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Holiday Shipping: How to Prepare Your Small Business This Season

Heather Nix

Heather Nix

Marketing Manager at ShippingEasy
Heather is the Marketing Manager for ShippingEasy, and strives to make shipping simple for ecommerce sellers. She resides in Austin, Texas, with the rest of the ShippingEasy team where she enjoys kayaking, breakfast tacos, and live music.
Heather Nix

Latest posts by Heather Nix (see all)

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

The holidays are a crucial time for ecommerce sellers. While providing positive customer experiences offers opportunities to build your brand, increase revenue, boost customer loyalty, and acquire new and repeat customers during any time of year, it’s especially appreciated during the hectic time surrounding the holidays. And top-of-the-line holiday shipping is one surefire way you can keep your customers satisfied.

Everything you’ve done to build your business becomes critical during the holiday season when customers not only buy products for themselves but for their friends and family too. Positive holiday experiences will help improve your bottom line in a way that will last far beyond the holiday season.

With operations as the backbone of your shipping function—and therefore your entire ecommerce business—you need to evaluate your processes before the busy season. Optimizing your workspace layout, workflow, inventory, printing/packing materials, equipment, and staff for the holiday season can all help lower costs.

Beyond that, smooth-running shipping operations ensure your orders are accurate, packages are packed efficiently and attractively, and that they arrive in your customers’ hands-on time.

How to Prepare for Holiday Shipping 

There are quite a few things to keep tabs on to ensure your holiday shipping goes off without a hitch and leaves your customers happy this holiday season. This holiday shipping guide can help you prepare.

Don’t Lose Money on Holiday Shipping

Make sure that you’re not losing money with each shipment you send out. You should do the math to figure out what the average order value around the holidays is so that you can decide the price point to start offering free shipping at. If you arbitrarily choose a number, you’ll end up losing money shipping out orders.

Your average order value can be calculated with some simple math: your revenue divided by the number of orders. From there you get the average order and should make the free holiday shipping threshold higher than that.

holiday shipping

Set Realistic Holiday Shipping Expectations 

A key part of nailing your holiday shipping is being clear and letting customers know what to expect when they place an order with you. They should know how long it will take for their order to arrive and you should provide them with a way to track their order’s progress from processing to the actual shipment until it arrives at their door.

Around the holidays especially, customers are eager to get their orders so they can package them up nicely in wrapping paper. You should be clear with customers how their items will be shipped and how long it will take. Choose a reliable shipping company that you trust to get orders where they’re going on time.

The last thing customers want is to have to track down an order, spending hours of their time on the phone with a shipping facility or your own customer service, especially during the holidays. Additionally, don’t offer holiday shipping you can’t deliver on. What we mean by this is, don’t promise one- or two-day delivery on orders placed on a certain day unless you’re clear that it only applies to orders placed before a certain time when you can feasibly get the orders out and shipped.

For one-day delivery, pay close attention to the cutoff time, and make sure you’re clear about time zones as well. This will help you avoid upsetting customers with unclear communication around delivery time.

Know Holiday Shipping Dates 

This is similar to the step above, but be sure that if you say something will be delivered by a certain day, like Christmas, that it actually is. When it comes to holiday shipping, you can’t ignore shipping deadlines. Shipping facilities have deadlines and if you don’t abide by them, your packages likely will not arrive on time.

Major shipping companies post their important holiday shipping dates ahead of time, so you’ll know the lastest possible date you can send something for it to be delivered by the holidays. These dates vary by carrier, but here are the holiday shipping dates for the following best shipping services. The following dates are the latest possible day you can ship something and have it delivered by December 25—or December 24 for UPS.

USPS

  • First class mail and packages: December 20
  • Priority mail: December 21
  • Priority mail express: December 23
  • Retail ground: December 14

UPS

  • Ground: December 13
  • 3-day select: December 19
  • Second-day air: December 20
  • Next-day air: December 23

FedEx

  • SmartPost: December 9
  • Ground: December 16
  • Home delivery: December 16
  • Express Saver: December 19
  • 2-day services: December 20
  • Overnight services (standard, priority, and first): December 23
  • Same-day services (including city priority and direct): December 25

holiday shipping

Have Plenty of Inventory and Somewhere to Store It

Can you get enough products made or sent in from your suppliers to fulfill your anticipated holiday demand? To answer this, review last year’s demand and out-of-stock data, products shaping up to be popular this season, and the anticipated impact of other initiatives (e.g., offering free shipping).

Be sure your purchase orders reflect the increased product inventory needs, and that your suppliers can fulfill them on time. Otherwise, it may be time to find backup suppliers or substitute products. You might want to consider using an inventory management software to help you with this.

Something else to think about is how much room you’ll need to store the planned increase in inventory. Also, how much space do you need to accommodate your staff, equipment, boxes, and supplies?

Increased space needs can often be met by taking a hard look at your current area. If you don’t have room to handle higher holiday inventory levels, you might need to find supplemental space to lease, or—if workable—temporary solutions such as portable storage units.

Making sure you have space for all of your inventory is just as vital as your website’s ability to handle holiday traffic. With the uptick in incoming orders, it’s easy to overlook this detail.

If you do choose to expand, consider whether it might be time to add a warehouse to ship from in another part of the country. Having two or more warehouses that cover different regions can help you ship more quickly and can mean you can use ground shipping instead of air shipping, which is less expensive for you.

Have a Return Policy and Make Returns Easy

Keep in mind returns typically increase by 15% during the holidays. And 20% to 40% of consumers will return at least one gift purchase, with percentages rising to as high as 50%.

Be operationally prepared. Make sure your return processes are clear to customers visiting your online store and are clearly explained on your packing slip, as well as clearly defined from end to end internally and running smoothly to handle the extra workload in your return-processing facility.

You might want to include a return label in gift orders to leave a positive impression with potential future customers. Consider scan-based returns where the label can be printed but a charge is not applied unless it is scanned.

If You Can, Offer Gift Wrapping

Another strategic decision around holiday shipping and order fulfillment is over whether to offer gift wrapping and notes. You need to determine who on your team can capably wrap each package, how many wrapping options to offer, the operational implications of offering them, whether and how much you should charge for wrapping, or whether to use them as a threshold purchase incentive. At a minimum, offering gift notes is essential to capture holiday sentiments and identify the gift giver to the recipient.

If you’re going to offer wrapping services, your biggest preparation is setting up a wrapping process. Will you use pre-sized wrapping envelopes? How will you set up the wrapping operation and workspace? Equally important are the associated software requirements—any wrapping and note options you offer need to be reflected in your selling platform’s user experience.

Your shipping platform rules will likewise need updating so you can print notes and flag or otherwise indicate packages to be wrapped. Finally, remember to order any needed materials like gift wrap, boxes, tape, and ribbon, and have them in stock before you deploy the online functionality.

holiday shipping

What About When Holiday Shipping Is Over?

You can look at holiday-period performance data to help you decide what operational changes to make permanent and which ones you will scrap. Set up a monitoring plan going forward to ensure those changes remain a net-positive for your business (and adjust or revert as necessary).  

For example, if you changed your return policy to make it more liberal, take a careful look at the impact on your conversion rates and costs to see if they are feasible to maintain long-term. It may be worthwhile to be prepared to keep free returns running for a few months after the holiday season to see and measure any positive influence on repeat orders.

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Heather Nix

Heather Nix

Marketing Manager at ShippingEasy
Heather is the Marketing Manager for ShippingEasy, and strives to make shipping simple for ecommerce sellers. She resides in Austin, Texas, with the rest of the ShippingEasy team where she enjoys kayaking, breakfast tacos, and live music.
Heather Nix

Latest posts by Heather Nix (see all)

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