Introduction

1. Basic concepts and explanations

1.1. Effective shipping and fulfillment strategy

Shipping is one of the crucial steps to provide an efficient product to the customer with ideal costs concerning production of your goods, to reach the customer and to receive the payment. To deliver the product safely with an efficient cost to the customer there are some factors to be considered such as destination, specification of the content, weight, dimensions etc.

Shipping costs are one of the highest expenses for small- scale works and businesses, but shipping and fulfillment strategies help entrepreneurs to reach the customers on time with reasonable prices.

Price calculations for small-scale businesses are based on the amount and frequency to be sent for all shipping companies. If the volume of the shipment increases, price is lowers basically. However, negotiation is possible for many cargo companies. For many companies, membership accounts are available which helps to reduce shipping costs.

Using packages provided by cargo companies may prevent to face additional dimensional fees. Companies can supply various package types for different products. The most common ones are plastic bags, carton boxes, air channel packages for sensitive products, roller packages for paintings and paper in different sizes and dimensions.

The shipping and fulfillment strategy is an integral part of the sales profitability. If done correctly, shipping strategy and package can help foster repeat sales and even help acquire new customers.

1. Basic concepts and explanations

1.2. Shipping methods

Based on the area, shipping methods are divided into two groups as domestic and international transportation. Domestic shipping includes transportation inside the country and documentation of the goods consist of the national regulations. Cargo companies take a package and transfer it to the customer.

Based on type of the transfer vehicle, airfreight, shipping and road transport are available. Airfreight and transportation by sea are common overseas commerce in large-scale. Moreover, road transfer is the most common shipping type between the countries which has boarders. For handcraft materials in small quantities, related cargo companies may transfer the goods by road transfer. Way bill and invoice may be necessary. In some cases, packages needs custom declaration, thus, should be need some more documents. Cargo companies can make recommendation and direct to choose the right way.

1. Basic concepts and explanations

1.2. Shipping methods

1.2.1. Different types of pricing strategies

Free shipping might be defined with a minimum order amount or minimum number of items. Offering free shipping is one of the ways to get customer’s attention. Overall, it is clear that displaying ‘Free Shipping’ on the sales provides significant advantage over any competitors in the same field. (Anonymous 2018a).

1. Basic concepts and explanations

1.2. Shipping methods

1.2.2. Different types of pricing strategies

Agreements with a cargo company for continuous work may help to lower the shipping rates due to work capacity. Also, choosing the best carrier individually for each order can cause lower rates. While it may seem time and labor intensive to reassess your shipping choice every time you receive an order, different shipping carriers can offer drastically different rates based on the weight, dimensions, and destination of your package.

Negotiation with different cargo companies may incentive to offer more competitive pricing. A brief rundown about future work capacity and aims for future might be effective for the rates. On the other hand, as shipping rates are determined by the calculations on weight and dimensions, another thing to help lower your cost of shipping is by using packaging provided by the cargo companies.

1. Basic concepts and explanations

1.3. Customer shipping options

Shipping and delivery is a major sales driver for retail business due to the expectation of the customers to reach the items quickly and easily. Some of the customer shipping options are indicated as below (Ufford 2018).

Same-Day Delivery

Same-Day- Delivery is a service that ordering online and receiving the delivery in the same day which is a kind of express service. (Ufford 2018).

In-Store Pickup

In-store pickup allows customers to shop for items online, checkout, and pick them up within a set timeframe at a local store or place (Ufford 2018).

Ship from Store

Ship-from-store is a service that retailers turn their offline locations into fulfillment centers that cater to both in-store and online shoppers (Ufford 2018).

Scheduled Delivery

Scheduled delivery is a service that shipping companies offer customers the option to schedule their deliveries within a set window for a small fee or for free if they are members of their loyalty program. (Ufford 2018).

1. Basic concepts and explanations

1.3. Customer shipping options

1.3.1. How to charge customers

One of the stressful points at the beginning of sales is to charge to the customers. Except the expenses of the product during production period, there may be some other costs after the production to be considered to get attention by the customers. Shipping costs are evaluated by in this option.

To get attention to lower the price of the product carrier costs might be stated separately. During the sales, price without shipping cost might be given where the transfer costs will to be covered by the customers. In this point, preference for the cargo company and terms might be defined by the customer and, according to customer need, shipping will be processed. On the other hand, price of the product and shipping cost defined by cargo company might be stated separately.

Charging shipping costs to sale price may provide competitive prices for product which gets attention of the customers.

1. Basic concepts and explanations

1.3. Customer shipping options

1.3.2. Offer free shipping

Offering free shipping (typically only on domestic orders) is a proven method to get customers’ attention and increase conversion. But depending on margins, it can significantly decrease the profits (Anonymous 2018b).

If free shipping is offered in any capacity in any offer amount and quantity, it should be considered to know how much it actually costs to ship the products, how the competitors handle shipping and the profit margin. That will help to make the right call on whether or not for offering free shipping. Another option is to define minimum order totals above the average order value, or for a minimum number of products per order (Anonymous 2018b).

Some of the advantages of free shipping are to remain competitive or undercut the competitors' shipping options, improve conversation, increase the average order value and reduce abandoned carts. On the other hand, increased prices to cover the shipping cost should be considered to compare with competitors in the market (Anonymous 2018b).

1. Basic concepts and explanations

1.4. Packaging & Marketing

1.4.1. Calculating rates

When it comes to classifying freight one of the biggest things to take into consideration is density. Certain items you may hear are density based. Typically the denser the item, the lower the class rule applies. When it comes to freight when you have a low class high density item it will cost less to ship then the opposite an item with a higher class low density (Anonymous 2018c).

Calculating freight density will also provide with a recommended class for the shipment. The freight class chart below is an abbreviated scale that can be used to help estimate the freight classification for the shipments (Anonymous 2018d).

1. Basic concepts and explanations

1.4. Packaging & Marketing

1.4.2. Packaging techniques

1.4.2.1. Basic packaging method (single box packaging method)

• Ship no fragile products like soft goods inside a sturdy outer box.
• Use fillers like crumpled newspaper, loose fill peanuts, or air-cellular cushioning material to fill void spaces and prevent movement of goods inside the box during shipping.
• Place goods that might be affected by dirt, water, or wet conditions inside a plastic bag.
• Consolidate small parts or spillable granular products in a strong sealed container, such as a burlap or siftproof plastic bag, then package in a sturdy outer box.
• Use the H taping method for sealing your package (Anonymous 2018e).

Picture . Single box method (Anonymous 2018e)

1. Basic concepts and explanations

1.4. Packaging & Marketing

1.4.2. Packaging techniques

1.4.2.2. Box-in-box method

• Wrap product(s) individually with at least 5-cm (2") thickness of air-cellular cushioning or foam material to fit snugly inside a corrugated box.
• Restrict product movement inside the box using filler like crumpled newspaper, loosefill peanuts, or other cushioning material.
• Close and tape the inner box using the H taping method. This will help prevent accidental opening.
• Use a second box that is at least 15 cm (6") longer, wider, and deeper than the inner box.
• Choose the wrap or fill method to cushion the inner box inside the larger sturdy outer box. • Ship fragile products individually, wrapping them in a minimum 8-cm (3") thickness of air-cellular cushioning material.
• Wrap the inner box with 8-cm (3") thickness of air cellular cushioning material or use at least 8 cm (3") of loose fill peanuts or other cushioning material to fill the spaces between the inner box and outer box on the top, bottom, and all sides.
• Fill any void spaces with more cushioning material.

Use the H taping method for sealing your package (Anonymous 2018e).

1. Basic concepts and explanations

1.4. Packaging & Marketing

1.4.3. Special handling label

Shipping and Handling Labels are preprinted labels that identify proper handling directions and in some cases destination information. These labels may indicate contents of package such as Flammability or Fragile or they may indicate directions for handling (Anonymous 2018j). Shipping and handling labels alert shipping personal to all handling instructions and needs. There are several types of shipping and handling labels, including as indicated below.

Mailers and small package labels are used to caution personnel on specific handling instructions for small packages sent through the mail (Anonymous 2018j).

Production and small package labels will draw attention to packages through the production and shipping process (Anonymous 2018j).

International pictorial markings are used for international shipping. Picture labels reduce the risk of error since personnel in other countries may not understand the language of the package's origin country but it is recommended that additional labels in the language of the shipment's destination be used to ensure proper handling. Labels should be used to ensure compliance with environmental and safety standards and to identify hazardous materials (Anonymous 2018j).

Up arrow labels help protect fragile packages so they arrive safely. Up arrow labels are part of the international pictorial labels (Anonymous 2018j).

Fragile/Glass labels draw attention to package contents and proper handling instructions such as "this end up" (Anonymous 2018j).

Rush Labels are used for temperature dependent or medical supplies packages. Perishable drugs which need to be refrigerated and are needed in life saving situations often use rush labels (Anonymous 2018j).

Temperature awareness labels instruct shipping and handling personnel on the proper temperature requirements for the package. These labels are used for frozen and/or perishable goods (Anonymous 2018j).

Hazard labels identify packages with hazardous goods. They alert shipping and handling personnel to special storage and segregation needs during transportation. There are strict regulations for the shipping of dangerous goods and special documentation, such as chemical data, is often needed. Hazard labels should be used for explosive materials, gases, flammable liquids, flammable solids, spontaneously combustible or water reactive substances, poisonous substances, and corrosive materials (Anonymous 2018j).

Biohazardous labels identify packages of bio hazardous goods such as bio waste, human or animal specimens and used laboratory equipment (Anonymous 2018j).

Special handling labels cover all special shipping and handling instructions. Labels can be custom designed with specific instructions. They are often warning labels or shipping instructions (Anonymous 2018j).

Design Tip: The labels should be applied on three faces of the package, preferably side, and/or ends and top (Anonymous 2018j).
commoditiesrequire special handling or storage, the shipping package should be so marked, and this information should also appear on the bill of lading (Anonymous 2018j)

1. Basic concepts and explanations

1.5. Transferring documents – customs declaration and forms

What is a custom declaration ?

A customs declaration is an official document that lists and gives details of goods that are being imported or exported.

In legal terms, a customs declaration is the act whereby a person indicates the wish to place goods under a given customs procedure (European Commission 2018).

Who should lodge a customs declaration ?

In general it is the owner of the goods or a person acting on his behalf (a representative).
The person having control over the goods may also perform it. These persons may be individuals or companies, as well as in certain cases associations of persons (European Commission 2018).

Where should a customs declaration be lodged?

The declaration should be lodged with the customs office where the goods were or will shortly be presented (European Commission 2018).

Where should a customs declaration be lodged?

In order to comply with the legal obligations and to place goods under a customs procedure, a customs declaration needs to be lodged (European Commission 2018). This should happen in two cases:

• upon importation, when goods are brought into the customs territory, they must be assigned to a customs-approved treatment or use
• and goods intended for export - must be placed under the export procedure

1. Basic concepts and explanations

1.6. Insurance & Tracking

What Is Cargo Insurance?

Legally, all carriers must carry a minimum amount of insurance, known as carrier liability. However, carrier liability provides very limited coverage, and anything from natural disasters to vehicle accidents or even acts of war could damage your cargo. Therefore, shippers can request cargo insurance to protect their goods from loss, damage, or theft while in transit. Generally, goods are insured while being stored and while in transit, until they reach the buyer (Robinson 2016).

There are different types of cargo insurance policies, some going by names such as “all risks,” “broad form,” “legal liability,” and “motor truck freight”. However, most of them are necessary for high capacity shipments over the seas.   Cargo insurance can be taken for international as well as domestic transportation (Robinson 2016).

2. Active learning

Follow the steps indicated below to send the cargo :

Step 1: package your product with the proper conditions

Tips to make suitable cargo package:

• Choose the proper package type,
• Choose the proper package size,
• Cover sensitive products with protective soft materials,
• If any need, use some caution labels such as «fragile», 
• If any need, mark the handle angle.

Package types (Anonymous 2018f)

Step 2: write your and customer’s contact information on the package

Step 3: choose your cargo type and company

Some of the cargo companies in Türkiye to work national and international way:

• Aras Kargo: www.araskargo.com.tr/
• Fedex Kargo: www.fedex.com/tr/
• Mng Kargo: www.mngkargo.com.tr/tr/
• Ptt Kargo: www.ptt.gov.tr/ptt/
• Sürat Kargo: www.suratkargo.com.tr/
• TNT Kargo: www.tnt.com/
• UPS Kargo: www.ups.com.tr/
• Yurtiçi Kargo: www.yurticikargo.com/

Step 4: reach the company and give the package 

Some of the ways to reach cargo companies:

• Branches,
• Mobile branches,
• Internet web site,
• Mobile applications,
• Sms,
• Self-service,
• Call center.

Step 5: tell them who will pay the bill (customer or you)

Step 6: ask for the invoice.

Invoice includes some information as below:

• Sender’s name, address, telephone etc.,
• Receiver’s name, address, telephone etc.,
• Cargo size and type details such as quantity, dimensions, etc.,
• Payment details (receiver/sender),
• Date, invoice details and tracking number.

Step 7: share tracking number with customer

Step 8: track

Tips to work with cargo companies  :

• Asking the customer for the preferance (company, brach etc.) before transfer might be good idea. She/he may have a special requirement for it.
• Product should fit the package. Suitable packaging may lower the cost.
• Signing agreement with cargo company may lower the cost.
• Agreement may provide some advantages such as receiving cargo on your adress without any cost.
• Before transfer, branches and delivery time should be checked by the cargo.
• Catching and sharing cargo number with the customer may help to deliver at time.

3. Quiz

4. References

Anonymous 2018a. 27.09.2018.
https://snapretail.com/snapretail-blog/charge-customers-shipping/

Anonymous 2018b. 27.09.2018.
https://support.bigcommerce.com/articles/Learning/Shipping-Options

Anonymous 2018c. 27.09.2018. How to determine density
https://pnglc.wordpress.com/2011/01/17/how-to-determine-density/

Anonymous 2018d. 27.09.2018. Pallet Density Calculator.
http://palletrater.com/density-calculator/

Anonymous 2018e. 27.09.2018.
https://support.easyship.com/hc/en-us/articles/115003423492-Packing-Instruction

Anonymous 2018f. 27.09.2018.
https://www.shopify.com/blog/14069585-the-beginners-guide-to-ecommerce-shipping-and-fulfillment

Anonymous 2018j. 02.10.2018. Shipping and Handling Labels Information.
https://www.globalspec.com/learnmore/material_handling_packaging_equipment/packaging_labeling/shipping_handling_labels

European Commission. 2018. 02.10.2018. Customs Declaration.
https://ec.europa.eu/taxation_customs/business/customs-procedures/general-overview/customs-declaration_en

Robinson, A. 2016. 25.08.2016. Cargo Insurance: What is it, What are the Types, & Do I Need it for My Shipment?.
https://cerasis.com/2016/08/25/cargo-insurance/

Ufford, L. 2018. 21.03.2018. Shipping Success: Put Your Customer In Control of Delivery Options.
https://www.shopify.com/retail/shipping-success-put-your-customer-in-control-of-delivery-options