Real challenges of e-commerce – Part 2: Your package is ready to go

All set! The customer confirmed his order and you are pretty sure everything will go well. Nothing can go wrong, we will just pack it and give it to the courier and a few days later the customer will happily receive and order and pay for it. And suddenly you wake up and realize that it was just a dream…

Choosing a delivery company

This topic truly deserves a book, and it would be really a good one. So far we can proudly say we have tried 8 different shipping companies in the middle east and we have been equally disappointed with them. This is why I decided to keep the article professional and do not mention specific advantages and disadvantages of each one, but to give you an idea about the details you should pay attention to before you sign the contract with one.

Delivery charges

Pretty obvious but yet so many companies don’t know that these rates are highly negotiable. Almost always you will not be given the best rate upon the first meeting and you will be told that rates highly depend on the volume you are about to send. So what numbers are good? It depends on your product value of course but rates from 12 AED for the United Arab Emirates are acceptable, and from 36 AED for international shipments (Saudi Arabia, Bahrain, Oman). you can declare a higher amount of packages per month than you really estimate as in the worst-case scenario they will ask you to increase the volumes to keep lower prices (don’t tell anyone about that!)

Delivery time

To be honest I wished I could skip this paragraph as delivery times is something that surprisingly is not guaranteed in all of the contracts. Here you might ask, how can I guarantee to my clients that they will receive their package within X days? The answer is simple, you cannot. And this is a big issue because if delivery time is not guaranteed on your contract the company will never take any liability for delays. And bad can delay in shipment be? Let me put it straight. The delivery company is late so client is upset and once they contact him after the time that you promised – they will not collect. The delivery company doesn’t really care because they will just return the package to you with an additional bill for the returned package and the only person who really lost is YOU.

This was the real reason why we created our Advanced Order Management System.

As much as we could handle verifying our customers, monitoring 200+ packages at the same time was something we couldn’t handle. This is when an idea was born to use our couriers API’s to have packages monitored automatically and inform us about any potential issues How does it work in practice?

1. 1. Every 4 hours our system is scanning the status of every single package that was still not delivered
   2. It cheks the entire history of the parcel, calculates total transit time and if it’s too long it sends us notification immediately, it also sends an email to the delivery company 🙂 That way they know we are on top of the delay ASAP.
   3. Advanced Order Management System will read every single comment entered by the couriers and if it sees one of the following
      • Customer Unavailable
      • Delivery attempt unsuccessful
      • Package on hold
      • Customer requested collection

      That is an immediate Red Flag that we need to contact the customer and confirm the delivery status

   4. The system will also send automated emails to the courier company if for too many days in the row there is no update about the package.

Results? Amazing! We have increased our delivery rate but more than 15%. How exactly you can understand that? If you have 10 packages daily, 300 per month and you increase the delivery rate by 15% it means that around 45 more packages will be delivered. For an average order value of 200 in our case, that means around 9000 AED more successful sales monthly. Not bad considering that we don’t have to lift a finger to achieve that now.

Payment terms

Another important factor to consider is how you will be charged, and how you will be paid by the courier company. Local shipments are usually processed much faster than international, due to delay with customers, transfers, and billing. You can expect to be paid with a 2-3 weeks delay but at the same time, you will be charged immediately for every package sent. (Psst, this is something that you can negotiate with them too).

Handling returns

This is one of the things that I should put on the top because the cost of returns can become a really big problem. Here you will encounter a few scenarios.

1. Undelivered packages will be returned to you immediately and you will be charged for each one separately. This is by far the worst option ever as it will cost you a lot of money.
2. Undelivered packages will be gathered and send back to you monthly. This leaves you without your products for almost 2 months as the standard delivery attempt time is between 21 to 30 days and then your products will be kept for another up to 30 days before sent back in bulk. Luckily this option will cost you far less than option number 1.
3. Undelivered packages will be kept in the warehouse in the destination country and can be re-delivered within the same country. This option is by far the best of all possible scenarios, providing that the company will not charge you too much for storing your items in the destination country. It is also possible to find a company (we found) that will be happy to keep the undelivered items for you free of charge for up to 90 days so you can re-sell them and get them delivered at a lower cost.

Packaging

Before you will be able to send anything you will have to think about the packaging For domestic (UAE) orders it is not so much of a problem but for international shipments, we realized that couriers quite often don’t handle the shipment with special care and there is nothing worse than a customer who receives completely devastated box. This leaves a very bad impression about you and not the courier company so before you decide to invest in packaging, make sure that it is elegant and strong.

Preparing the shipment

So you have the company and the packaging, amazing! One thing you didn’t realize though is how much time does it take to manually copy and paste customers’ data for every single package from your e-commerce shop to the courier platform…and how likely it is that you will make a mistake which will cost you another undelivered package. This is another area where we found our Advanced Order Management System very useful as we have integrated all major UAE shipping companies with it and now preparing an Airway Bill requires…one click 🙂 If you don’t have too many packages then, of course, you can handle it manually but once you reach a level of 10+ orders per day, manually copying customer delivery and contact addresses plus the parcel package becomes problematic.

One more thing worth knowing here is that you should document the packing process. If it happens that the package will be damaged when the customer opens it, this will be proof for you to claim the insurance from the shipping company. Most of those companies guarantee to return up to a certain value in case they damage your shipment. How to document shipments? We made it very simple. Test the product, put product on the airway bill and take a picture. Yes, it is that simple! It happens that the courier company will deliver wrong item as sometimes they are re-pacing items, or items will be damaged. You can always send this picture to your customer to show how the package left your building and then for the courier company to claim the insurance.

Shipment is on the way

All set, item tested, documented and packed, you hand in your package to the courier. Is your work done? There is an old good saying – if you can count, count on yourself. From the experience, I can tell you that the delivery company almost never do their best to deliver the package. They stick to certain procedures that are in many cases cost-effective – for them. You cannot expect them to call the customer at a reasonable time, or make an extra effort to contact him again if the first attempt was not successful. Most of these companies settle with bringing packages back to the warehouse and informing the clients that they can come and collect. And how do they do it? SMS mostly…like they didn’t know that a lot of people simply ignore SMS messages as they receive too many unwanted messages nowadays. Once your package is on the way you need to constantly monitor it’s progress because that is the only way you can ensure that it will be delivered and you will get your money back.

That’s pretty much it when it comes to the delivery process, in the next chapter we will talk about even more difficult topis – billing statements.

Real challenges of e-commerce – Introduction

Part 1: Good Customers, Bad Customers

Part 2: Your package is ready to go

Part 3: Billing statements

Part 4: Marketing (coming soon)