring the item), or from 3rd party. Taking insurance from the shipper gives a hassle-free service in case you need to claim it, but 3rd-party insurance might be cheaper. If you use multiple shippers, 3rd party will be a better option. New India Assurance and other insurance companies offer such 3rd party insurance.
- Integration with Store Front: Integration allows message about pending drop-off can be automatically sent to the shipping companies and reduces delays. Similarly automated tracking status update when integrated with the store front allows for a seamless experience for the customer as they track their package, see Aramex and Blue Dart.
- Reach/Network – Most shipping companies cover about 10,000 pin codes out of over 150,000 codes in India (see here), so it is important to make sure your target audience will be reachable through your preferred shipment vendor. Also, don’t discount our good old postal service which has the best reach and now offers pretty reliable services.
- COD support – If you offer Cash on Delivery (most online store do this today to attract first-time buyers), your shipping partner also need to support CoD. Couple of things to check are: their ‘fee’ for collecting cash on your behalf, and when do they deposit the same in your bank account.
Hope this offers a good checklist when you look at add a new shipping partner for your online retail store.
