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Creating smart shipping policies and processes can be a competitive advantage.Supplied

For many small online businesses, shipping is seen as an unavoidable pain point. But savvy entrepreneurs quickly learn it’s also an opportunity to open up new markets and grow.

“Shipping can be an afterthought for some smaller retailers,” says Luke Miszczyk, director, parcels & e-commerce solutions integration at Canada Post. “But creating the right shipping policy can make you more competitive, and put you in a better position to succeed in the long run.”

Customers have high expectations, and not just about the quality and selection of merchandise. In the overall online experience, shipping matters too. Canada Post’s research shows that 46 per cent of online shoppers who abandon their shopping cart do so because of the cost of shipping or lack of free shipping.

So what’s the secret to getting into ship shape? Designing a shipping policy that meets the needs of both the customer and the business.

A key part of that process means determining how much customers will pay. Customers overwhelmingly prefer fast and free shipping. In fact, 74 per cent of e-shoppers report free shipping as the top influencer for selecting one retailer over another. But there are exceptions.

For unique products, customers might be willing to pay a little more for shipping. On the other hand, while customers want their orders fast, they might agree to wait a bit longer if it means they can save on shipping.

Free shipping can increase customer satisfaction, and can also be part of a sales strategy. For instance, offering a minimum threshold for free shipping might motivate customers to increase their cart size, which can boost margins.

Gaining that consumer insight helps. Consumers also want to know what to expect, which means making the shipping policy clear and easy to find on the website.

While considering all of the consumer preferences and habits, retailers of course also have to focus on their expenses.

“The main thing that every online merchant needs to figure out is the cost of shipping that’s associated with the shopping cart,” says Mr. Miszczyk.

Some businesses starting out online may choose to initially limit their shipping area to local or regional addresses, to keep costs in check. Flat rates enable costs to be split, but determining the optimal rate can take some experimenting. Most e-commerce businesses will also wrap some of the shipping costs into the price of the product itself.

The goal is to set a policy that neither stands in the way of the buy button nor sends margins spiralling toward the red.

Costs are only part of the shipping policy equation. Retailers also have to consider delivery times, the ability to track shipments and overall abilities.

As online retail has grown, Canada Post has broadened their e-commerce services through its Solutions for Small Business program. This program provides access to Snap Ship. The free online tool allows retailers to print shipping labels, fill out customs forms and schedule parcel pick-up.

Through Snap Ship, retailers can also obtain tracking numbers to provide their customers, who can monitor their packages through the popular Canada Post app. Shipping discounts are available too, which grow as a retailer’s volumes grow.

To make it easier for small businesses to ship, Canada Post is also integrated with e-commerce partners.

One of the biggest reasons why most Canadian businesses choose Canada Post remains its traditional advantage: reach. With more than 6,200 post office locations, retailers and customers always have a nearby location where they can drop off and pick up packages.

Perhaps most important, Canada Post is the only carrier that delivers anywhere across the vast nation – including community mailboxes, rural areas and the remotest of regions.

“One of the great differentiators we have in our network is the ability to deliver to every single Canadian address,” says Mr. Miszczyk. “There is no region too far for us.”

To succeed, online retailers have to answer many questions. Do they know how long it takes to fulfill and get packages to the carrier? Can they get orders packaged and shipped daily? Have they streamlined the order and fulfillment process so there’s no wasted time? Is their inventory up-to-date so there are no unexpected delays?

Over time, as online retailers grow, they might want to consider third-party fulfillment. That means more costs and less control, but also greater capacity, access to lower shipping rates and more time to focus on their business.

Returns are also key. Unlike customers who frequent brick-and-mortar stores, online consumers don’t get to see and touch the physical product before purchasing it. This is more often the case now as consumers are less likely to shop in-store.

Studies by Canada Post show that having a clear returns policy puts customers at ease. That makes them more likely to complete the purchase. In fact, almost two-thirds of online shoppers are influenced by the returns policy.

Mr. Miszczyk says Canada Post’s network of mailboxes and postal outlets support online retailers by allowing consumers to ship their returns back quickly and easily. That’s actually a business opportunity. When the return shipping is executed well, it can lead to more satisfied and long-term customers.

With shipping and returns policies that satisfy the demands of shoppers, small retailers can gain one of the most lucrative assets they need to grow their business: customer trust. And by fine-tuning shipping, retailers can make a valuable impact on their bottom line.

Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.