Startup logistics advice for 2022
STARTUP LOGISTICS ADVICE FOR 2022
With global e-commerce booming, it’s never been a riper time to launch an online business. But amidst the excitement of product planning and brand building, it’s essential to remember the part customers really care about – the delivery. Read on as Leendert van Delft, Vice President of Global Sales Programs at DHL, explains how startups can create a successful logistics strategy.
When launching an e-commerce business, there are 101 things to consider – from writing a business plan, to securing funding, to creating a marketing strategy. But it’s easy to fall into the trap of placing too much time and energy on these parts of the business and neglect the bit that can make or break customers’ loyalty to your brand – last-mile delivery. Investing in your shipping and delivery options will play a big part in the eventual success of your business.
According to Investopedia, the startup failure rate sits at a whopping 90%1, so the odds are stacked against new businesses from the offset. For e-commerce startups, things are even more tricky right now. Global supply chains are currently under enormous pressures due to Covid-19 and worldwide shortages of shipping containers and truck drivers. This means order backlogs and delivery delays are now a frequent occurrence for businesses – with no signs of easing up as we move towards 2022.
So, what can e-commerce companies do to overcome the odds and deliver customers their orders on time and with excellent service? As with almost everything in life, preparation is key. Read on, as Leendert van Delft, Vice-President of Sales Programs at DHL, runs us through the essentials:
- Deciding on a delivery service
- Express is best – and it shows
- The rise of parcel lockers
- Going global
- Getting accustomed to customs
- Getting the price right
- Returns, and how to handle them
Deciding on a delivery service
And it is not the case that the additional costs for fast shipping will immediately eat out of your profit: Your customers are the ones who will be willing to pay the additional charges, if they really want something the next day, they will almost certainly be willing to pay extra for this service if it is available. Just make sure your prices are clearly displayed when you offer express – especially on your website’s home page; not hidden in your website’s footer or only mentioned for the first time at checkout.
Express is best – and it shows
It’s simple. Fast delivery is arguably the most important delivery feature to consumers.Express delivery continues to evolve as e-commerce advances and customer expectations increase. It used to mean next-day or same-day delivery, but the rise of instant grocery-delivery apps over the last 18 months or so has brought the idea of “delivery within 30 minutes of placing an order” onto the playing field.
So having next day express delivery is absolutely something you should prioritize for your business – regardless of what you are selling. There’s a big difference in transit times between mail and express, and when you consider that 19% of online shoppers will abandon their shopping carts altogether if the shipping on offer is too slow3, it’s clear the former just won’t cut it.
And with DHL’s On Demand Delivery Service, you will automatically keep your customers informed along the last mile via e-mail or text. In addition, it will give your customer the choice to have the delivery on their terms: Where, when and how. And those flexible delivery options will be highly appreciated. With retailers who offer premium shipping growing 60% faster than those who don’t4, I truly believe that when you give online customers a choice of delivery options, they will be more willing to pay a fair price for a more efficient service.
The rise of service point deliveries and parcel lockers
Busy customers don’t like having to stay in and wait for their deliveries, so as we move into 2022, look out for an increase in the use of collection point deliveries and parcel lockers. DHL has over 80 thousand of these spread across the world. Customers can divert their deliveries to a collection point or parcel locker and then pick them up at a time convenient to them. Integrating this option into your online checkout could be the difference between winning or losing a sale.
There’s no risk in simply opening your doors to the international market, but there’s certainly a risk in being left behind. It’s important to know what your competitors are doing, and whether they already offer international shipping. DHL Express can help with this, thanks to our Website Health Check, which will analyze your startup’s potential and help you figure out your international business strategy, while also checking where your website could be optimized.
Evidence shows that international customers spend significantly more than domestic ones, so even if the international traffic to your website is small, it can still prove extremely lucrative. And I’m not just talking about the obvious international markets, either. Our Global Connectedness Index has tapped into 3.5 million data points linked to the cross-border movement of trade, people, capital and information – all of which enables us to guide you to the markets where your business will thrive. With DHL Express, your startup has the potential to be a truly global brand!
Getting accustomed to customs
Customs, duties and tax regulations can all be incredibly complex and time-consuming, which is where partnering with DHL Express will pay off. Our in-house customs experts will take care of all of this for you – including checking your paperwork – so you won’t have to worry about customs delays and your customers will receive their orders on time. You can also access plenty of relevant, easy-to-follow information on customs through DHL’s Trade Automation Services (TAS) or local government websites.
Getting the price right
It’s important to look at your projected average order value before structuring your shipping charges. You could offer flat-rate shipping prices to certain countries, or even free shipping for customers who spend above a certain threshold – incentivizing them to spend more. DHL Express provides free packaging options and can help you work out the volumetric weight of the boxes so that you can publish the right price for express shipping on your website.
And, if you need proof of our credentials, DHL’s delivery service was instrumental in helping fashion brands Zanerobe5 and Kulani Kinis6 achieve international penetration with minimal stress. Both companies went from ambitious startups to competitive global players in just a few months. Will you be following in their footsteps?
Returns, and how to handle them
There’s a lot of evidence that shows how return rates are much lower on international shipping, so the bigger your cross-border sales ambitions, the smaller the issue of returns delivery gets.
Returns are always going to occur in e-commerce, so your policy should take into account the additional orders you’ll earn by incorporating a free or easy returns policy. You can measure your customers’ appetite for online returns on a trial basis, in order to evaluate the potential benefits of say, offering free returns, over the losses. You could even incorporate their average cost into your overall international shipping fees to eliminate the risk factor.
No matter how new your startup is, a DHL Website Health Check is a great idea. Here's how it can help you optimize your business:
- A consultative approach to how to optimize your website for the cross-border consumer and a checklist to make sure you use shipping and delivery as a competitive advantage.
- Explore new customer channels by using competitor data to identify potential markets
- Understand the various IT integrations with a focus on connections to the different e-commerce platforms
- Provide an in-depth look at customs and trade agreements
- Supply a deeper understanding of pricing strategies when it comes to shipping, ensuring your charges are appropriate
1 - Investopedia, November 2020
2 - Business Wire, October 2018
3 - Baymard Institute, 2021
4 - Shopify, July 2020
5 - Zanerobe
6 - Kulani Kinis