Reading gives you superpowers

With online shopping becoming increasingly popular, providing customers with fast shipping options has become more crucial than ever. Leading eCommerce brands spend a great deal of time getting the specifics right for their shipments. With evolving technology and greater consumer expectations, overnight delivery has become an important service. While overnight delivery options are great for your customers, the idea of delivering orders in one day can be daunting for small eCommerce merchants.So, how does overnight shipping work, and what’s the easiest way to provide your customers with overnight deliveries? Let’s get to it.

What is Overnight Shipping?

Overnight shipping is the second quickest way of delivering products (after same-day delivery) where shippers guarantee that customers will receive their package on the next business day. One-day shipping, next morning, and next-day delivery can also refer to this process. Many popular carriers and shipping labels provide overnight shipping services; let’s take a look at them.

How USPS Handles Overnight Shipping

The United States Postal Service (USPS) is among the most popular delivery service providers in the U.S. The USPS Priority Mail Express Flat Rate is their fastest domestic mail service. It provides overnight to 2-day shipping with flat-rate pricing. USPS overnight shipping options come with tracking and insurance for most shipments. The price includes the proof of delivery signature record if the receipt is requested at the time of purchase. USPS is among the cheapest options because it operates through an extensive network of post office locations in the US. However, shipments to rural areas and Hawaii might be slightly delayed.

How FedEx Handles Overnight Shipping

FedEx is a popular carrier in the United States, and it offers many overnight services and next-day delivery options. The delivery options depend on the service you choose. FedEx offers FedEx First Overnight Freight, FedEx Standard Overnight, and FedEx Priority Overnight shipping options. FedEx overnight costs are determined by the delivery time for the next day, the delivery address at the destination, the packaging size, and weight, etc.

How UPS Handles Overnight Shipping

UPS is another famous shipping label in the US. UPS offers three overnight shipping options within the US. These options are the UPS Next Day Air Early that is the fastest, UPS Next Day Air, and the UPS Next Day Air Saver that delivers the package by the next day evening. All of these options are trackable online, and you can visit the Tracking tab to do so.

How DHL Handles Overnight Shipping

DHL is among the most popular international shipping service providers worldwide. For emergency shipments, DHL offers the DHL SameDay Jetline option and the DHL SameDay Sprintline option. Despite being an exceptionally reliable option, DHL overnight international delivery is often expensive. There are daily cutoff times for this service for the next-day delivery options.

Why is Overnight Shipping Becoming so Popular?

2-day delivery is already the standard for customer expectations due to the market dominance of Amazon Prime. Overnight shipping is becoming the name of the game and for the right reasons. As Amazon ramps up its investment in overnight and same-day delivery, customers are going to expect the brands they shop from start offering the same service.

Rising Customer Demand

In major markets across the spectrum, customers are demanding faster transit times and shipping speeds. When customers get speedier delivery options from platforms like Amazon, they expect the same from other brands.

Compete with Amazon

Amazon Prime has taken the lead to set the example with its 2-day delivery options and even overnight shipping options. For customers, this has become the standard, and companies who want to compete with Amazon must offer the same to stand a chance. Otherwise, you’re likely to lose sales to Amazon and other major brands.

More Customers Shopping Online Due to Current Trends and COVID

Because of the ongoing pandemic, shopping at brick-and-mortar stores has become an unsafe practice, and there are restrictions on in-person shopping. As such, more people are turning towards online shopping. As customers become more accustomed to online shopping, they’ll expect in-store pickup or fast delivery speeds for their orders.

How Much Does it Cost to Overnight a Package?

Overnight shipping costs differ for different carriers with different shipping fees. They are usually determined by several factors, as listed below.

Package Dimensions

The package dimensions are used to calculate the dimensional weight of the package. This is done by multiplying the length, width or girth, and the height of the box. It is then divided by a DIM divisor to calculate the dimensional weight of the packaging.

Package Weight

In case the actual weight exceeds the dimensional weight, the former is used as the weight of the packaging to calculate the shipping costs. Carriers usually have a given rate for each lb. or Kg of the package weight.

Shipping Zone

Shipping zones operate on the distance between the point of origin, which is often the warehouse and the shoppers’ residences. Carriers define their shipping rates according to different shipping zones. Depending on where your warehouse is and where the package is headed, there might be some additional charges because of restrictions, resulting in an additional fee for shipping.

Shipping Agreements with Carriers

There is a way to lower shipping costs if you have made agreements with the shipping couriers. Most shipping carriers offer discounted rates for high shipping volumes.

How to Offer Overnight Shipping to Your Customers

While daunting, overnight shipping is indeed possible to pull off. You’ll have to research the most economical options for your business so that you don’t suffer a loss while offering overnight shipping. Here’s how you can do it.

Negotiate Discounted Shipping Rates

Take a call with your carrier options and negotiate discounted shipping rates with them. You could base your argument that the more attractive your offer is for your customers, the more orders, and you will use more of the carrier’s services.

Ship from Multiple Warehouses

Realistic overnight delivery options can be pulled off by having your products stored in multiple warehouses near the areas where the bulk of your customer base lies (aka distributed fulfillment centers). This way, transit times can be reduced, and you can offer overnight shipping.

Require an Order Minimum for Overnight Delivery

It’s costly to offer overnight shipping for small items and you can end up losing money on the sale. To tackle this situation, place a minimum order limit for your customers so that you can realistically cover overnight shipping costs. Customers can choose to get faster delivery speeds for an additional charge. You can also offer an Amazon Prime-like membership option where customers can get free or discounted shipping if they pay a monthly fee.

Can You Realistically Support Overnight Delivery?

It can be difficult to guarantee overnight delivery and fulfillment, especially for small businesses. While big businesses such as Amazon store their products in multiple fulfillment centers, small businesses don’t have the luxury to store products in multiple warehouses across the world. Additionally, storing your products in warehouses can often be expensive and you might have to handle the fulfillment yourself.In case you are handling the fulfillment yourself through carriers, you might not be able to ship to rural and remote areas as handling these zones can be expensive. Furthermore, if your customer places the order on the weekend, like Friday, you might not be able to realistically deliver the shipment until the next working day, Monday. This brings a gap of two delivery days, Saturday and Sunday, and it might displease your customers. Realistically, overnight shipping can be expensive and time-consuming for small businesses to manage on their own. Luckily, eCommerce businesses can work with 3PLs that can help them provide faster shipping options.

Offer Overnight Delivery with ShipHero

By now, you understand the importance of overnight delivery options and how they can positively impact your business and sales. If you’re wondering how you can manage overnight shipping for your company, look no further for ShipHero has the solution to all your overnight shipping problems.

Discounted Shipping Rates

At ShipHero, there are no hidden fees. With ShipHero, you can look for the cheapest options to minimize your total fee. Our single shipping rate and discounts make overnight shipping manageable for businesses of all sizes.

Distributed Fulfillment

ShipHero handles your order fulfillment by distributing the products across the nationwide network of fulfillment warehouses. This way, transit delays are minimized, and your customers get their orders on their doorstep faster. This is the reason ShipHero lets you offer overnight and 2-day shipping to your customers without any worry or hassle.

eCommerce Integrations

ShipHero integrates seamlessly to your existing online shops on Shopify, Etsy, WooCommerce, Amazon, Quickly, and more, to provide you with the best experience possible. You can efficiently manage your products and customer orders from a single dashboard with ShipHero.

Conclusion

Overnight shipping is an excellent service to offer customers, but you need to make sure that your brand can offer it without wrecking your profits. If overnight delivery is something you're prepared to offer, then you need the right automation and tools to help you seamlessly manage your operations. ShipHero handles your fulfillment effortlessly and keeps your customers coming back for more. Get started with ShipHero today.

Beauty is in the i...Phone

The Beauty industry, as well as the fashion & apparel industry, were amongst the hardest hit sectors during the pandemic. Due to the fact that these industries rely on in-person brick-and-mortar shopping to browse their high number of SKUs, find the right fit, and test product quality, the beauty industry has struggled to adjust to the digital shopping experience. Until now.

Estée Lauder Co. Goes Digital in a Big Way

While traditionally relying on in-person samples and consultations, Estée Lauder Co. (ELC) has begun to rethink digital shopping. This week, Clinique (an ELC brand) quietly launched a new site in the UK, which features video chat consultations, product demos using augmented reality, the ability to shop based on product preferences, skin types and recommendations based on user data. Soon, they will roll out a feature for friends to shop together online from various locations, customize their own storefronts and control their digital shopping journey from end-to-end.

Nicky De Simone, enterprise marketing and transformation at Estée Lauder Companies, says “One of the things shoppers love about going to the store is that social connectivity. As much as we have pivoted digitally, we were still losing the customer along the way. [We] will leverage data to route a consumer’s consultation through to the right consultant for them and who will be able to make smarter recommendations.”

Tech FTW

Personalization has been a major e-commerce trend for many industries (think: supplements), due to the widespread ability to collect personal information and deliver services and recommendations based on consumer preferences. Beyond big data, other emerging technologies like augmented reality, virtual reality, chatbots and personal assistants are creating new avenues for brands to engage with their customers at scale. Companies like L’Oreal have made big investments when it comes to digitizing their shopping experience.

But is There More to Life Than Being Really, Really, Ridiculously Good-Looking?

No.

Blackstone Bets On India E-Commerce

Already the largest owner of office buildings in India, Blackstone Group Inc., has now publicized plans to become the country’s largest owner of warehouses, as well. While e-commerce continues to rise in India, the investment firm plans to spend $720 million to purchase 3.5 million square feet of industrial warehouses, as well as 18 million square feet of development sites that could be used for fulfillment and logistics properties.

Captain Planet At It Again

Before hosting the upcoming global climate summit (which falls on Earth Day) with world leaders from China, India, and more, President Joe Biden pledges to reduce U.S. greenhouse gas emissions by at least 50% by 2030, more than doubling the previous agreement under the 2015 Paris Climate Accord. in the latest push by the administration to aggressively combat climate change. This pledge comes after more than 300 businesses called on President Joe Biden earlier this month to readjust their gas emission targets.

ShipHero News

You’ve Got a BariatricPal in Me

Gym bros, swoll-mates, keto cadets, dieteers ‘til you die … no matter what you call it, weight loss and fitness is a lot more fun and successful when you have a trusted companion. That’s exactly how this eCommerce CEO’s voyage started -- while embarking on his own health journey, Alex Brecher, CEO of BariatricPal, recognized the need for support, connection, and community, and launched the BariatricPal store to provide the bariatric community with high-quality food, snacks, vitamins and health accessories. Learn more about Alex’s journey in our latest case study.

Amazon FBA v. FBM

What is Fulfillment-by-Amazon (FBA) & Fulfillment-by-Merchant (FBM)? What are the pros/cons of each? How do they compare/contrast and which one right for my business, if any? Let’s dive in.

The secret to success with any ecommerce business is to keep your customers happy. Rapid order fulfillment, free shipping, and excellent customer service are some of the best ways to do that. When determining an ecommerce business plan, many fail to factor in (or underestimate) product returns.

Returns are a necessary evil for any ecommerce business, and if you don’t handle them properly, they could swiftly break you. Frequent returns negatively impact your profit margins but also destroy conversion rates, bring down customer loyalty,, and threaten the survival of your business as a whole. Developing and enforcing a strong returns policy is a must if you want your business to be successful. Counteracting return fraud should also be a focus to further prevent lost profits.

In this article, we’ll cover the ways in which your return policy impacts sales and how to change your policy to benefit your business. We’ll also cover some of the best ecommerce return practices to make sure that returns don’t ruin your business.

The State of E-Commerce Returns

In 2017, there were over 1.6 billion digital buyers around the globe – that’s more than 20% of the world’s population. What’s more is that number is projected to increase to over 2.1 billion by 2021. Though the e-commerce market presents nearly limitless possibilities for retail businesses, it does come with its challenges.

Reaching your target audience can be tricky when you have billions of potential customers, and you must compete with dozens or even hundreds of businesses like yours. In the wide world of ecommerce, it’s the little things that make your business stand out – things like your return policy and refund policy.

According to Star Business Journal, returns at brick-and-mortar stores hover around 8% to 10% while returns for online retailers are nearly double at 20%. Furthermore, returns can be extremely expensive for a business – particularly during the holidays. Here are some eye-opening statistics:

• Over 40% of online purchases include multiple sizes or variations with the intent of returning unwanted items.
• 77% of online returns come from repeat customers.
• 95% of online shoppers say a positive return experience affects brand loyalty.
• On average, it takes 28% of businesses two weeks to add a returned item back into inventory.

To account for the logistics of returns, many businesses take steps such as increasing their workforce, adding more warehouse space, and creating separate departments to handle returns. All of these factor into an ever-dwindling profit margin as the cost of returns grows higher.

Before getting into the details of how you can keep ecommerce returns from potentially ruining your business, let’s take a closer look at some of the ways returns affect your overall profitability.

How Do Ecommerce Returns Affect Your Profitability?

To a certain degree, keeping your customers happy is about transparency. Customer expectations in the world of online shopping are high considering they can switch to a competitor’s site or Amazon in just a few seconds.

The customer experience in today’s world is critical to success. Your customers want to know that the products they are purchasing are of the highest quality and they are getting the best value for their money. Customers want to know their order will be processed quickly and efficiently and that they can contact customer service with questions or concerns, which will be resolved in a timely manner. They also want to know what your return policy is upfront, before clicking “buy”.

Your ecommerce return policy affects your business more than you may realize. According to recent research, about 67% of online shoppers will check a company’s return policy before buying. What do customers like and dislike about return policies? Let’s take a look…

• About 80% of consumers surveyed expect free returns.
• Only 25% of online merchants offer free returns.
• Over 83% of consumers read a company’s return policy before buying.
• About 71% of customers decide not to purchase when restocking fees are charged for returns.

As an ecommerce business owner, you need to account for all variables when it comes to profitability. While it might cost your company money to offer free returns, doing so could, in turn, boost your sales. In fact, customers are twice as likely to make a large purchase (over $1,000) online if free returns are offered.

To give you an example of what a good return policy can do for your business, consider the Zappos model. They were the first ecommerce retailer to offer a 365-day, free two-way shipping, and returns policy. What’s more, is that the free return shipping policy allowed customers to return their shoes for any reason. This was absolutely unheard of in 1999.

According to Zappos’ VP of Services and Operations, the company’s best customers have the highest return rates (up to 50% of everything they purchase) but they also spend the most money which makes them the company’s most profitable customers. At first glance, it may sound like their return policy is hurting business but, over time, those loyal customers end up spending more, which offsets their returns.

Simply put, a lenient return policy (when properly executed) can make a huge difference for your business and for your profit margins by creating a more loyal customer base.

What Really Drives Returns?

In order to improve your returns policy, you first need to gain a better understanding of who is returning your goods and why. Here are some of the most common reasons for returns:

• Damaged Goods – Items arrive at the customer’s door having been damaged prior to or during the shipping process.
• Mis-Delivered or Undelivered Goods – Items fail to arrive at the desired destination.
• Malfunctioning Goods – Items arrive at the desired location but do not work properly.
• Gift Returns - Items are received as gifts and returned by the giftee if they don’t want the product.
• Exchanges – Items are exchanged for another item.
• Inaccurate Description – Items received are not as described, either in terms of size or style.
• Changed Mind – The customer simply changed their mind about the product.

In addition to identifying why certain items are being returned, it is also helpful to develop customer profiles to determine who is making the most returns and how to prevent it from damaging your business. For example, some customers intentionally take advantage of lenient returns policies by purchasing items to wear once and have no intention of keeping them after. There are also others who order multiple sizes and options for the sole purpose of trying them on at home.

Having developed a better understanding of your customer base and the most common reasons for returns, you can now work on developing a stronger return policy.

Tips for Developing a  Hassle-free Returns Policy

Now that you understand that the majority of customers will check a company’s return policy before making a purchase. It is also important to note that nearly 50% of customers will continue buying from a company if they have a hassle-free return policy. So, how do you create a return policy that improves your profit margins while also retaining your customers?

Here are some simple tips to help you develop a strong return policy that wins over customers while keeping return rates low:

Offer returns in a specific time window

Your customers want to know that if they aren’t satisfied, they’ll be able to return the item easily. For example, if you sell footwear, your return policy can state that all shoes can be returned within 30 days if they’re still in good condition.

Keep your return policy clear and concise

A clear return policy makes it easy for customers to understand which products can be returned and which can’t. If you have products that have a separate return policy, be sure to list them on the product page so customers are aware of any special return policies.

Make your policy easy to find

Your customer shouldn’t have to search for it. A strong return policy should show that you stand behind your product to instill confidence in your business to build trust with the consumer.

Never copy a return policy from another company

You should personalize your return policy to your business and products. While there are templates available to help you craft a return policy, they’re meant to be customized to your brand’s unique return policy.

Try to keep the language light

Avoid phrases like “you must” and “you are required to.” You want your returns process to be easy, not scary.

Be clear about what the customer can expect during the process.

Some customers expect immediate refunds or a gift card when returning a product. Your return policy should list out the steps involved during the return process so they know how it all works.Make it clear whether you offer an exchange for returned products or if you provide store credit or a full refund.

The bane of any online retailer’s return policy is deciding between full refunds or store credit. While there is no one clear answer as to which one to choose, we recommend surveying your customers to see what they’d prefer.

Give specific instructions about the procedure for returns and exchanges.

Tell the customer whether they need to use the original packaging or if they can use their own. Tell them if they need to include the order slip and if they can print a return label online.

Educate your staff

So they understand the return policy and can communicate it to your customers quickly and efficiently. If your staff is confused about the returns policy, it could lead to negative interactions with customers when they try to return products.

No company is perfect but having a strong returns policy will prevent returns from destroying your business. Even with a strong policy, however, you should be prepared to take a hit now and again. If you make a mistake with shipping or packaging, you may be forced to eat the cost yourself for the sake of keeping your customer happy. Unlike physical stores, customers can’t just walk in and return a product at no cost to you. Always keep the customer and your long-term bottom line in mind.

What About Reverse Logistics?

The term reverse logistics is sometimes used interchangeably with returns, but they are not quite the same. Technically speaking, reverse logistics refers to monitoring the life-cycle of a product after it arrives at the customer’s door. This includes the ways the product can be reused, how it should be disposed of, and other ways to create value with an expired product – it also involves the return of products from the end consumer back to the manufacturer.

In order to develop a reverse logistics procedure, you need to first think about the different stages a product goes through during a return. First, you’ll need to consider the physical shipping of the returned product – how you will get it from the customer back to the warehouse. Next, you may need to test the returned item to identify existing flaws and document any problems. Then, you’ll need to repair, recycle, or restock the item.

To help you get a better understanding of the reverse logistics portion of your company’s supply chain, there are four key analytics to consider:

• Volume – Take a look at which products are being returned most often – if it’s a large volume of the same products, you may need to consider a recall or make changes to your production.
• Percent of Sales – What percent of your net sales is lost to returns and how many of the returned items can be reincorporated back into your inventory?
• Product Condition – See if you can identify a pattern of failure or malfunction to determine what is going wrong with the product and what condition it is in when it is returned.
• Financial Value – Are the returned products able to be recycled or resold? Think about ways to use returned items to minimize the blow to your profit margins.

Once you’ve gathered this information, you can gain a deeper understanding of your company’s reverse logistics and use that information to optimize your workflow. Improving the efficiency of your reverse logistics system provides numerous benefits, including the following:

Reduction in related costs

When you plan ahead for returns and implement a system to ensure that orders are fulfilled correctly, you can minimize related costs for administration, shipping, quality assurance, tech support, etc.

Faster processing

By implementing a reverse logistics system, you can increase the speed with which orders and returns are processed which keeps your customers happy.

Improved customer retention

A poor return policy can prevent a customer from coming back, but a strong policy instills confidence in the brand and makes customers more likely to purchase again, even after you’ve made a mistake.

Recoup your losses

By using a reverse logistics system to gather data on returns, sellers can decide how best to use returned products to reduce losses. You could fix and restock the product, scrap it for parts, or repurpose it in another market.

Improve the Returns Management Process with ShipHero

ShipHero is a leading 3PL for ecommerce merchants. We work with over 4,000 ecommerce merchants to ship out millions of orders a year and process returns as they come in. Here’s why you should let ShipHero handle fulfillment and logistics for you.

Done for you returns processing

Don’t want to handle every return that comes in? Leave it to us. With ShipHero, we handle all returns as they come in. With our integrations with your ecommerce platform and marketplaces, returns are easily processed on our end.

Integrations with returns management software

ShipHero currently integrates with Returnly to make returns management even easier. With our open API, ShipHero can be connected to any of your returns software to make the returns process easier to integrate into our workflows.

Turn fulfillment into a growth channel

With ShipHero, you’re able to offer customers 2-day and overnight delivery as shipping options. These can be powerful conversion drivers that help you compete against the likes of Amazon and other major brands so you stop losing sales to them.

Final Thoughts

Handling returns in a quick and efficient manner is the key to keeping your customers happy. With a strong returns policy, you can minimize the damage caused by shipping errors, manufacturing defects, and other issues that necessitate a customer return. When your customers feel like they can trust your company to correct errors in a timely manner, they will be more likely to become repeat customers.

Between finding the best deals, navigating carrier requirements and managing inventory, order fulfillment is challenging and time-consuming. Fortunately, you can outsource order fulfillment to third parties to focus on other business tasks.

Amazon offers two fulfillment methods for its sellers: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). What are the differences, and which one should you choose? Read on to find out!

What are Amazon FBM and FBA?

FBA is a fulfillment option where Amazon handles all order fulfillment tasks for sellers. If you register for FBA, your inventory is stored in a designated Amazon warehouse so the fulfillment crew can pack and ship your items.

Meanwhile, FBM involves a company selling its product on Amazon sales channels while handling storage, shipping and customer support on its own.

Of all current Amazon sellers:

• 57% use FBA only
• 34% use a combination of FBA and FBM
• 9% use FBM only

Amazon Prime Shipping

FBA and FBM sellers can ship products via Prime, Amazon's reward program that offers one or free two-day shipping. Amazon reports that sellers with Prime memberships are more popular than non-member sellers – customers are more likely to purchase products from you if the Amazon

Prime badge shows up on your listings because customers want fast deliveries.Prime is automatically available for all FBA sellers. If you’re an FBM seller, you need to earn a Prime membership by joining Seller Fulfilled Prime (SFP). To be eligible for and retain a Prime membership, you need to ship all of your orders on time and have a low cancellation rate – otherwise, you’ll lose it.

Seller Fulfilled Prime is currently not accepting new registrations, but you can sign up for the waitlist.

How Fulfillment by Amazon Works

Fulfillment by Amazon sends your products from an Amazon warehouse directly to customers. Here’s a simple guide to explain how FBA works:

1. Amazon receives your products at a designated FBA warehouse.
2. Amazon stores your items.
3. Amazon handles all customer transactions.
4. Amazon prepares your product for shipping.
5. Amazon ships your products out to customers.
6. Amazon deposits profits to your bank account every two weeks.

FBA vs. FBM – Choosing the right option for your business

Considering your specific business and the products you sell, you may be better off with FBA, FBM, or a hybrid of the two. Each option is evaluated below on the cost & fees, autonomy & control and ease of use.

Is FBA better than FBM?

FBM is the better option for your company if:

• You sell heavy, bulky, or oversized products
• Your products sell slowly and inventory turnover is low
• You already have logistics in place and can fulfill your products
• You have existing customer service practices and want to control your customer experience end-to-end
• You want higher margins
• You don't want to be at the mercy of Amazon's fees
• You sell products that aren't in the approved categories for FBA

FBA is better for your company if:

• You sell small and lightweight products
• Your products sell quickly and have a high volume of inventory turnover
• You do not have logistics in place and expenses would be higher than fulfilling on your own
• Your products are large-margin products that can offset Amazon's additional fees
• You do not have a customer service department
• You are okay relinquishing control of your customers' experience to Amazon

Shipping Items to Amazon FBA

One of the best perks of being an Amazon FBA member is that Amazon handles your entire inventory process. All you need to do is ship your products to an Amazon FBA warehouse, and the team there will do the rest.

How to Ship to Amazon FBA

Recently, Amazon introduced a “Send to Amazon” inventory replenishment method that’s very simple and saves you a lot of time. Here’s how to send items to an Amazon FBA warehouse:

1. Choose Items to Send

First, choose what items you plan to send to an FBA warehouse from your product listing and enter how many units you're sending.

2. Enter Your Shipping Address and Choose a Carrier

Input your destination Amazon FBA warehouse, then choose between an Amazon-partnered carrier or your preferred carrier company.

3. Print Shipping Labels

Depending on your choice in the previous step, you can print shipping labels directly from the Amazon Shipping Services page or your chosen carrier's company website.

4. Attach Labels

Once you have printed labels, attach them to your product boxes. Note that Amazon has strict packaging requirements, so make sure you use the right boxes.

5. Send Your Items

With the labels attached, you can schedule a courier pickup or visit the nearest office. From there, the carrier will ship your items to an Amazon FBA warehouse, where an inventory team will handle the rest.

Amazon FBA Cost Factors

You'll be charged costs and fees if you participate in Amazon FBA. Here are some factors that influence your Amazon FBA usage costs:

Item Size/Weight

You can use Amazon's FBA Calculator to predict fees and expenses, given your item sizes and weight. Overall, the fee structure for FBA sellers dramatically increases with the size and weight of a product; therefore, FBA sellers with small, lightweight products incur fewer fees.

Inventory Turnover

Inventory turnover is the speed at which a company sells and restocks inventory. Amazon tracks sellers' inventory turnover and assesses fees based on the duration; in other words, sellers with products that sit in Amazon fulfillment centers for longer (i.e., have slow turnover rates) must pay higher FBA fees. Additionally, if a product sits in an Amazon fulfillment center longer than 365 days, they are charged long-term storage fees.

FBA Fulfillment Fees

All FBA sellers must pay FMA fees to cover the shipping and handling costs involved with fulfilling their company's orders. These most likely cover the labor hours, packaging and overhead that Amazon incurs to provide this service.

FBA vs FBM: A Comparison

FBA and FBM have their pros and cons. To help you choose, we’ve laid out some key differences between the two fulfillment methods below:

Autonomy & Control Over Inventory

How much control do you hope to retain over your company? FBM has the most power and autonomy regarding fulfillment because there are many ways to fulfill your product, like dropshipping, outsourcing to a 3PL, leasing and operating your warehouse, or even using a spare bedroom in your apartment for storage.

Meanwhile, FBA sellers have little to no autonomy over handling their products. Once you ship products to the FBA warehouse, Amazon will handle the entire order fulfillment process.

Customer Experience

Most FBA members pass customer service responsibilities off to Amazon, so they don't usually speak directly to customers. Outsourcing customer service means saving money and effort because you don't have to pay or train customer service specialists. However, you're also passing up a chance to communicate directly with customers and foster brand loyalty.

Meanwhile, Amazon FBM sellers are 100% responsible for customer service. Because the customer service ball is in your court, you must spend time and money to ensure a positive customer experience. However, this is an opportunity to connect with customers and reinforce your brand.

Seller Rating

FBA sellers have little concern over their seller feedback and rating because Amazon handles most of the process. In fact, FBA sellers can request Amazon to remove negative feedback if Amazon was the one who handled the fulfillment.

FBM sellers have almost complete control over their sales, so you might be easier targets for bad feedback. Since you can't request Amazon to remove negative feedback, you must constantly deliver the best service and respond to negative reviews on your own.

Ease of Use

The whole process of order fulfillment, picking, packing and shipping is laborious and time-consuming.

For companies and brands with no sales channels or fulfillment methods, Amazon FBA allows instantaneous access to a gigantic logistics network for a price. But this also saves you time to focus on the aspects of your business that need your attention most.

Companies and brands that already have fulfillment channels and are considering adding Amazon should consider whether the additional FBA logistics channel is worth the costs, especially those that sell big, heavy products.

If you already have logistics channels and partners, FBM is likely the better option because you don't have to pay the extra FBA fulfillment costs.

Amazon FBA vs FBM: Which is Best?

Which one is “best” between FBA and FBM depends on what you want out of your business. There's no doubt Amazon will remain the #1 eCommerce site for a long time, so both options are relatively stable.

Generally, FBM is better if you want more control over your sales process and build more brand loyalty through direct customer interactions. FBA is better if you want a hands-off approach to order fulfillment and are fine with Amazon running your customer service.

Best Amazon FBA Freight Forwarder

Even if you're an FBA member, shipping items to Amazon warehouses takes time and effort. Fortunately, you can go to freight forwarders to help send products out to Amazon FBA without hassle. Here are some of the best Amazon FBA freight forwarders operating today:

Unicargo

Unicargo is an Amazon freight forwarder that inspects your products upon picking them up, so you don't accidentally ship damaged goods to the FBA warehouse. Unicargo also offers short-term storage warehouses if something happens with your FBA membership.

Flexport

Flexport offers freight forwarding services with real-time tracking in over 80 countries. If you run an environmentally-aware business, Flexport is a good choice because one of its mission to attain 100% carbon neutrality.

Freightos

Freightos helps you compare freight quotes from dozens of providers so you can find the best deals easily. It also offers on-demand freight tracking and issue resolution assistance if things go wrong mid-shipment.

Let ShipHero Handle Amazon Fulfillment

Need help with fulfillment for your Amazon orders? Here's how ShipHero’s third-party logistics software can help you offer Amazon-like delivery speeds without breaking the bank.

2-Day and Overnight Delivery

ShipHero has fulfillment centers across the country that deliver to customers within one to two business days. We can help you deliver as fast as Amazon – without the FBA fees.

Multiple Sales Channel Fulfillment

ShipHero doesn’t just handle Amazon order fulfillment. We offer third-party order fulfillment for numerous major eCommerce platforms like eBay, Shopify, Walmart and BigCommerce.

Affordable Shipping Costs

Thanks to ShipHero’s partnerships with multiple shipping carriers, Amazon sellers working with us get lower delivery costs for each order. Moreover, our fulfillment network makes last-mile delivery faster and more affordable.

Conclusion

So, is FBA or FBM right for your business? Stay tuned to our Shipping Methods Explained series as we dive deep into the specifics of fulfillment.

Learn more about ShipHero's industry-leading warehouse management software.

Amazon FBA vs FBM FAQs

Can you use both FBA and FBM?

You can use both FBA and FBM. In fact, about 34% of Amazon sellers use both fulfillment methods. You can use FBM to sell large products that don’t sell too well and FBA to sell smaller, high-selling products. This combination method saves you more money because you can avoid large item fulfillment and long-term storage costs.

Does Amazon charge for FBM?

Amazon doesn’t charge subscription fees if you’re an individual FBM seller, but you’ll be charged $0.99 for every product sold. However, you can get a Pro FBM subscription at $39.99/month to avoid paying $0.99 for every item you sell.

How much does Amazon take from FBA?

Amazon takes a variable FBA fee, depending on the product’s size and dimensions, that starts at $2.92 for every item sold. You also need to pay monthly storage fees based on how much merchandise you have in FBA warehouses.

-

‍About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With over 5,000 brands and 3PLs relying on us daily, we’re here to help with all your logistics needs.

Fulfillment centers, also known as 3PLs, provide a great option to expand your fulfillment capabilities. ShipHero Fulfillment provides an easy outsourced fulfillment option without the need to engage with a 3PL directly if you're running a Shopify store and are looking for simple fulfillment services.Online shopping has made it easier than ever for consumers to find the products they want at the best price. As brick-and-mortar stores slowly fade into the background, eCommerce stores are taking advantage of nearly limitless scalability and a worldwide customer base.Though the convenience of online shopping is a major draw for many consumers, a positive customer experience is still vital for success. If purchases take too long to process or if shipments are delayed, your business could suffer and you may lose potential repeat customers. Rather than limiting your inventory to prevent backups and shipping mishaps, consider using a fulfillment center to manage your store’s inventory. These companies help your business deliver global eCommerce order fulfillment.Fulfillment centers, also known as third-party logistics companies (3PLs), provide a great option to expand your fulfillment capabilities. If you’re an eCommerce merchant selling products on Amazon or another eCommerce platform, a fulfillment center handles all the order processing for you. They’ll receive the order, prepare it for shipping and get the order delivered to the customer. ShipHero Fulfillment provides an easy outsourced fulfillment solution for many eCommerce merchants running on a variety of marketplaces including Shopify, WooCommerce and more. In this article, we’ll explore fulfillment centers as a convenient option for online merchants. You’ll learn what a fulfillment center is, how it compares to warehousing and the specific benefits of using a fulfillment center. We’ll also provide helpful tips for choosing the right fulfillment center for your business. Another option if you’re looking to outsource your shipping is to use a fulfillment service, a new option for using a fulfillment platform to manage and ship your orders without engaging with a fulfillment center directly. We’ll add an article that details more about this and how you could use Shopify store fulfillment.

What is a Fulfillment Center?

A fulfillment center is a location, typically a large building, that fulfills eCommerce retail orders. A fulfillment center handles the entire order process, from picking and packing to shipping. Without a fulfillment center, an eCommerce retailer must take items from their inventory, pack them and send them through a shipping carrier to the customer. If you run an especially popular business, you may be swamped with orders and spend most of your valuable time processing shipments instead of developing your business.Not just that, but more orders mean a larger chance of human error in the shipping process. If your team loses focus because they’re overwhelmed, they may make mistakes that result in unhappy customers. To prevent errors and save valuable resources, third-party logistics companies often offer fulfillment center access to their clients.

What are the 3 Types of Fulfillment Centers?

Three main types of fulfillment centers serve different purposes and cater to varying business models:

• Traditional Fulfillment Centers: Ideal for bulk storage and shipping, often serving wholesalers or B2B businesses with large inventory volumes.
• eCommerce Fulfillment Centers: Specialized for online retailers, focusing on fast processing and shipping of individual consumer orders with seamless platform integration.
• Specialty Fulfillment Centers: Specialized facilities like temperature-controlled warehouses, designed for unique products such as fragile, perishable, or oversized items for specialized handling and shipping to maintain product quality.

The global e-commerce fulfillment market is expected to grow from $141.35 billion in 2025 to $468.44 billion by 2034, so having the right type of fulfillment center is more important than ever to stay competitive and meet evolving customer expectations.

How Do Fulfillment Centers Work?

Fulfillment centers work by storing your inventory so your 3PL’s team can process orders whenever they come in. Here’s a quick overview of how fulfillment centers process your orders:

1. You receive customer orders, which will then be forwarded to your 3PL provider.
2. The fulfillment center team picks the ordered items from storage for packing.
3. The shipping carrier accepts the ordered items and delivers them to the customer.

The general process is similar to doing it yourself, but fulfillment centers do it at a larger scale to take the burden off your hands. Fulfillment centers are generally more experienced in fulfilling orders, so they can do it more efficiently.Fulfillment centers can process business-to-business (B2B) and business-to-customer (B2C) orders cost-effectively. B2B orders are usually shipped to the client’s shop or storage, while B2C orders are shipped to the customer’s residence.

Understanding the Challenges of Online Stores

Online stores provide customers access to a wide range of products they might not have access to in traditional brick-and-mortar stores, depending on their location. By shopping online, consumers also can compare prices. However, online shopping is about more than just finding the best price; it's also about efficient shipping and an overall positive customer experience.On the seller’s side, online shopping opens up a whole new customer base that isn’t limited to a specific region. Though this creates the potential for much higher sales margins, it does come with a few challenges. Overselling, for example, is a common problem among online merchants. This happens when the merchant receives more orders for an item than they have the inventory to fulfill. They are then forced to contact their customers to tell them that the item is out of stock or shipping will be delayed. Both options can lead to low customer satisfaction levels and potential lost sales.All it takes is one angry customer to write a bad review that could dissuade other customers from buying your products.In addition to overselling, many online merchants encounter specific shipping issues such as mispicks and misships. A mispick happens when the merchant selects the wrong product for an order, and a misship occurs when the wrong item is sent to the customer. Both of these situations result in returns. Plus, there's a high probability that the customer will simply cancel the order instead of waiting for the correct item to be sent.The larger an online business's inventory, the higher the risk for problems. It might be time to consider a fulfillment center if you're currently trying to manage your inventory directly and experiencing these and other issues.

Fulfillment Center vs Warehouse: Comparison

The term fulfillment center is often used interchangeably with warehouse, but the fact is that they are different. Both are large buildings used to hold business inventory, but the services offered can differ.A warehouse is a long-term storage solution used to store products for an extended period. In many cases, a warehouse is an industrial space designed to house inventory items in bulk. If you were to walk into an inventory warehouse, you'd see products being moved by a forklift on large pallets stacked high with large quantities of similar products. Warehouses are primarily used by wholesalers and businesses that fulfill B2B orders.Generally speaking, a warehouse is usually the best option for retailers that have a diverse inventory and stock large quantities of products. Large retailers sometimes have the capital to purchase warehouse space, but leasing is usually the most cost-effective option for small and mid-sized retailers. For small businesses, renting a storage unit is sometimes the best option.A fulfillment center performs some of the same roles as a warehouse but with additional services. In addition to storing inventory, a fulfillment center will fulfill customer orders. When an order is placed through an eCommerce store, the order is forwarded to the fulfillment center, where the inventory is picked and boxed up, then labeled for shipment and sent to the customer.Using a fulfillment company means outsourcing order processing which takes the burden off your shoulders and lets you focus on other areas of your business.

How Does a Fulfillment Center Compare to a Warehouse?

Despite their surface similarities, fulfillment centers and warehouses offer different services. Here’s a look at three elements that set fulfillment centers apart from warehouses.

Long-term vs. Short-term Storage

Warehouses are designed for long-term storage, where your items are kept for months or even years. Meanwhile, eCommerce fulfillment centers are more common for short-term storage because your inventory frequently changes as orders come in and out. In fact, your inventory shouldn't stay in fulfillment centers for a long time because storage fees can get expensive. At the same time, you should keep sending inventory to fulfillment centers to avoid running out of stock.

Facility Operations

Warehousing operations are generally very simple. Items come in when you send them and come out when you need them. There's not a lot of processing involved aside from moving items around.Meanwhile, fulfillment centers have more complex operations because they handle order processing. Here are some key operations of a fulfillment center:

• Receiving items from factories or manufacturers
• Picking products to fulfill customer orders
• Assembling items, if required
• Packing items and labeling shipments
• Shipping items through carriers
• Accepting and managing returns

Frequency of Pickups by Freight Companies

Warehouses don’t see a lot of shipping company pickups because you can get items shipped in bulk instead of individually. That’s why we typically see scheduled truck pickups at warehouses, with items being stacked together in big batches with pallets.Fulfillment centers often see daily shipping company pickups or even several times a day if you run an especially prolific eCommerce business. eCommerce fulfillment centers get multiple shipper pickups daily because they need to fulfill customer orders that come in even after business hours.

Fulfillment Centers vs Warehouses: A Summary

Here is a quick summary of the differences between a warehouse and a fulfillment center:

• The primary function of a warehouse is to store inventory, while a fulfillment center’s goal is to turn inventory over quickly and ship orders.
• Fulfillment centers handle all stages of the order fulfillment process, including negotiating rates with shipping carriers.
• Operations at a warehouse are relatively static, whereas operations at a fulfillment center are much more complex and in constant motion. Some of the services provided by a fulfillment center include the following:
  • Receiving inventory from merchants
  • Picking products for individual orders
  • Gathering inventory and packaging orders
  • Labeling shipments for delivery
  • Turning over orders to the shipping carrier
  • Managing customer returns and exchanges
• Warehouses typically have scheduled less-frequent pickups, whereas fulfillment centers typically have daily pickups from shipping carriers.
• Fulfillment centers can guarantee same-day or next-day shipping.

Every 3PL provider is different regarding their services and the size and type of businesses they cater to.Later in this article, we'll talk about how to choose the right fulfillment center for your business, but for now, let's take a closer look at the benefits fulfillment centers provide.

What are the Benefits of Using Fulfillment Centers?

Simply put, the benefit of using a fulfillment center instead of directly managing your inventory is that you don't have to deal with the inventory management's ins and outs (e.g., storing, shipping and returns). It may sound simple, but you will never go back once you make the switch. The supply chain for eCommerce companies is complicated, and fulfillment centers make the supply chain easier to manage.After using a fulfillment center to manage your inventory, you’ll find that the order fulfillment process not only goes much smoother, but you’ll be able to free up time on your end which can be dedicated to growing the business (rather than managing it).Here are some of the top benefits of using a fulfillment center:

Extra Storage Space

Working with a fulfillment center means you don't have to find extra space for your inventory on your premises. This is especially useful if you run a small business at home or in a small office.

Managed Order Fulfillment and Shipping Services

Fulfillment centers handle everything from product picking to shipping, so you don't have to do it yourself.

Affordable Carrier Rates

Many fulfillment centers work with shipping carriers to give you delivery cost savings. Lower shipping rates mean you save money with each sale, growing your profit.

Enable 2-Day and Overnight Shipping

Working with fulfillment centers allows you to offer 2-day or overnight shipping options to your customers.

Professional Inventory Management

Fulfillment center workers know what they're doing, so you can trust your items will be properly organized and stored. You also get live updates to see which items are in and out of stock.

Returns Processing Assistance

Your fulfillment center assists with returns and exchanges, saving you a lot of time and effort.

Helps You Focus on Your Business

Fulfillment centers and 3PLs handle inventory and order fulfillment, so you don't have to. This means you can focus on other tasks for your company, like marketing, customer service and product development.By now you should have a thorough understanding of what a fulfillment center is and how it can benefit your business. If you’re ready to make the switch, you’ll be glad to know that there are 3PL providers all over the country waiting to handle your inventory. Keep reading to learn how to find them.

Things to Consider when Choosing a Fulfillment Center

A fulfillment center may seem like the perfect solution if you've been struggling to keep up with orders and manage your own inventory. While 3PL providers can take the burden of order fulfillment off your shoulders, there are some things you need to consider before you commit.First and foremost, you need to determine whether it's a cost-effective solution to start using a fulfillment center. Prices vary from provider to provider but will include costs for things like warehouse space, equipment, warehouse management, staff salaries, worker's compensation and liability insurance, packaging supplies, postage and more. Some 3PL providers offer a flat rate while others add individual fees per task, such as picking and packing.In many cases, outsourcing your order fulfillment services costs more than doing the work yourself, but what you'll be saving is time. If managing your inventory and fulfilling orders is holding you back from doing the work you need to grow your business, outsourcing may be worth the extra cost.Not only do you need to consider the cost of using a fulfillment center, but you need to make sure that the center you choose is compatible with your eCommerce platform. The type of software you use determines whether the 3PL provider will be able to receive, process and track orders. The easiest option is to choose a provider that can integrate with your existing software rather than changing your entire eCommerce platform to match the provider.With these factors in mind, here is a simple process to follow when choosing a 3PL provider:

Review Your Existing Shipping Process

Sit down and take a closer look at your inventory as well as your shipping process. Take the time to identify existing problems and consider whether a 3PL provider could resolve them.

Do Some Research to See What Options are Available

You may be able to find a 3PL provider in your region, or you could choose one closer to your largest customer base.

Compare and Contrast Services Provided

Each 3PL provider is different, so you'll need to know your business's needs before finding a company to match.

Narrow Down Your List to No More Than Three

Once you've created a list of options, narrow it down to the top three choices – these are the companies you'll evaluate on a deeper level to make your decision. Any more than three will simply be too much to handle.

Dig a Little Deeper into the Company You’re Considering

You'll be relying on your chosen 3PL provider to fulfill your customer's orders and handle returns efficiently. Choosing a company with similar culture and values to your own is important for maintaining a consistent and satisfactory customer experience.

Think About Technological Compatibility

Even if your business is still fairly new, you already have some kind of management software in place – save yourself the hassle of switching by choosing a 3PL provider that is compatible with your existing management software.

Plan Ahead for Scalability

Ideally, outsourcing your order fulfillment process will give you more time to focus on what it takes to grow your business. Choose a 3PL provider that can scale its operations to accommodate your changing business needs.

Choose a Provider That Uses Distributed Fulfillment

Depending on what your business sells, you're likely to have customers from all over the country. You want to choose a 3PL provider with multiple distribution center locations to keep costs down and optimize your efficiency.

Consider Experience and Customer Satisfaction

Though the satisfaction of your own customers is paramount, you also want to be satisfied with your 3PL experience. Look for a company with a proven track record that you can trust to handle your business's day-to-day order fulfillment operations. Financial stability is also an important consideration, and you should look for a provider with plenty of industry references – and don't hesitate to check them!

Negotiate the Pricing

Each 3PL provider prices their services differently, some according to the size of your business and others by individual services. You'll need to sit down with your chosen provider to determine the exact pricing and what specific services are included.Once you've chosen a 3PL provider, you need to sit with them and discuss the details. Many small businesses who switch to using a fulfillment center skip this step and end up frustrated when there is no clear process.Before you sign a contract, sit down and go over the details of exactly what you expect from the company and how they will fulfill those expectations. You'll need to determine which responsibilities the 3PL will handle and which you will retain in-house. It's also a good idea to establish a schedule for regular meetings between members of your team and representatives from the 3PL. This is where you'll evaluate the 3PL's performance and discuss any changes that need to be made.

Examples of Fulfillment Companies

Looking for a great fulfillment center provider for your eCommerce business? Here are three example fulfillment companies to consider:

Fulfillment by Amazon

Fulfillment by Amazon (FBA) boasts over 170 fulfillment centers and 150 million square feet of storage space. Additionally, FBA users can offer free two-day delivery to their Amazon Prime shoppers – a great way to draw customers in and improve sales.In addition to Amazon itself, FBA also supports numerous eCommerce platforms like Shopify and WooCommerce.

FedEx Fulfillment

Shipping carrier FedEx offers a full-service fulfillment center and third-party logistic service that includes packaging, warehousing and order fulfillment. In addition to its complete suite of services, FedEx Fulfillment also assigns small business owners a professional assistant to teach them about fulfilling orders.

Rakuten Super Logistics

Rakuten Super Logistics boasts 100% order accuracy and guarantees order turnaround by the next business day. Rakuten Super Logistics users can also offer customers two-day ground shipping to 98% of the United States.However, Rakuten Super Logistics requires a minimum volume of 250 orders per month, so it may not be the best option if you can’t pass the threshold consistently.

How ShipHero Makes Fulfillment Easy

Boasting over 4,000 eCommerce partners, ShipHero is one of the leading 3PL companies for online merchants. Here are some key benefits of working with us as your third-party logistics provider:

2-Day and Overnight Delivery

You may have lost sales because your store doesn’t offer 2-day delivery like Amazon. Customers expect 2-day shipping everywhere they shop, but building a fulfillment network that can do that is a lot of work for a business – especially a small one.If you work with ShipHero, you can offer 2-day and overnight delivery to compete with Amazon and other eCommerce giants. Moreover, we offer shipping discounts so your customers can enjoy cheaper 2-day deliveries.

Nationwide Fulfillment Center Network

Storing your entire inventory in one fulfillment center usually leads to longer delivery times, excess inventory and higher shipping costs. For instance, if your fulfillment center is in Florida, delivering orders to California will be much more expensive than shipping to New York, due to distance and many other factors.ShipHero's distributed fulfillment network boasts eight warehouse facilities in the United States and Canada, with locations in Florida, Texas, Vancouver and more. We split your inventory across these fulfillment centers, so customer orders will be sent out from the closest location. By reducing the shipping distance, you save money and your customers get faster deliveries.

Integrations with Your eCommerce Platform

We support many popular eCommerce platforms like BigCommerce, WooCommerce, Shopify, Shopify Plus and Amazon. Our eCommerce platform integrations are very simple to activate and especially useful if you're selling on multiple sites. In addition to handling all orders, we offer real-time updates from your multiple eCommerce platforms, so you don't have to fumble through multiple sites to see everything.

Transparent Fulfillment Fees

Unlike other fulfillment providers that have unexpected hidden fees, ShipHero offers a simple and transparent pricing model. Our single flat rate covers the entire order fulfillment process for the lower 48 states. We don't lock you into lengthy contracts like other companies, either.

The Final Word

Customer satisfaction is essential to the success of your online business. If customers like your products and experience a smooth order fulfillment process, they're much more likely to recommend your business to others and become regulars themselves.As an online business owner, you’re responsible for selling high-quality products that cater to your customer base’s needs. However, you can’t focus on that if you still have to process orders yourself. Outsourcing the order fulfillment process to a third-party logistics provider means you don’t have to spend hours a day dealing with customer orders and have more time to develop your business instead.

Fulfillment Center FAQs

What is a Fulfillment Warehouse?

A fulfillment center or a fulfillment warehouse is a place where your third-party logistics provider stores your inventory and processes customer orders. Whenever an order comes in, the fulfillment center team picks, packs and ships the product to the customer’s door.

Do Fulfillment Centers Handle Inventory Management?

Fulfillment centers handle inventory management as part of their order fulfillment services.

How Does Order Processing Work?

Here’s how your fulfillment center staff processes orders:

1. They receive inventory from your manufacturer or distributor.
2. They store and organize stock on the warehouse shelves.
3. They pick items from shelves according to the order.
4. They prepare the items for shipping.
5. They send the items to carriers for delivery.

What is a Fulfillment Company?

A fulfillment company handles the storage, processing, and shipping of products for businesses. These companies manage inventory, process orders, and deliver goods directly to customers on behalf of their clients.

How Do Fulfillment Centers Help Small Businesses?

Fulfillment centers for small businesses help manage inventory, packing, and shipping orders efficiently. This allows your businesses to focus on growth while outsourcing logistical challenges.About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With over 5,000 brands and 3PLs relying on us daily, we’re here to help with all your logistics needs.Let us know how we can help you today by scheduling a call HERE.

Gym bros, swoll-mates, keto cadets… no matter what you call it, weight-loss and fitness journeys are a lot more fun and successful when you have a trusted companion by your side to support you, motivate you, and keep you on track towards your health and fitness goals.

That’s exactly how this e-commerce CEO’s voyage started -- while embarking on his own health journey and after a personal bariatric surgery, Alex Brecher, CEO of BariatricPal, recognized the need for support, connection, and community.

On the same day that I came home from surgery, I launched a weight loss surgery forum to share information on procedures, diets, and related topics. That was 17 years ago. Now the forum has 374,000 members and over 4.5 million posts.

Alex Brecher, CEO of BariatricPal

In 2015, the BariatricPal store was launched to provide the bariatric community with high-quality food, snacks, vitamins and health accessories. The company currently owns 4 brands: BariatricPal (Store), PatchAid (vitamin patches), NutriNoodle (pastas), and Alex’s Acid-Free Organic Coffee.

Since health & fitness is such an important part of our lives (especially for those of us that gained the Covid-19lbs #thanksgrubhub ????), we just had to sit down and chat with the fine folks at BariatricPal, break down their business into sizable chunks, and chew it over 25 times.

Alex, thanks so much for joining us! To start us off, you look amazing.

Alex Brecher: “You stop, you look amazing.”

Ohhh quit making me blush, you scoundrel! I could lose a couple.

Alex Brecher: “From where??”

Okayyy, that didn’t happen but he does look great -- take 2: Alex, thanks so much for joining us! To start us off, please tell us about your business.

Alex Brecher: "BariatricPal is a brand and online community that offers a one-stop shop for a huge range of vitamins, supplements, and diet food, including 3,500+ products from over 150 bariatric-friendly brands. The story of BariatricPal began in the most personal way – with my bariatric surgery. While embarking on my own health journey, I recognized the need for support, connection, and community.

"On the same day I came home from surgery, I launched a weight loss surgery forum to share information on procedures, diets, and related topics. That was 17 years ago. Now the forum has 374,000 members and over 4.5 million posts.

"As millions of Americans, and countless people across the globe, continue to spend billions of dollars on weight-loss products, BariatricPal’s popularity is showing no signs of slowing down."

What was your fulfillment model before switching to ShipHero? What were the challenges or areas of improvement?

“At first, we fulfilled all orders out of a spare room in my office. After a few months, we switched to a 3PL, which we used from Nov 2015 - August 2017. Due to the growing number of SKUs, we outgrew our 3PL and moved into our own warehouse on 8/17.

"The 3PL was having issues scaling with our growth, and towards the end of our business relationship, we had orders that were massively delayed and inventory took weeks to receive. After crunching the numbers and talking to ShipHero, we realized that we could operate fulfillment for much less than we were paying and at the same time be much more efficient.

"We should be moving to a new, larger warehouse after this summer.”

Congratulations! Crunches to get summer ready, who knew? And what were the main goals for your company when deciding to alter your fulfillment logistics?

“We had two goals. First, we wanted to increase the speed that it was taking customers to receive their orders from the time they placed the order on our site. Second, we wanted to decrease our fulfillment costs.

"When searching for a fulfillment partner, we valued compatibility with Shopify, ease of use, and of course, cost.”

Why did you choose ShipHero?

“Choosing ShipHero came down to three factors:

1. It was the PERFECT solution for what we were looking for: It allows us to efficiently pick, pack, and ship and receive and create purchase orders.
2. The pricing is reasonable and affordable.
3. Very good product support”

Just like you, we’re all about supporting our community. What was the experience like integrating ShipHero?

“It was a lot less difficult than I had expected. We did run into a few bumps in the road and support was super helpful, patient and communicative. They held my hand through the entire migration process going from the 3PL to ShipHero.”

We’ll never let go ❤️ What advantages have you seen with using ShipHero?

“It's allowed us to scale our growth and assist us with running a very efficient warehouse operation.

"We also use ShipHero's Bulk Ship feature to ship our subscription boxes each month. Offering a subscription box allows our customers to sample the many new bariatric products we add to our store each month. This allows us to streamline the entire shipping process without our team being required to pick and weigh each subscription box individually. It saves a huge amount of time and our team loves it.”

Ready to start your personal journey to health and wellness? Follow Alex Brecher and get your BariatricPal and associated brands at their website(s).

https://store.bariatricpal.com/

https://patchaid.com/

https://nutrinoodle.com/

https://acidfreecoffee.com/

Facebook

https://www.facebook.com/BariatricPal

https://www.facebook.com/Patchaid

https://www.facebook.com/NutriNoodles

https://www.facebook.com/alexacidfreecoffee/

Want to be featured in our case study?

If you would like to share with us stories about your eCommerce experiences, whether it’s how you started your business, what opinions you have on the stories we share, or if you just feel like venting … we’re here for you.

Shoot us an email and you could be featured on an upcoming Case Study, our critically-acclaimed weekly news segment The Packet, or if you’re lucky, you could be invited to join one of our many Podcast episodes!

While brick and mortar stores are convenient, nowadays eCommerce platforms are growing fast in popularity among consumers and retailers alike. Online stores created with Amazon, BigCommerce, Shopify, and other platforms make the sales process easier for both customers and businesses. However, a digital storefront invites some supply chain management challenges for merchants. Inventory management is essential for smooth order fulfillment, and it directly impacts your online store’s efficiency and growth potential.

What exactly is inventory management, and why should you, an eCommerce business owner, focus on optimizing it? In this article, we'll go over the ABCs of inventory management, detailing the terms and formulas in this field and how you can optimize inventory management for your online store.

What is eCommerce Inventory Management?

eCommerce inventory management is a vital link of the eCommerce supply chain that starts from order placement and ends with the products getting delivered. It consists of the products being picked from the suppliers, stored in the warehouses, and upon the order placement, being picked, packed, and shipped to the destination.

Many 3PL companies handle outsourced fulfillment and inventory management for small and large businesses. Through inventory management, eCommerce companies get a better idea about how products are stocked and how they should be stocked in the future.

What Happens if eCommerce Inventory isn’t Optimized?

Inventory management is related to the direct estimation and organization of the products. It determines the proper functioning of the whole supply chain and can have dire consequences for the businesses if it isn’t optimized. Let’s take a look at some of these consequences.

Stock-outs or Too Much Inventory

If inventory management isn’t optimized, your inventory levels could cause problems. For example, overstocking can cause deadstock, especially in the food and fashion industry. No one wants to buy spoiled food or fashion that isn’t in line with current trends. Understocking can hold up the whole supply chain and cause delays that ultimately cost you customers.

Heavily Manual Inventory Management Processes

If you’re reliant on manual inventory management, it can slow down the whole supply chain. It also doesn’t allow for the business to grow quickly. For example, using a warehouse management system integrated with barcode scanners could save you a lot of time and labor costs compared to workers with manual scanners.

The Wrong Products get Shipped

Not having an organized inventory means more errors when fulfilling orders. Customers aren’t happy when they get the wrong products delivered. Having a proper inventory management system with automation can reduce these risks.

Hard to Track Inventory Across Sales Channels and Multiple Warehouses

Not having a proper inventory management system also means that it is harder to sync with different fulfillment centers in real-time, resulting in potentially dire consequences on sales. For example, let’s say you sell on both Amazon and Shopify. If a customer places an order on Amazon, a lack of coordination can result in orders not being fulfilled or the same order being fulfilled multiple times.

Lost Inventory

If all the inventory details aren’t accounted for through proper channels, it can become hard to keep track of products. This potentially results in the loss of inventory records and can cause losses for the company in the end.

No Data or Insights into Inventory Performance

If the inventory management system isn’t equipped with the proper tech stack, it can often become hard to track the data and then analyze that data. A lack of data analysis means that you cannot correctly measure the inventory performance and often affect future decisions - especially when it comes to demand forecasting and inventory reordering.

Getting Started with eCommerce Inventory Management

Now that we've covered the dangers of not investing in proper inventory management, let’s cover inventory management basics. Of course, inventory management differs from business to business, based on their individual needs and setups, but the blueprint is similar.

Understand Basic Inventory Demand

You can get an idea of which inventory levels you might need by analyzing past sales performance. Look at your orders based on time frame to look for seasonal trends. Once you have this data analyzed, you can order the right inventory to prevent overstocking or understocking.

This also helps save money on storage costs as you won’t need to lease more warehouse space to keep up with the increase in inventory.

Set Minimum Viable Stock or Minimal Stock Levels

If your eCommerce shop is already up and running, you should set up the minimal stock levels for each product category. These levels measure how much stock you should have at a minimum to ensure smooth operations and prevent a stockout.

Prepare for Seasonality

To ensure a better customer experience, it’s vital to prepare for busy shipping seasons like holidays. This way, you can ensure enough inventory to cater to the fluctuating purchase orders during a busy shopping season.

Implement Inventory Management Software

To correctly manage inventory, eCommerce businesses usually employ inventory management software. You can typically add integrations like a POS system for purchase orders. QuickBooks for keeping tabs on the bills and receipts, etc.

Essential Inventory Management terms

Inventory management is a versatile field and can be customized according to the needs of your business. There are many inventory management systems like ABC analysis, Set Par Levels system, etc. Here are some essential inventory management terms and systems that you’re likely to encounter.

First In, First Out (FIFO)

This inventory management system relies on the principle that the first products to be received by the warehouse should be the first to be shipped to the users. This method ensures that the stock is cycled properly and is especially useful in food inventory management where expiration dates come into play.

Last In, First Out (LIFO)

This inventory management system is essentially the opposite of the FIFO mentioned above method. Here, the items that are added last to the inventory are the first to be shipped. This method is not suitable for perishable items but is also becoming obsolete in other industries as well.

Just-In-Time (JIT)

This particular inventory management system isn’t for those who like to play it safe. Here, the inventory stocks are kept at the minimum possible levels where demands are still met. This is not a suitable system to prepare for emergencies and runs a high risk of out-stocking.

Safety Stock

Safety stock is like the safety net for your inventory and helps you overcome emergencies. Safety stock quantities can be estimated by using the safety stock formula that uses the maximum daily usage estimates. The formula for safety stock is mentioned in the next section.

Reorder Point

The reorder point measures the minimum inventory level that a business should have before they reorder. This point helps you avoid overstocking and understocking situations and ensures that you reorder the goods at the right time.

Inventory Distribution

Inventory distribution is best when you think that one fulfillment center isn’t enough. This especially helps with cutting down the transit times and shipping costs upon order placement. If your ecommerce business receives a high influx of orders, inventory distribution might be the thing for you.

Perpetual Inventory System

A perpetual inventory system records the real-time sales and restocking of the inventory stock through inventory management methods. Inventory management software can be used to automate this process. The system records changes in the inventory systems and updates the inventory counts automatically as goods are bought and sold.

Inventory Metrics, Formulas and Terms

When going about inventory management, it's crucial to get things right. A few formulas and metrics related to inventory management can help with the analysis and you can make your future decisions based on them. Here are some commonly used metrics and their formulas.

Finished Goods Inventory

The finished goods inventory tells about the total stock available for customers to purchase that can be fulfilled. This metric can be used to estimate the amount and value of goods available for sale and how much inventory you need to prevent stockouts. The total value of finished goods can be calculated by this formula below.

• Value of Finished Goods = (Cost Of Goods Manufactured – Cost Of Goods Sold) + Value of Previous Year’s Finished Goods

Inventory Holding Cost

To estimate the total costs for holding the unsold inventory including warehousing, insurance, transportation, labor, shrinkage, and opportunity costs, inventory holding costs are used. The following formula can calculate the total inventory holding costs.

• Inventory Holding Cost = (Storage Costs + Employee Salaries + Opportunity Costs + Depreciation Costs) / Total Value of Annual Inventory

Inventory Safety Stock Formula

Inventory safety stock helps you prepare for unforeseen circumstances by stocking enough for fluctuations. This metric enables you to stay prepared for emergencies and supply chain failures, etc. It is thus the safety net for your inventory stock. You can use the following formula to estimate the inventory safety stock for your business.

• Inventory Safety stock = (Maximum daily usage x Maximum lead time in days) – (Average daily usage x Average lead time in days).

Inventory Turnover Rate

Measuring the inventory turnover rate helps you properly estimate and forecast future inventory needs. It essentially is a ratio of how many times inventory is sold and restocked in a specific period to determine the turnover frequency. To calculate the total turnover rate for your business, you can use the following formula.

• Inventory turnover rate = cost of goods sold (COGS) / average inventory

Inventory Days on Hand

This is another formula that tells you about the frequency of turnover and lets you assess how many days of inventory you have on hand so you can restock in time and prevent a stockout. You can also estimate the stock lead time with this metric.  Use the following formula to estimate the total inventory days on hand for your eCommerce business.

• Days on hand = (average inventory for the year / cost of goods sold) x 365

Inventory Reorder Point Formula

This formula estimates the minimum quantity of stock you should have on hand before you reorder. This ensures both overstocking and understocking.  It also makes sure that you reorder before it is too late. Many inventory management systems remind you about this in time. The inventory Reorder point formula is as follows.

• Reorder point formula = demand during lead time + safety stock

Inventory Shrinkage

Inventory shrinkage occurs when the accounted inventory levels aren’t the same as the actual inventory levels with the latter being lesser than the former. This can occur because of consumer theft, employee theft, management errors, or inventory damage. It is calculated as a ratio. To estimate the total inventory shrinkage rate for your business, use the following formula.

• Inventory shrinkage rate = (recorded inventory – actual inventory) / recorded inventory

Reorder Quantity Formula

The reorder quantity is the number of goods you should request from a manufacturer or supplier when you restock your inventory. This reorder quantity mustn't be so high that you overstock, and not so low that you run the risk of understocking. The optimal reorder quantity can be estimated by using the following formula.

• Optimal Reorder Quantity for an SKU = Avg. Daily Units Sold x Avg. Lead Time

eCommerce Inventory Management FAQs

While you might have a working knowledge of inventory management now, some questions are still unanswered in the above sections. Here are some of the typical inventory management-related questions and their answers.

What are the 4 Types of Inventory?

The four primary inventory types include raw materials, work-in-progress (WIP) inventory, finished goods, and sellable inventory. The WIP inventory includes raw materials, labor, and other overhead costs. Out of the four mentioned inventories, sellable items are the only ones ready to be shipped.

How do eCommerce Stores Get Inventory?

eCommerce stores get their inventory in the form of finished goods directly from a manufacturer or supplier. These goods are then shipped to a warehouse or fulfillment center where they are stored until they are ready to be shipped.

What are the 3 Major Inventory Management Techniques?

While there are plenty of inventory management techniques, like the ones mentioned in the section above, the commonly used ones include First In First Out (FIFO), Forecasting Demand, and Setting Reorder Points. These techniques can be used for the inventory management of your business.

What is the EOQ model?

The Economic Order Quantity (EOQ) is also referred to as the optimum lot size. It is a metric that measures the optimal order quantity for a business such that overstocking and understocking situations are prevented. It also helps a company minimize logistics costs, warehousing space, stockouts, and overstock costs.

Improve Inventory Management with ShipHero

ShipHero is a warehouse and fulfillment management software that connects eCommerce sellers and retailers to 3PL companies worldwide.

ShipHero works with integrations of popular ecommerce platforms like WooCommerce, Shopify, Amazon, Etsy, Magento, and eBay, etc. With ShipHero, you can do comprehensive inventory management by managing warehouse locations, returns, low stocks, cycle counts, and many other things. ShipHero allows you to sync your channels through integrations with ecommerce platforms, optimize shipping through robust shipping features, simplify operations through order management, and help from our dedicated customer support team.

Reorder Alerts

With ShipHero, you can set reorder alerts for each product that notifies you when some stock needs replenishment. This way, you can stay on top of your restocking game and ensure that you do not run the risk of being out of stock.

Detailed Analytics & Reporting

With inventory tracking, replenishment, and reporting all in one place, you don’t have to worry about your inventory’s visibility. ShipHero helps you collect the data through inventory logs and reports and then analyze it to devise optimal inventory management strategies. With reporting and analytics, you can get an idea about how different products are performing on your eCommerce store.

Returns Processing

You can create new purchase orders with ShipHero by specifying the supplier and the receiving warehouse. You can also replenish any depleting stock with just a click through the ShipHero dashboard. With ShipHero, you can also keep tabs on any PO change. For the returns processing, you can indicate whether a product is to be restocked or not.

Conclusion

By now, we've established why inventory management is vital for an eCommerce business and how organized order fulfillment encourages a better customer experience. While traditional selling through brick-and-mortar stores requires only one channel to be managed, the modern-day eCommerce setup with multi-channel selling can be more demanding to manage.  

But you don’t have to worry about managing your inventory alone because robust logistics solutions like ShipHero provide you with the best inventory management solutions.

So, get started with ShipHero today to make managing your inventory that much easier.

Bezos Kisses Amazon Adios - Part Dos

On Thursday, Jeff Bezos released his final letter to shareholders before he relinquishes his CEO title next quarter, to incumbent Andy Jassy, CEO of Amazon Web Services. In the address, Bezos commented on the recent Union election that took place in one of its Alabama warehouses.

“While the voting results were lopsided and our direct relationship with employees is strong, it’s clear to me that we need a better vision for how we create value for employees — a vision for their success."

Jeff Bezos

An Appelbaum a Day...

Keeps poor labor conditions away. Stuart Appelbaum, who led the campaign in Bessemer, Alabama and is the president of the Retail, Wholesale and Department Store Union, says that Bezos’s statement is an admission that their mistreatment claims have been correct, and there needs to be more conversation about how Amazon treats its employees.

“His admission won’t change anything, workers need a union – not just another Amazon public relations effort in damage control.”

Stuart Appelbaum

Why Unionize?

Workplace injury and rigorous schedules have been the main topics during these Union elections. In his new role as Amazon’s Executive Chairman of the Board, Bezos plans to focus on how to make Amazon’s warehouses safer: approximately 40% of work-related injuries are sprains or strains caused by repeating the same motions over and over. There have also been reports of employees having to use shipping packages and bottles to “relieve themselves” due to a lack of bathroom time. Amazon has denied these claims.

Un-Fair Trade

The Ever Given cargo ship, which famously disrupted the Suez Canal last week and held up $9 billion in global trade a day, has been detained by the Suez Canal Authorities, who are calling to be paid $916M in reparations, including $300M for ‘loss of reputation’. In response, the Japanese owner, Shoei Kisen Kaisha Ltd., responded “you know what, keep the ship”. Not really, Shoei Kisen Kaisha and the Suez Canal Authorities are still negotiating a figure.

Ali-wahhh-wahhhh

Earlier this week, Chinese e-commerce titan Alibaba received a $2.75B slap on the wrist from China's State Administration for Market Regulation, totalling 4% of Alibaba’s 2019 revenue. This record fine serves as a conclusion to their high-profile antitrust investigation, which came months after Jack Ma’s criticisms of the Chinese regulatory system. In a press statement, Alibaba called the fine "an important action to safeguard fair market competition", and then went and pouted in time-out.

Busch Beer is for the dogs

Tired of sharing your beer with your dog? Busch Beer has announced a contest to hire a doggo “Chief Tasting Officer” for its popular Busch Dog Brew, and the winner could take home $20,000! To enter, post a picture of your pooch on social media with the hashtag #BuschCTOcontest... so animal services can come pick them up. JK sounds fun, good luck.

ShipHero News

How to Master Inventory Management

Breaking: Shopify reveals that sellers accrue $2 trillion in costs due to inventory mismanagement like overstocking, out-of-stock items, and preventable returns. Learn how to master your inventory management and reduce your costs with the simple steps given in our latest blog. Check it out!

Proper inventory management is crucial to building a thriving Shopify store. Statistics from Shopify reveal that sellers accrue almost $2 trillion in costs due to inventory mismanagement. The losses are spread among overstocking, out-of-stock items and preventable returns.

Interestingly, these aren’t the only problems associated with inventory management. Shopify store owners still have to battle missing items, misplaced inventory, wrong product packaging and delivery, among others. If you can establish a solid foundation for tracking inventory on your Shopify store, you’re on your way to building a genuinely agile eCommerce business.

What is Inventory Management?

Inventory management refers to how businesses manage goods as they move along the supply chain. eCommerce inventory control ensures that companies know their products are in stock and are notified when inventory needs to be replenished.

Ultimately, a good inventory management system should minimize costs, satisfy customer demand and help you maintain optimal inventory levels. It should also centralize your data, making it accessible to the appropriate point persons.

Part of stock management is inventory control, which is the process of handling existing inventory, while the former primarily involves forecasting, ordering and receiving goods.

Why is Inventory Management Important?

Inventory management is the key to any eCommerce business’ success. It ensures customer satisfaction, keeps businesses profitable and minimizes operational costs. Other benefits of having an effective inventory management system include the following.

No Spoilage or Dead Inventory

When your inventory moves faster and your product lines stay healthy, you don’t put anything to waste. Regular inventory updates can help you avoid spoilage with perishable goods like food and beverages. Similarly, automatic stock updates can prevent dead stock, which are non-perishable products that are no longer in season.

Early Detection of Low Stocks

Most American retailers without powerful inventory software only have an inventory accuracy level of 65%. The more warehouse locations they have, the more this percentage falls.

Fortunately, perpetual inventory systems inform you of available inventory items in real time, preventing stockouts and missed sale opportunities. Instead of scrambling to increase your stock flow, early stock alerts can remind you to make refills in advance.

Improved Cash Flow

Cash flow shortfall is a persisting problem for businesses without perpetual inventory systems. The best way to increase cash flow is to turn inventory into revenue. When you factor inventory into your business operations, you get insight into how much you can sell and buy at any given time.

Remember, inventory flow can directly impact your future sales. Projecting when you’re about to run out enables business owners to accurately plan and increase sales.

Minimized Warehouse Costs

Efficient inventory counts tell you what items are selling fast and which don’t. You can free warehouse space up and store items that sell more by keeping up with sales volumes.

In addition, you can monitor every single product that doesn’t sell, potentially cutting them out of your inventory. When you stock only what is necessary, you can downsize your warehouse and save on costs.

Improve Shopify Fulfillment Network

By employing effective inventory management methods, you can hasten the fulfillment process. For instance, if you have multiple fulfillment partners, inventory management techniques like distribution ensure that you are close to buyers and can keep customers happy. Doing so also ensures that customer returns are seamless and you can easily re-enter usable inventory into circulation.

What is an Inventory Management System?

Inventory management systems enable users to track inventory quantity and streamline processes from purchasing to end sales. Key features of a stock management system include:

• Barcode scanning
• Detailed reports
• Labeling and documentation
• Purchase and supplier management
• Low stock alerts
• Stock turnover rates
• Bills of material (BoM) management

What is Inventory Management for Shopify Stores?

Inventory management for Shopify stores is the systematic approach to sourcing, storing and tracking your inventory. With a proper inventory management system in place, you’ll have the right stock at the right levels, in the right place, at the right time and at the right price.

Plus, it’ll reflect on your Shopify store listings. That way, you can avoid preventable losses due to out-of-stock items, overstocking and returns, and your brand has a better shot at survival, growth and profitability.

Why Inventory Management Matters for Shopify Stores

Inventory management is crucial to the success of Shopify stores. If you can get this aspect of business right, you’ll reduce overall inventory costs, optimize order fulfillment and position yourself to serve your shoppers better. Below are some of the benefits of proper inventory management:

Accurately Track Inventory and Prevent Stockouts

Shopify store owners understand that meeting customers’ needs is crucial to profitability. If you frequently run into stock management problems like overstocking, out of stock or overselling, you’re likely to have many dissatisfied customers. Ultimately, they would go elsewhere to make a purchase, and you may never see them again.

Better Cash Management and Inventory Accounting

If you have too much stock that you can sell within a reasonable period, you’re leaving your capital idle while wasting precious storage space. Knowing how much product to stock helps minimize the amount of dead stock on your shelves and levels out cash flow.

Improve Multi-Channel Selling and Demand Forecasting

Proper inventory management facilitates seamless selling across multiple marketplaces. For example, suppose you’re selling on Shopify, Amazon, eBay, Etsy and your business website. In that case, you’ll need to stay on top of your stock levels to convey accurate information to customers across these platforms. Inventory management also helps you accurately forecast demand, so you’ll always have what your customers need in stock.

Save Inventory Dollars

Virtually every task involved in inventory management helps you manage your resources efficiently. If you stock the right amount of the right products, you won’t waste inventory dollars on storage space. There’ll also be fewer cases of spoiled or expired inventory since your turnover rate will be optimal. Furthermore, the potential gains of having what your customers need in stock whenever they need it is unquantifiable.

Inventory Transfers

Due to varying demand levels, you may frequently have to transfer inventory from one marketplace to another when selling across multiple channels. If you do not follow the right inventory management practices during the transfers, tracking each channel’s inventory levels gets harder.

Shopify Inventory Management Challenges

Shopify has built-in inventory management software that’s adequate for tracking your inventory and managing sales on Shopify. However, the native Shopify app can’t cater to retailers’ unique needs who sell on multiple channels. Here are three common problems you’re likely to experience with Shopify’s native inventory management solutions:

Products That Don’t Integrate Into Shopify

Shopify has a long list of restricted and prohibited items. If you sell one of these products on other platforms, you’ll be facing a significant challenge with multi-channel inventory management.

Often, the only viable option is to have separate inventories for Shopify and other platforms. This complicates the inventory tracking process and can lead to inaccurate or inconsistent stock levels across the different channels.

Automated Inventory Replenishment

As your SKU library expands, your inventory management process will likely become more complicated, and there’ll be more opportunities for inventory management errors. To prevent these problems, you need inventory management software that automatically replenishes depleted stock from suppliers.

Such a program should recommend order quantities by factoring in your sales volume on Shopify and other channels. Unfortunately, the native Shopify app may be unable to carry out the task effectively.

Functionalities Across Channels

The native Shopify inventory management software does not fully support multi-channel selling. For example, the app cannot estimate all the product variants in your online stores. This information is vital to evaluating the performance of your products on channels other than Shopify.

Phantom Inventory

When your system reports items that don’t exist in your store, you risk creating phantom inventory. Without accurate and powerful reports, your business can become susceptible to errors and shrinkage.

While enterprise resource planning has its advantages, it does come with a steep learning curve, so always brush up on your inventory management tips.

How Do Shopify Merchants Handle Inventory Management?

How you utilize the different types of inventory management will ultimately depend on your business goals, existing systems, retail locations and other requirements. You can implement several strategies when using inventory management for the Shopify app.

FIFO Principle

The first-in, first-out (FIFO) principle prioritizes selling the old stock first, which is an ideal method for retailers that sell perishable goods. To achieve a FIFO system, warehouse management begins from the back, pushing older products to the front.

LIFO Method

Opposite the FIFO method is last-in, first-out or LIFO. This method involves selling your newest stock first, which benefits businesses that want to curb rising prices. While this method will lower taxable income, it will also yield lower profits and can negatively impact your retail business’ bottom line.

Regular Auditing

Facilitating a regular inventory and supplier audit can put the current state of your business into context and pinpoint areas of improvement. There are several ways to keep track of low or excess inventory:

• Physical inventory count: A physical inventory count refers to year-end inventory reporting. Count your stock to pinpoint discrepancies, update accounting and file income tax.

• Spot check: Count products in stock one by one throughout the year to ensure you have enough of that particular item. Spot checking is best for fast-moving items.

• Cycle counting: Count various products on a rotating schedule, prioritizing high-value items.

On top of physical audits, supplier audits can help identify areas of risk, improve your standards, enhance supplier communication and increase customer satisfaction.

Relationship Management

Relationship management is imperative to adapting quickly, especially if you have more than one retail store location or a thriving online business.

If you have a bad supplier, you could have insufficient inventory or too much of it. The better your relationships, the easier it’ll be to bring up issues with suppliers and resolve them. Keep your suppliers in the loop by letting them know when you’re expecting a sales increase, if you’re experiencing inventory dips or if a specific product is running behind schedule.

Accurate Forecasts

Accurate forecasts are challenging to achieve but not impossible. If you want to ensure you’re stocking the correct inventory, keep an eye on:

• Your average growth rate
• Market trends
• Upcoming deals and promotions
• Predicted ad spend
• Daily, weekly and monthly sales
• Sales comparisons

Noting these metrics can help you make more informed inventory decisions and prevent miscalculation in inventory mean.

What to Look For in a Shopify Inventory Management App

The Shopify App Store boasts numerous third-party inventory management tools that can make up for the native app’s shortcomings. Brands that sell on multiple channels typically layer these inventory apps over Shopify’s inventory management software to deliver the best results.

But how do you know the right app to choose among the scores of available options? Here are the nine inventory management features eCommerce store owners should look for in any app.

Multi-Warehouse and Multi-Channel Functionality

A good inventory management app must be capable of syncing your inventory across all sales channels and fulfillment centers. When you update your inventory, it should reflect in real-time or at most within fifteen minutes.

Order Routing and Automation

The app you want to choose should automatically route orders to the nearest fulfillment center to save on shipping costs. The order routing will be based on inventory availability across fulfillment centers, destination zip code and delivery date. Your inventory management app should direct the order to the warehouse, guaranteeing cost-effective and timely delivery.

Inventory Control Features

You want an app that allows you to adjust the number of units on your listings across channels. The inventory adjustments should reflect in real-time to prevent overselling or processing the payment for an order you cannot fulfill.

Comprehensive Analytics and In-Depth Reporting

You should be able to generate real-time data about stock level, inventory turnover, sales margins, profitability, etc., from your inventory management app. All these metrics can guide your purchase decisions and help you satisfy your customers better.

Shared Inventory Across Listings For the Same Product

The ideal app should be capable of tracking inventory across multiple listings for the same product. This is one of the shortcomings of the native Shopify app, as it cannot effectively manage multiple inventory listings that rely on one source.

Automated Inventory Replenishment

Your inventory management system should be able to generate purchase orders once you have the lowest inventory levels automatically. Furthermore, it should recommend order quantities based on previous sales data. These capabilities will significantly streamline your stock replenishment process.

Locked Inventory

If you offer special promotions or pre-order sales, you may want to prevent the items from showing on listings. However, you’d still want them to show on your total inventory since you’ll be processing pre-orders and promotional sales orders. The best Shopify inventory management apps have a wide range of features for locking such products.

Cross-Channel Capabilities

As mentioned earlier, brands that sell across multiple channels will benefit significantly from having a bird’s eye view of their inventory and sales data across each channel. For example, they should know how each SKU is shared across listings, the quantities of inventory in each warehouse at any given time, the amounts appearing on the listings across each channel, etc. Not all inventory management software can provide these vital pieces of information as desired.

How ShipHero Makes Inventory Management Easy on Shopify

If you’ve been looking for an all-encompassing Shopify inventory management app that allows you to fulfill orders expediently and manage inventory while still giving you the best shipping rates, ShipHero is the future of inventory management. Our inventory planner serves over 4,000 eCommerce brands and third-party logistics (3PL) companies, and you’ll no doubt enjoy our custom workflows. Below are a few advantages of ShipHero over its competitors:

All-in-One Inventory Tracking

With ShipHero, inventory management doesn’t stop at knowing what’s left in your warehouse or fulfillment center. Our all-in-one inventory tracking feature gives you limitless capabilities, including but not limited to tracking a product’s shelf life, tracking movement across warehouses, monitoring sales data across each sales channel, figuring out the best shipping routes and even providing customer experience insights.

These features allow you to monitor inventory movement in and out of your fulfillment centers while ensuring you give your customers the best shopping experience.

Easy to Set Up Shopify Inventory Integration

ShipHero is available on the Shopify App Store, and it seamlessly integrates with all the essential Shopify features. For example, the app easily connects with Shopify POS and allows you to swiftly and securely process customer orders as they come in. Beyond Shopify native apps, ShipHero also boasts numerous integrations that make it easy to connect shipping carriers, other eCommerce platforms such as WooCommerce and other essential business software like Inventory Planner.

And it still doesn’t end there. ShipHero further boasts over 20 partners that provide systems expertise and integrations to help you get more out of the app. FedEx, Hermes, LaserShip, DHL, USPS, WooCommerce, Walmart and Shippo are just some of ShipHero’s illustrious partners.

Inventory Reorder Alerts

As already emphasized, the ideal inventory management app should be capable of automatically reordering inventory based on your sales records. ShipHero also ticks this box, and it can significantly streamline your stock replenishment process while helping your in-house buyers make better decisions.

Also, since the app can have multi-channel integrations, it monitors your stock level across all the warehouses and factors in your sales data across each sales channel before placing the order. So, you can rest assured it’ll suggest just the correct quantity you need to satisfy all your customers and not just your customers on Shopify.

Conclusion

The native Shopify inventory management app can satisfy your needs if you only sell a few items on Shopify. However, the app's limitations become more glaring when you explore other channels and expand your SKU library.

You’ll have to manually input SKUs into individual listings and update your stock levels, which can lead to poor inventory management. Doing this is akin to going back to managing stock using excel spreadsheets, and there’s no doubt your stock managers can make better use of their time.

Thankfully, ShipHero, an all-encompassing option for inventory management that integrates seamlessly with Shopify, is the commerce solution you need. The software possesses the much-desired multi-channel inventory management capabilities to streamline your inventory management tasks, get real-time location data, achieve strong sales and improve operational efficiency.

What’s more? You’ll be incurring significant cost savings while leaving your customers pleasantly satisfied. ShipHero helps you spend less time on inventory and has just the attributes you need to stay ahead of the competition.

Get started with ShipHero today by clicking the button below.

Shopify Inventory Management FAQs

Is there inventory management in Shopify?

Yes, there is built-in inventory and warehouse management on Shopify. You can track inventory history, stock transfers and product variants, adjusting stock levels as necessary.

Which is the best inventory management software integrated with Shopify?

The best inventory management for Shopify is ShipHero, which is ideal for growing and high-volume brands. ShipHero provides real-time tracking for stock transfers, levels, sellouts and replenishments. It also offers full warehouse management, enabling users to automate repetitive functions that contribute to a complex workflow.

In addition, ShipHero provides advanced reporting and personalized dashboards that make it easy to share data across teams. Other advanced features besides direct integration with Shopify include multi-location inventory, barcode scanning and supplier management. ShipHero also serves 10% of Shopify Plus stores globally.

How do I add a stock to Shopify?

You can add stock to your Shopify account by following these steps:

1. Click on Products from the Shopify admin page.
2. Click Add Product.
3. Entitle your product and add a description.
4. Save your product.

There are additional options for updating your stocks on Shopify, including duplicate, tags, edit, barcode scanning, delete and archive.

-

‍About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With over 5,000 brands and 3PLs relying on us daily, we’re here to help with all your logistics needs.

Let us know how we can help you today by scheduling a call HERE.

In today's bustling marketplace, consumers have grown accustomed to the luxury of online shopping complemented by rapid deliveries. With the convenience of mail services and the availability of numerous delivery options, the demand for fast and reliable shipping services has skyrocketed. Major industry giants like Amazon and Walmart have paved the way, offering services like two-day, same-day, and even next-day delivery options. For smaller retailers, not jumping on the expedited shipping bandwagon can translate to missed sales opportunities. Data suggests that 26% of online shoppers abandon their carts due to extended shipping times. Furthermore, over half of these consumers consider delivery time a pivotal factor in their buying choices. An interesting fact is that while consumers crave fast shipping, 75% of U.S. consumers expect this service without any shipping fee. So, how can emerging businesses level the playing field? This guide provides a deep dive into the world of two-day shipping and its implementation.

Decoding the Essence of 2-Day Shipping

2-day shipping is a promise that consumers will have their products in hand within two days of placing their order. Given the current impatience of online shoppers, this delivery option is a cornerstone for a thriving eCommerce strategy. With the right information and strategy, even businesses with a single office location can offer this service effectively, especially when they partner with our top-notch shipping service.

The Impactful Benefits of 2-Day Delivery

Meeting customer expectations and enhancing loyalty: With brands like Amazon setting the standard, two-day shipping is now an anticipated service. Delivering within this time frame not only meets these expectations but also nurtures trust and loyalty, just like providing discreet shipping to your customers. Minimizing lost sales and cart abandonment: Speedy delivery times act as a significant incentive, reducing the likelihood of cart abandonment. Creating a unique selling proposition: A guaranteed two-day delivery can be a major draw, attracting more consumers to your online store.

The Intricacies of 2-Day Shipping

The execution of 2-day delivery is a form of expedited shipping that can differ based on the retailer's choice and the way they handle their shipping logistics. For example, Walmart calculates two business days from the order cutoff time. Two primary methods are employed for two-day shipping: air and ground. Air Shipping: This method involves aircraft to transport packages, often suitable for international deliveries or those far from fulfillment centers. However, it can be pricier. Ground Shipping: This method, using ground vehicles, is more affordable and perfect for deliveries closer to fulfillment locations.

Leveraging 2-Day Shipping for E-commerce Excellence

With thousands of online retailers in the U.S., the eCommerce scene is intensely competitive. Offering two-day shipping can give businesses a competitive edge by: Meeting shopper expectations: Most online consumers find a three-day wait acceptable. Anything longer might push them towards competitors. Enhancing conversion rates: Emphasizing expedited shipping in marketing materials can lead to heightened interest and sales. Improving customer retention: Prompt deliveries can lead to repeat purchases. Offering two-day shipping as part of a membership program can also help balance shipping costs.

Unveiling the Choice: Should You Offer 2-Day Shipping?

While two-day shipping can diminish cart abandonment, it's crucial to weigh the associated costs. If expedited delivery proves too costly, businesses can present it as an option alongside other shipping services. It's essential to get your products shipped quickly with our reliable and affordable service, ensuring they reach their  delivery destination in a guaranteed time.

The Price and Ways of 2-Day Shipping

The price of two-day shipping hinges on several factors on the packing slip, including item size, delivery calendar, chosen carrier, and destination zip code, among others. It's always a good idea to access discounts and insurance options to ensure the best rates for your deliveries.

Mastering the Art of Affordable 2-Day Shipping

Businesses can keep costs in check by: Utilize Ground Shipping: This solution is cost-effective for deliveries near fulfillment centers. Offer 2-Day Shipping for Membership Plans: Like Amazon Prime, businesses can offer faster shipping to members, helping to offset costs. Leverage Multiple Warehouses: Using multiple fulfillment centers can cut down transit times, ensuring quicker deliveries.

The Future is Here: Embracing 2-Day Shipping

To stay ahead in the e-commerce arena, businesses must offer swift and affordable delivery options. Outsourcing fulfillment to experienced partners like Amazon's Fulfillment By Amazon (FBA) or third-party logistics companies such as ShipHero can empower businesses to incorporate 2-day shipping seamlessly.

Exploring the Possibilities: 2-Day Shipping FAQs

• What is Second-Day Shipping? It signifies dispatching orders within two days of placement.
• Is 2-Day Shipping Actually Two Days? Typically, customers receive the package within two business days of it being shipped.
• What is the Amazon Prime Effect? It denotes the benchmark set by Amazon's two-day shipping service.
• Is 2-Day Shipping Guaranteed? Various factors can influence this, so a guarantee isn't always possible.
• What is the Benefit of Offering Free 2-Day Shipping? It can entice more consumers, but businesses must weigh the associated costs.

Navigating the 2-Day Shipping Landscape

For businesses, shipping is more than a mere transaction—it's a key aspect of customer satisfaction and success. As we've uncovered the nuances of 2-day shipping and the myriad benefits it holds, remember that the future of ecommerce thrives on swift, efficient, and reliable delivery options.