Boosting WooCommerce Efficiency with Shipping Automation

Ronald: Hello, everyone. It’s Ronald here from Do the Woo, and I’m talking to Wilson from Sendcloud. How are you?

Wilson: Hey, Ronald. Thanks for having me on the show. Super excited to be here. I’m doing great. Calling in from sunny Switzerland this morning and happy to be talking to you.

Ronald: Great. I’m so happy to speak to you. This episode is to discover and cover Sendcloud and what it means to be part of a bigger ecosystem. First of all, what is Sendcloud?

What is Sendcloud

Wilson: Sendcloud is quite simply a shipping automation platform, and looking at what we do in a nutshell is we make shipping easy for e-commerce merchants. Shipping traditionally is something that’s complicated for merchants. You’re good at making your product. You’re good at creating your product. You’re good at doing the design, the creativity, everything that goes into actually making your product, as well as a lot of other things. We do know that e-commerce is complex, and one of those complexities is really shipping. How do you get your products to the consumer?

We’re here to help you with that by automating your shipping. What that essentially means is that by plugging your shop through WooCommerce to Sendcloud… And I’ll speak a little bit more about that later, as how we can do it and why our partnership with Woo is so important. Well, by plugging your shop with us, you get access to 80-plus carriers using our API, so everything from DHL to FedEx to Deutsche Post, so international shipping methods as well as local shipping methods.

Where automation simplifies things

Ronald: Okay. If we unpack that journey a little bit, so WooCommerce has their own shipping rules set up, which works. You can set up, like if it’s over a weight, you charge a little bit more, and et cetera. You have these bands as well free shipping. At what point does it become too complicated and automation makes a lot more sense?

Wilson: Well, I think there’s a lot that you can do inside your panel. You can follow some simple guidelines in terms of where you’re based, where your customers are based, where you want to ship, with what carriers. But essentially, even as I’m speaking about this, I already introduced this element of complexity. Are you aware of all the markets in which your consumers are present? Are you aware that typically consumers in Italy like to pay with cash on delivery? Are you aware that French consumers love to go to what they call a [foreign language 00:02:42], so a deposit point where you can drop off and pick up your packages?

So there’s a lot of those complexities that are related to the nature of logistics and preferences of consumers. And essentially, plugging into Sendcloud’s allows you to break down that complexity by having access to all the carriers, by being able to enable them at the click of the button, by having access to the diversity of options that consumers want, and by having Sendcloud, as a thought leader in the space, guide you to where you should go and what you should be doing in order to make shipping easier for you, as a merchant, and the consumer experience better as a result.

The Woo integration

Ronald: Yeah. So if you integrate Sendcloud, these options appear depending on where the customer is from. So if I’m French, I order from France, I get very different options than if I bought something from the US.

Wilson: Correct. Once you go into your panel, once you’ve essentially connected your WooCommerce shop to us… And again, I’ll speak a little bit more about how we can do that later because I think we’ve developed a pretty special relationship there. Ronald about this, and this is one where you can take a little bit of credit there because you’ve been instrumental in building this partnership with us.

But once you’ve connected your WooCommerce shop with us, you go into your panel. And it’s super simple, then, to do that, activating a carrier, being guided to activate [foreign language4], or deposit points for France, cash on delivery for Italy, more local carriers for Italy, DHL for Germany. All of that becomes super intuitive and super simple once you’re in the admin.

Getting the shipping costs right

Ronald: Yeah. Okay. So we, in short, figure out that this is a great solution for a merchant. They can plug that in, and it all does it. It’s on autopilot. You know you’re not going to be underpaid for your packing or the cost for your region.

Wilson: Can I speak to that? I’ll speak to that for a second, Ronald, because that’s actually a good segue into the main point. I think we often tend to forget that the biggest drop-offs in e-commerce come for two reasons. The payment method you want is not offered, and the shipping method you want is not offered, and shipping isn’t fast enough, et cetera.

So if you can fix those two things in your shop, in your backend, and then in the front end, with nice UI, nice UX and good options, show solutions that are palpable, that are easy to consumers, your conversion skyrockets. Payment is the first one, as I mentioned, and shipping is really the second one.

You want shipping that shows up fast. You want shipping that’s relevant to the markets in which your consumers are asking for the shipping to be done from. You want the right shipping options. You want the right times. You want the right payment options for your shipping. Are you going to pay for returns? Is a CO2 surcharge going to be included, a peak surcharge, et cetera, et cetera.

It’s super important for consumers to have that, and that’s really a massive complexity in e-commerce and a massive reason for which consumers simply drop off at the checkout. So if you can solve these two things, which we think we really do well with Sendcloud, happy merchants and happy consumers and consumers that come and become repeat customers as well.

Ronald: Yeah. You named a whole list of features and important parts of that user journey. I just want to touch on two things. One is free shipping and also returns because I know those two are big levers for a conversion.

Wilson: Yeah, absolutely.

Looking at free shipping

Ronald: First, free shipping, I mean you see it everywhere. Free shipping increases conversion. How important is it and what’s maybe one or two, three points of advice for a merchant? At what point would you offer that? Is it after, I don’t know, 50 euros or $50. I don’t know. What’s your take on it?

Wilson: Yeah. Well I think it’s super important, first of all, to remember that there really is… I mean, free shipping is very good marketing, but someone always pays for shipping somewhere. Right? It’s something that we’ve forgotten and something, as a consumer, we’ve been given, in a way, bad habits by the big platforms. We know who they are. They’ve gotten consumers hooked on free shipping. It’s fantastic on marketing, but somewhere someone always pays for the shipping. So if you, as the consumer, you’re not paying for shipping, it means that the merchant is taking it on themselves, probably because they’ve got enough volume and they negotiate with big carriers or with big shipping companies and they essentially decide to take it on themselves.

So I think the advice for merchants, really, is find that sweet spot. Understand what the psychological levels are in terms of the value of your goods, the average value of your carts, and I think really try to understand where free shipping becomes a must, or level beyond which your consumers really expect you as a merchant…

If you’ve got, let’s say, a cart that’s above $120 or 120 euros, and they’re like, “Okay, I’ve spent quite a bit of money here on your product, so it would be nice to get free shipping.” So I think understanding that, as a merchant, is super] important. And typically, we help. We have a big Customer Success Team, so we help merchants figure that out as well. That’s certainly something that they can do through our platform.

And there are returns

The second one, returns, is a really interesting question. Returns, much like free shipping, have been free for the longest time, and you expect, as a customer, to be able to send back. And you just put it on a box, affix the label on it, and boom, you’re done, and you’re never going to see anything happening.

I think what’s very important is to see that now, with all the dynamics in the market, inflation going up, fuel cost going up, it’s becoming increasingly costly for merchants and especially with merchants where there are a lot of returns. Look at fashion. Look at beauty. Look at cosmetics, electronics, who get a lot of returns. It’s becoming more costly for them to actually process these returns for free. So increasingly that cost is being passed on to the consumer.

That’s something that we saw coming at Sendcloud, and as a result, we did a product partnership with one of our favorite partners, Mollie, the payment service companies out of the Netherlands, just like us, to build a payment, or rather return portals. We have a return product, of course, but to build an easy paid returns portal that allows merchants to actually charge the end consumer for those returns. But this entire world of free shipping and free returns is changing very fast due to the dynamics that we’re seeing, micro as well as macroeconomic realities.

Ronald: Yeah, it’s interesting how as a merchant, you’re so focused on the homepage, and as you get more customers and worry about conversion about marketing and bringing more users, that shipping and returns sometimes can be a little bit of an afterthought. But planning that well in advance and calculating that cost and working out what your competition does, and you mentioned already these are sometimes the big tech companies that are playing a massive role in competing against you, that trying to match or even improve on that makes a lot of sense to take that into account.

Wilson: And to your point, Ronald, it’s if you’re a small merchant, you have to accept that it’s difficult to compete with the mega platforms and the mega shops and the mega malls, but I think anticipating these questions in terms of shipping, how you’ll ship, where you’ll ship, what the cost of shipping will be, the extent to which you’re willing to take on part of that cost and the impact that has on your unit economics is very, very important. That’s certainly something that I recommend all our customers, all our merchants and all our partners to think about well in advance, to have really a…have a pricing strategy on shipping and on returns, right.

Ronald: Yeah, it’s a cost. Yeah, yeah, yeah. And returns is also an opportunity because although you return an item, it’s also part of your customer service. So it might not be the correct item that they want because it’s the wrong size or wrong color. But making that an easy process and encourage them to order the right item, at least you gain your customer because you’ve already invested in them.

Wilson: And it’s another way interesting that we see that, with our return portal, but it’s another way to activate touchpoints with the consumer, so to have typically, branded emails, to have SMS messages. So it’s another way returns used well is a way to make a process that’s a little bit complicated for the user.

“Oh, I didn’t get the right shirt,” or, “It’s the wrong size,” or, “There’s a button missing. I’m going to put it back in a box.” “Oh, wow. Look. I can have a tag in the box. It’s super easy to print a tag to affix it. It’s super easy to drop it off at my local neighborhood shop or to order a pickup for it.” “Wow, look. Cool brand, that fashion brand. I got another email, an automated return email.” It’s really another opportunity for merchants to shine with consumers and to transform a process that is a little bit complicated or a little bit unpleasant into a positive brand touchpoint.

The economics of using a shipping service

Ronald: Yeah. Yeah. Let’s talk a bit more about the economics because this is great. From the way you explain, it’s like, well, why wouldn’t you choose a platform like that? But obviously it comes at a cost. It comes at a cost to the merchant and eventually for the consumer as well, for the shopper.

Can you explain a bit more on that? Is it, what’s the investment that a merchant needs to make in connecting, setting this up? And is there an added cost per order? Does it make sense, for example, if you ship goods that’s average basket value of more than a hundred dollars or euros? At what point does the economics make sense?

Wilson: Yeah. I like the economics because I originally trained as an economist before landing in tech and doing all of this. But I always encourage merchants to think about the economics of their business and to think about the unit economics.

I’d be remiss if I gave you general thresholds. I think it’s difficult to think those, that the best piece of advice that you can give a merchant is really look at the unit economics of your business.
So if you’re priced to produce… Let’s say you make forks. If you’re producing forks that cost you $4 to produce, and you’re selling those at eight, at some point, you… It’s an easy calculation of margin. Your margin is half of that. So working back from that, look at the things that are a cost and look at the things that you can deduct from your cost while still making a profit, while offering a better consumer experience.

If you think that above a cart value… Let’s say that someone is ordering a set of forks, to keep with our example of forks. You have a little apartment, you’ve got usually yourself, your partner, and three guests coming over for dinner, so that’s five. Eight times five. I’m counting in French because I’m Swiss French, so counting comes easier to me when I do my math in French. That’s about 40. If at 40, that psychological threshold is okay where you can still charge for shipping, then you’re okay, you’re still in the money still making a profit.

If suddenly, you order double that because you’re having a big dinner party, that’s a much bigger cart. The consumer expects free shipping. Do the calculation, take that out of your margin. If you’re still making and turning a profit on your product, it’s actually well worth in offering that free shipping to the consumer.

Really, for the merchant, you know your business well. You know your products well. You know your cost of production. You know your margins. Anticipate that shipping question and think a little bit about those psychological thresholds at which the consumer expects free shipping. Difficult to give you standard numbers, but look at your business, which you know better than anyone, being the merchant.

Thanks for the support from A2 Hosting

The conversations freelancers and developers should have with their clients

Ronald: Yeah. Okay. Let’s say a merchant says, “I need a solution like that,” or, “No, let’s turn the other way.” The developer freelancer that helps you with your e-commerce or with your WooCommerce site suggests, because the shipping rules have become so complicated, they would like to convince the merchant or their client to start using a shipping automation platform. What are the sort of conversation points that freelancers, agencies can have, should have with the customer? I think you’ve touched on a few others, but maybe you can elaborate a little bit more on that.

Wilson: No, absolutely. I think the first thing to think about is if you’re a freelancer, or if you’re a developer, you know how to help a merchant build their homepage, and build that backend, and build the frame. There’s a lot of things you know how to do. I would imagine that not a lot of people know about logistics and shipping.

So that’s the first thing. You start with something that’s complex for you. How are you going to help your customer figure it out, understanding if you’re not really a subject matter expert? At that point, I think if you recognize that there’s a knowledge gap, I think it’s that’s when you should turn, and quite early on for the reasons that you described before. I mean, thinking about conversion and the impact it has, you should turn to a shipping solution and a shipping aggregator.

And typically a shipping aggregator makes sense because you give consumers choice. We all know that what consumers most want, it’s what we were saying before, is choice. They want to be able to pay with a preferred payment method immediately at checkout. They want to be able to find the best shipping methods and the best carriers in less than a couple of seconds at checkout as well. That’s super important.

And these touchpoints that, as a developer, as a freelancer, you want to advise your customer on and say, “Hey, look. Sendcloud is super cool because it allows you to do a couple of things, I think is, first of all, save time. A little factoid here which I think is super relevant, we’ve seen across our user base, and we’ve got 25,000 customers in Europe now, we’ve been around for 10 years, users save an average of seven minutes per parcel shipped.

Think about that. If you’re a small shop, that’s relevant. If you’re a medium-sized or large shop, seven minutes per parcel is enormous in terms of what you can do, especially if you’ve grown from the kitchen of your apartment. So let’s say that you’ve got a warehouse or that you work with a warehouse management system. If you’ve got high volumes, that seven minutes per parcel is absolutely enormous in terms of efficiency gain.
The second thing is, it sounds basic, but is lower costs. If you ship with a platform like ours, because we focus on the shipping and we have a lot of volume from all the merchants that we have. We negotiate better rates with the carrier companies. So you can ship on our pre-negotiated rates and save some money, or you can upload your own contract. If you’ve gotten a contract that beats yours, you can upload it into the platform, and you still get that efficiency gain, and you do everything through an easy-to-use platform.

Using the power of WooCommerce with your product

Ronald: Going back to WooCommerce as a platform, you integrated various other e-commerce platforms. What do you see as the power that WooCommerce offers and how you’ve upgraded it?

Wilson: Yeah. I think a lot of different things. I think first of all, the product itself, WooCommerce as an e-commerce solution is very powerful. It’s beautiful. It’s simple enough, but it’s also complex. It’s modular. The navigation is great. The UI is great. The UX is great.

I think there’s a reason why you power… I think, the insane statistic is more than 29% of shops worldwide using e-commerce technology are powered by WooCommerce. And again, Ronald, here, correct me if I’m wrong, but you’re by far the market leader, and there’s a reason for that. Again, for all the reasons I described, merchants, love WooCommerce.

And I think WooCommerce’s ability of surfacing various pain points for the merchant relatively early on is also super powerful. Typically looking at shipping, which is what we’re discussing today, when you sign up for a WooCommerce shop, you’re triggered to do a couple of things, including a shipping task list where you’re cued as a merchant to think early on about shipping for your store. I think that’s super powerful, and that’s one of the reasons why, again, merchants come to WooCommerce again and again, for these type of product innovations.

Ronald: Yeah. No, I’m glad to see that that shipping is taking more a prominent part in that WooCommerce site building. I think, maybe also because I’m referring to some of these from my own experience, that shipping can be a little bit of an afterthought because there are shipping rules out of the box within just WooCommerce as a plugin. So seeing that as part of a task list where you have different options of integration partners is a good way to introduce shipping early on to any new store, and also later on.

Wilson: And speaking on the shipping rules, Ronald, that’s something that you can do out of the box with WooCommerce, and that’s something that, then, you can turbocharge. Typically, we’ve got a shipping rules feature as well. And again, that allows you to do something. It’s you put work on autopilot. You spend less time and resources on processing orders. You automate that repetitive work by customizing your shipping rules, and then you just print your labels in bulk in just a few clicks and you slap them on the boxes and send your parcels to happy customers.

So again, that component in WooCommerce native and then WooCommerce plus Sendcloud, putting that work on autopilots, and allowing the merchant to focus on what they really want to do and love to do, is super important.

Making the argument for WooCommerce and WordPress with clients

Ronald: Yeah. But Wilson, you and I, we’ve talked in the past about the ecosystem of WooCommerce. But it is a difficult ecosystem to enter because it’s not one hosted platform where, let’s say, WooCommerce would have access to every single merchant that’s hosted on that particular platform. So being part of this ecosystem can be tricky. What has your experience been making a name and getting some established business within WooCommerce and WordPress?

Wilson: Yeah. Well, I think first and foremost it’s simply a must. It’s interesting that you guys at Woo say this. You’re like, “Okay, it’s a little bit tricky to get into,” et cetera, but it’s a must. I mean, merchants want it. Developers and freelancers are good at it as well. So being present in that Woo ecosystem is an absolute must. Simply, it’s a necessity of the market. Excuse.

And working back from that, why is it a necessity in the market? We were discussing it before, because it works. It works well. Historically our integration with WooCommerce is core in terms of how we’re built as a company. Of course, as a shipping solution provider, integrations with e-commerce solutions is a must. And our integration with WooCommerce right from when we started 10 years ago has always been core. We actually call our most important integrations core and all of the work on them is done in-house by our integrations team. And WooCommerce, historically, has always been a core integration for us.

Ronald: Yeah, that’s great to hear. And yeah, I refer to it as being tricky. I think it’s… I’m not quite sure if that’s the right word, but it’s a balanced approach you need to have when being part of that ecosystem. You need to be aware of the freelancers and how agencies operate. And there isn’t a direct route to setting up a store.

That’s also the powerful thing because everybody owns their own data, if it’s on self-hosted. Well, you own your own data. You can self-host it. And understanding that journey that emphasize with anybody who’s starting a store out on WooCommerce is a great start of that.

Woo’s future and the community

As you think about where WooCommerce is heading and in the world of the very competitive e-commerce platforms, what’s your gut feeling now?

Wilson: Well, I have a sense that, again, you got to where you are because, yes, maybe tricky, but great product, a product that merchants and organizations and companies come back to again and again, and a product that’s modular, and a product to speak to that community.

I think the community around WooCommerce and the WordPress environment is quite unique in terms of what WordPress powers, who WordPress powers, and the same thing for WooCommerce. So I think, in actual fact, that that community and that… I’d like to actually call it community-driven ecosystem. Maybe I can coin that, and you guys tell me if it’s got some legs on it, especially you, Ronald. You know a thing or two about marketing. But really that community-driven ecosystem is super, super powerful. And I only see that as continuing to be the case.

Fundamentally, we’re seeing that, in every corners of the business, in every corners of WooCommerce, you want to go where friends, families, people who you’ve worked with recommend that you should go. And I think that recommendation engine that you get through that community-driven ecosystem in the WordPress and WooCommerce galaxy is super powerful, and I think it’s going to continue being the case.

Ronald: Yeah. You shared earlier you’ll be attending WordCamp Europe, which is around the corner. Have you been to WordCamp before?

Wilson: No, my first. I’m very excited. I’ve been in tech for a long time. It’s not my first rodeo in e-commerce as well. I’m well familiar with Woo and with WordPress. I built my first WordPress site, something completely private, about 15 years ago, so I’ve been a part of this community for a long time, but I’ve actually never been to a WordCamp, so I’m very, very excited about attending that later. Well, actually, no, next month.

Ronald: Yeah. Yeah. No, it’ll be so fascinating. I mean, you said it. WordPress is huge. I mean, 40 plus percent of the world is powered by WordPress, and with that as an access for, to WooCommerce, that enables people to set up their own store wherever they are in the world. And you see this as an opensource community where everybody’s contributing towards that and investing their own personal time, businesses investing in resources and plugins and solutions to build that up.

Seeing that all come together in real life at a WordCamp, especially at the Contributor Day, is… It still gives me goosebumps to see a hall with hundreds and hundreds of people, all so focused, having these conversations of all the problems that you can solve. And then at the end of the day, code has been pushed. New solutions have been discovered. It’s just such a powerful phenomena. I hope that when you go there, you also experience that. I get a lot of energy out of that.

Wilson: Well, we’re actually, I’m going to be there for Contributor Day, for the first time, so I’m very excited to-

Ronald: Yeah, just observe. It’s just incredible. And then, of course, you have the conference after that, with speakers, with sponsors and et cetera.

Wilson: Yeah, I know. I think it’s going to be different from anything else. Again, I can imagine that… You know a traditional trade show. So the equivalent to that with people who contribute to that ecosystem just all sitting together in a big conference center and just hashing out ideas and solutions I think is incredible. I’m very much looking forward to it.

Ronald: So you shared earlier that you started a WordPress site 15 years ago. Is that still going? Is that still active?

Wilson: Actually, I let it lapse a couple of years ago. I used it as a… Yeah, the first time I wanted to try my hands at building a website. It’s funny that you say, “It’s a little bit tricky,” but my first port of call was WordPress. It’s not going anymore. It’s not live anymore. It’s not published. I still have my account, but yeah, it’s not been published for a couple of years.

Ronald: Yeah. And with what you do, you obviously see so many different businesses succeed, and maybe if you fail as well. If you were to set up your own store, have you got any idea what you would like to set up? Do you have a passion, something on the side that, “Oh, if only I had the time to do this,” what would you do?

Wilson: Yeah, yeah, that’s a really good question. My wife and I actually… I’m blessed to be married to a lovely Argentine lady, and we have a passion for coffee. And as a side hustle, as a side business, we’ve been dreaming for years of opening a little coffee, and of being able to roast actually our own coffee, so a microroastery as well. So I think that’s what I would open on my WooCom. My WooCom would be the store for my microroastery.

Ronald: Great. Thank you so much for your time, Wilson. It’s been really interesting talking to you. I’ve learned, even though we’ve connected before, but it is that conversation with the merchant and thinking big-scale economics of what shipping, what part of that, the economics, it solves. And it’s an investment. It’s an investment in your business, in your customer and eventually growth. That’s been fascinating to see that or hear that again, once more. Thank you so much for your time, Wilson. It’s been a pleasure talking to you.

Wilson: Thank you, Ronald. Thanks for having me. It was a lot of fun, and let’s do it again soon.