The knowledge of shipping zones is so crucial in the order fulfillment world, although most ecommerce business owners endeavor to understand how the zones work.
This post will cover some of the frequently asked questions concerning shipping zones, and let you know how to choose the right shipping strategy for your eCommerce business. So let’s dive in to find out.
1. What Are Shipping Zones in Ecommerce?
According to ShipBob, geographical areas where carriers transport goods are known as Shipping Zones. Domestic shipments in the US start right from Zone 1 to 8. Shipping carriers utilize shipping zones to calculate the distance a package travels according to groupings of zip codes, from the point of origin to the destination.
The area from which an order is transported is the point of origin and is found in Zone 1. The place it’s ferried to is the destination zone. And its number solely relies on the far it is from the point of origin, with the distant zone being Zone 8.
Many small businesses choose to use USPS due to its cheap and credible nature. For most retailers not utilizing distribution centers, they have to schedule how they’ll ferry goods across the continental US’ 2,500 plus miles of coast to coastal consumers.
2. How do you calculate shipping zones?
Zones are dynamically calculated based on where your package is ferried from. This could mean that two distinct points of origin that are shipping to a similar destination address can be shipped to totally different zones.
For instance, if you transport from Los Angeles, California to St. Louis, Missouri, you are hauling to Zone 7.
Nonetheless, in case you ship from Dallas, Texas to St. Louis, Missouri, you are hauling to Zone 4.
Need to determine shipping zones for your orders?
USPS Domestic Zone Chart: Navigate to the tab “Get Zone for ZIP Code Pair.” Simply enter the zip code you’re mailing from and the zip code you’re mailing to, and you will get the shipping zone for your destination.
UPS Zones and Rates for the 48 Contiguous States: Enter your zip code of origin and download zone charts to Excel.
3. How do shipping zones affect the cost?
Shipping carriers utilize zones to calculate rates for certain services. Some service providers use a flat rate, allowing you to pay the same price regardless of the destination (as long as it’s within the US).
USPS enlists which services are zoned (Priority Mail Express, Priority Mail, USPS Retail Ground, and Bound Printed Matter) and which are not (First-Class Mail, USPS Marketing Mail, Library Mail, and Media Mail).
For services that are zoned, the greater the zone, the greater the cost in most cases.
4. How does order weight affect shipping cost by zone?
Besides the carrier and service users, as well as the origin and destination zip codes, precise shipping rates will also rely on order weight and dimensions.
Given the January 2019 change to zone-based pricing for even lightweight packages sent via USPS First Class Mail, all businesses are affected by distance. However, the heavier a package is, the more dramatic the price increase will be as the zones increase.
Hence, you will encounter a lower shipping cost if you ship from a location closer to the end customer.
The lower the zone, the more manageable the cost for you and your customers.
Shipping cost by zone example – ShipBob
A note on dimensional weight: Shipping carriers utilize this pricing method to estimate weight calculated from the length, width, and height of a package, utilizing the longest point on each side.
The shipping expense will depend on which number is greater: the actual weight of the package or its calculated dimensional weight.
5. How can ecommerce companies afford to offer free shipping?
It may appear counterintuitive to provide free shipping when it can get so expensive to deliver orders to high zones. Ecommerce businesses that incorporate free shipping into their pricing policy must be strategic in their decision to make sure that it won’t harm their margins. It’s generally done using one of the following options:
They incorporate shipping expenses into the price of the product (utilizing the average shipping cost)
They need a minimum dollar amount to be spent (to increase the average order value)
They lessen the number of zones they ferry to.
6. How do shipping zones affect delivery speed?
In case a package is sent to a close distance (such as Zone 1 or Zone 2), it will reach its destination in fewer days compared to a package sent to a farther zone, such as 7 or 8. Minimizing transit time is more significant because slow ships affect your customers.
About 73% of buyers expect affordable, fast deliveries, while 24% of customers cancel an order due to slow shipping.
Today’s consumers think that the maximum number of days considered reasonable to wait for their order is only 4.1 days (as compared to 5.5 days back in 2012).
In case all of your stock is fulfilled from one location, for instance, out of New Jersey, it can take 5-6 days to reach its destination in Oregon.
7. How Do Shipping Zones Affect Fulfillment?
The fulfillment of an order relies on several things. Including the courier company of your choice, the package handling services you hire, and the distance the package has to travel all influence the process of fulfillment.
Cost
A substantial impact of shipping zones on fulfillment is linked to cost. The shipping rate for your package relies on the shipping zone it travels in. Additionally, different zones can have distinct rates based on the mail class that is used. Specific mail classes are available for some zones but not for others. This, along with the weight and dimensions of the package, influences the cost of the shipment
Delivery Speed
Another significant factor of shipping is the speed of delivery. The distance the package has to transit is directly proportional to the delivery speed. In case a package is to be delivered to a nearby zone, then you can expect fast delivery; the further the zone, the longer the delivery time.
Transit time
The time of transit refers to the time a package takes en route to its destination. This is normally a hard time for the package. It can easily get lost or damaged at this phase. The limited-time your package takes in transit, the better the possibility that it will be delivered safely. Destinations are specified carefully, decreasing the transit time.
Shipping Costs
Zones simplify your shipping costs calculation. They are a systematic approach to assigning shipping expenses to various destinations and mail classes.
Fulfillment process
The zones similarly facilitate the fulfillment process by automating the most tricky issues for the courier firm. Recognizing the destination, mail class, and cost assigned to a package quickly solves most of the issues. There isn’t confusion for the courier firm and that ensures that the process is clear, easy, and fast.
How Can Ecommerce Business Owners Pick the Right Shipping Strategy?
The most crucial aspects to be considered when choosing the right shipping strategy can be divided into three categories. Namely:
Product size and weight: What’s the distinction in size and weight from your minor, lightest SKUs to your biggest, heaviest SKUs?
Shipping destinations: Where are you transporting to, international or local?
Shipping options: What are the preferred shipping carriers or services for your personal needs?
1. Product size and weight
First of all, product size and weight are always the easiest to think about and have an enormous impact on the approach you choose.
In case your commodities are fairly uniform, then going with a per-item, zone-based strategy, where the shipping price varies by your customer’s location as opposed to by-product size or weight, works well.
This is also a better place to build easy-to-understand promotions such as $10 shipping per order, $5 shipping per item, or even free shipping over $50.
For retailers with varying sizes and weights within their set of products, getting rates directly from a carrier such as UPS, DHL, Australia Post or others is a good way to make sure the rates you’re giving to your customers are the best possible ones.
The significant thing to concentrate on here is ensuring that your products have accurate weights and dimensions so that the rate you’re offered by the carrier is as accurate as possible.
To achieve this, categorize your products and concentrate on getting product weights and dimensions for the heaviest or largest 20% and smallest or lightest 20%.
This will positively impact your shipping rates and offer the best return on investment.
2. Shipping Destinations
Shipping destinations can be just as important as product dimensions and weight.
Similarly, in a simpler scenario like domestic shipping, a flat-rate or free shipping option works well.
To enhance it a bit, set rates based on zones. For instance, in case you’re located in New York, offer a cheaper rate for the mid-Atlantic region and increase the rate as you radiate out from there.
Shipping internationally normally makes it possible to get a rate straight from a carrier such as the USPS, DHL, or others. Rates can differ considerably even in neighboring nations and it’s hard to create your rates for these scenarios.
- Shipping Options
Managing your shipping options allows you to delight customers and keep costs in check.
Look beyond the big-name carriers and you’ll find a world of opportunities to offer same-day delivery, next-day delivery, or timely and cost-effective delivery for even the largest items.
In main cities, you’ll often find local delivery and courier companies that will deliver more quickly to your customers than the big carriers at very competitive rates.
How Would Using Multiple Fulfillment Centers Benefit ECommerce Retailers in Reducing Shipping Costs?
Using a 3PL offering multiple fulfillment centers can be quite beneficial for your eCommerce business. Whenever it comes to the location of a fulfillment center, you must consider where your customers are located. Since your customers don’t usually reside in a single geographic region, using one fulfillment center can make it nearly impossible to efficiently reach the majority of people who buy from you.
The best way to reach as many customers as you want is by distributing your inventory across multiple fulfillment centers. Inventory distribution is the splitting of products across various fulfillment centers that are strategically located closer to the end customers.
Let us take a look at a few of the benefits of tying up with multiple fulfillment centers :
Deliver Faster to Customers
With customers expecting fast delivery of their orders, next-day, or even the same day, using multiple fulfillment centers and storage locations lets you reduce the delivery times.
With today’s expectation of next-day delivery and same-day delivery, a longer time in transit can prevent your customers from buying from you in the first place or making a repeat purchase. According to reports, nearly 49% of customers are more likely to shop online if they receive their products the same day or the next day.
For example, if you utilize fulfillment centers in hubs located in Delhi and Mumbai, it will be easy to get the orders delivered the same day to people living in both cities, as the inventory will be situated closer to them.
On the other hand, if your inventory is located only in Delhi, it will take a much longer time for the package to be delivered to your customers residing in Mumbai. The faster a customer receives his orders, the happier he is.
Reduce Shipping Costs
When you ship products from only one warehouse, it can take a long time to reach your end customer. A longer shipping distance means increased shipping costs. Thus, you will have no option but to charge your customers for these increased charges. High shipping costs are one of the top reasons for shopping cart abandonment.
Keeping stock closer to your customers helps lower shipping costs because orders will travel a shorter distance. It is always less expensive to ship an order 40 km than 400 km. Of course, having access to a 3PL’s network of e-commerce fulfillment centers lets you use multiple facilities without paying for the infrastructure, staff, and equipment yourself.
Disseminating your stock across multiple fulfillment centers allows you to grow your business. As and when your business grows, you will need to expand your inventory volume, which means you need more space to store your products. And growth comes down to speed. If you can get your inventory shipped out to your customers faster, you can deliver more products and improve the customer experience. It’s a win-win situation!
Reduce Returns
Given multiple fulfillment centers, you can store your inventory closer to your customer’s delivery location. This will result in reduced delivery time and cost. So, if your orders reach your customers on time in the best state possible, the chances of return orders decrease by a large margin. Major causes of return include late delivery, tempered packaging, etc. Multiple fulfillment centers can help you avoid these problems and serve your customers better.
Avoid Risk
Engaging multiple fulfillment centers to store your inventory helps you in having a backup of inventory in other fulfillment centers in case, for any reason, a package cannot leave a specific fulfillment center. For example bad weather conditions. Terrible weather conditions or any other natural calamity prevent shipping companies from making it to the fulfillment center and cause delays in shipping. This impacts the order delivery process. When you split your inventory across multiple fulfillment centers across various cities, you will have backup inventory in the other locations.
Key takeaway: ECommerce businesses can benefit from partnering with a reliable 3PL to handle the shipping and order fulfillment piece of the business so that they can focus on growing their revenue.
Conclusion
Having the right information about something you’re either intending to do or doing is so important. Now that you know what shipping zones are, how they can impact your eCommerce business, and how to choose the best shipping strategy. You have all the necessary information to help you identify your shipping zone as well as the right shipping strategy.
