Leveraging your eCommerce site and ERP to import your shipments and send out a customer email with what’s in their box, their invoice and their tracking number (updated to “shipped”) is a critical milestone, but before that, there are many more processes to be completed.
Integrating Orders and Warehouse Management
Order and warehouse management software works with a range of shipping optimization solutions and integrates with your ERP. As an order is being placed, it will automatically shop for and display shipping rates based on the size of box, weight of order, picking at the warehouse location and the ship-to address.
Depending on origination point and customer delivery address, an order might be sent in several different shipments. Conversely, several orders made by the same customer might be consolidated into a single box or shipment. As calculations are done based on your available shipping options, how do you show a final shipping price to the customer?
Flat rate shipping
Flat rate can be the simplest option, particularly if free shipping is in play (and it almost always should be an option at some level of customer purchase). Set up a matrix on the website that is based on quantity, weight, dollar value, and other details: if x, then charge y.
You’ll typically offer three options — standard/ground, expedited and overnight — and can use business logic to decide internally whether the delivery will be fulfilled using FedEx, UPS, USPS or another carrier. When a customer order hits the ERP, the price can be maximized based on how it’s assigned to what carrier.
Have the capability for a free shipping threshold built into the model. Free shipping should be heavily marketed, and options should be presented as upsells and cross sells to allow customers to achieve free shipping. Message early and often as well as at checkout…”Only $3 away from free shipping!”
Direct rate integration
Magento/Adobe features extensions of direct rate integrations for UPS, Fedex, USPS and DHL. You can choose which options to offer customers, with rates calculated based on your company’s specific rate calculator that lets you add x% as profit. This method is calculating shipping rate against the same account your warehouse management software will be calculating. In this scenario, you can tell customers exactly what it costs them, and you know what it costs you — with markup as profit on shipping.
The downside with direct rate integration is that too many choices can be overwhelming for the customer at checkout. You may decide to choose flat rate shipping instead, for that reason. Customers don’t typically have a preference as to who the carrier is in most scenarios, only how fast they can get it. If you only work with a single carrier, it’s great to have direct integration.
Payments and Recordkeeping
It’s critical to be very clear and transparent to the customer about how you work. More complex workflows are supported by erpCommerce with Magento/Adobe.
Authorization vs. payment up front
If you’re shipping multiple packages for the same order and expect all to be delivered in an acceptable time frame, it’s recommended to simply collect the full payment up front. If this is impossible, you’ll need to manage tight workflows to allow for the complexities of releasing authorizations and recapturing for the remaining balance as each shipment is dispatched, and tracking when authorizations expire if there is any sort of delay in shipping.
Consolidating multiple orders
If you ship multiple orders in a single shipment, you should add a customization that allows you to use a single shipping record to update multiple orders, line item to line item. This streamlines shipping and saves money but is another complex workflow.
Pixafy’s erpCommerce solution can help you maximize profits from your shipping selection and configurations. Contact us today for a conversation on how we can help you manage your logistics options.