Can orders be shipped too fast?

By Jeremy Rudolph on 03.02.2011

Today’s e-commerce sales have driven merchants to ship orders the same day. Shipwire is one of the few order fulfillment companies that has a Shipping Time Guarantee that includes same day shipping with money back guarantees.

But is it possible that orders can be shipped too quickly? In this blog post we’ll discuss the impact of buyer errors on your business and explore this question.

Don’t worry, we’re not going to eliminate our same day shipping guarantee. Nor are we going to argue that the world needs to slow down. Rather, we hope this inspires you to look at your business and run some numbers for whether you might be increasing your returns and customer support costs because of the speed at which you ship.

Twitter Opinions

I asked our twitter friends “What is the impact of same day shipping to returns?”. Here were some of the thoughts.

@billda (ecommerce merchant and developer behind FoxyWire): “very few – probably 1% edits at most. Bigger problem is people ordering twice by mistake and trying to catch it b4 sending em 2.”

@colderICE (John is just the man! But also an expert in ecommerce education, an old school eBay PowerSeller). “I am sure the rate of cancellations alone will be hit. We get people all the time wanting to cancel an order they placed that day”.

@Practicalecomm (Top resource for online business owners) “Tend to agree with @@alwaysriding who said there is no impact…a return is still a return. Hv no evidence to the contrary.”

@pamelahazelton (a top Ecommerce consultant)”I haven’t seen much change in returns. Small percentage needing to return as result of same day cancel post shipping.”

9% of orders get changed

In a quick Shipwire study of a few hundred merchants over the past 2 years, we found that 3.5% of orders are edited after being processed by the shopping cart. An additional 5.7% of orders are canceled after they were submitted but before the orders shipped. Remember, we are only looking at orders that have been cleared by the shopping cart (passed all payment and fraud checks). When you run your analysis you should look at how many orders get canceled before you send them to Shipwire.

So, approximately 9% of consumers who purchase online in our study want to modify their orders after they have paid and the shopping cart has confirmed the order is ready for shipping.

For every 100 people who buy something online, 9 of them need to inform you of a change on their order. In some cases, it may be buyer’s remorse after an impulse buy. In other cases, they may be trying to proactively get in front of a payment issue. Most commonly in our survey, they are trying to change the shipping address.

That seems to be a bit higher than what our twitter friends are reporting, but please also realize that the question asked was slightly different. I would also expect Shipwire to have more edits and pre-shipping cancels because we have made it very easy to empower merchants and customers to control this aspect of their shipping.

Ship Now Vs. Give it a day?

There is obviously a trade-off to same-day order processing. Get that product out the door now. Or give time for that small percent of people who want to edit their order.

Once the order leaves the warehouse it becomes more expensive and increasingly difficult to redirect the shipment. With many shipping methods, it is impossible.

While Shipwire offers same day shipping, we have specifically built in functionality to allow you to delay the processing of your orders if your business needs it. Our API preferences or Same Day Shipping allow merchants to control how long orders can be held. We recommend that you give buyers clear guidelines on how long they have to edit (or change) orders. Set up your Shipwire account to match this policy. This can save a lot of time on returns, cancels and costs for carrier redirects. Each edit or cancel you can catch, before it gets to the shipping truck, the better your bottom line.

The argument for processing orders as fast as possible is that you can tell the buyer “It already shipped.” While this sounds great in theory, it breaks down with most buyers who will want you to have the carrier redirect it or will be initiating expensive returns processing.

What do I need to know as an Online Retailer?

As an E-tailer starting out, if you tend to have a lot of customers who cancel or edit their orders, as you scale, these numbers will likely scale respectively.

If you manage your own warehouse, you know the hassles of finding the order and editing the shipping label. That assumes that the order change didn’t result in a new shipping price. Even a simple change like changing an apartment number can turn into a 30 minute hunt for the order to scratch on a new address. If you are a small volume shipper, you will likely have less hassles with this, but you still need to make sure you get all your systems in line with the new address.

If you are a bigger company or using a 3rd Party Logistics (3PL) distribution center, there is a bit more complexity because another party is added to the mix. If you are use to shipping on your own and planning on using an outsourced fulfillment company, it helps to set expectations and create some time buffers to help you catch and manage order cancels and edits in a timely manner.

A Look Inside a Warehouse

In a big warehouse there are thousands of shipments coming in and going out. It is a constant “buzzz” of activity that might remind you of a beehive. Like a beehive, there is incredible order and lots of small little processes that add up the overall success of the individual order shipments.

And then there is Joe Exception. Who is Joe Exception? Joe Exception is your buyer who insists on canceling his order far after your cut-off dates. We all know Joe Exception. He didn’t check his order properly and perhaps ordered product 1 when he meant to order product 2. He wants you to just change the product you package or issue an immediate refund even though he placed the order yesterday and you have already processed his credit card and told the warehouse to ship product 1. Joe is “adamant” that you immediately fix this problem.

You inform Joe, “I’ll ship you a new order for Product 2 (order 2) and try to cancel order 1, but it has already been processed and the warehouse has likely shipped it already.” Joe doesn’t want two orders on his credit card. He wants you to change the product in his original order. You help Joe understand it’s better for everybody to just cancel the order and start over, but you need to try to catch the order before it ships. You are now going above and beyond because you love your customers.

You notify the warehouse of Joe Exception and tell the warehouse to “cancel that order”. With same day shipping, this this is past the stage where you could log-in and cancel it and you know this is probably already on the shipping truck. If we haven’t shipped it yet, we’ll immediately cancel it and tell you to resubmit a new order. However, if the order is already being processed on the floor, let’s dive into the process of tracking down this order.

With many employees in the warehouse, thousands of packages moving, and all the bees humming around the hive, it’s pretty hard to identify one bee and tell them to do something different.

1) You call or email because Joe insists on canceling his order and you know the warehouse is already processing this order.

2) The customer service representative learns of this issue and escalates it to a warehouse team supervisor. These supervisors handle “out of band” order processes.

3) The warehouse team supervisor stops what they are doing, finds the status of the order, and tries to locate this within the warehouse (Keep in mind they may be stepping away from coordinating freight, receiving and shipping those 1000′s of backorders you have). With luck, they find the shipment to either cancel it or inform you that it is on the truck already. Depending on when they catch the shipment, they will need to edit the inventory systems to adjust inventory correctly and possibly cancel shipping postage or inform carriers not to make a pickup.

If it’s shipped, the supervisor delivers the bad news and probably spent just as much time on the order as if he could have caught it.

As you can tell, there is lots of time involved (in some cases hours) which means there is cost both real and opportunity to deal with Joe’s exception.

What is the take away? As the speed of e-commerce speeds up, it helps to communicate to your buyers the last time they can edit/cancel an order. IF your business has a lot of post-transaction edits, you need to set guidelines with your buyers that match your warehouse processes. Shipwire gives you tools to do all this, but it’s a helpful thing to review before your big shipping seasons.

Your Edit is Actually a “Cancel”

Cancels Can be Good!

In our hypothetical above, Joe wants to edit the order because in his mind he is changing one aspect of it – the product. In some cases it may be a simple thing like a color change. In reality, that change actually causes a cascade of changes. The order price could change, the product availability may change, the product location could change, the shipping price may the product inventory levels in the online store and warehouse change.

When dealing with an edit to an order, it is better to think about canceling the order and then rebuilding it correctly from scratch.

The reason is that, canceling an order is something supported by all the upstream and down-stream systems. The warehouse can easily cancel the order. The shopping cart knows how to deal with an order cancel. The payment systems know how to deal with a cancel.

Shipwire, Making All This Easy

Shipwire warehouses are highly automated, processing thousands of orders a day. Shipwire systems are designed for incredible performance, while delivering a cost-effective service. One side effect of this efficiency is that Shipwire must limit the changes that can be applied to an order once it is submitted to a processing warehouse. Prior to warehouse submission, Shipwire allows orders to be fully edited and/or canceled, as needed, directly through your online account. Shipwire also provides rich software controls that allow you to choose the frequency at which orders are submitted to the appropriate processing warehouse.

You can always tell the status of an order and whether it has been submitted to a warehouse in your account. Just look at the order progress indicator.

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Quick Tips for Hassle Free Online Returns

By Jeremy Rudolph on 12.27.2010

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The Holiday season rush is over and now it’s time for post-holiday returns and exchanges. Every year around this time Shipwire puts together a list of tips and tricks for your “return policy” on your website and a quick review of how to manage returns to your Shipwire inventory.

How should returns be handled? If you want to keep your customers happy and knocking on your virtual door, a hassle-free returns policy is the always the way to go.

What do Your Customers Want?

Most customers say the hassle of returning products purchased online is a big turnoff, predictably resulting in fewer online purchases. Clearly, online retailers that make it easier and less costly for customers to return their products have a distinct advantage over their competitors — specifically, advantages in customer loyalty, higher sales and increased revenue.

Shipwire knows this and this is why we have built an easy return mechanism for you.

It’s also a good idea to make a return policy very accessible and very clear to customers. Ensure it is front-and-center with a link to the policy during checkout, and clearly spell out any return restrictions, including how long a customer has to return an item, and any restocking fees. Finally, make it easier logistically for customers to return merchandise. Include return instructions and a return address label with each shipment. Online retailers may consider even picking up the cost for return shipping. Customers will appreciate such generosity.

Tips for easy returns with Shipwire

Be sure that you have clearly listed your return policy on your website. Ensure that your customers know not to send back the merchandise without generating an RMA (Return Merchandise Authorization).

Tip #1: Double check your return policy. Is it in line with what you want your buyers to actually do?

Tip #2: If the product is unopened , send it back to the warehouse. If it is opened, have it sent to your warehouse or office. Use the Shipwire warehouse to restock unopened returns. If you need to review an item and make a “subjective call” on whether it can be restocked or not; you should review it personally. If you can then resell the product, ship it back to Shipwire if you want us to stock it. Alternative, use the Shipwire Anywhere order management service to route orders to your returns inventory.

Tip #3: Be generous with your buyers about their returns. For example, if the return shipping is close to the value of the product, give it to them and ask the customer to tell 10 of his/her friends how nice you were. That kind of word of mouth marketing will be worth 10 times the value of the product!

Tip #4: Use a shipping method where the carrier gives you a tracking number for any returns to your office or your warehouse. We will ask you for one of these if you are sending it back to the warehouse, as we need to know when to expect it. We also recommend it for any shipment because it can short-circuit many conversations about lost packages. This is a classic example of when it makes sense to spend the extra couple bucks.

Lets take a look at what Shipwire does to make returns processing easier.

How do I manage returns to Shipwire?

This section assumes you have a Shipwire account. For any order that you want to generate an RMA:

1) Log in to Shipwire Account and enter the order number in the search box at the top, go to that order.
2) Click on “Report a Problem or Return” (underneath order status on top box of page)
3) Choose the delivery problem with your order and follow the steps relating to your specific order.

If your customer is sending merchandise back to the warehouse, Shipwire will automatically generate an RMA (Return Materials Authorization) label, which MUST be placed on the return. This will ensure that Shipwire can quickly add it back to inventory. It also keeps the inventory counts correct. For example, if somebody ordered a Large; but, got a Small t-shirt; then you would tell Shipwire this was a “cross-shipment” (wrong product). If the right product got there, it just needs to be returned, we handle the inventory are replacement product shipment different.

The reason we have created these steps is because the warehouse team does not know if a package is being returned unless it is reported by you. It is similar in the fact that you may not know a package is being returned unless it is reported by your customer. When you report the return and enter in tracking, this process provides documentation to the warehouse to expect the return to come back and to receive against it. It helps you track the item once it has been delivered and placed back into inventory. We also adjust your inventory correctly as well as address these issues with the warehouse team.

Do you have any tips?

Please feel free to write any holiday return tips, tricks or stories in the comment section. Give yourself a backlink from our blog when it gets approved.

To Russia, No Love. 5 Tips for Shipments to Russia

By Jeremy Rudolph on 07.21.2010

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After conversations with merchants and tips from our network of global shipping carriers, we are now recommending to our merchants that they think twice before shipping to private individuals in Russia. One of the biggest issues we have seen is that the carrier gets the shipment to Russian customs only to have it stuck…for a long-time. As anybody who sells online knows, some overseas buyers will say that is the shipper’s problem and will start canceling orders, initiating charge-backs, or causing a large support hassle.

Currently Russian customs authorities have a restriction on dutiable shipments sent to private individuals. What does this mean? Almost any product subject to tax and duties being sent to a private individual in Russia will be held and inspected by customs. This can take days and even weeks, where they are being looked at with extraordinary scrutiny in an effort to improve the accuracy of accompanying shipping documentation. Why? Foreign country, different laws. Even after this process has taken place, there is still no guarantee that the package is going to be shipped out. In the event that it isn’t shipped out, it will often be returned to sender, forcing the merchant to pay for the return shipping — expensive and not fun.

This situation is so bad that some carriers, like UPS, have “suspended acceptance of dutiable shipments sent to private individuals in Russia until further notice.”

If you decide you would like to go ahead with your shipment to an individual in Russia; we would like you to consider a few options:

1) Do not ship anything that is automatically dutiable or needs to be declared. Here are a few USPS thoughts on their Russian country “conditions” help page.

2) Make sure you know the 6 digit HS number (Harmonized Tariff Schedule number) to speed things through customs.

3) Ensure the retail value is less than $100.00 USD (Standard insurance).

4) Do not include any prohibited items and it’s best to eliminate any questionable items per the Russian Federation (e.g printed matter may be prohibited, which would require a more detailed inspection).

5) Send the package via USPS mail, which has simplified forms (but no tracking).

We don’t have a guaranteed solution for ensuring prompt accurate shipping to private individuals in Russia.

If you sell on eBay and value your eBay ratings, really think twice. Same goes for any public marketplace allowing Russian buyers and has feedback forms.

And remember, even with all this it could get stuck in customs, sent back or both. You and the buyer will be waiting for two weeks while the shipment clears customs, not having access to information and potentially in a losing situation. A good thought is to modify your returns policy and make explicit to Russian buyers that they take the risk of shipping. Get in in writing if you take credit cards (another concern).

A great way to prevent your orders from shipping out to Russia without your approval or review, is to first look into your shopping cart and change your settings to hold all international orders for review. If you are a Shipwire user, there is a setting in shipping preferences to hold international orders.

The good news we found is that Russian customs says you can still send commercial shipments addressed to businesses. Take that with a grain of salt and ship at your own risk.