Module 21

Fulfilment, shipping and returns

8 lessons, 50 stepsOne instruction at a time, each with the result to expect. Tick steps as you go; Helix remembers.

Outcome: orders leave on time and you know shipping costs before you set prices. Delivery problems have a plan, and returns cost you less each month. You know when to hand packing to a warehouse partner and how to move without losing orders.

Related: Module 19 Inventory, cash and the year plan, Module 13 Shopify store setup, Module 22 Tax, GST, sales tax and duties, Module 14 Website, conversion and order value

In plain words

Stage: Grow (keep more of every sale, then scale). Every lesson below is tagged with its stage; see Attract, Convert, Grow.

What it is: How orders get packed, shipped and returned without eating your profit.

Why it matters: Shipping and returns are often your biggest costs after the product. Late or lost parcels lose customers for good.

Do this:

  1. Work out your true cost per order and get three warehouse quotes when packing takes over your week.
  2. Know your shipping cost per order, show delivery times and keep a second carrier ready.
  3. Track your return rate and top return reason, and fix the biggest one first.

Words to know:

  • 3PL: Third-party logistics: a warehouse company that stores your stock and packs and ships your orders.
  • Return rate: The share of orders that customers send back.
  • Shipping protection: An optional fee at checkout that covers lost, stolen or damaged parcels.
  • Lead time: How long it takes from ordering from your supplier to having stock ready to sell.

All words are explained in the glossary.

Lesson 21.1: Do you need a 3PL yet?Grow

In short

Packing orders yourself is cheap at first and expensive later, because your hours stop going into growth.

Do this now

Step 1: For one normal week, write down how many orders you sent.

Why this matters

Packing orders yourself is cheap at first and expensive later, because your hours stop going into growth. A 3PL is a warehouse company that stores and ships for you. It makes sense when packing takes more of your week than selling does.

Step 1 of 70 of 7 done

For one normal week, write down how many orders you sent. Note the hours spent packing, labelling and dropping off.

Expected result

You have orders per week and packing hours per week.

Lesson 21.2: Moving to a 3PL without losing ordersGrow

In short

Most moves to a warehouse go wrong in the handover week.

Do this now

Step 1: Give every product and variant its own SKU (your product code) and a barcode.

Why this matters

Most moves to a warehouse go wrong in the handover week. Stock counts do not match, barcodes are missing or orders get stuck between systems. A careful switch avoids all three.

Step 1 of 70 of 7 done

Give every product and variant its own SKU (your product code) and a barcode. Do it before anything ships (see Module 13).

Expected result

Every variant has a SKU and barcode.

Tips

Variant
One option of a product, like a size or colour, with its own stock and price.
SKU
Stock keeping unit: a short code you give each product option so you can track it.

Lesson 21.3: Shipping rates, carriers and delaysGrow

In short

Shipping is often one of your biggest costs after the product itself.

Do this now

Step 1: Weigh and measure your 3 most common parcels.

Why this matters

Shipping is often one of your biggest costs after the product itself. Know it before you set prices and free shipping rules, and have a plan for delays.

Step 1 of 70 of 7 done

Weigh and measure your 3 most common parcels.

Expected result

You know the size and weight of each. Carriers charge by size as well as weight (cubic or dimensional weight), so smaller boxes can save money. See Australia Post: cubic weight and USPS: size and weight.

Tips

Lesson 21.4: Shipping protection and lost or damaged parcelsGrow

In short

Some parcels will go missing or arrive broken.

Do this now

Step 1: Track lost and damaged parcels for one month: how many, what they cost and which carrier.

Why this matters

Some parcels will go missing or arrive broken. Decide early who pays and how fast you fix it. Also decide if you offer shipping protection: a small fee the buyer can choose that covers loss or damage.

Step 1 of 60 of 6 done

Track lost and damaged parcels for one month: how many, what they cost and which carrier.

Expected result

You know the monthly cost of lost and damaged parcels.

Lesson 21.5: Returns and exchanges that cost lessGrow

In short

Every return costs you twice: the refund and the handling.

Do this now

Step 1: Work out your return rate : returned orders divided by orders for the last 3 months, by product.

Why this matters

Every return costs you twice: the refund and the handling. The aim is fewer returns and more exchanges, while always meeting the law.

Step 1 of 70 of 7 done

Work out your return rate: returned orders divided by orders for the last 3 months, by product.

Expected result

You have a return rate per product.

Tips

Return rate
The share of orders that customers send back.

Lesson 21.6: When a spreadsheet stops working for stockGrow

In short

A spreadsheet works for a handful of products.

Do this now

Step 1: Start with the Helix Suppliers and stock page.

Why this matters

A spreadsheet works for a handful of products. It breaks when you have many variants, more than one location, or purchase orders in transit.

Step 1 of 50 of 5 done

Start with the Helix Suppliers and stock page. It shows reorder points, stock-out dates and order-by dates (see Lesson 19.9).

Expected result

Each product shows when to reorder.

Tips

Lesson 21.7: Customer service that keeps customersGrow

In short

Most questions are the same few.

Do this now

Step 1: Read your last 50 customer emails and messages and group them by question.

Why this matters

Most questions are the same few. Where is my order? Can I change my size? How do I return this? Fast, friendly answers turn a worried buyer into a repeat buyer. Good automation takes most of the work off you.

Step 1 of 40 of 4 done

Read your last 50 customer emails and messages and group them by question. Count the top five.

Expected result

A list of your five most common questions, with how often each comes up.

Lesson 21.8: Product safety, labelling and recallsGrow

General information, not legal advice. Rules change and depend on the product. Check the official pages above, and ask a lawyer or a testing lab when a product is for children, uses batteries, or plugs in.

In short

Some products must meet safety rules before you can sell them, and a few are banned outright.

Do this now

Step 1: List every product and the countries you sell it in.

Why this matters

Some products must meet safety rules before you can sell them, and a few are banned outright. If a product hurts someone, you have days, not weeks, to tell the regulator. Fines for unsafe or unlabelled products can be far bigger than the profit on them. A one-hour check per product, and a plan written before anything goes wrong, keeps you safe.

Step 1 of 70 of 7 done

List every product and the countries you sell it in. For Australia, search the mandatory standards and bans on ACCC Product Safety for each product type.

Expected result

Each product is marked "standard applies", "banned" or "nothing found", with the date you checked.

Watch out

Take extra care with products that contain button or coin batteries, toys for young children, infant sleep products and furniture that can tip over. Sellers must meet mandatory standards and must not sell banned products, even if a supplier made them (see ACCC: product safety responsibilities). Products with button or coin batteries need warnings on the packaging and in the instructions (or a swing tag if unpackaged), and the ACCC recommends the same warning in your product listing (see ACCC Product Safety: button and coin battery information standard). Not sure which standard applies? The ACCC suggests getting legal advice.

Tips

Mandatory standard
A safety rule a product must meet by law before it can be sold, such as the Australian rules for products with button batteries.

Good to know

Where Report what Deadline Where to report
Australia A death, serious injury or serious illness a product caused or may have caused Within 2 days of becoming aware ACCC Product Safety
Australia A safety recall you start Within 2 days of taking recall action Recall notification
EU An accident caused by a product (the manufacturer reports) Without undue delay Safety Business Gateway (GPSR Article 20)
US A possible defect or hazard, or a product that breaks a CPSC rule Within 24 hours of having the information CPSC: duty to report

The CPSC's advice is "when in doubt, report", and a US report does not have to wait for an injury.

Self-check

  1. A customer emails on a Friday to say your night light's battery cover came off and their child needed treatment at hospital. You sell in Australia. What must you do, and by when?
Answers
  1. Report it to the ACCC through the mandatory report form by Monday (2 days from becoming aware, moved to the next business day because the deadline falls on a weekend). Stop selling the product while you check it, and keep your notes. If you then recall it, tell the ACCC within 2 days of taking recall action.

Words to know in this module

GST
Goods and services tax. Each country sets its own rate, such as 10% (Australia) or 15% (New Zealand). Registered businesses add it to most sales.
Sales tax
In the US, a tax set by most states (and many local areas) that the seller collects at checkout.
Duties
Taxes charged by a country on goods coming in from overseas.
Profit
Usually means contribution profit: what is left from sales after product cost, shipping, payment fees, discounts, refunds and ads. Net profit also takes off fixed costs.
Return rate
The share of orders that customers send back.
3PL
Third-party logistics: a warehouse company that stores your stock and packs and ships your orders.
Shipping protection
An optional fee at checkout that covers lost, stolen or damaged parcels.
Lead time
How long it takes from placing an order with your supplier to having stock ready to sell.
Flow
An email or text series that sends by itself when something happens, like a new sign-up.
Variant
One option of a product, like a size or colour, with its own stock and price.
SKU
Stock keeping unit: a short code you give each product option so you can track it.
Test order
A pretend order you place yourself to check payments, emails and tracking work.
Landed cost
What one unit really costs once it reaches your warehouse: product, freight, duties and fees.
Mandatory standard
A safety rule a product must meet by law before it can be sold, such as the Australian rules for products with button batteries.
All words to know