Handling orders and deliveries takes time and effort. You can either:

Create a delivery plan

Outsource packaging delivery

If you’re just starting out — or want to add a personal touch — you might want to take care of this side of your online business yourself.

If you sell a lot and want to maximise your time for other things, consider getting another business to handle orders and deliveries for you.

Whichever method you choose, you're responsible for customer service. It’s important to have clear policies and processes to deal with any issues during or after delivery.

Handle returns and exchanges

Deal with complaints

A clear delivery plan helps you manage risks and build your reputation. Before you accept any orders, think through all the details. These tips will help you work out a delivery plan that suits your business and your customers.

Check customers want deliveries

First, think about whether delivery is essential for your customers. Your customers may be happy ordering online and picking items up from your store. This both saves your customers delivery costs and gives you a chance to meet your customers and understand their motivations.

Don’t assume what your customers want — ask them. Then provide whichever method (or methods) they prefer, if it also suits your business.

Explore your courier options

A simple online search brings up a range of couriers to choose from. Consider all the options — you don’t have to go with one you’re most familiar with. Think about reputation, speed, price, customer service, and insurance.

Dig into whether the courier’s principles and performance match your customers’ expectations.

Which of these matter most to your customers:

• speed of delivery
• cost of delivery
• tracking (particularly for expensive items)
• text message updates
• signature on delivery
• safe handling of fragile or sensitive items, or items that need refrigeration.

Also, check the courier’s process. How often will they pick up from you — once or multiple times a day? Do they deliver overnight? What time of day will be the cut-off for your orders?

To check pricing, compare how much different couriers charge to deliver a popular item you sell. Each courier may calculate costs differently, eg by size, weigh, or distance. Luckily, many couriers have online calculators to help you.

If you find it hard to choose, make a shortlist and call each courier. Tell them about your business, explain what your customers care about, ask how they can best serve you. This gives you a good feel for their commitment to customer service. Ask if opening a business account includes any benefits, eg discounts or online tools. Check which couriers include insurance in their pricing, and which require you to buy it separately.

Choose how to charge

You have three main ways to cover the cost of delivery: free delivery, real-time charges, or flat rates. Some businesses offer a combination, so customers can choose. Some customers will pay more for speedy delivery, but others prefer paying less (or nothing) and waiting longer.

Any pricing decisions should match your market position. For example, if you sell cheap products, your customers may expect no-frills delivery. If you sell customised or specialist products, your customers may expect to pay a little more for tracking and careful handling.

Free delivery

Some customers abandon their purchases when they see the cost of delivery. Making delivery free avoids this, but you’ll want to make the money back. Options include:

• Raise product prices to cover some or all of the cost of delivery.
• Give some customers discount codes for free delivery, eg first-time customers, or loyalty club members.
• Offer free delivery for purchases over a certain amount. This increases the average purchase amount to offset the cost of delivery.

Real-time charges

Some e-commerce platforms let you integrate real-time pricing from various couriers. Customers can then choose the exact service they want. So real-time charges can be calculated, include volume and weight information online for each product.

Flat rates

A flat rate means the same delivery price for every purchase, or set delivery prices for small, medium and large items. It works best when you sell fairly standard products with similar sizes and weights. Make sure you don't undercharge or overcharge by too much. Choose a rate that covers most or all delivery costs over time.

Also, check options with your courier. Some provide packaging for flat-rate delivery based on how far a parcel goes. This can be useful if you regularly deliver to specific places.

Verify addresses

To accurately calculate delivery costs, gather accurate addresses at your online checkout. It’s a good idea to use an address verification tool to:

• help you gather correct information
• simplify the checkout experience for your customers.

Some e-commerce platforms integrate with the AddressFinder tool.

AddressFinder(external link)

Verifying addresses is particularly important if you deliver rurally — rural delivery rates tend to be much higher. Be sure to specify urban and rural rates so you are not left out of pocket.

Add tracking

Some customers like being kept up to date with the status of their purchases. Dispatch notifications (by email or text message) show when an order has been packed, when the courier picked it up, and when it’s due to arrive.

To automate these notifications, you can integrate your website with tracking providers.

Possible providers include eShip from NZ Post.

Customers increasingly expect quick delivery, but accurate notifications may mean they’re happy to wait an extra day or two. Seeing what’s happening with their order creates peace of mind — so they’re less likely to call you for updates.

Choose packaging and labels

Packaging protects your products so they arrive safely. But packaging also plays a part in how customers experience your products. Think about:

• What to wrap your products in, eg brown paper, branded paper, tissue paper, plastic.
• What to use for padding, eg foam beads, bubble wrap, compostable shredded paper.
• What to include as well as a receipt, eg thank you note, product catalogue, loyalty voucher.

Choose packaging that supports your brand and what your customers value. This could be cheap and cheerful or bespoke and luxurious. You might even want it to look good on social media, so people share the arrival of products they buy from you. Remember people increasingly make choices based on sustainable practices, so consider eco-friendly packaging.

Your courier will likely provide packaging options too. These are worth checking out, especially if it’s important to keep costs low.

How will you label your packages — handwritten or printed? Again, this is part of your overall presentation, so make sure labels match your packaging. But consider long-term feasibility too — handwriting addresses might be okay for your first few customers, but not when you deliver dozens of packages each day.

A. Paper padding

Paper is eco-friendly, reduces packaging cost. Your customers value it.

B. Flax basket

Adds finesse to your package. Aligns with the natural brand.

C. Thank you note

Elevates customer experience. Builds customer intimacy and trust.

Work out your profit

Delivery can cost more than you might expect. Don’t invest in beautiful packaging if it means you sell at a loss. Add up all the costs involved in getting products to customers, then decide if anything needs to change.

Work out how much each product costs to make and deliver. Include in your calculation:

• the cost of making or providing your product
• packaging costs
• delivery costs
• any costs you need to cover if your customer returns it, including from overseas
• credit card fees.

Add up all these costs. Subtract them from the product’s price tag. Do you make money on each sale?

If you lose money — or make less than you expect — it’s time to make changes. Options include raising product prices, cheaper packaging, or a new delivery price or model. Juggle the components until you find the sweet spot. Your e-commerce platform or integrated tools may help with this.

Plan for loss or damage

This is when insurance comes in handy. Most couriers offer insurance at reasonable prices. Some offer free insurance for packages worth up to a certain amount. And some build insurance into their pricing. Be sure you know who covers costs if something goes wrong, especially before you send expensive items.

You can choose to offer customers insurance when they order online. If they want their item insured, they pay a little extra.

Whoever pays, remember you’re responsible for packages until they reach your customers. If something goes wrong, don’t ask your customer to deal with the courier. It’s up to you to sort it out. A lost package could lose you a customer, so it’s worth finding a quick resolution.

Write a delivery policy

A written delivery policy helps you be clear about what customers can expect. In your policy, set out:

• delivery costs and options
• who pays postage on returns — consumer law says it’s usually the customer, but you might decide to pay
• if packages will be tracked
• timeframes
• how to get in touch if something goes wrong.

Think about exports

You’ll have a few more things to think about if you export. Exporting is selling to someone overseas. You export as soon as you send even one item overseas.

Make sure you know what you can and can’t export.

Export prohibitions and restrictions(external link) — New Zealand Customs Service

And add customs forms to your to-do list. On these forms, you write what’s in the package, how much it costs, and confirm it’s not a gift. This tells customs officers in the destination country that your package is safe, plus it lets them collect taxes on certain items.

Customers are responsible for paying any taxes, so remind them taxes may apply. Find a place on your online store to set out your delivery policy, so customers are well informed.

Understand different ways to ship and distribute

Manage inventory well

When selling online, inventory means products you stock so you can quickly fulfil online orders.

Holding inventory has pluses and minuses, so it’s important to order and store the right amount. Too much inventory affects your cashflow, but too little can lead to delays for your customers.

Managing inventory

If handling orders and deliveries seems like a lot of work, consider outsourcing the job to a logistics company. They’ll store, package and deliver products for you.

Because you sell online, orders automatically forward to your logistics company by email or through an app. This means they can start work as soon as your customer hits the ‘buy’ button. Logistics companies do this all day, every day, so they can get orders out more quickly, efficiently, and cheaply than you can.

Outsourcing can play a key part in optimising your online business. But think through the pros and cons first.

If you’re unsure, talk to a few logistics companies to get the full picture. Search online for third-party logistics. New Zealand has a wide range of companies to choose from.

Outsourcing — focus on your core strengths

Dropshipping

Dropshipping businesses outsource almost everything — creating and making products, packaging and delivery. Dropshipping means selling other people’s products. If you choose this as your business model, you put all your effort into marketing and customer service.

Selling other people’s products: dropshipping

Dealing with returns and exchanges is unavoidable. Doing this well helps build your customer base and strengthens trust in your brand. Putting right what’s gone wrong shows integrity — customers will remember that.

It’s not always your job to do what the customer wants, and it’s important to know the difference.

You’ll need to:

• understand what’s fair
• have a clear policy for sorting things out
• make it easy for customers to tell you what’s wrong
• consider options other than returns.

What’s fair

Legally, you only have to replace, repair, or refund under certain circumstances, eg a faulty product.

Customer complaints: What fair means

However, you may choose to do more. Be careful to strike a balance between what’s good for your customer and good for your business. You want to encourage customer satisfaction and loyalty, but you shouldn’t be left out of pocket.

Returns policies

A written returns policy helps you be clear about how any issues will be handled. Make sure your policy is line with the Consumer Guarantees Act, which protects customers who buy faulty products or substandard services. You can do more than what’s legally required, but you can’t do less.

It’s a good idea to include:

• if customers can return or exchange unwanted items, eg they change their mind or buy the wrong size
• timeframe to return unwanted items, eg within how many days
• condition of unwanted items, eg unused
• what they get in exchange for unwanted items, eg refund or store credit
• how to return items and who pays any costs — free, no-hassle returns can boost purchases.

Fair returns and complaints policies

Contact details

Make it easy for customers to tell you when something goes wrong. It helps to place your returns policy:

• in the footer of your website, if you have one
• on product pages
• in the customer’s shopping cart
• at the checkout.

Make sure your online store has a contact page, or makes contact details clearly visible. Invite customers to tell you if they have any problems.

Alternatives to returns

Refunds can be painful. You lose the sale and may lose money because of return delivery costs.

For unwanted items, think about options more attractive than a refund. For example, offer free return delivery if the customer exchanges it for another product. Or offer a gift card or store credit worth more than the item they want to return.

You cannot offer store credit or gift cards if the item is faulty, or there’s another problem protected by consumer law. If the problem is:

• major — your customer decides if they want a refund, repairs or a replacement
• minor — you choose whether to offer a refund, repairs or a replacement.

Good systems and processes help cut down on complaints. So do clear policies that customers can find easily. But complaints will happen, and you should know what to do when they pop up.

Get prepared with the right attitude: be ready to apologise, stay open to solving problems, and avoid confrontation if you can. It’s a good opportunity to turn customers around and build on your customer service reputation. Handling complaints proactively and authentically helps create loyal and long-term customers.

Reducing risk of complaints

Turning negatives into positives(external link) — Digital Resources