When choosing shipping providers, accurate tracking is more important than price

12Jan10

Big retailers like Amazon have trained customers to expect free shipping, or at least a low-cost economy shipping option. When choosing shipping providers for your own company, should you go with the lowest-cost provider? Probably not, and I’ll explain why.

In most cases, the cheapest shipping option will be the US Postal Service. But even if you pay for their delivery confirmation service or something else that sounds like tracking, every shipment with the USPS is basically a giant black hole until it either arrives or is declared lost. Third-party services that use the USPS for part of the delivery cycle (such as FedEx SmartPost) have the same problem. So if you ship packages with these USPS services, that means that customers won’t be able to get accurate tracking info.

Who cares about accurate, real-time tracking? A whole lot of customers and prospects. Whenever I buy something online, I try to avoid retailers who ship only with the USPS, and I’ll always choose UPS or FedEx for more expensive or fragile items. I’m sure some percentage of the overall online buying population feels the same way. And even if a customer doesn’t know any better before they place their order, and they choose the USPS option, they’ll be quite upset when they try to track it and get a bunch of nonsensical messages for days or weeks after the package was sent.

There’s a better way to deliver low-cost shipping without sacrificing customer acquisition and retention. Just pick the most affordable carrier that has real tracking data, like UPS or FedEx, while avoiding services like FedEx SmartPost that hand packages off to the USPS. Ship everything (or at least all your domestic shipments) with that carrier, and be aggressive about asking for discounts based on your growing shipping volume and loyalty. Over time, you should be able to get rates that rival the USPS. Meanwhile, make sure to let customers know that you’ve chosen a high-quality shipping option that lets them track their order every step of the way, rather than turning shipments into a guessing game like your competitors may be doing.



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