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According to the most current US Department of Commerce report, from January to March 2022, more than 20% of consumer spending took place online, with online sales increasing by 6.7% while total retail sales increased by roughly 8%.
Additionally, experts predict that these figures will increase as $650 billion in non-food spending will move online by 2025. And of this total, home deliveries are expected to account for $540 billion.
It is not unexpected that package theft, missing things, and parcels ruined in transport are also on the increase given the expansion of online retail sales. According to the 2022 Package Theft Annual Report, over the previous 12 months, 49 million Americans had at least one package stolen, with the average loss amounting to more than $2.4 billion in stolen items.
There are several reasons why eCommerce packages may get damaged during shipping. Some of the most common reasons include:
- Rough handling: Packages may be dropped, thrown, or handled roughly during the shipping process, which can cause damage to the contents.
- Weather: Extreme temperatures, humidity, and precipitation can damage packages and their contents. " The best method for avoiding transportation damage is to use water-resistant packing and shape inserts to reduce interior moving. Another item to consider is how the product is sealed. "If e-commerce packages are not securely packed, they may be harmed. If the container is not properly sealed, moisture or other factors may get inside and harm the contents.
- Poor packaging: Packages that are not properly packaged can be more susceptible to damage. For example, if an item is not securely wrapped, it may shift around and become damaged during shipping. If you don't test the packaging to ensure that it fits well, is secured, and can survive severe handling, it might be difficult to get the packaging just right. When eCommerce suppliers or merchants don't conduct their full diligence in investigating and testing various product packaging choices, packages can get damaged.
- Mechanical failure: Equipment used to move and sort packages, such as conveyor belts and sorting machines, can malfunction and cause damage to packages.
- Human error: Mistakes made by people handling the packages, such as incorrect labeling or routing, can also cause damage.
- Incorrect packaging labels: An infant should be carried differently than a toddler, who should be carried differently than a bag of potatoes. Individuals who deliver packages are more inclined to handle them carefully if they are aware of what is inside. To comply with the product protection regulations, be sure to apply the proper stickers to each package. Offering a lovely packing procedure with branded wrapping helps to increase customer loyalty and is a terrific approach to having more control over delivery.
- Natural disaster: Packages can be damaged or lost during natural disasters such as floods, hurricanes, or earthquakes.
ECommerce businesses need to use proper packaging and labeling methods, and for customers to inspect their packages upon delivery to ensure that their items have arrived in good condition.
Shipping damages can harm a business by causing loss of merchandise, delays in delivering products to customers, and resulting in negative customer reviews and complaints. Damaged goods may also have to be sold at a discount or returned to the supplier, resulting in financial losses. Additionally, if a business has a high rate of shipping damages, it may struggle to maintain good relationships with suppliers and carriers, which can negatively impact the overall supply chain.
In a recent poll of more than 7,000 consumers, it was discovered that one of the three leading reasons respondents cited for returning things was that they were damaged or defective. Customers reported returning boxes in 65% of cases due to damage.
Expensive replacement costs
No matter what, you have to send a product to a consumer who has paid for it. The merchandise must arrive at the customer's kitchen table from your company's warehouse on pallets. If not, you will have to pay more money to have the damaged package replaced.
Shippers may even be charged by some carriers to look into a misplaced package, which typically takes seven to ten business days. Within about seven to ten days, the replacement you provide a customer with could have been sold.
When due to any reasons if products are stolen, broken or misplaced. The reputation of the company is damaged. It is a disadvantage that every online store faces. So, they need to control this by looking for reputed and trustworthy courier companies. As well as provide third party insurance from good companies to your customers. This will ensure their trust in your services.
In addition to the cost of replacing damaged items and losing consumers, there is also the additional cost of the time lost when focusing too much on the shipment procedure and supply chain issues.
If you do run into shipping issues, keep the idea of potential cost in mind. You may spend more time working on other aspects of your e-commerce business than dealing with delivery issues.
Shipping damage is one of the major causes of failure of an online store. There are a lot of ways that companies can prevent these losses from occurring.
- Use sturdy, appropriate packaging materials for the products being shipped.
- Properly package and secure items to prevent movement during transit.
- Use protective materials such as bubble wrap or foam to cushion fragile items.
- Use clear and durable labeling and packaging that can withstand the shipping process.
- Choose reliable shipping carriers known for handling packages with care.
- Track packages and address any issues that arise during transit promptly.
- Provide customers with detailed instructions on how to open and handle their packages to minimize the chance of damage.
- Consider offering shipping insurance to protect against damages or loss.
- Use automated packaging software to ensure the right size box is used and the package is sealed correctly.
- Regularly check and maintain your packaging equipment to ensure it’s in good working condition.
ECommerce companies should prevent shipping damage to maintain customer satisfaction, reduce returns and complaints, and minimize financial losses. Damaged products can lead to customer dissatisfaction and loss of reputation. When customers receive damaged products, they may request a refund or return, which can be costly and time-consuming for the company to process. Additionally, eCommerce companies may have to bear the cost of replacing or repairing the damaged product, which can also have a significant financial impact.
By preventing shipping damage, eCommerce companies can ensure that their customers receive high-quality products on time, which can lead to increased customer loyalty and repeat business. Additionally, preventing shipping damage can also help to improve the company's bottom line by reducing costs associated with returns, refunds, and replacements.
Join forces with a reputable shipping company and insurance provider
It's crucial to work with a shipping and logistics company that has well-oiled operations, whether your eCommerce business is small or big.
ECommerce companies may benefit from collaborating with third-party insurance providers like Simply Shipping Protection to protect themselves from the financial losses that can result from shipping damages. Third-party insurance providers can offer coverage for lost or damaged goods during transit, which can help e-commerce companies mitigate the financial risks associated with shipping.
This can also help to ease the concerns of customers, who may be more likely to purchase from a company that offers insurance options. Additionally, third-party insurance providers can help eCommerce companies to process claims and resolve disputes more efficiently, which can save the company time and resources.
Simply Shipping Protection is a platform that enables companies to manage claims quickly and generate extra income through personalized insurance.
This program enables users to design unique insurance policies, hence raising client lifetime value and providing an additional source of income.
- Revenue Boost - Your business increases sales and wins over customers.
- A flawless user experience- A completely functional user experience will enable your customers to complete their purchases more quickly.
- Comprehensive Report - Utilize thedashboard analytics to manage claims and monitor additional revenue.
- Increases your AOV- It will improve the ratio of your Average Order Value.