Our co-founder Nicholas Daniel-Richards answered all – or, well, almost 30 – questions about ShipHero, shipping, fulfillment, and nearly everything else ecommerce-related on AMAFeed. Read the adapted text here:
What’s the main goal of ShipHero? What do you want to offer your clients ultimately?
We offer a comprehensive cloud based WMS/OMS solution that’s easy to use. If you want to add a 3PL (or 3PLs plural) to extend your existing capability or outsource all fulfllment, use ShipHero Marketplace.
Our goal is simple. Make it easier for ecommerce businesses to win at fulfillment.
Are there any qualifications or limitations for a business to work with you?
No qualifications – what is a fit for the business. Goes without saying it should be an ecommerce business (we have a number of customers who sell online and in store as well).
If the business needs help with inventory, order management and shipping and wants to do this in-house, then ShipHero SaaS is worth a look.
If the business is looking to outsource for ecommerce fulfillment, then ShipHero Marketplace is worth a look.
What should be the starting budget of startups to be able to work with ShipHero?
Brilliant question. My answer may surprise you. It depends on the volume of sales. Our software for managing your own warehouse starts at $500 a month, which will be too much cost for a business shipping a few items a week.
If you’re an early stage startup, shipping lower volumes, without the complexity of many products (SKUs) and the requirements of a warehouse team etc I would recommend ShipStation – they’re a perfect get started solution.
ShipHero is designed for businesses that are starting to see 50+ orders per day, the complexities of keeping inventory correct, want an effective method to automate order actions and priorities, keep shipping costs low, offer returns, minimize errors etc.
Of course, with ShipHero Marketplace, you also have the option of just outsourcing fulfillment either partly or entirely, which is another perfect solution for when you need to scale.
Does ShipHero ship anywhere in the world? What are your shipping conditions?
ShipHero software is used to ship everywhere indeed, infact, we’re constantly impressed on where products are being shipped to.
While we don’t “ship”, we enable the process of making sure the order is fulfilled and then the correct shipping label is generated and used. Important to know that international shipping means dealing with customs which means getting all of the customs information correct.
ShipHero allows you to set at a product level, the customs value, description or even if it should be included on the invoice (or not), making the international shipping process easier.
Can dropship startups also work with ShipHero?
ShipHero does indeed support drop shipping. How’s that for a simple answer?
Does ShipHero ever handle goods or is everything done mainly online?
We do 2 things.
1. ShipHero WMS/OMS software – you can use this to manage your own warehouse.
2. ShipHero Marketplace – you can use this to find the perfect outsourced warehouse to handle the goods for you.
What inspired you to start ShipHero?
Absolute frustration when scaling ecommerce!! Why is it the sales channel has fantastic options (Shopify FTW), but inventory, orders and shipping is such a process? The challenge isn’t so much when you’re shipping 10-30 orders per day (not to say it’s easy, but you can get away with the inefficiencies a lot more), it’s more when you grow beyond that. We started ShipHero on the premise of solving the problem of going going paper, and needing to track who did what in the warehouse. There’s a huge gap between paper based systems, and various apps being stitched together and a multi-million dollar enterprise platform that takes years to build. Seemed like the perfect opportunity to solve these challenges, while tackling a seemingly stale and stubborn industry.
Now we’re nearly 6 years in, we’re tackling the issue of fulfillment overall. Sure, many ecommerce businesses are looking to manage inventory and orders better, only because they can’t find a good outsource solution.
3PLs are typically not great. Not great to find, not very easy to integrate with and not very transparent. Thus, ShipHero Marketplace.
Our perspective is, make working with oursourced 3PLs easier (think AirBnb for warehouses!) and more ecommerce businesses owners can focus on what they do best – marketing, story telling and selling great products and services. Let someone else deal with all that fulfillment stuff!
As you can tell, the passion isn’t going away 🙂
Can you connect to an existing inventory system or does the business have to switch to yours to be able to use the service, how does it work?
Typically, the root cause of pain around inventory and fulfillment is the inventory software itself. So you want to start with a solid solution that allows you to maintain accurate inventory – which means it needs to be tied into your ecommerce channel(s), recieving, shipping process and as a double bonus – returns restocking. If you were using ShipHero, you would connect to your ecommerce stores, shipping carriers and you’re ready to go as far as seeing your inventory and incoming orders (loaded from your store) as well as having the ability to ship them.
Some important questions to consider when managing inventory.
- How many SKUs do you manage?
- Which ones are the most active?
- Are you barcoding? (if not, why not!?)
Do you believe that overnight shipping to international locations can be possible in the future?
Interesting thought. Obviously, factors such as distance, the destination country and product will have huge factors on feasibility. Thinking technically, it’s quite possible (although customs clearance may be a bottleneck), however, not sustainable and probably very costly. This is actually a topic we spend a lot of time thinking about at ShipHero, and is one of the reasons why we believe having a mulitple warehouse strategy is the best approach. Basically, keep your product closer to your customers, reducing distance, time and cost for shipping.
That said, it’s quite a challenge to have your product located near your customers – especially in different regions of the world. We’re obsessed with solving that with ShipHero Marketplace – making it easier to put your product around the world.
We’re also working an inventory forecasting feature that can take sales history, sales campaign information and forecasted demand modelling to recommend where product should be so you don’t even need to figure that part out.
So, in short – overnight shipping internationally is complicated, expensive and while shipments could be shipped overnight. We’re betting the easier approach will be to have product located in warehouses closer to customers.
What advice would you give to brands branching out into e-com who are currently exploring shipping and fulfillment?
We see companies who have traditionally been b2b focus in the past (fewer but way larger wholesale orders, typically freight shipping) exploring or shifting to direct to consumer fulfillment. In those cases, they already have a good understanding of running a warehouse, and basically need to transform processes and figure out customer support. In most of these cases, it’s about finding the right technology platform.
For businesses that have not run a warehouse or dabbled in fulfillment, there’s a lot a ground to cover, but it can be summed up in a few categories.
- What is your shipping strategy? Which carriers will you be using, where are you shipping to? what are the shipments in terms of dimenson and weight. Will you be offering a free shipping option?
- Is maintaining inventory and running a warehouse something the business wants to take on? Obviously, leasing space, hiring people, storing product etc are different tasks than marketing, selling, customer support etc. If the business wants to take this on, then it will require investment in time and money.
- Whats the volume? If the business is indeed running it’s own warehouse, then volume needs to be taken into account. Not only an average, but also what are the projected spikes, say during holiday season or during a promotion. Its important to know from a team capacity perspective and of course, warehouse space perspective.
- How are fulfillment processes tied into customer support? Great ecommerce shipping is about responsive customer support, communication, returns, exchanges etc. This requires a customer support team that are connected with the operations of a warehouse, be sure there are defined channels of communication and processes to handle customer order changes, returns etc.
There are a bunch of fantastic write-ups on this topic, most recently Shopify posted The Beginner’s Guide to Ecommerce Shipping and Fulfillment which gets into a lot more detail than me – a really great read.
How does ShipHero stand against competition? What does your company do better?
It’s interesting. When we first started out, we had less features and were rather scrappy in how we looked at our offering vs the competition. Several years later, with more features and more platform ability I would say, and bear with me – we don’t really have a direct competitor. Yeah, there are many apps, plugins, solutions large and small aimed at helping ecommerce businesses with inventory, or printing shipping labels, or printing barcodes – however, try getting all that running on in a single solution. Not so easy. Add on top of that, something that would give you the flexibility to work with 3PLs, not easy at all unless you build something.
For inventory management, we are often finding ourselves compared to Cin7 and SkuVault. For Shipping label generation, ShipStation and Shipworks. For 3PL fulfillment, ShipBob, 3PL Central and Flex. Our approach differs from what these companies provide – but everyone has a fit, for example, ShipStation is worth consideration (at least as of writing this answer) for fresh businesses starting out and need to get a few shipments out.
So yeah, I guess we have a lot of competition if you looked at the number of companies that have the word “ship” in their name! The problems we are solving for scaling ecommerce businesses who need to be smart about fulfillment and our approach seems to be something a lot of ecommerce businesses prefer, and we’re thankful for that while continuing to add more value each and every day.
What are the most common customer complaints when it comes to shipping? How does ShipHero handle these complaints?
Because our customers are ecommerce businesses, we don’t receive complaints from consumers buying products and wanting shipments! That said, we have seen a few common mistakes ecommerce businesses can make when shipping orders, which are easy to avoid.
- Communication. This above everything else is key. Given the choice between something shipped 4 days with updates versus something shipped 2 days without communication – most customers would prefer 4 days. Make sure the customer recieves clear communication when an order is shipped, along with tracking information of the shipment.
- Orders being incorrectly fulfilled. There’s nothing worse than ordering something and getting the wrong items. This costs an ecommerce business time and money, as well as damage control to please the customer. Barcode scanning is an effective method to reduce errors at fulfillment.
- Shipping Costs. Ok, this ones tough. Shipping something costs money, no matter who you are. However, if you’re competing on price, then providing a free shipping option (even if that means spending more than a certain amount) means you need to understand carriers, options and costs. ShipHero is designed to do this automatically – and will find the cheapest method to ship an order.
When did you start ShipHero? How long did you have to wait before you considered it successful?
Started in my home office in the fall of 2012. It then took another 2 years or so for us to reach that point where we felt this could be a business we could grow out.
Ironically, speed of success is something that we’re very mindful of – in some ways we’ve worked hard to make sure we don’t grow too fast as we don’t want to drown ourselves with too many customers at once, while trying to build a product that’s reliable and valuable.
Everyday we’re learning something new, and we feel like we’re just getting started still – all good things to keep the team focused and passionate about our objectives 🙂
What’s the story behind the brand name ShipHero?
Well, it started when we had just finished the ascent of Mount Everest and we were 2 glasses of scotch in and – oh right, that’s fiction 🙂 Ok, the real story. Myself and Aaron were fixated on the problem we were going to solve. “Make ecommerce fulfillment easy for ecommerce businesses”. One of the core premises of our solution was, how can you know who in your warehouse team is awesome, and who might be slacking?
Thinking about this further, a lot of what helps motivate people to do great work is recognition and to know you’re making a difference. On the flip side of that, underperformers in a team can be quite toxic to the rest of the team trying to do a great job. So with this in mind, our focus was quite clear. We’re going to help companies discover their best employees, while at the same time, help companies that use ShipHero have happy customers!
We needed to have some relevance to our industry in the name, and the word warehouse seemed a tad boring. So after much real scotch and brainstorming, and our fair share of truly horrific ideas, we ended up with what sounded about right.
That said, we feel our brand is not about the story of ShipHero. Because we’re the software that powers great brands, the best stories about how we’re solving problems are the stories of the brands using our software. It’s not about us, it’s about the ecommerce business owners and empoyees who get up everyday to run successful businesses. We’re glad to be a part of this, to make a difference and solve some real problems. So yeah, that’s our brand.
When working with ShipHero, can a company use your own customer support team too?
If you’re using a 3PL from ShipHero Marketplace then yes! There are fantastic 3PLs that offer customer support for your customers.
If I want to outsource fulfillment, what company should I outsource to?
Couple of recommendations. You could start googling, researching, calling and generally spending a lot of time trying to find a 3PL (anyone who has had to find one will share the stories). Or and forgive the self promotion, you could use a new service the ShipHero team just launched to help you find an outsource fulfillment partner. Think of it as AirBnb for warehouses… https://marketplace.shiphero.com
What can business owners do to ensure their stores are secure? How can they reassure customers about the security of the site and of any transactions that occur on it?
All reputable ecommerce platforms run very secure platforms. The best companies also invest a lot of resources and time into keeping their platforms secure, and share this information so you can learn more. Here’s more on Shopify: https://www.shopify.com/pci-compliant
Over $123 billion dollars was spent on ecommerce sites this past quarter alone! Credit Card companies have also improved how fraud is detected and disputes are resolved. My recommendation would be to have a very easy to read policy on your security practices (if you’re using Shopify, you can point to the Shopify writeup for example).
Do you have the capability to store and ship perishable items (e.g. refrigerated or frozen foods), if so, how does this compare to Amazon’s fulfillment rules? If not, do you plan to expand to this in the future?
We do not have lot tracking or expiration date tracking as of this AMA! These features are in the works and planned for release later this year.
Why is it important today for sites to be both mobile and social media friendly? How can ShipHero help with both of these?
Simply put, you need to be where your customers are – both in the device they use, and the context of their user experience. You don’t want to lose out on customers who may see something to buy on instgram using their mobile device, to be forced to then use another device (would they even have a desktop / laptop? prolly not) to then seperately make a purchase.
Something we focused on when starting ShipHero was creating a comprehensive set of tools for mobile devices. Designed and built to look and feel like typical smart phone apps. This makes it easy to do things in the warehouse such as fulfil orders, create shipping labels, cycle count inventory, receive purhase orders or even print / scan barcode labels. By making things easier, people are less prone to making mistakes, leading to a better performing warehouse.
How can one deliver better than Amazon? What are some disadvantages of Amazon’s shipping process?
It’s quite a question. “Better” comes in a few flavours. Probably the toughest area to compete with Amazon on is speed – going up against the amazing machine that is Amazon distribution centres is tough. That said. Couple of ways we are seeing customers create a better customer experience.
Lets talk about speed. In order to ship fast, you need to do a couple of things.
- Have a very fast turn around time for inbound orders. Have a great WMS/OMS solution like ShipHero (I know I know, I might be a bit obsessed) which can take care of many of the typical tasks of order fulfillment. Think order priority, special instructions for the packer, shipping method etc.
- Speed up how you fulfill orders, and do this without making mistakes. This is easy with the right tools. Basically, let technology do the work for you. Use locations for inventory, batch pick (quick video on that) orders in bulk, use barcodes for picking confirmation and remove the decision points pickers / packers need to make.
Communication. Getting something in 2 days without any communication or tracking link is a worse experience vs having something delivered in 3 – 4 days with great communication. Sending a shipping notification as soon as that order is fulfilled with a tracking link is easy (especially using ShipHero of course. I am ridiculous.).
Lastly, here’s a big area of advantage you have over Amazon.
Sure, if we’re buying light bulbs, general commodity type products, getting something loosely packed in a brown Amazon box is fine, because you wanted it fast and cheap. However, if you’re buying something that’s not the cheapest or fastest, you’re most likely buying into the the brand experience.
We wrote some tips on this recently – 4 ways to give your ecommerce customers a memorable unboxing experience.
The basic takeway being, you have the opportunity to brand and personalize what your customer receives, make it special and not so generic. That’s right, a superior experience vs Amazon, something memorable and more valuable.
What do you think are the most common mistakes online retailers make when it comes to setting up e-shop?
Two major topics on this question.
1. Marketing & Sales.
This is a big big subject, with many great resources out there. I recommend you looking at the Shopify blog for great insight and resources, BigCommerce also has fantastic resources (and we have a few stories on the ShipHero blog as well).
2. Fulfillment & Customer Support
This topic I can talk to with a bit more insight. Though again, check out the ShipHero Blog for some interesting insight.
Most typical mistakes we see being made from a fulfillment perspective are:
- Incorrect inventory counts. This is a basic thing, however, it’s surprising how ecommerce businesses struggle with this (and why ShipHero is a great inventory management solution). It’s critical you have a correct inventory count of every item you sell, as well as know when to reorder or what not to sell in the future because of lack of demand.
- Manual Shipping. Having to decide which shipping carrier (USPS or UPS for example) or method to use (Overnight, Express?) for each order will really slow things down. Use technology (you knew it – ShipHero can do that for you) to figure out the best carrier and method for each order automically.
- High error rate. Incorrect items in your customers orders, incorrect amounts, late orders, incorrect addresses, missing fraud purchases etc – these will all massively prevent an ecommerce business from succeeding. Prevent this with an effective OMS (Order Management System) that is digital and mobile. Use barcode scanners (we love the Socket Mobile scanners for their durability, ease of use and form factor). You should be aiming to be correct on orders at least 99.8 % of the time.
- Unclear or confusing returns process. Make it easy for your customers to return things. Sure, some customers may not be honest about a return, but most are, and a clear and easy returns policy can a contributing factor to the sale in the first place.
- Slow customer service and bad communication. Let a customer know when their order has shipped, with a tracking link. Use something like Intercom for live customer chat (what we use at ShipHero). Respond to customer queries, reach out to customers who are unhappy and generally be responsive. It makes a big difference when you know you’re dealing with real humans who can help you with a problem or question.
What’s most challenging about building a shipping company?
Intentional or not, you raise a very pointed question in your question. What is shipping? I’ve been asked if I can help advise on the actual management of ships (the floaty things), of which I can’t, though I play a mean game of battleship… The world of “shipping” is large and diverse – otherwise known as logistics, and there are many smart people out there that specialize in many areas.
What I can talk to is both shipping as an ecommerce business (managing inventory, prioritizing order flows and of course, printing those shipping labels) or, what I would consider to be more of a Shipping company in the context of ecommerce – a 3PL.. For those interested, the wikipedia definition of 3PL.
Hopefully, this is what you’re asking about. So, challenges come in all sizes depending on a few factors:
- Real estate. You need to be in a great location, preferrably near a shipping carrier hub, near highways, train, waterways etc.
- People. Guess this is the same for pretty much any company you build, finding the right people who care about their work.
- Tech. You need something you can get up and running fast, doesn’t require a huge upfront investment and is easy for your team to use.
- Customers. It’s difficult to differentiate yourself with traditional 3PL marketing – you basically need to think about shipping and being really good at SEO and digital marketing.
Those being the most typical challenges, it will come down to what you’re good at, have assets in, connections etc. That said, even great 3PLs (I’ve been lucky to work with some brilliant 3PLs while building ShipHero) struggle with finding the right customers. The warehouse space, people and tech while not trivial challenges, are easier to solve than the where do you get new customers challenge. When you’re small, you will take smaller customers with lower volume. As you grow and hopefully scale, the smaller customers are harder to maintain if your processes and overheads and not super efficient.
To scale, you need to reach larger customers, and you need to be more efficient with the time spent with evaluating customers. Typically, larger customers require integrations with their techology and need transparency of inventory and orders in real-time. What we’ve seen the smartest 3PLs do is really hone in on process and efficiency of operation. Use a platform that gives their customers access to the data they need in real-time and most importantly, solve the customer aquisition struggle problem. Turns out, that’s exactly what the ShipHero team is obsessed about – we’re seeing more and more individuals and existing businesses that are building shipping companies (3PLs) to serve ecommerce businesses because of the tools and marketplace created by ShipHero.
Was it ever difficult for you delegate very complicated tasks to your employees? How does put 100% trust on employees?
That’s a difficult question for me to answer, I will need to delegate that. I kid! It can be difficult to delegate if the approach to delegation is more task oriented – at least in my opinion and experience.
hat I mean by that is, most of us, me included, do a much better job and feel more invested when we’re given objectives or tasks in areas we can own. For me at least, what has worked well is sharing the vision and goals of what you’re trying to do. Instead of “can you do x”, more, “we need to do x, and this is why. I need your help, can you take this on?”.
Of course, this also is about personality – but in most cases, giving someone a clear objective with an option to take ownership and work with you to accomplish tasks versus simply telling someone to do tasks will typically result a happier team member, better outcome and more willingness to go beyond what you originally expected.
As the company’s co-founder, how involved are you in the ShipHero business?
Fabtastic question. Myself and Aaron (other co-founder and what I like to call big brain) are very involved, we need to be as we still have so much to do. My day to day is mainly focused on answering questions on what we offer, doing demos with new leads, visiting customers warehouses and growing our team. We’ve built a profitable business, and are 25 people as of this moment – so there’s opportunity as you scale to give team members ownership of roles and tasks.For example, this time last year I was working support chat all day. Today we have much smarter people covering support and I can focus on annoying you on #AMA along with other efforts to talk about ShipHero and help customers. ShipHero and providing value to our customers is our absolute focus.
Before ShipHero, what was your professional career like?
Firstly – “professional” seems a bit rich for me 🙂 I’ve been all over the place career wise, following what seems to be the randomness of opportunity that comes your way. That said, everything I’ve done has been centered around technology and an early obsession with solving problems and building products. Over the years, as I’ve grown up (shudder the thought) that obsession morphed into what looks great and ultimately, what drives a positive customer experience.
Talk about randomness though. My last full-time gig before focusing on ShipHero was working at the NBPA (National Basketball Players Association), leading the digital efforts and working with various NBA players who are very passionate and involved in technology startups.
I was without a doubt, the worst basketball player around. I’ll stick with building things that solve problems and bring value to people I think 🙂
Any tips you can share about time management? What’s the usual schedule of a company’s founder like?
Something I have honestly struggled with. Startup life, at least in my experience is about freedom to choose what you prioritize, however the struggle is what to prioritize! I start my day by writing out the key objectives I want to get done for that day. I respond to emails and have a quick 10 minute standup meeting with my team. Then, several hours seem to fly by! and before you now it, it’s 2pm. I have a stop and reflect for 10 mins around this time, see how I’m doing on my objectives and get back into it. Stop around 7pm. Typically most nights there are calls with customers in other parts of the world (different timezones) and the catchup of emails etc from the day. Most nights I put a hard stop in around 10pm, and will every now and then get a glass of wine in 🙂
One bit of advice I have is this. It’s easy to work, and work you will. That said, you need to make sure you’re getting some time to yourself. This does wonders for productivity and overall health. Be sure to take care of yourself! I also never bother with wifi (outrageous!) on planes, and use that time to be disconnected and either sleep or read.
What eCommerce innovations are exciting you the most these days?
It seems like there’s so much happening right now that’s truly exciting.
What I’m excited about:
- Closer eCommerce & Retail experiences. I was recently at a Warby Parker store in Grand Central, NY and was able to purchase one of the items I had previously abandoned in my shopping cart from a few days before. Retail and eCommerce are just 2 different channels, and it’s going to be fun to see how brings bring those experiences together and make it more personal for customers no matter if it’s on the phone or in a store.
- Fast delivery! Not just 2 days, but a few hours. Sure, this is not a new concept, however, the experience is incosistent and not reliable enough for me to think of this as part of a general shopping experience. We’re not far off though.
- Better content and ecommerce options. I want to see options to buy something I like in the show I’m watching on my smarttv, or review products with VR (Shopify are pushing on this).
So many things coming – and I’m barely scatching the surface 🙂