People shop online for convenience, a huge piece of which entails convenient delivery options. Today’s consumers expect Amazon Prime-like service — free 2-day shipping — everywhere they shop online:
- 26% of online shoppers cited slow shipping as the main reason behind cart abandonment in 2017 (up 4% from 2016).
- 53% of consumers said that speed of delivery is an important factor when it comes to evaluating their online orders.
Failing to meet these expectations can result in lost business and a negative brand perception, yet despite its rising popularity, not all sellers use 2-day shipping in their ecommerce strategy.
But why not?
Often, it seems too intimidating to even try and compete with giant retailers. Between the costs, logistical obstacles, and general smaller volume, it may seem insurmountable for small to medium size ecommerce companies to be on the same playing field as the behemoths that have set the standard around 2-day to same day shipping and delivery.
Luckily for small to mid-sized up-and-coming brands, affordable 2-day shipping is attainable. Read this guide to find out how!
What is 2-day shipping?
Two-day shipping is the process of sending packages from the shipping carrier to the receiver within 2 days. In ecommerce, offering 2-day shipping is a common practice for sellers to ensure online orders are delivered to end consumers with a quick turnaround.
How does 2-day shipping work?
Two-day shipping starts once a carrier has the order in its possession. During those two days in transit, packages may be handed off several times. There are two primary methods that enable delivery in 2 days: air shipping and ground shipping.
Air cargo is used to send packages to a faraway destination quickly. With air shipping, packages are shipped via airplanes. While it is much more expensive than other modes of transportation, air shipping may be the only shipping method that can guarantee a 2-day turnaround, when coming from overseas or the other side of the country.
Ground shipping uses trucks to transport packages and costs less than air shipping. Orders that use ground shipping for a 2-day turnaround are typically traveling a shorter distance. The exact number of days in transit is determined by the point of origin as well as the shipping destination.
Merchants that offer 2-day shipping via a ground network typically ship orders from fulfillment centers or warehouses in different regions to cover more ground.
With more than half of shoppers in the US having abandoned an order because delivery was too expensive, ground shipping can help keep 2-day shipping costs low.
Benefits of 2-day shipping
Here are a few of the top advantages of offering 2-day shipping on an ecommerce website.
1. Meet customer expectations
Consumers today want fast shipping, and Americans’ definition of fast shipping for online orders is ever-changing. The average maximum amount of time considered acceptable to wait for a package is only 4.1 days compared to 5.5 days back in 2012.
In the age of instant gratification, offering guaranteed two-day shipping, or transit times that won’t be seen as “too long” in their eyes, can lead to a positive customer experience. In turn, this can lead to better customer reviews and recommendations.
If you can’t meet these expectations, your shoppers will look elsewhere.
2. Reduce cart abandonment
There are many factors that play into why a shopper makes it all the way to the checkout page and then exits before making their purchase. Two of the top reasons for abandoned carts are high shipping costs and slow delivery speeds.
You must think about it from your customer’s point of view: When they check out, are there a variety of options displayed to meet their needs, including the cheapest and fastest options?
To increase conversions and ultimately grow your business, offering a lower-cost expedited delivery option can help prevent some people from abandoning their cart. Of course, it must be the right balance of healthy margins and profitability for you, and what’s appealing to your customers.
3. Keep customers coming back
When customers get their delivery fast and on-time, they may be more likely to purchase from you again in the future. Encouraging repeat purchases via promoting your shipping offerings in your marketing is key to customer retention.
Unlike selling on a marketplace where your customer information and email addresses are not available to you, offering 2-day shipping on your website means you can build customer loyalty and remarket to them.
Selling on your own ecommerce website also allows you to maintain control over the brand experience, whereas marketplace buyers may not even realize that they’re purchasing from a brand other than the marketplace.
Should all sellers offer 2-day shipping?
Ecommerce sellers should offer 2-day shipping to as many customers as possible and when available. With a quarter of shoppers having entirely canceled an order because of slow delivery speeds, merchants that offer 2-day shipping can capture more sales.
The more shipping options that customers have to choose from — especially free or affordable ones — the better.
While merchants often have control over the price of their shipping options, marking them up to make a profit can be harmful. Instead, they should be priced low enough to entice customers to buy without harming the business’s margins.
How to keep 2-day shipping costs low
Express or expedited shipping can be very expensive — but it doesn’t have to be. Here are the secrets used by top ecommerce companies to keep shipping costs down.
Use ground shipping and ship from urban fulfillment centers
The key to reducing shipping costs is to keep inventory in fulfillment centers located near your customers and leverage ground shipping. Because the majority of the population lives in big cities, using urban fulfillment centers is the best way to reach the most people.
Because of how shipping zones work, the less distance a package has to travel, the faster and less expensive it will be to reach your customer. In other words, orders shipping to higher destination shipping zones will have a higher cost and longer time in transit than those shipping to a closer destination.
[Related article: Shipping Zones 101: How Distance Affects Fulfillment Costs]
Offer 2-day shipping to only certain zip codes
Based on which fulfillment centers your inventory is in, you may be able to use technology that lets you cater to customers who are nearby. For example, if you use a fulfillment center in Chicago, you can target certain zip codes in the larger Midwest region as shown on the map of the continental US below:
The shades of blue represent the predefined zip codes that apply to 1-day (dark blue) and 2-day (light blue) ground shipping out of a Chicago-based fulfillment center (indicated by the yellow star).
Conversely, you wouldn’t want to offer 2-day ground shipping to shoppers in rural areas or on the other side of the country, as it would be impossible for delivery trucks to get the package there in time (e.g., in Montana).
Here’s how offering dynamic two-day shipping works at checkout:
- A seller’s ecommerce platform is integrated with a fulfillment company’s technology.
- The customer enters their zip code.
- If the zip code is within the area of guaranteed 2-day shipping, and the closest fulfillment center has inventory, the customer will see the 2-day rate.
- If the zip code does not qualify for guaranteed 2-day shipping, the option will not be shown to the customer.
This lets merchants dynamically provide an affordable two-day ground shipping option to increase conversions for those who qualify while hiding it from customers who are outside of the guaranteed two-day coverage.
Fulfill orders from multiple warehouses
If you are only using one fulfillment warehouse, you are limited to offering 2-day ground shipping exclusively to that region. If you want to extend your 2-day ground shipping coverage, you can do so by utilizing more than one fulfillment center, for example, covering different regions on the country.
Think about it: If your customers are distributed throughout different regions of the country, you should distribute your inventory to multiple fulfillment centers.
By doing so, you can put more customers in the 2-day shipping range of ground coverage. And the more people you offer 2-day shipping to — at a fraction of the cost of expedited air shipping — can ultimately help reduce abandoned carts for more shoppers.
Examples of 2-day shipping
There are several ways that online sellers can provide 2-day shipping. Here are the most common methods ecommerce merchants use.
DIY: going to the post office or carriers’ locations
When you handle fulfillment in-house, you may make frequent trips to the post office or to your local or preferred shipping carrier. If you offer expedited shipping to customers who shop on your online store, you can select the appropriate service such as USPS 2-day shipping, FedEx 2-day shipping, UPS 2-day shipping, or the equivalent.
Of course, domestic 2-day shipping will be priced differently from international expedited shipping.
If your company is big enough to manage your own warehouse or fulfillment center, you may have a shipping carrier come to your facility to pick up packages. This can include 2-day shipping if it’s a service you’ve negotiated and shipping option you offer to customers.
Outsourced: partnering with a 3PL
A third-party logistics provider, or 3PL, is a common choice for shipping orders to customers that require 1-day or 2-day express shipping. Many 3PLs enable ecommerce companies to offer 2-day shipping to their customers. When partnering with a 3PL, online merchants send their inventory to the 3PL’s fulfillment center(s) and the 3PL ensures it gets shipped out on time.
Sellers can also utilize multiple fulfillment centers from the 3PL’s distribution network to offer the same speed as giant retailers while keeping costs low. The 3PL’s fulfillment center staff can pick, pack, and ship items as soon as a customer places an order on the seller’s website, and send tracking information back to the store to be shared with the customer.
“Speeding up deliveries and keeping them affordable for customers is a top concern for us. With ShipBob, we can comfortably assign a shipping cost to each order by pinpointing the product weight and destination zip code.”
Greg MacDonald, CEO & Founder, Bathorium
Required: complying with online marketplaces
From Amazon 2-day shipping to Walmart 2-day shipping, if you sell your products on a marketplace, you may have certain requirements for fulfilling those orders. Some marketplaces provide fulfillment on the seller’s behalf, rather than having to handle fulfillment in-house.
Meeting 2-day shipping requirements on marketplaces adds an extra layer of complexity; retailers must meet both the marketplace’s rules and customers’ expectations.
2-day shipping FAQs
Check out these frequently asked questions about what two-day shipping actually means.
Is 2-day shipping really 2 days?
The use of “2-day shipping” and “2-day delivery” can be confusing to consumers and merchants alike. Will it be shipped from the seller within 2 days or will it be delivered to the consumer within 2 days?
In many cases, like with Amazon Prime, the two days begin once the item is actually shipped from a fulfillment center. Before a package goes on a carrier’s truck to be shipped, the order must be picked, packed, labeled, and ready to go.
Depending on the time of day the customer makes a purchase, this all can be done the same day the order is placed online. For example, if a customer makes a purchase in the morning, it will likely ship the same day. If the order is not processed the same day as it is ordered (i.e., if the order is placed late at night), it will likely be shipped out the following day, at which point the two-day timer begins. It’s important to keep in mind that the customer might be based in a different time-zone than the fulfillment center.
In some cases, 2-day shipping only includes business days. This means that if you place an order on a Friday night, you may not receive it until the following Tuesday.
If you need to ship a package yourself and go to the post office or UPS Store, using a 2-day shipping service will mean two days from when you drop it off.
In other contexts, shipping within two days may refer to the maximum amount of time the seller can take to get the order in the mail, and not to the time in transit.
When in doubt, review and instate a clear shipping policy and shipping options. If you work with a 3PL or an online marketplace, make sure you understand their definition of 2-day shipping and plan your policy accordingly.
What is the Amazon Prime Effect?
The ‘Amazon Effect’ refers to the standard of 2-day shipping for purchases made online, as set by Amazon through their subscription Prime service. Because this is today’s norm, shoppers expect all of their orders to be shipped in two days or less.
The Amazon Effect has implications for merchants of all sizes and sales channels. Consumers want everything now and are no longer willing to wait for their deliveries.
As a result of the Amazon Effect, individual brands are pressured to offer 2-day shipping on their websites to compete.
Is 2-day shipping guaranteed?
Two-day shipping is not always guaranteed and will depend on the exact carrier, service, cutoff time, and days of operation, among other factors. While some delivery estimates are simply estimates, certain 2-day shipping programs are guaranteed or your money back.
Even when 2-day shipping is guaranteed, not everything always goes according to plan. Delays happen, packages are stolen or lost, bad weather conditions affect carriers, and other events transpire that prevent packages from arriving on customers’ doorsteps on time.
In addition to shipping guarantees for time in transit, if you work with a 3PL, they will have guaranteed service for orders to be fulfilled. For example, for all orders placed before noon local time, ShipBob’s fulfillment center will have the order picked, packed, and ready to be shipped that same day.
With 76% of shoppers saying shipping delays would affect their future purchasing decision from a brand, it’s important to keep promises around 2-day shipping — whatever you offer your customers.
How much is 2-day shipping?
The cost of 2-day shipping can vary drastically as rates can be based on a combination of the following factors:
- Carrier and service used
- Point of origin zip code
- Destination zip code
- Dimensional weight and package characteristics
- Date and time you are shipping
- Peak period
- Type of products you are shipping
Shipping carriers often offer bulk discounts to companies with high shipment volumes. 3PLs can then pass these discounts onto their clients, which can, in turn, even lower two-day shipping costs.
That said, how much one seller charges customers for 2-day shipping can vary. Similarly, the cost of 2-day shipping for the same item on two different sales channels may be different based on the fulfillment costs and fees for each channel.
For example, ordering one item with 2-day shipping from a marketplace can cost more or less than ordering that same item with 2-day shipping directly from the ecommerce brand’s website.
What about offering free 2-day shipping?
Free shipping is one of the biggest draws when it comes to completing a purchase online.
However, offering free 2-day shipping is not feasible for everyone. To stay profitable, it has to make sense for your margins.
For example, unless you sell very expensive products, offering sitewide free shipping will cost you a lot of money — especially if you are offering expedited 2-day air shipping rather than ground shipping.
Sellers can test offering free 2-day shipping to a smaller subset of customers by requiring a minimum spend threshold, in a one-time promotion. For this option to make sense, the amount a customer spends to qualify for free shipping must be greater than the average order value.
Best options for sellers to offer 2-day shipping
Not all sellers want to handle the complexities of fulfillment themselves. Outsourcing shipping can save a lot of time and headaches while meeting customer expectations around online deliveries — unlike fulfilling orders in-house. Here are some of the best options for providing two-day shipping.
Fulfillment by Amazon (FBA) is a service for merchants that sell on Amazon. FBA is one way to be a part of the Amazon Prime program for sellers to offer guaranteed two-day shipping to customers who buy their products on Amazon.com.
Unlike Amazon’s Seller Fulfilled Prime (SFP) option, where the seller is responsible for shipping orders in two days, FBA is handled by Amazon within their fulfillment centers.
While Amazon Prime shipping is one of the most well-known options when it comes to 2-day, it is exclusively for orders placed on the Amazon marketplace. FBA also incurs seller fees, meaning that merchants often take home less profit on each sale than they would by selling on their own website.
Sellers also lose the ability to highlight their brand when they ship via FBA — The entire customer experience and communication will take place via Amazon, and all packages will send in Amazon-branded boxes, meaning sellers miss out on the ability to highlight their brand when shipping with FBA.
ShipBob is a 3PL that helps merchants grow their brand by fulfilling orders placed on the seller’s website in addition to other sales channels and third-party marketplaces. Partnering with ShipBob to fulfill ecommerce orders helps sellers offer customers same-day and 2-day shipping.
ShipBob’s technology is already integrated with the top ecommerce platforms, such as Shopify, BigCommerce, or Magento. By connecting the seller’s sales channels to ShipBob’s technology, customer orders are automatically pushed to the ShipBob fulfillment center to be picked, packed, and shipped.
Sellers can distribute their inventory to multiple ShipBob fulfillment centers that are closest to their end customers to further compete on shipping speed and cost.
“We partnered with ShipBob to scale up operations in the United States. We’ve seen a reduction of 70% on shipping costs in the US, which helps keep conversions high.”
Greg MacDonald, CEO & Founder, Bathorium
Learn more about 2-day shipping
It’s never been more important to offer customers convenient delivery options including 2-day shipping. Fortunately, you no longer have to be a trillion dollar business to provide 2-day shipping to your customers.
ShipBob created “The Guide to Offering Affordable 2-Day Shipping” to explain how this strategy is made possible for independent brands.
Download the guide for free and dive deep into:
- Streamlining fulfillment across sales channels
- Understanding shipping zones
- Determining the best fulfillment center locations to hold inventory
- Creating a shipping pricing strategy
Ready to start meeting customer expectations around 2-day shipping? Download the guide below!