What Are the Benefits of Nonprofit Organizations?

ByVladana Donevski
March 17,2022

We’ve all heard of the YMCA, and not just because of the song. Of course, there are plenty of other famous nonprofit organizations (NPOs) - including the Scouts, the Red Cross, and the Salvation Army - that are making a positive, long-lasting impact on the world, one individual at the time.

If you have a cause you believe in or want to change the world for the better, you might consider starting a nonprofit organization yourself. 

But how do nonprofits work? Should you start one yourself? And what does the process involve? In this article, we’ll explain the benefits of nonprofit organizations and outline the steps you should take if you decide to start one.

What Is a Nonprofit?

Informally speaking, any group whose mission is to help others could be considered a nonprofit organization. The group’s primary goal should be to serve the community or to promote and work on a social cause. 

Some of the most common NPOs you encounter every day are associations, churches, and clubs. You might have also read about or donated to nonprofit organizations that provide funding for education or humanitarian aid. Many focus on raising funds for research to find a cure for a specific illness.

There is, of course, a more comprehensive answer to the question: “What is a nonprofit organization?” It would be fair to describe an NPO as an organization that receives donations, sponsorships, goods, and services to help with its mission. These are the main sources of income for any nonprofit organization. 

A nonprofit organization’s profits must be immediately applied to pursuing its goal or donated to other related nonprofits. This is a major definition of nonprofit organizations. It is extremely irregular, sometimes even illegal, for the leaders of nonprofit organizations to make a profit from their involvement.

What Is the Difference Between Nonprofit and LLC?

Many people assume that a nonprofit corporation isn’t allowed to generate any profits whatsoever. That’s not the case. In fact, the main difference between nonprofits and LLCs lies in how they use their profits.

LLCs can - and usually do - distribute some or all their profits among owners and shareholders. An NPO can’t do this. Of course, nonprofit employees still earn reasonable salaries if they are hired instead of volunteering, but these salaries do not increase based on the organization’s success. The sole purpose of the money a nonprofit generates is to further the goal and mission and keep the organization running.

What Are the Benefits of a Nonprofit Organization?

Perhaps you’re wondering whether or not you should formalize your group as a charity or nonprofit organization. If that’s the case, you should know there are multiple benefits to turning your group into an NPO. The process itself is not daunting, and if you’re looking to create the change you want to see in the world with your group, it’s well worth the trouble. 

The Credibility You Need

Being part of an enthusiastic group of people busting their backs for a cause is amazing, period. However, at some point you’ll need a business address and a bank account. Making your organization last without funding can be challenging, and while there are plenty of benefits of working for nonprofit organizations, not everyone is going to be dedicated enough to stay true in the long term. Getting donors to invest in an unofficial group could be a futile effort, too.

By incorporating your group into a nonprofit organization, you’ll gain the credibility you need to approach donors with the confidence your goal deserves. 

Access to Funds

Once you turn your group into a nonprofit organization, it will open up many doors leading to public and private grants that could help you pursue your goals. There are many benefits of nonprofit organizations for the welfare of society, so naturally there are plenty of grants available. After all, if you’re registered as a 501(c)(3) nonprofit organization, donations are usually tax-exempt, which will make your group more appealing to donors.

Chasing donors can be a hassle, but it’s likely the best way to keep your organization afloat. However, even if you simply rely on small donations from the general public, you need to make sure you’re adhering to state laws. Some states require that you register as a nonprofit to receive donations from the general public. If not, you could get in serious trouble.

Limited Personal Liability

Speaking of trouble, once you’re registered, you’ll only have limited personal liability; it’s one of the advantages of nonprofit organizations. Unlike with non-incorporated groups, if your NPO gets sued or is struggling with debt, your personal assets are protected. 

That’s not to say that once you have nonprofit status, you can do whatever you want and not be liable for your actions. There are certain cases in which limited liability can be revoked, such as board members mingling nonprofit and personal funds or engaging in dodgy practices. Still, in case of a dispute, board members are generally protected if they follow the relevant rules and regulations that apply to nonprofits. 

Advice from a Professional Registered Agent

Once you decide to incorporate a nonprofit corporation, it’s mandatory by law to have a registered agent. That could be you or one of your team members, but it’s not a good idea; we strongly advise you to hire a professional registered agent

It might seem like an annoying cost you could live without, but there’s a good reason for acquiring these services; you want to have a professional handling your legal paperwork in a proper and timely manner. These services typically cost between $100 and $300 per year, and in some cases NPOs qualify for a discount. For that amount of money, a registered agent is well worth it.

What Are the Disadvantages?

There are, of course, some disadvantages. Consider these carefully to make sure you understand the pros and cons of a nonprofit organization.

 Inevitable Expenses

Access to grants does not come for free, so you might find yourself in a pay-to-play situation. If you’re looking to establish your group as a nonprofit organization, you’ll need to dedicate some startup funds, as you would with a business.

The first major expense you’ll have to deal with is filing all the paperwork. Forming a statutory nonprofit company requires you to submit documents to your state’s business entity filing office. Some states also require an annual fee as part of the nonprofit’s cost of operation.

After that, you might need some legal assistance to ensure you’re working within the laws of the state in which you’re operating. Of course, if you opt for online legal services, these costs will be trivial compared to having an actual lawyer on retainer, but it’s still worth factoring them in when you plan your budget.

Unavoidable Ongoing Obligations

Even though it might feel like it, you’re still by no means exempt from your compliance obligations once you establish your NPO. Make sure you check what these are within the nonprofit statute under which you form your nonprofit business. It might require you to draft bylaws or operating agreements, keep records or specific books, or file an annual report.

Significant Regulations

Keep in mind that every nonprofit is closely regulated by a particular nonprofit statute, so you need to ensure your management team is up to par. This is mandatory if you’d like to retain your nonprofit status and avoid public scrutiny.

This can encompass many things, but primarily it will require you to have a board of directors, which must gather for periodic meetings. You’ll usually need to keep notes of those meetings, organize quora, and much more.

Wondering How To Set Up a Nonprofit Organization?

There is no such thing as a foolproof method for starting an NPO, as each one is subject to different regulations. The best approach is probably to hire an LLC service company to do the job of founding the nonprofit for you. You’ll have to pay a reasonably small fee, for which you’ll get the peace of mind that a professional is on the job.

If, however, you’re determined to do it yourself, here are some general steps to help you through the process.

  • Step 1: Do your research. 
  • Step 2: Form your NPO’s team. 
  • Step 3: Develop a strategy and an operating plan for starting a non-profit.
  • Step 4: Select the NPO’s name, board of directors, and legal structure.
  • Step 5: File a non-profit certificate of formation.
  • Step 6: Apply for federal employer certification.
  • Step 7: Prepare a 1023 federal tax-exemption application to get 501(c)(3) status.

Summary

Starting and running a 501(c)(3) organization is a major undertaking. It takes a lot of research, determination, and a group of exceptional people who are all united with the purpose of achieving a common goal. 

Hopefully we’ve answered the most basic question: What are nonprofit organizations? Now it’s your turn to establish the NPO that will bring about the next great change!

 

Frequently Asked Questions
What are the advantages and disadvantages of nonprofit organizations?

The most significant advantage of having a nonprofit organization is that by legitimizing it, you gain credibility among donors and potential access to plenty of public and private grants ready to support your cause. On top of this, donations made to you will be tax-exempt under 501(c)(3) nonprofit legislation, which your donors will appreciate. 

On the other hand, there are some disadvantages (or, more precisely, challenges). The process requires startup funds and there’s heavy regulation, so you must adhere to some rather strict rules. 

What are the benefits of a for-profit organization?

We’ve looked at the benefits of nonprofit organizations, but there are also advantages to for-profit organizations. For starters, owners and shareholders can benefit financially from a for-profit business’s success. 

Who is liable in a nonprofit organization?

In the case of the lawsuit, the nonprofit organization is mostly protected. Workers’ and board members’ assets are protected; it’s only the nonprofit itself that could lose out.

Which is easier to manage profit or nonprofit?

A nonprofit is usually more difficult to manage, since nonprofits have board oversight. In for-profit businesses, entrepreneurs typically don’t have anyone to report to but themselves.Additional Resources:

National Council for Nonprofits

Incorporation Rocket

More from blog

It's no secret that eCommerce is a huge industry. In fact, it's projected to grow to $5 trillion in 2022. That's a lot of money up for grabs! If you're looking for ways to make money online, selling products and services through an eCommerce website is still one of the most profitable options out there. So, without further ado, let's get started! We'll discuss some interesting eCommerce business ideas that you can use to start making money online.  Start an Online Store To Sell Products The easiest way to make money online with eCommerce is to start your own online store. If you have unique products that you can either create or source, or that you can get shipped from around the world, this can be a great way to earn a healthy profit. Starting an eCommerce store can be daunting because you might be at a loss as to what to sell - in all fairness, a range of eCommerce product ideas can work. This could be either vintage garments that are your finds from the local thrift shop, products that are inconvenient to get, or even regular products that you can offer at a lower price online. You'll need to invest in a good eCommerce platform and make sure your eCommerce website is optimized for search engine ranking. Once you've got everything set up, it's just a matter of driving traffic to your site and making sales. Here are some profitable eCommerce business ideas for your online store: Sell Your Art, Handmade Jewelry, Accessories, or Clothing If you're a creative type, selling handmade jewelry, accessories, or clothing on Etsy is a great way to make money online. You can start a shop and promote your products through social media and other online channels. As Etsy is the 12th largest marketplace globally, it's got a lot of eCommerce entrepreneurs. So, you'll need to compete with other sellers in terms of price, quality, and customer service. But if you can establish yourself as a top seller, selling handmade goods online can quickly turn into a profitable eCommerce business. Create a Store for Selling Your Craft If Etsy is not your thing, you can also build your online store and start selling your craft there. However, you'll likely have to spend more time creating your website by using an eCommerce website builder or hiring a developer. Plus, attracting new customers might require more dedication than you would need on Etsy. You'll also likely have to execute some part of your sales via software or rely on another person if you choose this route. However, you’ll save on fees you'd otherwise pay to Etsy or other marketplaces. Sell Your Digital Art or Your Photos Online If you're an artist or have some artistic talent, selling your digital art online could be a good eCommerce business idea. A number of marketplaces allow you to sell online, and many of them are quite reputable. This can be a great way to join the online business world if you're comfortable using your artwork to create digital products. For example, if you're a photographer, you can sell your photos through stock photography sites. This can be a great way to make money if you have a good camera and some creative talent. Finally, as with selling physical goods, you don’t have to rely on marketplaces and pay the required fees. You can set up your shop and market your wares independently. This eCommerce business idea is perfect for getting your product out there and winning over your first set of clients. It’s also great for figuring out the ropes of the eCommerce business. Once you know how it all works, you can create a website and start selling your digital artwork on your own terms.  Have You Created Your NFT Collection Yet? NFT collections are a great way to showcase your work and one of the most profitable business ideas these days. However, getting started with NFTs requires some serious know-how, plus some tech skills. Still, since they are gaining in popularity and people are becoming interested in this type of art, it’s the most profitable eCommerce business. If you’re lucky, you can become rich in the process. Write Your eBook and Sell It Online If you take pride in your writing skills, you can write an eBook and sell it online. This is a fantastic business idea if you have some expertise that you can share with others. It could be anything from writing a self-help book, a piece of fiction, or your autobiography.  As with all other eCommerce business ideas on this list - it won’t rake in instant profit. You'll need to invest some time in writing your eBook, editing it, and ultimately - promoting it. However, once it's finished, you'll be able to sell it over and over again and make a great income.  Start a Print-on-Demand Line of Products If you're looking for a business idea that doesn't require a lot of money upfront, starting a print-on-demand line of products can be your thing. For example, starting a T-shirt business is an excellent way to become a small business owner, but you don’t have to limit your offer to T-shirts.  Print on demand involves creating T-shirts, pillows, phone cases, puzzles, or mugs. It’s one of the best eCommerce stores to start since you can set up a printing process at home. Alternately, depending on your budget, you can rely on a service to have these custom printed when someone makes a purchase. If you decide to go with a print-on-demand business model, you don't have to carry any inventory, and you can start with modest upfront investment. There are a number of excellent platforms that allow you to print on demand, and many of them offer support for marketing and promoting your products. These platforms also charge commissions for their services, so you might not be able to get as much profit as you’d hope for. Luckily, this eCommerce business idea is scalable, so you can switch your initial setup into one that works better for your new online business anytime. Create Your Online Restaurant If you have been toying with the idea of setting up a food truck, why not start it online? This could include anything from homemade meals, jams, organic food, cakes, and baked goods, to handmade pet treats for our little furry friends. If you decide to go with a restaurant-type online business, make sure to find a good website builder designed for restaurants. This will allow you to create a website that includes a menu and other relevant features to help your restaurant grow into a profitable eCommerce business. Fill a Niche Food Role These days, people are looking for convenience, especially when it comes to their meals. If you can fulfill this role and provide them with easy solutions for their meal planning, you might make a big buck online.  Online grocery stores, meal-making kits, and fresh or frozen food subscription boxes are skyrocketing in popularity. After all, the online purchase of restaurant/meal kit delivery amounted to 33% of all online purchase categories in 2018, and the growth didn’t stop.  This is becoming more prominent, especially for niche products and dietary restrictions, such as vegetarian, vegan, or gluten-free. If you’re thinking of running a food business as someone who loves this type of food, it could be the perfect choice among our ideas for eCommerce businesses to start. Start an Online Pet Store Another great eCommerce business idea is to start an online pet store. If you love animals, this could be an awesome online business for you. You can sell pet supplies, food, toys, and more. You can also offer pet-sitting services or dog-walking services through your eCommerce business.  To get started, create a website or blog to showcase your products and services. Use social media to spread the word and attract customers. With dedication and effective marketing activities, you can build a successful online eCommerce business. Set Up a Shop To Sell Vintage Items  Do you have a passion for collecting vintage items? If so, why not join one of the most profitable eCommerce businesses ever? You can sell vintage clothes, furniture, art, and other collectibles that you've accumulated over the years. These eCommerce business ideas are a great way to make money online if you have an eye for spotting valuable items. Just be sure to do your research before listing anything for sale, as you don't want to undervalue your items. Provide Services Online Almost any service that you could provide in a brick-and-mortar venue - you can also provide through your eCommerce store. If you’re searching for eCommerce business ideas, you don’t have to sell physical products. Instead, it could be anything from digital marketing or personal shopping to expert consulting services - anything you could already be providing offline. If you have a skill or expertise that you think people or businesses would be willing to pay for, start offering your services online through your eCommerce business. You can promote your services through a website or social media and start making money. Not sure which business you should transfer online? Here are some eCommerce business ideas for services. Provide Online Classes or Tutoring Online You can make money online by providing services such as consulting, coaching, or tutoring. Online education is gaining popularity, and you should jump on the bandwagon if you have skills to share. This is a great way to monetize your skills and knowledge. Just be sure to set your prices competitively and market your services in a way that speaks to your target group. Depending on your expertise, you could consider various potentially profitable eCommerce businesses. You can provide one-on-one courses via Zoom, for example, or pre-record lessons and charge subscriptions. Make sure to find the right medium for transferring knowledge to your audience.  Translate for Others If you know a second language, not only can you offer online courses as your eCommerce business, but you can also start a freelance translation business from home.  You can start by creating a website or blog to promote your services. As with all good eCommerce ideas on our list, acquiring new clients will take some time. You can also use social media sites like Facebook and Twitter to spread the word. When you get your first project, be sure to ask for the client's requirements so you can give them an accurate quote.  Once you complete the project, ask for feedback so you can improve your services and include testimonials as references. With a bit of digital marketing, you can build a successful translation eCommerce business. Become a Social Media Manager If you're good at leveraging social media, you don’t have to look for additional ideas for an eCommerce business - you can make money online by managing social media accounts for businesses or influencers.  Social media is a great opportunity for communicating with customers, finding new clients, and promoting your products and services. However, not everyone has the skill set needed to get the most out of their social media accounts. This is where you could come in and assist businesses to improve their relationship with customers on social media. If you have a knack for building followership, posting engaging content, and communicating with your audience, this might be the idea to pursue and build a profitable eCommerce business.  It’s advisable to choose businesses or influencers that are relevant to your niche. Promoting your portfolio website on social media could provide you with the metrics you need to impress potential customers. Start an Accounting/Bookkeeping Firm If numbers are your forte, you can turn it into a business by starting an accounting or bookkeeping firm. Many people struggle with paperwork come tax season or with day-to-day bookkeeping. If you can provide reliable service, your clients will come to depend on your assistance. You can also consider business accounting as one of the eCommerce business ideas for people comfortable with crunching numbers. While the niche boasts renowned bookkeeping companies and is saturated as a result, you can still claim a piece of the pie for yourself.  Consider working locally or collaborating with smaller companies that don’t need a large accounting team to manage their paperwork. These companies prefer working with someone who can provide their expertise and a bit of extra care and dedication.  Become an Online Fitness Trainer If you're a fitness enthusiast, you can make money by providing online fitness coaching. This is a great eCommerce website idea to pursue if you're able to build up a large following. This holds true for yoga and other types of physical activity that can be done online. Similar to those video tapes with exercises that were all the rage in the 80s, you can also record and sell training programs or create fitness plans, diets, and so on. Depending on the online fitness coaching type you provide, one medium might work better than the other.  Become a Freelance Writer, Designer, or Developer If you're a writer, designer, or developer, you can make money online by offering your services on your eCommerce website. The idea is that your site should serve as your portfolio and opportunity to promote yourself to new clients, but also as a store to accept payments for your work. While anyone can create a website in a manner of minutes with all the free website builders, these professions are still valued on the global market. Apart from creating your site, you can also join some of the popular freelance marketplaces or promote your services via social media. Become a Virtual Assistant On the same note, if you're good with computers and have some administrative skills, becoming a virtual assistant is among good eCommerce ideas to consider. Virtual assistants provide administrative, technical, or creative services to clients from their home offices. For this role, you’ll need excellent organizational skills and a willingness to dedicate time and effort to finding the right clients. You will also have to compete with some established virtual assistant companies, but if you focus on smaller businesses and entrepreneurs, you’ll be able to make more than a decent living with this option. Offer Event or Wedding Planning and Organization When it comes to profitable eCommerce business ideas, providing wedding and event organization is another service you can promote and book online. Not everyone has the time or creativity to organize everything for their big day, company outing, or kids’ party.  This is where your eCommerce site comes into play. You can offer services online and allow your customers to book through your eCommerce store.  For this to be successful, you'll need to create a large network of vendors, caterers, and other third parties. However, if you already have such service providers standing by, this business could be the right idea.  No Clients Needed If you are an introvert and prefer not to deal with clients or customers, you can still make money online. There are excellent online eCommerce business ideas you could pursue, so let's discuss those as well. Start With Affiliate Marketing Affiliate marketing is a type of online marketing where you promote other people's products and earn a commission on any sales that you generate. This can be a great way to make money online if you're able to drive traffic to your affiliate links. Just be sure to choose products that are relevant to your niche and audience. So, where do you start with affiliate marketing now that you’ve chosen it among other ideas for an eCommerce business on our list? You could create a blog, social media account, or YouTube channel where you review products from an array of brands. Having a niche market, you can tap into through your blog or account can be a great way to earn affiliate commissions, as well as build up your own brand and authority. You'll need to invest some time and effort into creating high-quality content, but if you can build up a large following, you'll be able to make a great living reviewing products online. Launch a Dropshipping Business Another excellent choice that belongs to the easy eCommerce business ideas category is launching a dropshipping business. When you dropship, you simply sell products sourced and fulfilled by a supplier. This can be a great way to get started in eCommerce with little or no investment. You just need to find a reputable supplier and set up your eCommerce store. Once you've got everything up and running, it's just a matter of driving traffic to your site and making sales. You'll also be responsible for customer service and ensuring that your shoppers are having the best experience. After all, 91% of customers will simply leave and never return if they have a bad experience with your store, which is something new businesses cannot afford. Bottom Line There are plenty of ideas for an eCommerce business that involve selling products or services. So, if you're looking to get started in eCommerce, be sure to choose the option that best suits your skills and interests. Moreover, take a closer look at the professional network that you’ve built up over the years and then decide which avenue to pursue. With commitment and effort, you can start making money online in no time!
By Vladana Donevski · June 23,2022
The documents for incorporation differ by state, and the nature and type of the business looking to incorporate. In the United States, Corporations and Limited Liability Companies (LLCs) are the two main types of business entities, and require different documents to achieve that. In this article, we will learn the differences between articles of incorporation and organization, their components, the filing process, and why they’re necessary. Let’s get right into it! Articles of Incorporation: Definition The articles of incorporation - also known as a corporate charter, articles of association, or a certificate of incorporation - are legal documents filed to establish a company of a specific type as a business entity. In other words, they give the corporation its legal identity. In practical terms, for a corporation to open a bank account, issue stock or shares, operate within a state, and engage investors, it must first file articles of incorporation. In the United States, this is usually done with the Secretary of State or company registrar, depending on the state of incorporation. Delaware and Nevada are the most popular states for registering your corporation, because of their friendly regulations and minimal tax requirements. Articles of Incorporation vs. Organization Most people tend to confuse articles of incorporation with articles of organization, but they are not the same; now that we’ve defined the former, we’ll do the same for the latter. The articles of organization are filed at the point of creating an LLC. In terms of function and components, they are no different from articles of incorporation. However, the regulatory requirements are different and might be stricter, depending on the state and industry the business is in. These are the primary thing to research for prospective owners learning how to incorporate their business. The next step is filing your articles, so it’s time to learn how it works. Filing Articles of Incorporation The Required Documents The components of documents to be provided upon filing articles of incorporation vary by state, but many of them are the same everywhere. Most of these components will be on the face of the certificate of incorporation, and they include: The corporation’s name and address The name and address of the registered agent responsible for accepting legal documents on behalf of the corporation; some states may require a formal agreement of the agent’s acceptance of this responsibility. The number and type of authorized shares; more details on this can be found in the articles of incorporation and their bylaws. The type of corporate structure (e.g., profit, nonprofit, etc.) The names and addresses of the founding board members The names, signatures, and addresses of the persons handling incorporation; a corporation can have multiple incorporators who do not need to be directors or stockholders. If applicable, the lifespan of the corporation, as some corporations are made to exist for a limited time and carry out a particular function. The number and type of stocks the corporation can issue. Other components which are not required, but can be included, are: The limitation of directors’ liability Stockholder actions The assignment of authority to call stockholder meetings The purpose of incorporation, which may not need to be specific, depending on the state. The Filing Process The end goal of filing is to receive a certificate of incorporation. After preparing the documents, the incorporator should schedule an appointment with the designated filing agency of their state. Procedures differ between states, but generally begin with paying a filing fee after submitting the required paperwork. The process is completed upon acceptance of the paperwork and approval of the corporation’s registration. In most states, corporations must have both articles of incorporation and bylaws, even though bylaws are not to be filed. Bylaws only serve as internal documents setting out the rights and responsibilities of a corporation’s shareholders, directors, and other officials. Benefits of Incorporation Corporate Brand Identity Customers are more inclined to trust and do business with a brand when its corporate identity is established, as are investors. Banks are more likely to finance your venture if it’s an official business, and you’ll certainly look better in the strict due diligence checks on your business. Where no official or formal records are found, chances are that funding will disappear for lack of confidence in the safety of investing in you. Tax Advantages A corporation’s tax liability can be reduced depending on the state of incorporation. This tax reduction is often justified through operational costs like insurance, green energy investments, employee retirement benefits, production costs, employee wages, etc. Separation of Liability Filing your articles of incorporation separates the corporation's liabilities from those of its owners, in events of criminal activity, injury, or loss. The owners’ personal assets cannot be seized, auctioned, or sold if the business goes into debt. On the other hand, owners of unincorporated businesses are at risk of losing personal property in such situations. Protection of the Business Name Before an applicant is accepted, the state of incorporation will conduct a search to ensure that no other existing business or corporation has the same name. Applications for companies with an already taken business name won’t go through, because those names are protected - but only if their owners incorporated in time. Business owners also have the right to seek legal consequences for infringement of this protection. Perpetual Existence For businesses with no preset lifespan, the articles of incorporation guarantee longevity and perpetuated existence. This means that, in the event of withdrawal or death of one or all owners, the business remains in existence. By extension, a transfer of ownership is an option for incorporated entities. Unincorporated entities suffer a different fate and cease to exist in such situations.
By Vladana Donevski · June 22,2022
In eCommerce, fast delivery is essential, because ensuring customers receive their orders on time will undoubtedly help your fledgling eCommerce business gain a good reputation, new customers, and more sales. If you are looking for a metric you can improve to appease your client base, look no further than your eCommerce’s transit times. Let’s discuss all you need to know about them and how they can be improved to gain some happy customers and stand out from the competition. What Are Transit Times in Shipping? In shipping, transit is the length of time it takes the courier to deliver the order to your customer's doorstep. It starts when they pick up the order and ends when it arrives at the final destination. ECommerce transit times vary depending on multiple factors and can take up a few hours to several months. However, according to the 2020 statistics from ShipStation's Last Touch, Lasting Impact ebook, users expect to have their packages arrive within eight days. It is safe to say that the participants were being generous about it and that they actually expected their packages to get to them within five days at most. The Benefits of Fast Transit Times It boils down to this: ECommerce success is all about convenience. For example, eCommerce statistics show that 28% of shoppers abandon their cart if the store requires them to make an account. Every eCommerce business owner should prioritize convenience when planning their business, and fast ​​delivery of products to customers plays a key role there. Being able to meet, if not top, your customers’ expectations is essential for your business. 85% of consumers will abandon the cart in search of faster shipping options, and an extra day of delivery can make or break the deal. Therefore, fast shipping leads to higher conversion rates, which every business needs. Considering the percentage of customers you could be losing, taking the time to improve the transit times in shipping will undoubtedly pay off. What Factors Play Into Transit Times? Several factors affect transit times. Some of them you can work on; others might be above your pay grade and will require a plan B. Here are some of them: Service Level Often, service levels can be the most crucial factor to consider when figuring out how to deliver ordered products. Ground shipping is usually the cheapest option and can take a few days longer to arrive than other shipping methods. However, with ground product shipping services, you can provide lower prices and even free shipping to your customers without affecting your margin. Flat-rate shipping costs the same regardless of how much you order and is a good option if you want to make it affordable for your customers to purchase a lot from the same place. Freight shipping is usually the most expensive but can be faster than ground shipping. If you want to provide next-day shipping, you might consider this option. International shipping can take even longer than ground shipping and may have additional costs like customs fees. However, this is frequently the only option for dropshippers to deliver goods crafted abroad to their customers. Destination Zone The destination zone can play a crucial role in eCommerce transit times. For example, sending something to a rural area may take longer because the infrastructure for shipping is not as developed as in more urban areas. Additionally, if you are sending something to an international destination, it will almost always take longer to arrive than if you were sending it domestically. Time of Year or Weather-Related Issues Packages sent during the holiday season may take longer to arrive because of the increased volume of mail. That’s when accurate and fast shipping times are the most important metric to your customers.  If your goods are holiday-centric, you should consider using an eCommerce shipping solution that can guarantee delivery by a certain date and have a plan B ready. Having a fallback option is essential for any business that values its customers. Providing your customers with free shipping or offering discounts for their next order to remedy a bad experience are just some of the best practices you can implement for your eCommerce business. Weather can play a role in how long it takes for a package to arrive, too. For example, if a snowstorm closes down the airport, obviously, packages won't be able to get through. However, this is not something you can influence. So, being prepared to remedy the situation will be crucial for customer retention. You can achieve this by offering free goodies or refunds - something most eCommerce website builders will let you integrate. How To Decrease Your eCommerce Transit Times Decreasing your transit times typically boils down to two things: Carefully planning your shipping strategy and paying a bit extra for faster delivery. Let’s discuss both. Shipping Strategies If your existing delivery plan isn’t bringing in the sales you’ve expected, maybe it is time to reconsider. You can employ same-day, two-day, and overnight shipping, as well as expedited delivery. All of these shipping strategies are great options for eCommerce owners who want to ensure customers receive their orders as quickly as possible. Same-day shipping is excellent because eCommerce owners who offer it can benefit from increased customer satisfaction and loyalty. Additionally, offering this option can help you compete with other eCommerce stores that do the same. However, its main drawback is that it requires significant resources from business owners and is often something only top eCommerce stores can afford. Overnight shipping is still pretty fast, but you can get it without breaking the bank. Most product shipment carriers offer these services, but their rates can differ significantly, so make sure to look into multiple options. Two-day shipping is slowly but surely becoming the norm. It’s a good option for eCommerce stores that don't have the resources to offer shorter transit times, but still want to provide their customers with a fast shipping option. Paying a Bit Extra for Your Shipping Each option above can help you speed up the delivery process, but will also likely require you to raise your prices to accommodate the higher shipping fee. It can also make a significant dent in your profits if you offer free shipping for your goods. That’s why small businesses can transfer costs for expedited eCommerce shipping options to their customers. In eCommerce, expedited shipping is a service that allows customers to receive their orders sooner than the standard delivery time. Expedited shipping is usually available for an additional fee, and the delivery time varies by shipping company and destination. This can be a valuable option for your customers who need their items quickly, such as those who are buying a gift or need the items for a special event - without requiring you to pay extra for fast shipping for every product you send out or implement other delivery solutions for eCommerce.
By Julija A. · June 17,2022

Leave your comment

Your email address will not be published.


There are no comments yet