Waiting for a delivery to arrive might be the most frustrating part of online shopping. The entire experience is designed to be convenient, and there’s no reason the checkout-to-door experience can’t be the same way. While two-day shipping has become the industry standard thanks to platforms like Amazon, shoppers want an even better solution. With as many as 88% of consumers ready to pay extra fees for expedited delivery, overnight shipping becomes the difference maker for every ecommerce business.
When you offer customers overnight shipping, you’re not just offering speedy delivery options; you’re promising shoppers a higher level of service when they shop at your ecommerce store. Limited shipping options can negatively impact the conversion rate. Up to 22% of online consumers abandon shopping sessions because the shipping options are not satisfactory.
If you want your business to stand out from the competition, having expedited, same-day delivery options for your customers will do the trick!
What is overnight shipping?
In overnight shipping, deliveries are completed on extremely short timelines. Customers receive their package the very next day after placing an order. Usually, overnight shipping is the fastest delivery option offered by couriers. For example, if a customer makes a purchase with overnight shipping on a Monday, they can expect to receive their package on Tuesday.
Overnight shipping is a premium service that can add tremendous value to any ecommerce business. Despite this clear advantage, only about half (51%) of retailers currently offer such delivery options with a fast turnaround. That number is likely to rise even higher in the coming years, and your company should be able to take advantage of this critical trend in logistics.
Next-day delivery, one-day shipping, and overnight shipping
Retailers use a variety of names for the same level of service. Both next-day delivery and one-day shipping can be used interchangeably in place of overnight shipping. As with overnight shipping, this naming clearly sets customers’ expectations for a speedy delivery.
Ultimately, it doesn’t matter what you call your expedited shipping method as long as the deliveries reach shoppers at the promised time. Few things can hurt a brand as badly as failing to uphold its own delivery guarantees. A survey of U.S. shoppers found that while most customers are willing to wait up to two days for delivery, they are far less accepting of delivery times any longer than that.
How does overnight shipping work?
As with the convenience of air travel and fast food, overnight shipping requires many moving pieces that many of us take for granted. It’s incredible that you are able to place an online order with a California-based company while sitting in New York and receive your package the very next day.
But there’s a lot involved in the process.
From the moment your customer places an order to the point where they unbox the package, there are multiple steps that need to be taken to ensure a speedy delivery. Let’s look at the process step-by-step:
- Order placement: A customer places an order on your online store before the daily cut-off time, thereby qualifying for overnight delivery.
- Order processing: Warehouse workers prepare the product for shipping and hand it off to the shipping department. Urgent packages, like overnight deliveries, are shipped out on the same evening that the customer placed the order.
- Package sorting: After an overnight journey by road, rail, boat, or air, the package reaches the local distribution hub. The following day, a team at the distribution center sorts the packages according to the delivery destination.
- Delivery: Expedited deliveries are sent out the same day they arrive at the distribution hub. The courier picks up the package from the distributor and drops it at the customer’s doorstep.
The entire process, from order placement to delivery, takes less than 24 hours.
The growing popularity of overnight shipping
Overnight shipping didn’t become a viable means of transporting goods until the 1970s when it was pioneered by courier companies like FedEx and DHL. Since then, it has become an indispensable tool for ecommerce companies looking to distinguish themselves from their competition.
Today, nearly every ecommerce company offers some version of overnight shipping. For example, though Amazon’s standard delivery time is two days, members of Amazon Prime can avail of free and expedited delivery options. This is one of the most popular hooks to get people to subscribe to Amazon Prime, with 72% of users saying the unlimited free deliveries were the most important perk of the service.
Key considerations for overnight shipping
Ecommerce companies are able to meet the strict deadlines involved with overnight delivery by maintaining a robust transport network that spans the country, if not the globe.
To run a successful overnight shipping operation, ecommerce companies need to quickly process orders, track their inventory in real-time, and manage the costs of transportation — all at the same time. It seems like a daunting task, but it’s worth the effort. Customers have a clear preference for brands that offer fast delivery options, so taking the trouble to set up an overnight shipping distribution network can pay off for your business.
For an ecommerce company to successfully fulfill overnight shipping orders, it needs to pay attention to the small details, like:
- Only offering overnight delivery for orders placed before the cut-off time
- Creating a shipping label and safely packing the goods for delivery
- Dropping off the package at the designated distribution hub on the same day the order is placed
- Safely storing and sorting the package at the distribution hub overnight
- Customers should receive their package on the next business day after placing the order
How much does overnight shipping cost?
Overnight shipping is a complex, costly logistical endeavor. At a minimum, overnight shipping comes with a price tag of around $25. However, depending on a collection of other factors we will examine next, that price tag can increase to $70, if not more. So, what contributes to the final cost of shipping goods overnight?
1. Package dimensions
When you ship goods for delivery, you also have to account for their packaging and external containers. The length, width, and height of the package, along with the weight of its contents, come together to form the dimensional weight or DIM weight. Another name for this value is billable weight since this is the figure that carriers consider when setting a price.
2. Package weight
While the DIM weight has several components, the most important one among them is still the product itself. Heavier products mean heavier packages, leading to higher shipping costs.
3. Shipping zones
Most carriers use shipping zones, which are pre-defined geographical areas, to help set their rates. The number of shipping zones your package has to cross will raise the price.
4. Shipping carrier contracts
If you are regularly sending out goods for delivery, it doesn’t make sense to continue paying retail rates for shipping services. Approach your preferred carrier to set up a contract to fulfill your overnight deliveries in return for favorable rates. Research the different carriers in your area and their pros and cons before entering into a contract with anyone.
Benefits of overnight shipping
Overnight delivery can sometimes feel like a tall order, but it’s worth the effort so that your business can enjoy the benefits. These include:
1. Faster Order Fulfillment
Fulfilling orders quickly isn’t just a question of meeting deadlines. Some products, like perishable goods or emergency medicines, absolutely must be delivered as soon as possible. Overnight delivery ensures customers receive fresh goods.
2. Greater Customer Satisfaction
Overnight shipping is a great option for customers who can’t wait to get their hands on your product. Offering it as an option during the checkout phases lets the customer decide if they wish to pay extra for a faster delivery, saving you the expense.
While some customers will be fine with standard shipping options, an expedited delivery option lets you convert customers who need their packages more urgently.
3. Boost for Revenue
Every service your ecommerce company offers needs to have a business value. Overnight shipping’s value is in driving up revenue. It does this by boosting sales and outsourcing the costs of expedited delivery to the customers who opt-in. Since the customer chooses to pay for a speedy delivery, your company doesn’t have to bear the costs itself.
Overnight shipping drives up your sales conversions because it helps you target two different groups of customers at your checkout touch point: Those willing to pay for faster deliveries and those who are fine with the standard shipping period. With tailor-made shipping options to suit their needs, both sets of customers are more likely to complete a purchase.
After successfully receiving a package via overnight shipping for the first time, your customers become more confident about placing repeat orders. An effective overnight delivery operation can create valuable customers who goon to become ambassadors for your brand.
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How to Succeed at Overnight Shipping
Following a few simple pointers will help streamline your overnight shipping operation and get you ready to serve online customers. The Three things that you must remember when setting up your shipping infrastructure are:
- Store goods in multiple ware houses to ensure good coverage for your transportation network
- Choose warehouses located close to your customer base for shorter last-mile deliveries
- If customers are located in close proximity to your business, consider offering a ship-from-store fulfillment option
- Set clear terms for customers who use overnight shipping, including a daily cut-off time for placing orders
Choose the Right Overnight Shipping Partner for Success
It’s unlikely that your business is prepared to tackle the logistical challenge of shipping without an expert partner. PackageX is a one-stop solution for all your shipping needs. Transform how you ship to customers with a convenient and robust shipping app that allows you to check out rates of a vast network of traditional and on-demand carriers, create cost-effective shipping labels at scale, automate delivery notifications, and much more.
