Feb 25, 2022 | Blog
By: Maggie M. Barnett, Esq., COO at ShipHero
Over the years, plenty of brands moved their fulfillment outsourcing overseas, setting up a series of complications in the wake of COVID-19.
While the pandemic continues to disrupt supply chains, brands are taking the opportunity to reevaluate their logistics processes and build a stronger shipping plan. By taking steps to identify pain points, leverage warehouse data, and bring outsourced fulfillment closer to home, the interrupted logistics network can become less of a daunting obstacle.
1. Identify supply chain pain points
The first step to solving supply chain woes is to identify where the pain points are. Most eCommerce brands are hitting roadblocks when importing their products into the U.S. and communicating with their fulfillment partners.
Whether it’s a lack of flexibility, an inability to meet customer demand, or outdated IT systems, it’s essential to understand specific areas of trouble in order to start making improvements. The best way to narrow down the exact issues impacting your supply chain is by leveraging warehouse data.
2. Leveraging warehouse data
To get an idea for where there’s room for improvement, brands are beefing up their data capture and analysis procedures. This elevated visibility offers a way to better understand inventory, customer demand, warehouse capacity and how these factors drive the cost of running a business.
Without a digitally driven logistics operation, risk mitigation becomes infinitely more difficult. In such a volatile supply chain environment, improved visibility is a key initiative for emerging consumer brands aiming to optimize their fulfillment processes.
3. Mitigate supply chain risks
For years, eCommerce brands moved their fulfillment outsourcing to other countries, opening the door to an untenable amount of risk that went mostly ignored until the onset of the pandemic.
Now, brands are opting to bring their fulfillment operations back in-country, granting them more control and flexibility when shipping products to their customers’ doorstep. While this might come with a higher price tag than warehouses in another country, mitigating the risk of bottlenecks and inventory shortages is well worth it. While the fulfillment outsourcing cost might be higher in-country, the ability to get supplies and shipments reliably will help meet customer expectations and avoid expensive issues down the line.
4. Communication within the business
For any successful business, communication is key. That’s especially true for teams juggling the uncertainties of today’s supply chain. In order to avoid bottlenecks and mis-ships, sales, devs and warehouse workers need to all be on the same page.
For brands working through multiple 3PLs, communication is especially difficult. When evaluating your shipping partnerships, it’s a good idea to find fulfillment outsourcing options that offer more efficient and holistic processes.
Communication with your customer base has also gained new importance in light of shipping complications. Being upfront about delivery times, or including a breakdown of raised prices can go a long way when building trust in your customer relationships.
5. Determine the best supply chain solution for you
No two eCommerce brands are exactly alike, and the shipping solutions that work for one business might not apply to another. There’s no cut and dry solution to today’s supply chain issues, so brands need to find creative, custom solutions that empower their customers, employees and shipping partners.
Conclusion
Outsourcing fulfillment, especially with multiple 3PLs, can easily complicate any of the steps listed above, so it’s important to seek out reliable partnerships that can set your brand up for success in the long term.
That’s why so many brands are turning to ShipHero for a reliable fulfillment option that offers superior data management. From emerging eCommerce stores to Fortune 500s, ShipHero helps clients grow their business with a dependable shipping partnership.
If you’re struggling to get your Fulfillment Operations under control, contact ShipHero’s Fulfillment Experts today to talk about our fully outsourced fulfillment solution.
Click HERE to Schedule a Meeting Today
Maggie M. Barnett, Esq., COO
ShipHero
About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.
Follow Maggie on Twitter & LinkedIn.
Apr 1, 2022 | Blog
By: Aaron Rubin, Founder & CEO at ShipHero
Getting eCommerce products from the warehouse to the customer has become more difficult than ever. With supply chain disruptions and a sudden rise in online orders, eCommerce entrepreneurs are seeking ways to optimize their delivery processes that allow for heightened visibility and better standards of control over their inventory.
To achieve this streamlined version of shipping, some brands have brought their fulfillment operations in-house. While this can grant you more control over your products and how they’re shipped, it does come with its own costs and some degree of risk. Let’s take a look at what in-house fulfillment entails and how to know your brand is ready to meet the challenge.
What does in-house fulfillment mean?
In-house fulfillment means all facets of the eCommerce shipping process are handled internally, without the help of a third party. By switching your brand to an in-house fulfillment approach, you’ll be responsible for packaging, labeling and mailing products, as well as tracking the order and keeping your customers updated on its progress.
When should you consider in-house fulfillment?
When you’re still trying to get your business off the ground, paying a 3PL to handle your shipping can ease the financial burden associated with fulfillment, but after a while, you might see more value in having control over the process.
Before you decide to take this step, let’s look at a few considerations you should make to guarantee in-house fulfillment success.
Complex Products or Packaging
Most 3PLs and full service fulfillment providers have a standardized process for packaging and shipping their products. If your brand comes with complex packaging requirements, or if your products are especially fragile, managing fulfillment yourself might be a good idea.
This way, you can rest assured that customers receive their orders intact, with the appropriate packaging that provides the intended brand experience.
Order Volume
A relatively low order volume makes it much easier to handle some aspects of fulfillment, like inventory management, on your own. Depending on the size of your warehouse and the available bandwidth of your staff, it might not be worth paying a 3PL to take control of your shipping.
However, if you’re looking to expand your product line or customer base, in-house fulfillment might not be sustainable. As your sales numbers increase, so will the amount of space, inventory and labor required to make a shipment. If you’re anticipating growth, paying for a full service fulfillment provider might be the best way to help your eCommerce brand scale.
Customer Expectations
With major retailers like Amazon setting the standard for eCommerce delivery, you’ll want to make sure your fulfillment operations can keep up with customer expectations. These days, buyers expect their package to arrive within a week or less. If you can’t fulfill these orders within that time frame, it might be time to start looking for a reliable 3PL.
However, if your warehouse is located in an urban area, close to where your customers live, quick delivery becomes much more feasible. Additionally, close proximity to your customers means you can offer other fulfillment options, like in-store or curbside pickup.
How to manage in-house fulfillment
Before you move fulfillment in-house, it’s important to ensure that your brand is ready to take on the challenge. Even if the process seems optimal at the initial stages, changes in sales, technology and the supply chain can expose new issues that have the potential to impact your bottom line.
3PLs and larger fulfillment service providers are able to navigate these changes by employing a well-trained staff and utilizing scalable warehouse management software. Putting together the right team and resource pool can make the process much easier.
In-house fulfillment might seem like the best way forward, but it’s important to consider a variety of risk factors before diving in. Sure, cutting out a 3PL and handling fulfillment yourself can give you more control over the process, but doing that work yourself comes with additional costs that you’ll need to be sure you can afford.
Rent
Depending on the size of your eCommerce brand, you might need to rent additional space to store your products. Not only can renting a warehouse be expensive, but you’ll run the risk of locking yourself into a lease that could hinder your brand’s growth.
For example, if sales continue to do well, you may eventually need even more space than your rented warehouse can accommodate. Without extra room to grow, providing consistent and reliable delivery to an expanding range of customers will be a challenge.
Labor
Another major expense for in-house fulfillment is the cost of additional labor. If your eCommerce brand is doing well, your existing workforce might not have the bandwidth to move high-volume shipments day after day. Committing to in-house fulfillment also means you and your employees would have less time to manage other essential aspects of an eCommerce brand, such as marketing and sales.
With a 3PL, on the other hand, additional resources can be committed to your shipments as the business begins to grow, without piling on to your team’s existing workload.
Software
An efficient in-house fulfillment process requires high-quality warehouse management software. In today’s eCommerce environment, simple spreadsheets and paper-based procedures just don’t cut it.
Customers expect detailed delivery updates, which requires thorough inventory management, pricing information and an efficient warehouse. All these features of fulfillment can be handled and enhanced with the right software.
Conclusion
While in-house fulfillment might seem like a great option right now, it’s important to remember how quickly that can change. Even positive changes like a sudden increase in sales can cause trouble for eCommerce brands that use in-house fulfillment with a finite amount of storage space and labor.
To get the most out of your in-house fulfillment process, it’s essential to find resources that are ready to scale along with your brand. ShipHero’s warehouse management software could provide the flexible and customizable solution you need.
If you’re looking for a partner to help your eCommerce scale to new heights, contact the Software Experts at ShipHero today.
Click HERE to Schedule a Meeting Today
Aaron Rubin, Founder & CEO
ShipHero
About the author: Aaron Rubin is the Founder & CEO of ShipHero. He is responsible for planning and executing the overall vision and strategy of the organization. Rubin’s greatest strengths are leadership, change management, strategic planning and a passion for progression. He is known for having his finger on the pulse of ShipHero’s major initiatives, his entrepreneurial spirit, and keen business acumen. His leadership of ShipHero is grounded in providing excellent customer service that drives improved business operations. His passion for ShipHero comes from the culture and his ability to have an impact on the lives of employees, customers, partners, and investors.
Follow Aaron on Twitter & LinkedIn.
May 27, 2022 | Blog
There’s a lot more to returns management than placing an item back on the shelf. In fact, returns can often be one of the most expensive and time consuming aspects of fulfillment, and quickly become a point of frustration for paying customers.
A comprehensive and efficient returns process, on the other hand, can help maximize your brand’s inventory space and easily recover the lost value of a returned shipment.
What is Returns Management
Returns management is the process of receiving, storing and reclaiming value from products that are sent back by the customer. It also offers an opportunity to identify the reasons for returns, such as misships, damage or defects.
A disorganized returns process can lead to a cascade of issues throughout your fulfillment center and ultimately impact the customer’s experience. Ramped up holding costs, limited storage space and additional work for your staff can lead to higher prices and warehouse bottlenecks. When aiming to maintain a flexible supply chain, avoiding these issues is crucial.
With so much competition in the fast-paced field of eCommerce, keeping up an optimized returns policy can give your brand the edge it needs to stand out from the crowd. Luckily, recent trends in eCommerce have made implementing the process easier than ever.
Reverse Logistics
One of the overarching goals of modifying your supply chain for optimal returns is to make your delivery process work in reverse. Rather than products moving one way, from warehouse to customer, reverse logistics ensures that products can also move in the opposite direction, from customer to warehouse.
The ultimate goal of reverse logistics is to provide an optimized method for receiving returns and reclaiming as much value as possible. According to Invesp, nearly one third of online orders are returned, compared to in-store purchases which are returned at a rate of 10%. As eCommerce continues to grow in popularity, it’s more important than ever for online retailers to set up a thought-out and optimized approach for a good returns process flow.
Let’s take a look at what needs to be prioritized when setting up reverse logistics, and how you can streamline returns management.
How to Streamline Returns Management
An efficient returns management process involves a multifaceted approach both in terms of warehouse operations and customer outreach. With upfront customer communication, proper data capture and an emphasis on quality assurance in the warehouse, setting up a reverse logistics protocol can be much easier.
Customer Communication
Cutting down on returns can sometimes be as easy as setting up clear and consistent communication with your customers. The decision to return an item is often because it doesn’t quite meet the expectations they got from the eCommerce store. Without the ability to physically hold or interact with an item before making a purchase, online shoppers rely on eCommerce platforms to tell them exactly what the product looks like and how it works.
By providing a detailed description that includes the item’s dimensions, color and functionality, your customers know exactly what they’re getting and can feel better about making an informed purchasing decision.
Beyond product descriptions, communicating how the returns process works is essential for reverse logistics to function. When a delivery is completed, customers should be made aware of how long they have to make a refundable return and how to get that process started. When a customer decides to send an item back, making them comfortable and confident about the process is a great way to keep them coming back, despite their dissatisfaction with the product.
Data Capture on Returned Items
Building a streamlined returns management process requires you to identify which products are returned most often and why customers are sending them back. Tracking this information is much easier when you have quality warehouse management software, or WMS, in your tool kit.
With all of your incoming and outgoing inventory pushed through a WMS, you’ll have insight into what items are being returned the most and why customers are sending them back. If one item is frequently returned for damages, for example, you can trace those issues back to the source, whether it be the supplier or your own warehouse staff.
Warehouse Quality Assurance
The easiest way to manage returns is by working to avoid them altogether. By working to ensure every item that leaves your warehouse is intact and accurate, customers will be much less likely to send the item back. Quality assurance in the warehouse can be tedious, but it’s the best way to ensure customer satisfaction and hold suppliers accountable for products that arrive mishandled or damaged.
Periodic inventory checks or product sampling can help your team spot defects before the item goes up for sale. The durability of some products can’t be determined by just a glance, so random testing of items pulled from the stock is also essential. With a commitment to quality assurance in your inventory management, you can be sure customers are satisfied and knowledgeable about exactly what they’re getting in the mail.
Conclusion
As the eCommerce industry continues to expand, so will the amount of returns sent back to warehouses. For a scaling online store, anticipating and planning for these issues is essential to the brand’s continued success. Streamlined reverse logistics and a proper returns management system can keep your warehouse operations running smoothly while ensuring a satisfying buying experience for your customers.
If you’re looking for a partner to help modernize how your brand handles returns, contact the Software Experts at ShipHero today.
Click HERE to Schedule a Meeting Today
Aaron Rubin, Founder & CEO
ShipHero
About the author: Aaron Rubin is the Founder & CEO of ShipHero. He is responsible for planning and executing the overall vision and strategy of the organization. Rubin’s greatest strengths are leadership, change management, strategic planning and a passion for progression. He is known for having his finger on the pulse of ShipHero’s major initiatives, his entrepreneurial spirit, and keen business acumen. His leadership of ShipHero is grounded in providing excellent customer service that drives improved business operations. His passion for ShipHero comes from the culture and his ability to have an impact on the lives of employees, customers, partners, and investors.
Follow Aaron on Twitter & LinkedIn.
Jun 10, 2022 | Blog
Receiving a package in the mail is always exciting, and for online retailers, it’s one of the few opportunities to make a memorable connection with customers.
As a result, brands have gotten creative when it comes to the moment of unboxing, investing in inventive designs that distinguish their product from the others on the market. With the goal of building the ultimate unboxing experience, eCommerce sellers have created one of the hottest retail trends of 2022.
What is unboxing?
Unboxing is a relatively new focus in eCommerce marketing that refers to the design and packaging of a product. When customers receive something in the mail, the process of opening the item for the first time can be made into a fun and captivating experience.
What started as a stylish way for brands to stand out from the rest of the crowd, the unboxing craze has grown into a near necessity when marketing a new product. In addition to building customer loyalty, distinct and creative packaging can open new and lucrative marketing opportunities.
As unique branded packaging became the norm, online content creators started making videos that feature themselves opening these packages for the first time, giving their audience a glimpse of what to expect when they place an order. Unboxing videos, as they came to be known, have since become a fixture for brands marketing their products online. For online retailers, unboxing videos are a great way to tap into a new pool of potential customers.
Benefits of Branded Packaging
Aside from just looking good, specialized packaging that sticks out from the crowd has a ton of benefits for an emerging eCommerce brand. Let’s take a look at how a focus on unboxing can bring an online store to the next level.
Marketing Opportunities
Online retailers don’t get the marketing opportunities offered by having a physical storefront where customers can be invited in to do their shopping. Without a brick-and-mortar extension of a brand’s identity to help build customer connections, digital retailers are more constricted in how they can express what their products are all about.
Aside from the product itself, the box that it comes in is one of the few chances you’ll have to make a lasting impression on a customer. For example, Anthem, an Italian based apparel company, brands itself as an eco-friendly clothing option that embodies surfer culture. In order to sync their packaging with this brand identity, Anthem’s products come in a biodegradable bag, sporting an off-white, sandy color.
This packaging reinforces Anthem’s core values and emphasizes the qualities that drew those customers to the store in the first place.
Long-Term Savings
When opting for a basic product packaging setup, most brands settle for a one-size-fits-all box. While this might be convenient, it’s not an optimal solution in the long term.
Customized packaging means your products are delivered in a box that fits the exact dimensions of the item inside. In a time when shelving space is hard to come by, this approach helps ensure that valuable warehouse space isn’t wasted.
For retailers selling fragile items, custom packaging that’s designed to protect your product specifically can help avoid damages and warehouse returns.
Leveraging Influencers
Providing a fun unboxing experience also opens up the opportunity to explore avenues of social media marketing that you otherwise wouldn’t have access to. Working with influencers to promote a product is easy, but actually getting their fans excited about a product is another challenge.
Unboxing videos, as we discussed above, allow customers to see a trusted content creator’s live reaction to an item and can make a big difference for shoppers who are on the fence about completing a purchase.
In addition to unboxing videos, influencers on Instagram, Facebook and Twitter make a living by featuring products in their social media posts. After displaying a product for their audience, they typically provide links that direct to where the item can be purchased, allowing the customer to make a purchase easily.
Live shopping and unboxing streams are a popular extension of social marketing, where a host opens items from an online store and provides customers with an idea of what to expect when the item arrives. If an exciting product arrives with eye-catching packaging, an Instagram or Facebook live stream can excite potential customers about what your brand has to offer.
Upgrading Your Product Packaging
Designing and implementing a new product design sounds like a lot of work, but there are plenty of third-party services that can put together a stellar unboxing experience for your customers. These creative design agencies build customized packaging that speaks to the brand identity and helps it stick out from the competition.
With the added benefit of a quality warehouse management system in your toolbox, adding customized packaging to your process won’t be a hassle. By simply including a few automation rules to your shipping strategy, you can easily integrate new packaging details and start sending out orders with a brand-new look.
If hiring outside help isn’t an option, simply including a few extra tokens of gratitude can make your product’s unboxing more memorable. Merchandise like stickers, coasters or greeting cards won’t add much extra weight to the shipment, and can make for a fun surprise when a customer opens the item.
Conclusion
Packaging is too often overlooked as just what carries an item from point A to point B. Rather than seeing it as just another tool, brands are approaching their packages like a blank canvas that can highlight what makes their brand special and heighten the customer experience when it finally arrives in the mail.
If you’re looking for a fulfillment partner to help optimize your delivery process, contact the Fulfillment Experts at ShipHero today.
Click HERE to Schedule a Meeting Today
Maggie M. Barnett, Esq., COO
ShipHero
About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.
Follow Maggie on Twitter & LinkedIn.
Jun 18, 2022 | Blog
Without the benefit of face-to-face interaction with buyers, eCommerce customer service presents a valuable opportunity for brands to connect with their customers and assure them that they’ve made the right purchasing decision.
Since every online brand is a little different, there’s no single secret to ensuring customer service excellence. But, by learning from the methods of other eCommerce stores, you can find the right blend of strategies that support your buyers when problems arise or questions need to be answered.
By rethinking the fulfillment process, monitoring online reviews and prioritizing convenience, you can take your brand’s customer service to the next level.
What is eCommerce Customer Service?
Traditionally, customer service is thought of as a number you can call when you have a question about a product or service. Since the advent of online shopping, customer service has expanded to include everything from how a user interacts with your site, to how they eventually receive an order.
For an eCommerce brand to be successful, customers need to be supported throughout every step of the way. Digital stores that provide clear and up-to-date information on available products, pricing, and order tracking tend to leave their customers more satisfied and willing to return in the future.
Making it easier for customers to complete a purchase and have their questions answered sounds like common sense, but in the fast-paced world of eCommerce, building that infrastructure can be easier said than done. Automations, order management and performance tracking can be a lot to deal with, so some brands have turned to third-parties that can upgrade their customer service protocols quickly.
Partnering with these third-parties helps your brand build a helpdesk that optimizes customer service and drives profits. By providing services like messaging, self-service and live statistics, these companies can turn eCommerce customer service into a cost-effective branch of the business.
Fulfillment & Customer Service
One of the easiest ways to boost your customer’s shopping experience is by making a few quality adjustments to how your orders are fulfilled. Let’s take a look at some of the recent trends in fulfillment and how they can take your brand’s customer service to the next level.
Multiple Delivery Options
As the volatile supply chain continues to cause problems in warehouses all over the world, brands have begun to explore alternative delivery options to take some of the pressure off their staff while ensuring the customer can still get their order on time.
For brands with a brick-and-mortar location, in-store pickup has become a reliable and time-saving fulfillment solution that allows customers some flexibility in how they choose to receive an item. However, not every online retailer has the benefit of a real-world location. That’s why so many online brands have purchased additional retail space or underutilized warehouses to offer their customers a pickup option.
These rented facilities, known as micro-fulfillment centers, help get products closer to their destination while limiting the expense of last-mile shipping. If a customer lives close enough to one of these locations, they’ll have the option to pick up the order themselves during regular business hours. For an extra layer of flexibility, many fulfillment centers now offer a parcel locker option that can be accessed 24/7.
Providing these extra delivery options helps avoid the cost of postage, labeling and carrier fees that can really stack up and drive away customers before they place an order. With customer expectations higher than they’ve ever been, supporting their purchases with multiple delivery options could be the key to ensuring they’ll come back for more.
Customized Buying Experience
One of the most important developments in eCommerce customer service has been the emphasis on a personalized buyer experience. At this point, customers expect online stores to present them with custom content that’s most relevant to their previous purchases and guides them towards items they’re most likely interested in.
By offering features like product recommendations, price comparisons and personalized interfaces, retailers are employing what’s known as an omnichannel marketing strategy. An omnichannel approach gives your customers specifically tailored content that’s designed to help them make informed purchasing decisions while boosting the amount of products sold.
As customers visit your site and interact with the omnichannel interface, they’ll be able to find the products they’re looking for more easily and will be encouraged to purchase similar products.
Returns Management
Product returns might mean someone is unsatisfied with their item, but they still present a key opportunity to connect, communicate and problem solve with your customer base.
In the crowded field of online shopping, ensuring a fast-paced and efficient returns management process can help your brand stand out from the crowd. With the recent advancements in fulfillment tech and warehouse management software, building an intuitive returns process is easier than ever.
Providing upfront and clear instructions on how to complete a return can sometimes be the difference between a stress-free product return and a frustrating experience for the customer.
Rethinking how your brand handles returns and implementing changes can be time consuming, so many online stores outsource this side of the business. Third-parties like Loop Returns help clients optimize their warehouse returns process and provide an easy solution for customers that need to send an item back.
For a scaling online store, returns can be an unwelcome issue to deal with, but anticipating and supporting a customer’s decision to make a return can help ensure their satisfaction in the long run.
Customer Reviews
Social proof and online word-of-mouth can make or break an online store. With so many customers turning to user reviews before making a purchase, there’s a reason so many brands pay close attention to how they’re being talked about online.
From inside a company, it can be difficult to tell where your customer service approach needs the most improvement. The often brutally honest feedback gained from a customer review can be a great resource when thinking about what aspect of your customer experience could use the most focus.
Conclusion
As more and more customers get their shopping done online, customer service has become a competitive advantage for eCommerce brands. With the right blend of communication, fulfillment efficiency and feedback processing, brands can stick out of the crowd and turn their customer service approach into a profit-driving branch of the business.
If you’re looking for a fulfillment partner that can help keep customers happy from the moment they place an order, talk to the fulfillment experts at ShipHero today.
Click HERE to Schedule a Meeting Today
Maggie M. Barnett, Esq., COO
ShipHero
About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.
Follow Maggie on Twitter & LinkedIn.
Feb 10, 2023 | Blog, Fulfillment, Warehouse Management Software
With the popularity of subscription services on the rise, it’s no surprise that eCommerce businesses are looking into this innovative and convenient model. But just how much can subscriptions improve customer retention? In this blog post, we’ll delve deeper into the benefits of subscription models and explore how these strategies can bolster user engagement, drive business success, and increase overall customer satisfaction. Bid farewell to your old approaches to customer retention — there’s a new modern solution in town!
What is a Subscription Business Model, and How Does it Work?
Subscription business models have taken over the economy. Instead of paying a hefty one-time fee upfront, subscription business models have conditioned customers to buy in and pay multiple payments spread throughout the year. This means subscription businesses can focus on customer retention rather than acquisition, leading to longer lifetime values (LTVs) per customer. Rather than ownership of physical goods or services, subscribing has flipped the script and ushered in a new wave of subscription-oriented lifestyle choices.
Types of Subscription Models
The Curation Model
The curation model is one of the most popular subscription services, with boxes tailored to every person’s personal needs and preferences. From beauty sets to cheese boards – whatever your vice is, there’s a subscription box for it. The curated approach is what sets this model apart from the other types of subscriptions available; it offers customers an ever-changing and exciting selection of products that are all unique to their tastes!
Example:
The Birchbox subscription service sends monthly subscription boxes containing two to six beauty products from more than 200 brands. Personalized boxes are sent based on a quiz, and the same product is never sent twice. Customers can purchase the full-size product directly from the website, improving retention and LTV.
The Replenishment Model
Replenishment subscription models often referred to as “subscribe and save,” are an increasingly popular option for busy people who wish never to run out of toilet paper or coffee pods again. This type of eCommerce establishes a recurring revenue model and ensures customers receive their purchases at predetermined intervals, allowing retailers to confidently and accurately predict inventory needs. If you sell everyday consumables, embracing this subscription strategy could give you a competitive edge.
Example:
Subscribers to Dollar Shave Club receive blades and shaving products regularly based on their needs. After completing the initial quiz, the customer can customize the suggested box to include the products they want. Customizing these specific features is the key difference from a curation model.
The Access Model
Access-focused subscriptions offer familiar customers exclusive discounts, early access, and more. Access models are all the rage in fashion and food verticals but can also be found among digital subscription brands. A subscription model allows you to benefit financially and insight into future forecasting, but it’s also a great way to show your valued customers some love. When customers feel special, their loyalty toward your brand is likely to increase.
Example:
Clearly, streaming media subscriptions, such as Netflix, are here to stay. Just having the ability to access unlimited shows and movies whenever you want is a fantastic perk and a great example of the access model in action! This model allows viewers to enjoy extra features like no commercials or early access to their favorite shows by signing up for more exclusive paid services.
Benefits of Subscription Models in Business
- Subscription models are convenient for customers.
- Customers can discover new products.
- Businesses can accurately predict revenue.
- Subscriptions can attract more customers.
- Subscriptions decrease customer acquisition costs.
- Businesses build stronger relationships with their customers.
Subscription Retention Strategies
Tracking what content subscribers engage with is a great way to determine what people are interested in and whether you’re hitting the mark with your content. By observing which stories they’re clicking on and products they’re talking about, you can determine which topics will be the most successful. On top of that, you can better tailor the content that runs in the future to suit their tastes. Getting this right is essential if you want to keep your subscribers engaged and coming back for more!
Welcome new subscribers and make sure they’re aware of their subscription’s benefits! An effective onboarding process will ensure that your subscribers are connected to your brand and understand the value of their subscription. When it’s time for them to decide whether to renew, you can be sure that they are already invested in the product and that their decision is easy. Subscribers will appreciate a great welcome, and you’ll be on your way to building a long-term relationship with them.
Encourage existing subscribers to renew by optimizing customer service and actively engaging with your current subscriber base. Doing this will build personal relationships with them and lay the foundation for a long-term relationship. At the end of their subscription, you’ll be able to have meaningful conversations that remind your subscribers of the great value they’ve already experienced from your service, which makes it much easier for them to hit “renew” when the time comes.
Reduce subscriber churn by knowing which of your subscribers are most likely to cancel. You can get ahead of potential cancellations by using data-driven insights to identify these high-risk customers and understand why their intentions may differ from other subscribers. From there, you can build targeted strategies to re-engage them and ensure they stay part of your subscriber base!
Measure and test any initial promotions or offerings. Try creating different discounts with different lengths of offers—this can help identify which works best at drawing in and retaining subscribers. Keep in mind that discounted subscriptions should also include your most engaging content if you want those readers to stick around. So don’t be afraid to experiment with various promotional offers; this is an excellent way to find out what attracts—and keeps—subscribers on board!
Offering exclusive subscriber-only benefits is a great way to increase loyalty and show your customers that you appreciate them. These benefits could range from tailored content, discounts on products or services, early access to new developments—or all of the above! However you choose to structure these offers, they will surely inform your subscribers that you prioritize their business and are committed to providing them with high-quality content and services.
Why Subscription Models are Becoming More Popular
Subscription models have become increasingly popular due to the range of benefits on offer. Price is a significant factor driving customers to subscriptions as companies offer discounts for bulk orders, keeping prices lower than store-bought equivalents. Plus, these companies tend to deliver directly to your door – making them an easy and convenient option too.
On top of that, most subscription services personalize their offerings with tailored deliveries, which add an extra touch and make the customer feel special. All this has ensured that subscriptions are rising in popularity, with reports showing 100% year-over-year growth for the last five years – so hop on board and join the subscription revolution!
Advantages of a Subscription Model to Improve Retention
Subscription models are a revolutionary way of tackling customer retention. With subscriptions, you can strategize the best approaches for creating relationships between you and your customers that extend beyond profit.
Companies can benefit from increased customer engagement and recurring revenue to support their business. When done strategically, big brands can also use their existing assets to launch new initiatives and acquire more subscribers.
Subscriptions also offer customers convenience, security, and reliability of products and services they need regularly. All in all, subscription-based revenue models can be advantageous for both the customers and the companies.
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Maggie M. Barnett, Esq. COO of ShipHero – Author
About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial, and administrative procedures, reporting structures, and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management, and a passion for business transformation. She is known for her expertise in delivering operational excellence and ability to provide guidance and mitigate risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.
Follow Maggie on Twitter & LinkedIn.
Jun 14, 2018 | Blog
Nashua Nutrition began humbly in 2003, in a 350 square foot nutrition store inside a local gym. Today, it is a booming, multimillion dollar company housed in a 15,000 square foot facility. We sat down with owner Eric Godshall to discuss their success
- How did Nashua Nutrition get where it is today?
Nashua Nutrition’s core customers were gym members who liked the convenience of purchasing reasonably-priced, nutritional products at the gym. While running the small store, our founder Glenda Godshall worked hand-in-hand with a nutritionist at the gym to help people improve their eating habits and lose weight. She used a line of medical-grade food products as part of the nutritional regime, which allowed clients to eat regularly while reducing their caloric intake and speeding up their metabolism. As Glenda continued to counsel those seeking to lose weight, she realized how many individuals were misinformed or uneducated about safe, sustainable weight loss.
So, she decided to build a website to advertise these high-protein, medical-grade products to those struggling to lose weight. It wasn’t long before the website was generating substantial traffic, and people from all over the country were purchasing the products online. As business grew, Glenda brought in several more lines of medical-grade nutritional products, as well as bariatric-specific vitamins, which enabled Nashua Nutrition to become a “one stop shop” for weight loss and bariatric needs.
- How have you approached marketing and growing sales?
In our early stages, we relied heavily on PPC ads (Google, Bing, etc.). It also helped that we focused on providing the lowest price and superior customer service! Additionally, to remain competitive in our rapidly growing market, we have started adding value to our customers’ experience through social media, informational blogs, and loyalty programs. By implementing these programs, we are becoming a weight loss and bariatric resource for information as much as an ecommerce store. When a customer comes to our site to receive valuable information, they are more apt to purchase from us. We want our customers to be loyal to us as much as we are loyal to them.
- What have been your challenges, and how did you adapt as Nashua Nutrition grew?
As I imagine is typical of any small business, we’ve had our fair share of challenges and obstacles. They’ve ranged anywhere from restrictive vendor policies to not having adequate space for expansion. When we started to outgrow our warehouse, we would try to minimize the floor space needed. This was done by staggering our ordering, optimizing our box deliveries, and getting creative on stock picking locations. When we would hit an obstacle, we always found a way to adapt to the situation. Constant monitoring of our industry, it’s trends and competition, have allowed us to keep in touch with our customers’ needs and fulfill them to the best of our ability.
- Have you noticed any change in customer expectations when it comes to shipping orders over the past several years?
Absolutely. With the invention of Amazon Prime, customers are expecting to get free shipping and 2 day delivery. In order to try to compete in the Amazon world, we have lowered our free shipping minimums and use expedited shipping methods when it makes sense.
- You recently moved and now have a new warehouse along with a store. What made you choose Shiphero?
We realized that the systems we were using were antiquated and were not allowing us to work efficiently. Since we moved to a much larger location, we knew that our existing methods and software wouldn’t work. We were looking for a single system that could handle all aspects of our warehouse and order fulfillment. After much research we came across ShipHero which turned out to be the perfect fit for our company.
- Is there a particular ShipHero feature that has been especially helpful for you?
There are 3 core features that have greatly increased our efficiencies and savings:
- Shopify Integration for Live Inventory: Previously, we had disparate systems that didn’t “talk to each other.” This required us to constantly monitor inventory levels manually. If we saw something was running low, we would have to put a counter on an item in an effort to prevent overselling. This was a time consuming and often inaccurate process. Now that we have ShipHero, our inventory is live so there is no longer a need to manually add counters to our inventory. And, with the new reserve functionality, we have a buffer to prevent any potential backorders.
- Picking Efficiencies: Before ShipHero, we were using a server-based WMS system and used our point-of-sale to scan our products out of inventory. Our pickers had to pick orders individually (which involved walking throughout the warehouse to pick a single order). Now, with Shiphero we are batch picking 8 orders at a time; using iPads and Socket Scanners; and snaking through the warehouse just once. Our picking errors have dropped dramatically, and the pick rate has increased substantially. Before ShipHero, we were able to ship about 325 orders in a day. Since using ShipHero, we are easily shipping 475 a day – with time to spare. We estimate that with our current resources, we will ship 600-700 orders in a day.
- Shipping Rate/Carrier Shopping: Before ShipHero, we almost exclusively used FedEx for all shipments over 1lb. USPS was only used for Priority Mail items under 1lb, which was only a few packages a day. Since implementing ShipHero, we are utilizing the “Cheapest” rate functionality to save on shipping charges. Now, we are sending approximately half of our order via USPS and saving money on each shipment.
- What’s your vision for the next 2 years? How will you expand your business?
To continue expanding our product offerings as well as our sales channels. We see some major shifts in the weight management industry and we plan on being on the forefront of these changes.
- What advice would you give ecommerce merchants that want to scale their businesses?
Keep up with current technologies. By using newer technology such as ShipHero, we have been able to greatly increase our efficiencies and cost savings.
Eric & Glenda Godshall combined their skill sets and founded Nashua Nutrition. Both Eric and Glenda have a strong interest in fitness, weight management and exercise in addition to Business Management degrees. With Eric’s prior IT experience and Glenda’s nutritional counseling experience, the husband and wife team built Nashua Nutrition into a market leader in the weight loss and bariatric consumer segment.
Jan 13, 2019 | Blog, Fulfillment
How to Create a Global Ecommerce Order Fulfillment Strategy That Works for You
With each passing year, more brick-and-mortar retailers are taking their businesses online. In 2017, ecommerce accounted for roughly $2.3 trillion in sales and is projected to exceed $4.5 trillion by 2021. Every year, ecommerce accounts for nearly 10% of retail sales, but that number is expected to grow by as much as 15% each year.
Since the internet has become readily available and due to the COVID-19 pandemic, more customers than ever are shopping online rather than in stores. Ecommerce retailers have the opportunity to cash in on this rising trend by providing customers with what they really want – easy access to the products they want, fast shipments, and excellent customer service. To keep your customers coming back time and time again, you need to ensure that your orders are fulfilled quickly, accurately, and efficiently.
Optimizing your ecommerce fulfillment strategy is the key to minimizing your costs while maximizing profits and meeting customer expectations. Keep reading to learn more about the challenges facing ecommerce businesses and to receive some tips and tricks for creating a global ecommerce order fulfillment strategy that works for your business.
What Challenges Do Ecommerce Businesses Face?
In the early years of ecommerce, the competition was low, products were flying off shelves, and the potential for profitability was high. Over time, technology has become more affordable, ecommerce platforms have made it easy to start an online business, and the world of ecommerce has become crowded with online retailers of all sizes. Opening and running a successful ecommerce business is no easy task, especially with monsters like Amazon controlling a significant portion of the market.
Competition is one of the biggest challenges any ecommerce business has to face. Still, there are other factors to consider, particularly when it comes to planning and executing your order fulfillment strategy. Here are some of the biggest challenges facing ecommerce businesses today:
- Finding the best products to sell: With so much competition out there, the fate of your business rests in your decision of what products to market. You need to choose products in high demand without too much competition to sell with a decent profit margin.
- Reaching your target audience: Selling great products doesn’t do you any good unless you reach those who want to buy them. Creating a marketing strategy is all about identifying and reaching your target audience to drive sales.
- Generating traffic: You won’t sell anything if no one visits your site, so generating traffic is extremely important. Conversion rates fluctuate depending on your industry, so you’ll be putting in a lot of effort to generate leads.
- Engaging with email subscribers: Having an email list of subscribers doesn’t do you any good unless you actively engage with them. Only a fraction will convert into paying customers, so give yourself the best chance at converting those emails into sales by offering as much value as possible (e.g., promotions, coupons, and even exclusive content).
- Converting shoppers into customers: If you want to close a sale, driving traffic and making the most of your leads is the best way to do so. You want to give shoppers a reason to choose you over the dozens of other retailers like you that are out there. What is your unique value proposition?
- Retaining customers: Once you’ve turned a shopper into a customer, you want to keep that customer coming back. Why? Based on the research and industry you’re in, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. Customer service and perceived value are two critical factors for higher customer retention rates.
- Achieving long-term growth: Higher sales volume doesn’t always equate with profitability, so your long-term growth strategy needs to be multifaceted. Look for ways to cut inventory costs, optimize order fulfillment, speed shipping, and reduce overhead and returns.
- Choosing the right technology: Technology is an integral part of any online business, and choosing the right tech is vital. Look for technology that will help you integrate and automate your business’s different aspects to reduce costs, improve accuracy, provide real-time insights, and boost efficiency.
Understanding and accounting for the challenges listed above is a big step toward ensuring your online business’s success. If you want your business to succeed in the long term, you need to make sure that you have a solid foundation to build from, and that means creating and executing a successful order fulfillment strategy.
What is Involved in Order Fulfillment?
Order fulfillment is the backbone of any ecommerce business. Rather than offering a particular service, you’re selling goods and products directly to the customer (aka D2C). The strategy you use to fulfill customer orders affects everything from profit margin to customer satisfaction, so it’s something you need to think about carefully.
Before getting into the details about different order fulfillment strategies, let’s quickly review the various stages involved in the order fulfillment process:
- Receiving: The first stage in the order fulfillment process is receiving your inventory. If you’re filling orders in-house, you’ll be receiving or manufacturing the products yourself.
- Storage: Proper storage of inventory is vital because you need to find, access, and ship your products as quickly and efficiently as possible.
- Processing: Order processing involves receiving an order and taking the necessary steps to fill it.
- Picking: The first step in order processing picking involves gathering individual items for an order from their storage locations.
- Packing: Once items in an order are picked, they are grouped by order and packaged.
- Shipping: When the order is packaged and ready to go, it is shipped to the customer.
- Returns: Processing returns is another step in the order fulfillment process – returns may be shipped directly to you or your storage facility for processing and corrections.
As you can see, order fulfillment is a multistage process, and there is room for error every step of the way. Choosing and utilizing a solid order fulfillment strategy determines both the immediate and long-term success of your business. Keep reading to learn more about the different fulfillment options available for ecommerce businesses.
The Most Popular Ecommerce Order Fulfillment Strategies
Every company is unique, so the order fulfillment strategy that works best for one company might not be ideal for yours. Before getting into the details about choosing the correct order fulfillment strategy for your business, let’s take a look at some of the options.
Here are some of the most popular ecommerce order fulfillment strategies:
- Direct Fulfillment
- Drop-Shipping
- Third-Party Logistics (3PL)
Now, let’s take a closer look at each of these strategies.
1. Direct Fulfillment
Also known as in-house fulfillment, direct fulfillment is a strategy in which the business fills orders itself. This strategy is generally the starting point for smaller and at-home companies, though it also works for massive corporations with the funds to run their warehouse operations. Direct fulfillment looks different depending on the size of a business. You could be fulfilling orders from your garage or using a fulfillment center to ship out hundreds of orders a day. Here are some of the pros and cons:
Pros for Direct Fulfillment:
- You retain total control and have complete visibility over order fulfillment operations.
- You can add personal touches to your orders.
- It could save money, depending on the size of your business.
- You may not need to negotiate as many business contracts.
Cons for Direct Fulfillment:
- It takes a lot of time and energy that could be directed elsewhere.
- You could be limited in what shipping options you offer customers.
- You’ll need a lot of storage and warehousing space, depending on size.
- You might not be able to get discounts on shipping.
2. Dropshipping
This is an order fulfillment strategy in which you pay for fulfillment as your orders generally come from the vendor or manufacturer itself. When a customer places an order, it goes directly to the dropshipper who picks, packs, and ships the product on your behalf. You are then charged for that order. This strategy works well with ecommerce businesses that prefer not to own any inventory themselves, but it does require a certain degree of marketing expertise. Here are some of the pros and cons:
Pros for Drop-Shipping:
- Inventory management is non-existent since you don’t have to purchase, store, and manage inventory yourself.
- You can offer a broader range of products without worrying about space or overhead.
- Overhead costs are low due to low operational expenses.
- You only pay for products that are ordered after they have shipped to the customer.
Cons for Drop-Shipping:
- You have no control over the packaging and shipping of your products.
- You still handle customer service, so you’ll need to communicate with the drop-shipper.
- Profit margins will be narrower since you’re working with a middle-man.
- It’s challenging to establish a brand because products are owned and packaged elsewhere.
- Dropshipping is incredibly competitive, with multiple stores selling the same product.
3. Third-Party Logistics
Also known as 3PLs, third-party logistics involves handing over the details of order fulfillment to a third-party provider. Your company will still be responsible for purchasing or producing your inventory, but you’ll be relying on another company to store, pick, pack, and ship it. When your customer places an order, the order goes to the 3PL who picks the item from its storage location in their warehouse, then packages it and ships it to the customer. Here are some of the pros and cons:
Pros for Third-Party Logistics:
- You’ll have more time to devote to other aspects of the business.
- You can still access important data about your inventory and sales.
- You may benefit from reduced packaging costs and shipping discounts.
- You’ll be able to offer your customers faster shipping options.
Cons for Third-Party Logistics:
- You have reduced control over how your products are packaged and shipped.
- You’ll need to stay in close communication with your 3PL provider to ensure everything is running smoothly.
- You may not be the 3PL’s only client and could have to share warehouse space.
- Hidden fees could cut into profits depending on which order fulfillment service you pick
Choosing the Right Fulfillment Strategy for Your Business
Now that you have a better understanding of the different options for order fulfillment, you’re ready to start thinking about the best option for your business. Though the three most popular strategies described in the previous section work for most companies, you may find that a combination of different methods works best for you. You also need to think about making the transition from one strategy to another as smoothly as possible, so you don’t have to shut down operations altogether.
How To Handle Inventory Management
The first factor to consider when choosing an order fulfillment strategy is inventory. If your business designs and manufactures its products, a direct order fulfillment strategy or 3PL partnership may work best. This is because dropshipping is best for companies that don’t produce or own inventory. Your business’s size and the number of products you sell are the determining factor between choosing a direct order fulfillment or 3PL strategy. For smaller companies with a limited inventory, you may be able to handle order fulfillment in-house until your sales volume and inventory grow to the point that you have the ability (and margins) to hand over operations to a third-party provider.
Can Your Ecommerce Fulfillment Strategy Scale?
Another factor to consider when choosing an order fulfillment strategy is scalability. You need to think about the current size and state of your business and your hopes for the future. The supply chain for ecommerce stores is complex, and hiring the right experts can be time-consuming. Companies like Amazon and Nike can handle fulfillment in-house because they’ve spent billions optimizing their supply chain and sales channels. Unless you have millions in capital, it’s going to be challenging building a fulfillment network that offers Amazon Prime levels of transit times and shipping speeds.
If you expect your business to grow quickly or if you hope to expand into additional markets, a 3PL provider may be the way to go. Many 3PL providers have multiple warehouses and distribution centers which can give you access to new markets without significantly increasing your costs.
Technology & Integrations
Technology is another vital thing to think about when it comes to order fulfillment. If you plan to handle order fulfillment in-house, you’ll need some kind of order management system (OMS) software to organize customer data and process orders. This kind of software can be expensive, especially for large-scale operations where different stages of the fulfillment process are automated. If you’re worried about the upfront cost to purchase this kind of technology, choosing a dropshipping or 3PL order fulfillment strategy may be best.
It’s also essential to have integrations between your technology. For example, if you use a warehouse management system (WMS), it must integrate with your ecommerce platform to sync order and inventory data, so orders are processed efficiently. Otherwise, customers could add products to their shopping carts and place orders for out-of-stock products.
Providing Value To Customers
Finally, you need to think about providing your customers with the best value when choosing your order fulfillment strategy. Customers want to find what they are looking for easily, pay a reasonable price, and receive their orders as quickly and accurately as possible. For small operations where you have time to prepare and process orders yourself, direct fulfillment is a cost-effective option. For more prominent companies with extensive inventories, however, drop-shipping or 3PL fulfillment may be the best way to speed order processing, reduce errors, and offer faster as well as more affordable shipping options.
There may not be a clear right or wrong answer when it comes to choosing an order fulfillment strategy. You’ll need to think carefully about your business in its current state and consider the direction you want to go in the future. Factoring in these details, along with customer satisfaction and profitability, will help you make the right choice for your business.
Tips for Implementing An Ecommerce Fulfillment Strategy
Once you’ve chosen your order fulfillment strategy, all that is left is to implement it. Unfortunately, that is easier said than done. You’ll need to make the transition as quickly and efficiently as possible so there are zero hiccups in your daily operations. Here are some tips for making the transition:
- Ensure everyone is on board with the new strategy: You’ll need to make sure that everyone understands their role within the new system so the transition can happen smoothly.
- Prepare your inventory for an onboarding experience: You’ll need to prepare your existing inventory and future inventory according to the requirements for your new strategy to make the receiving process as fast and efficient as possible.
- Make arrangements for the transfer early: The key to a smooth transition is making sure that your inventory arrives in the desired location on time. Planning ensures that you’ll be able to choose a cost-effective transportation method without putting your deadline at risk.
- Work with your logistics company to make the transition as quickly as possible: If you’re transitioning into 3PL for the first time or switching to a new company, go over the process in detail with your new provider so that their staff and yours can work together to make the process as quick and painless as can be.
- Keep your customers updated and involved: Making the transition to a new order fulfillment strategy can take time, so you may have some interruption in service that could impact your customers. Keeping your customers updated about the transition is vital if you want to avoid lost sales and dissatisfied customers. Share the details with your customers and highlight the benefits they’ll see when it’s complete.
ShipHero – The Best Ecommerce Fulfillment Provider
There are plenty of ecommerce fulfillment services available today. But ShipHero stands out. We work with over 4,000 ecommerce businesses to handle fulfillment. Here are some of the benefits of working with ShipHero as your 3PL.
Offer 2-Day and Overnight Delivery
Tired of losing sales to Amazon because you don’t offer 2-day shipping? With ShipHero, you can offer 2-day delivery and overnight delivery to compete with Amazon and other enterprise ecommerce companies. With our shipping discounts, 2-day shipping can be a powerful way to improve conversion rates, make more sales, and keep your customers happy.
Distributed Fulfillment
Distributed fulfillment is a proven method to decrease shipping costs and improve transit times. For example, if you’re based in Los Angeles, the cost of shipping an order to New York is going to be much more expensive than shipping an order to San Francisco. With ShipHero’s distributed fulfillment, your inventory is split among our network of fulfillment centers. When an order is placed, it goes to the fulfillment center closest to the customer. You’ll save money on shipping costs, and orders will be delivered faster.
Integrations With Your Ecommerce Platform
ShipHero supports a wide variety of ecommerce platforms, including Shopify, Shopify Plus, BigCommerce, WooCommerce, Amazon, and others. The integrations are simple to activate and are a great option for companies selling on multiple platforms. For example, if you sell on Amazon and Shopify, we’ll handle fulfillment for orders from both platforms. All the order data is available in one platform so you won’t have to fumble through multiple apps to track everything.
Transparent Pricing
ShipHero believes in transparency. Unlike other 3PLs that nickel-and-dime you with hidden fees, our pricing model is simple and easy to understand. Our single shipping rate includes picking, packing, packaging and postage and is a flat fee for the lower 48 states and we don’t lock you into long-term contracts.
Conclusion
The key to maximizing profits and efficiency with your ecommerce business is to choose the right order fulfillment strategy. The speed, accuracy, and efficiency with which you fill your orders directly impact customer satisfaction, which also impacts your bottom line. Take what you’ve learned here to evaluate your current order fulfillment strategy to see whether there might be room for improvement and, if there is, put the tips you’ve received to work.
Jan 17, 2019 | Best Practices, Blog, Warehouse Management Software
The world of ecommerce is a fickle one. At times, it seems completely random which sites survive, and which do not. In reality, however, it is the sites that plan ahead and take steps to keep up with the growth of their business that are the most likely to succeed.
The primary goal of any business is to grow, though there are certainly smaller goals you want to meet along the way. In the very beginning, for example, your first goal might be to break even – to start seeing positive cash flow after covering startup costs. From there, you want to see steady growth on a month-to-month basis and over the course of the year.
Ecommerce sales totaled $1.3 trillion in 2014 and are expected to grow by nearly 250% to a total of $4.5 trillion by 2021. If you hope to capture a slice of that pie for yourself, you need to set a strong foundation, build momentum, and prepare for future challenges. In this article, we’ll go into depth about the best ways to scale your ecommerce business both efficiently and effectively.
Start Strong with a Firm Foundation
Though most ecommerce businesses start out small, you should always be thinking and planning ahead. With each business decision you make, ask yourself, “Is this strategy scalable?” This is particularly important when it comes to things like choosing your inventory and with creating and implementing a digital marketing strategy.
Here are some other tips to follow in the early days of your ecommerce business to ensure that you have a solid foundation on which to build:
- Set goals for 1, 3, 5, and 10 years. As your shop grows, you’ll find yourself making decisions that will impact the future of your business – having specific goals set at different intervals can act as a guide to help you make the decision that is best for your business.
- Determine how you will measure your company’s progress. Annual revenue is a good measure of sales, but it doesn’t reflect profit or progress. Take the time to identify your Key Performance Indicators (KPIs) so you can track your business’s progress month-over-month and evaluate how different growth strategies pan out.
- Write a solid business plan. You’ll need a business plan in order to guide the success of the business within the first year. This plan is not only key for starting any new business but also projecting what hurdles you’ll have to overcome in the future as well as keeping you accountable.
- Run the numbers before you commit. Before you start buying or manufacturing inventory, you need to know that your sales will be enough to cover your costs. Create a cash flow spreadsheet and run the numbers to see how much revenue you can expect, what your monthly fixed costs will be, how much you’ll be spending on inventory, etc.
- Identify your target audience and build your brand. Gather information about your demographic and develop your brand to appeal to that audience. Having a strong brand identity will help guide you in future endeavors such as implementing a digital marketing strategy and choosing where to expand in the future.
- Build a strong website. Your website is going to be the mode that drives your sales, but it is also a tool for driving traffic. In addition to creating your sales pages and landing pages for any outbound marketing, you’ll also need content to help drive search engine traffic (inbound marketing).
First Steps to Build and Retain Momentum
Building your initial website can end up being easier than you might think. Particularly with the multitude of tools at your fingertips, such as Shopify. What is not so easy is turning that website into a successful, profitable, and scalable business. Though annual worldwide ecommerce sales are in the trillions, many new shops close their doors within the first few years. In order to scale your business for long-term growth, you’ll need to start out by taking certain steps to build and retain momentum. Here are 3 things you need to do:
1. Create a Strong Digital Marketing Campaign
Your website is the infrastructure for your online business, but you’ll never make any sales if no one sees your page. A strong digital marketing campaign is the key to building your online presence, driving traffic to your site, and converting visitors into paying customers. Here are some simple online marketing tips to get you started:
- Do some keyword research. Before you start marketing, you need to do some research to identify the strongest keywords to reach your target audience. Ubersuggest is a great free tool that can help guide your research.
- Create an automated email campaign. Not only is email one of the easiest ways to communicate with customers, it also provides ecommerce businesses with the highest return on investment. According to a study by Campaign Monitor, for every dollar spent on email marketing $44 is made in return.
- Personalize it. The internet is continually becoming a dynamic place where it reacts to our actions. For example, the ads you see on your social feeds from websites you just visited. Make your ecommerce store a personal experience for customers and they’ll be more likely to convert. This can be as simple as adding a “click to chat” bubble on the homepage or as advanced as sending them a reminder email when they leave something in their shopping cart.
- Implement a loyalty program. Depending on what industry you’re in, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. Consider implementing a loyalty program to keep your customers engaged and give them a reason to shop with you again.
- Optimize your site for mobile devices. You may not be surprised to learn that mobile internet traffic has outpaced desktop traffic. However, what is surprising is the fact that the search results for the same queries on mobile versus desktop searches are often different. This comes down to whether your website is mobile optimized or not. Get the upper hand for your ecommerce business in the search results by making sure your website is optimized for all mobile devices (phones, tablets, etc).
- Create content and build authority. One of the best ways to build trust with your customers is to establish your business as an authority in the industry. You can build trust by offering high-quality, informative, and relevant content on your site. Don’t limit yourself to print content either, use photos and videos as well. The process of using content to market your business is called Content Marketing.
- Connect with your target audience. The power in digital marketing comes from being able to connect with your target audience in a more personal way. No other form of marketing does this better than social media. Social channels like Facebook, Instagram, and Twitter give you the ability to connect, engage, and grow your business in a more personalized matter. Whether you’re simply building a following on social channels or using their ad platforms to connect with your demographic, you should invest time and energy into your social media strategy.
When it comes to ecommerce, digital marketing is not a one-and-done strategy – you’ll need to keep at it if you want your business to grow. There is no harm in starting out small but, as your business grows, you’ll want to start expanding your marketing strategy with it.
2. Switch to Third-Party Logistics (3PL)
In the early stages of your business, you might be able to handle order fulfillment yourself or with a limited staff. As you start scaling your business, however, you’ll need to decide whether you want to invest in your own warehouse space or if you want to outsource the order fulfillment process to a 3PL provider.
A 3PL is a third-party logistics provider who takes over one, some, or all of the aspects of your order fulfillment processes. Hiring a 3PL means that you will no longer be responsible for storing your inventory, picking and packing your orders, arranging shipment with different carriers, and handling returns. This will free you up to focus on the other things that will help you scale your business.
If you do choose to run your own warehouse, it is critical to choose the right warehouse management software.
3. Develop Excellent Customer Service
When it comes to running a successful ecommerce business, the quality of your product matters greatly. What matters even more, however, is customer satisfaction. When it comes to the scalability of an ecommerce business, word of mouth marketing is gold. This all comes down to the ecommerce buying cycle. The buying cycle looks like this:
Since ecommerce products are not tangible, like they are in brick-and-mortar retail stores, the cycle is often time more drawn out. Consumers spend more time making a buying decision because they cannot see the product in person and because there are some many choices available to them. The way you can tackle both of these obstacles is by offering customers supreme customer service.
Take for example Zappos, the world’s biggest online shoe store. In 1999, before ecommerce really became mainstream, they were able to convince people to buy shoes online. How? Through incredible customer service. In fact, Zappos encourages their customer support team to make a connection with all customers. To put this in perspective, their longest customer support call clocked in at a whopping 10 hours and 51 minutes.
Every business is unique, so the steps you need to take to build your initial momentum may be different than the steps another company needs to take. Keep reading to learn some simple ways to start scaling your business in order to retain that momentum.
6 Ways to Scale Your Ecommerce Business
As we mentioned in the beginning, building and implementing a strong digital marketing campaign is the best way to establish an online presence and to start obtaining customers. As your business grows, you’ll need to think about logistics and how best to maximize efficiency while minimizing costs.
Here are a 5 ways to do it:
- Evolve your marketing strategy. Over time, your business is going to grow and with that growth comes change. Upon achieving certain milestones, you should take a closer look at your current customer base and check to make sure that your marketing strategy is finely tuned to targeted that audience.
- Optimize your order fulfillment strategy. Whether you’re filling orders in-house or you’ve hired a 3PL, make sure that your order fulfillment strategy is designed for cost-effectiveness as well as efficiency. If you do have a 3PL partner, set aside time each year to talk to them about things such as your growth and how they can work to help.
- Consider expanding into a new market. If you are already working with a 3PL, expanding to new markets could be a fairly straightforward process.
- Upgrade your technology. As your business grows, that could mean potentially hundreds, if not thousands, of new SKUs. Your initial ecommerce platform might not cut it at a certain point. Invest in technology that helps automate your business — whether that means upgrading from SquareSpace to Magento or simply finding a new project management app.
- Keep an eye on your competitors. One of the best ways to scale your business is to fill a niche that your competitors have left open. Study your competition to understand what they’re doing right and, more importantly, what they’re doing wrong. Look for unmet needs by reading their customer reviews to get a sense of how you can fill in the gaps they’re missing.
Don’t feel like you have to implement all of these ideas at once. In fact, some of the ideas on this list might not work for your business at all. It is your job to know your business and to understand its potential – only you can decide how best to achieve your long-term goals and what tools and strategies to use along the way.
There are no guarantees in the world of ecommerce – a business that is thriving one day could tank the next. Though you cannot possibly predict every little thing that could affect your business, it pays to be thorough in the planning process if you hope to scale your operations down the road. Think carefully about building a strong foundation to create momentum in the early days of your business and always keep working to maintain that forward progress. Good luck!
ShipHero is one of the top providers of warehouse management software for ecommerce companies. See how we can help you here.
Jan 22, 2019 | Best Practices, Blog, Warehouse Operations
ShipHero Logistics Experts Show How To Optimize Your Warehouse Layout For Order Fulfillment
When it comes to ecommerce businesses, order fulfillment is the name of the game. The speed and accuracy with which you fill orders is one of the key factors in your long-term success. If you want to succeed you need to properly store and organize your inventory, so it can be picked, packed, and shipped with the greatest efficiency, speed, and accuracy.
That’s where warehouse optimization comes into play.
Warehouse optimization is not a process that should be implemented without careful thought. Before you can take steps to optimize your warehousing layout and process, you need to have a thorough understanding of what you’re currently working with and the limitations. Once you’re able to identify weaknesses and areas of unmet need, you can start getting into the details of optimizing your new warehouse layout.
In this article, we’ll walk you through the practical aspects of optimizing your warehouse layout starting with choosing the right warehouse space and brainstorming ideas for your ideal warehouse layout. We’ll also talk about how to implement your plan and provide tips for optimizing the different stages of the order fulfillment process.
When to Make the Switch and How to Choose a Warehouse Space
The goal of any business is to grow – it’s really that simple. Depending what type of business you’re running, the steps you take to accomplish that growth may differ. What all successful ecommerce businesses have in common, however, is an efficient order fulfillment process and, in most cases, that means a warehouse with a layout optimized for maximum efficiency.
If your business has grown to the point where you are considering purchasing or leasing a warehouse space, congratulations! Before you make the switch, however, there are a few things to think about.
First and foremost, are you really ready to make the switch?
Before you start looking around for a bigger warehouse space, you need to be sure that you really need it and that you can afford to run it. It might make sense to move to a larger warehouse space, for example, if your sales have started to exceed your storage capacity for inventory. It might also make sense to move to a different warehouse if you’re expanding into a new market. Take the time to think about whether making a switch is really the smartest choice for your business and, if it is, the next step is to carefully choose a warehouse space.
The first thing you’re going to be looking for when evaluating warehouse spaces is, of course, size. You need a warehouse large enough to hold your current inventory and to leave room for growth without being so large that you sacrifice efficiency. After size, you need to think about the little details that will really make a difference in your day-to-day operations.
Aaron Rubin, CEO of Ship Hero, suggests that even the smallest details like the type of flooring matters. In an interview with EcommerceFuel.com Rubin said, “The next most important thing that people don’t think about is the floor. You want something with a smooth, not pitted concrete floor.” He goes on to say that cheap flooring can produce dust that covers your products and pitted floors can damage rolling carts.
Here are some of the other key elements to consider when choosing a warehouse space:
- Size – When choosing a warehouse, think about how much space you need to store the inventory you currently have but leave room for expansion. It almost always makes sense to sign a multi-year lease. The caveat is you don’t want to get locked in should the business go under. Make sure your lease has a buyout clause so you can terminate it.
- Location – The location of your warehouse determines how quickly and efficiently you can fulfill orders and ship them to your customers. You’ll need to do some research about your market to determine the best location for your warehouse. Regardless of where it’s located, Rubin advises to find a warehouse that has a loading dock. This will make pallet shipments much easier to receive.
- Cost – Buying or leasing a warehouse isn’t cheap, so you’ll need to run the numbers to make sure you can afford it and that it will be a lucrative decision to make the change. In addition to the cost to lease or buy the warehouse, you’ll also need to factor in costs for shipping. If you’re an established business looking to expand, getting a line of credit from a bank could be the best option.
- Demographics – The location of your warehouse will impact the cost and the kind of job market you have to draw from in staffing your warehouse. Do some research to see if your business fits the local industry and whether you’ll be able to find qualified and experienced staff.
- Potential – Choose a warehousing space that not only fits your current needs but leaves room for expansion as well. Moving from warehouse to warehouse can be expensive and incredibly time consuming. Plan out what your inventory needs may be years down the line to give yourself enough warehouse space to accommodate it.
Now that you understand when the right time is to make the switch and what to consider when choosing, let’s discuss what to think about before you start planning your warehouse layout.
Things to Think About Before You Begin
Once you’ve chosen your warehousing space, next comes the task of planning the layout. Before you start getting into the details of planning your warehouse layout, however, there are a few things you need to consider. First and foremost, why is it even important to optimize how your warehouse layout?
As mentioned above, the speed, efficiency, and accuracy with which you fill your orders will determine whether your business lives or dies. The order fulfillment process can be fairly complex, so you need to really think through the details for picking, packing, and shipping. If you want to maximize profitability, it all starts with proper warehouse planning. When planning your warehouse, you’ll need to set up certain areas to make sure that your picking and packing process goes smoothly.
Here are some of the areas you’ll need to work into your warehouse layout:
- Receiving Station – This is where new products are received and checked in before they are stocked on warehouse shelves. This station needs to be well-organized to keep your inventory current and accurate.
- Packing Station – In this station, customer orders are packed into shipping boxes or poly-bags, and the shipping label is created and applied.
- Staging Station – Here is where items move from the packing station to skids or carts before being moved to the outbound shipping station.
- Returns Station – Many companies choose to have a dedicated returns station. If you don’t, you’ll likely be handling returns through the receiving station.
In addition to knowing which stations you’ll need and where to place them in your warehouse, you also need to plan around existing structures. For example, if your warehouse doesn’t have a loading dock, you’ll need to adjust your plan and create separate sections for inbound and outbound inventory. If there are walls or support structures in the middle of your warehouse, you’ll need to think carefully about the placement of your stations to prevent staff from having to navigate around them dozens of times a day which can reduce speed and efficiency.
Start with a Detailed Plan for Organization
Once you’ve thought through some of the details for optimizing your warehouse, next comes the stage in which you actually do the detailed planning. You’ve already thought about which stations you’ll need and whether there are any existing obstacles to work around – now is the time when you put those details together to actually map your layout for optimal efficiency.
Here are some simple steps to complete as you start organizing your warehouse layout:
- Measure the warehouse space you are working with and be sure to note any obstacles.
- Decide where you are going to place your receiving, packing, staging, shipping, and returns stations – keep in mind the location of your loading dock, if you have one.
- Plan to dedicate about 15% to 20% of your total space to staging and make sure it is adjacent to the shipping station – the remaining ~80% will be divided among storage and other stations.
- Choose the best shelving for your products to save space and time (we’ll go into greater detail about shelving in the next section).
- Decide on a labeling system and make sure all aisles and product locations are clearly labeled.
- Create material flow paths and picking paths to maximize efficiency by choosing the fastest route between stations.
- Plan the specific locations where you’re going to store your inventory – make sure the highest-selling items are in easy to reach locations.
Throughout the planning process, it helps to have a clear objective in mind. Ask yourself what the main goal is that you want to accomplish by optimizing your warehouse layout. Do you want to maximize your use of space by optimizing your shelving and storage practices? Do you want to cut down on travel time by being mindful of how you arrange your inventory and packing stations? Do you want to increase your warehousing efficiency by cutting out unnecessary products and processes?
If you can identify the primary goal for optimizing your warehouse, it will help you make the right choice in all of the decisions you make along the way.
Optimizing Your Order Fulfillment Processes
Creating a detailed warehousing plan is one thing, but implementing it is something else entirely. Optimizing your warehouse means optimizing the different stages in the order fulfillment process. Your primary goal at all times is to get the right products to the right customers in the shortest amount of time. Optimizing warehousing processes including receiving, picking, packing, and shipping is the way to do it.
Here are some simple tips for optimizing your warehouse operation along all the various stages of the order fulfillment process to ensure maximum efficiency:
1. Receiving
When it comes to optimizing your warehouse flow, it all starts the moment your product enters the warehouse. When products are received, they are checked for damage, mis-picks, and quantity so your staff will need plenty of space to perform these tasks without impeding the in-flow of new inventory. To make receiving as quick and painless as possible, your warehouse should have a loading dock – this will save time as pallets can be loaded directly from the truck into the warehouse instead of being removed from the pallets and delivered in smaller loads. Having a loading dock versus not is the difference between a one-man job and a multi-person job. Don’t count on the delivery driver to help.
2. Picking
In this stage of the order fulfillment process, pickers receive orders and then pick the products for packing. Where you store your inventory, the type of shelving you use, the locations of your picking stations, are all factors that affect accuracy and efficiency. Here are some simple tips for optimizing your picking process:
- Don’t store multiple unique SKUs in the same location
- Place products in easily accessible areas for pickers
- Designate certain zones for certain products (ex: hot sellers, seasonal, etc.)
- Reduce travel time by picking as many orders in a single run as possible
Optimizing your picking process is not something you do once – you should be making adjustments as your business grows and your inventory changes.
3. Packing
This stage of the order fulfillment process needs to be completed as quickly and accurately as possible. The best place to start in optimizing this stage of the process is to place your packing location near the shipping location to minimize travel time. You should also limit the types of packing materials you use, so pickers are able to assemble each order efficiently.
4. Shipping
It doesn’t matter how fast and efficient your picking and packing process is if your shipping provider can’t keep up. It pays to have connections with multiple providers, so you can offer your customers the best price on a variety of shipping speeds. Plus, if one of your providers falls through, you’ll always have a backup, so you don’t risk losing a sale. When it comes to optimizing your shipping process, have a designated shipping station so orders can be picked up, scanned in, and shipped out quickly all in one place.
Tips for Improving an Existing Warehouse Layout
If you’re moving from in-house order fulfillment to purchasing or leasing a warehouse space for the first time, you’re in a great position. Starting from scratch may take time, but it gives you the opportunity to plan everything from the very beginning to optimize your layout and maximize profits. If you find yourself making adjustments to your warehouse layout as your business grows, you may face some limitations, but there are still things you can do to make improvements.
Here are some ways you can improve an existing warehouse layout:
- Adjust your aisle widths. Something as simple as moving your warehouse storage shelves closer together or further apart can have a significant impact on speed, efficiency, and safety. Rethinking your layout could help you find as much as 15% to 18% more space. Just make sure that your aisles are wide enough for safety (e.g. operating a forklift) but not so wide that you’ll be wasting storage space or losing time during picking.
- Change your shelving. The simplest things can have the biggest impact on your business – shelving is one of them. If it isn’t already, rearrange your shelves, so they are all running in one direction and orient the aisles, so you can see straight down from the packing station. Aim for fewer, longer rows than for many shorter rows.
- Rearrange your inventory. Take the time to examine your product velocity and make changes to your storage practices as needed. Many businesses make the mistake of storing similar products together when it is more beneficial to store them according to how quickly they sell. Place the highest-selling items closer to shipping lanes to cut out unnecessary steps.
- Measure your travel times. While it may seem like more space is always better, it could actually end up reducing efficiency due to longer travel times. Take the time to measure travel times within your warehouse so you can identify areas for improvement.
- Liquidate unsold inventory. If your business has been running for a while, you probably already know which items sell and which items don’t. If you eliminate some of those unpopular products, you can save storage space and time during the picking and packing process.
In the short term, making these and other adjustments to your warehouse layout could be costly both in terms of time and money. Depending how much you need to change, you may even need to shut down operations for a few days. To minimize the damage and maximize your benefits, do all of your thinking ahead of time until you have a detailed plan that you can put in place as quickly and as efficiently as possible. Though you may lose money on the time it takes to incorporate these changes; if you do it right, the payoff will be well worth it down the line.
ShipHero provides outsourced, quality order fulfillment services. Find out more here.
