A Guide to Ecommerce Shipping in Australia

Australia has many carriers moving ecommerce orders around the country, and KeepSpace has worked with several of them. Some parts of this guide will be based on our true experience working with some of the famous carrier companies in Australia. Let’s start by looking at the domestic players.

Australia Post is the most established carrier service in the country. Established in 1809, Australia Post has delivered parcels for over 200 years!

It offers a vast array of delivery choices and options for letters and boxes of all sizes. They also provide business mail, customer communication solutions, domestic shipping and domestic parcel material so you can easily send your goods around the country.

They also have over 4,400 post offices within the country, making parcel lodgement and customer pick up easy, particularly in regional centres. Australia Post also has a list of subsidiary services that cater to your business needs.

In this blog, we will cover the two most popular Australia Post subsidiaries: E-parcel and StarTrack.

If you are a merchant who sends more than 1,000 parcels annually, E-parcel is the way to go. E-parcel prides itself on its freight management tool that can assist you with your shipping needs. You can also keep your customers updated with email & SMS tracking notifications.

E-parcel is an extremely flexible platform. It can be accessed online through your warehouse system and can be easily integrated into whatever system you use for inventory management.

Here are some more of the benefits of E-parcel;

• Managing consignments,
• Express delivery,
• Delivery manifests,
• Track your parcel,
• Online tracking for sender and recipient,
• Transit cover in case of parcel loss or damage, and
• Discounted shipping as your business grows (the 5,000+ account is seen as the holy grail by many ecommerce owners).

StarTrack and Australia Post are making deliveries easier and better together. That’s the tagline away. But in all seriousness, StarTrack is one of the most trustworthy partners for ecommerce merchants based in Australia.

StarTrack is a faster and more reliable version of Australia Post with all the bells and whistles you would expect from a big logistics player. Their strength is more in B2B orders and overnight shipments, made possible with the help of Qantas’s power in the air.

StarTrack offers the following ecommerce solutions;

• Reliable delivery and returns (same-day and overnight delivery available),
• Fixed Price Premium (for smaller shipments),
• Road Express (for bulkier shipments),
• Sell products overseas,
• Logistics management,
• Online store enhancement tools, and
• Help with targeting and selling products.

TNT is the commercial alternative to StarTrack, specialising in bulky shipments such as large boxes or pallets. They work with a flat rate, helping to save costs.

However, TNT has joined FedEx in a similar way to StarTrack and Australia Post. We may see it more as a domestic subsidiary within FedEx’s services.

Couriers Please is a specialised metropolitan parcel delivery service that has grown into a leading parcel delivery expert with nationwide coverage across Australia.

While being a carrier service, Couriers Please has two services designed to help ecommerce vendors and their customers.

The first is the POPStation (Pick Own Parcel Station) which allows customers to collect their parcels at their convenience.

The second is their partnership with HUBBED (a one-stop ecommerce aggregator) that connects to a network of newsagents to provide parcel delivery to every major city in Australia. It gives customers seamless access to their parcels.

Unfortunately, KeepSpace did not have the best experience with Couriers Please. It was a low-priced and affordable carrier service, which usually resulted in inconsistent service quality. In other words, we got what we paid for.

Toll is a company that provides a wide range of logistics and transportation services and aims to compete with Australia Post. They can handle both small and large shipments, and they also have a distribution centre.

We have worked with them before to utilise two of their services. The first was their flat-rate shipping service for our smaller parcels. The second was for larger shipments in alternative to StarTrack. Both were available at a great price, however, they came with some downfalls.

We found that many of our parcels have either been lost or damaged, and there were many times when they made mistakes with the address or the receivable point. The final invoice and the quote pricing didn’t match up either. Overall, we didn’t have a very pleasant experience, unfortunately.

Next are the international players. The list includes FedEx, DHL, UPS, and the all-mighty Australia Post.

We also have another blog that focuses on more detail about these couriers on international shipping. We recommend checking that one too if you’re focusing on expanding your business overseas.

FedEx Express is the world’s largest express transportation company, providing fast and reliable delivery to more than 220 countries and territories. FedEx offers all of the services that Australia Post and its subsidiaries offer. However, what differentiates them from the others is their worldwide reach and their shipping manager.

Some features of the FedEx Ship Manager are;

• Email status notifications,
• Information storage for future shipping needs (comes in handy if your site offers a “preferred shipping method”),
• Can be accessed from anywhere,
• Advanced reporting, and
• Shipping features such as tracking, pickup requests, rate quotes, etc.

DHL offers ecommerce vendors domestic and international delivery, as well as pick-ups and return solutions.

If you are an ecommerce business that sends out orders internationally, particularly in Europe and the UK, DHL gives you the ability to pay any taxes and tariffs that may be incurred at delivery. That way, your customer won’t have to pay for it. After all, the last thing your customer wants is to pay taxes with their package has arrived.

Some other benefits of DHL are;

• Defined transit times with end-to-end visibility,
• International B2C to 220 countries (handy as Australia only makes up 0.01% of the global ecommerce market), and
• Customs support.

UPS is similar to FedEx in that it is one of the biggest delivery companies in the world. It is extremely flexible, allowing ecommerce vendors to access preferred rates without creating a business account. This may be helpful for one-off shipments.

Payments for UPS shipping can also be made through PayPal, making payment a lot easier.

Other UPS services include;

• Parcel tracking,
• International trade,
• UPS integration, and
• Contract logistics

Lastly, Australia Post also provides international shipping services. It is the most economical service among the international players. However, it is not as reliable as some of the others.

FedEx and DHL provide reliable customs support when you are sending from Australia overseas. However, Australia Post will automatically expect your customer to pay the duties and taxes. When the parcel gets stuck in customs, it will likely stay there forever.

Now that we have gone through a review of the major carriers in Australia, here are five points to consider when setting up your shipping method for Australia. We highly recommend getting these right, regardless of which carrier company you choose.

The last thing you want to do is upset your customer because your product was delivered in less-than-perfect condition.

While you can’t control what happens after you send your product to the “courier” or “postal” service of choice, you can invest in quality packaging to minimise the risk of a broken package arriving at your customer’s door step.

If you’re stuck or not sure how to pack your goods, sites such as YouTube provide heaps of free tutorials in this space.

To select the right shipping method, there are three things you have to consider: cost, time, and most crucial- customer needs.

As we said earlier in this blog post, Australia’s costs for shipping are considerably high, especially if we compare them to the U.S. This is because of the logistical challenges and the costs that delivery companies incur when covering cast distances between locations promptly. (The closest city to Perth with over 1 million people is Adelaide, which is 28 hours away.)

Despite the delivery challenges we face, customers still expect a high level of delivery service.

There are many ways to go about your shipping pricing for your ecommerce site. Remember, what you charge for shipping not only affects your bottom line but also your brand image.

With that in mind, consider these options:

The best option for the customer is free shipping. (Not so much for the vendor). In saying that, free shipping can be affordable for your business if it only applies to domestic customers. Otherwise, you run the risk of eating into your margins.

Does free shipping correlate to more sales? Yes, in some cases, but there are no guarantees. So, here are a few alternatives to consider.

Increasing the price of your product to cover shipping fees has become a common industry practice for those dealing with products of high retail value, such as luxury or hand-made products.

Offering a minimum order quantity to justify free shipping is also a good alternative if your prices are sensitive to price hikes. It is also a good way to boost sales on your site if you are clever with your marketing and how you offer “add-on” products.

This is another popular method. However, this method needs to be done correctly to be effective.

For starters, make sure you are transparent with your customer. State what you are charging and why. If you are a small business that is socially motivated, people will have no problem paying a little bit extra once they know they’re helping your business grow. This is why it is crucial to be honest about your business. Many businesses look like they are one of the big fish online when in reality, they are just starting.

However, one downside to this method is the varying shipping costs that are charged to the customer. This makes budgeting difficult, especially if you are not tracking your product’s margins carefully.

This may seem like an easy option, but it takes a lot of data and experience to figure out the average shipping value of your products. Even when you do come up with a figure that works, there is also an element of risk involved (if you end up only selling cheap products, your profits would take a serious hit).

Flat-rate shipping works best for businesses that have limited products with similar profit margins. That way, the risk of you eating into your margins is mitigated.

In Australia, most goods and services are charged with a Goods and Services Tax (GST) of 10% when purchased. This tax also applies to all goods imported to Australia that have a value of over AUD 1000, plus other taxes that may be applicable according to the class of the goods.

From July 1, 2018, 10% GST is due on all goods sold by foreign online retailers to Australian consumers. Once the non-resident e-merchant sells more than AUS $75,000 per annum, they must GST register with the Australian authorities, file and pay any tax due. It is estimated that over 3,000 foreign companies will have to register for GST on goods.

For international deliveries, it is important to understand the tax regulations of overseas markets. This is why DHL is a popular choice for merchants that sell high-value products overseas. DHL allows you to pay the customs duty before the shipment is sent out. Leaving your customer without a tax bill alongside their order.

Even if you’re just starting and have no orders coming through your site, the best thing you can do is set up a business account with your chosen delivery service provider/s. By creating a business account, you will be awarded perks as you process more orders through their system. These perks include cheaper and faster delivery and some other customer loyalty benefits.

Once you’ve gone through all the steps mentioned above, you should be ready to launch your ecommerce business. So give yourself a pat on the back because now comes the even more challenging task of getting orders.

But what if you’re looking for something more than just a shipping service? What if you’re looking for a service that will automate your entire ecommerce delivery operation while you focus on growing your business?

KeepSpace is an ecommerce order fulfilment centre based in Perth and Melbourne that takes care of the picking, packing and shipping of all your goods. We give you more time to focus on the stuff that matters to you and your business.

You can reach out to us today by calling 1800 818 971 or sending an email to sales@keepspace.com.au.