Dec 11, 2020 | 3PL Warehouse Management, Blog, Fulfillment, Warehouse Management Software, Warehouse Operations
ShipHero is very proud to announce its partnership with Alloy, a Silicon Valley-based provider of automation solutions for ecommerce. Alloy’s software allows you to automate your store’s marketing, operations, fulfillment, rewards, and much more.
With Alloy, you can easily set up automation to send emails and manage orders, freeing up time for you and your team. Alloy has over 200+ workflows that enable you to improve customer retention and ensure a greater customer experience overall.
Here is a screenshot showing the set up of a ShipHero workflow that triggers events from ShipHero. Data from ShipHero can then be sent to other apps. Users can add logic and conditions for filtering that data.
Recipe: Send reorder emails or Slack notifications to staff for low inventory in ShipHero
A great way to organize the flow of customer traffic and inventory is with our workflow.
Our workflow automates reorder emails to be sent to staff when there is low inventory in ShipHero. This ensures that your team can restock inventory at a reasonable pace and without over-stocking.
You can get setup with this workflow immediately by using Alloy’s prebuilt workflow recipe: https://app.runalloy.com/template-setup?id=5fd2801c2f8f2300139725d1
Recipe: Tag Shopify orders based on ShipHero delivery date
Tagging orders is a good way to stay organized especially when your store is expanding globally and there are multiple orders placed on the same day.
This workflow tags Shopify orders based on the ShipHero delivery date. This means that all orders are tagged by date allowing you to view which days are busy and how many orders are expected to ship out weekly.
Apps used: ShipHero, Shopify
Recipe: Set a ShipHero threshold to notify store owner of low inventory
Controlling inventory management can be stressful but with this well-equipped workflow, you can easily be notified of when your inventory is low in ShipHero. For instance, inventory levels are updated regularly and you receive inventory levels for each inventory item. When stock is low, you receive a notification.
Immediate notifications to store owners are key to restocking your inventory and satisfying your eager customers. These notifications can be sent through Slack and email.
Apps used: ShipHero
Recipe: If an order is still unfulfilled in ShipHero after 2 days, email me
Checking the fulfillment status can be time-consuming, especially when multiple orders need to be checked in ShipHero. It’s important to make sure your customers’ orders are sent out on time, but there’s a chance where your product might not be fulfilled by the expected date.
This automation will schedule a workflow after 2 days. Then, it will check to see if the order is unfulfilled for greater than or equal to 2 days. This will trigger an email notification to the store owner.
Apps used: ShipHero
Recipe: Automate fulfillment for Gorgias returns requests in ShipHero
You can automate customer service requests, specifically in shipping and support.
This workflow automates fulfillment for Gorgias return requests in ShipHero.
When a customer requests a return on Shippo, a Gorgias request is immediately created and sent. This frees up time from going back and forth between Shippo and Gorgias and ensures no information is lost.
Apps used: ShipHero, Gorgias
Recipe: Cancel ShipHero scheduled delivery if there is a Gorgias request
Customers will occasionally need to cancel their deliveries. But there’s no easy way for them to cancel a delivery for an order that’s already being fulfilled.
With this automation, customers can send in a support ticket for a cancellation request. Once your team marks it as a canceled order, an email is sent to the ShipHero fulfillment team so they won’t fulfill the order.
Apps used: ShipHero, Gorgias
Recipe: Send ShipHero delivery updates via Klaviyo SMS
SMS messages can have open rates as high as 98% and you’re not limited to using them for promotional campaigns. With this workflow, you can send delivery updates to customers through a text message to leverage higher open and engagement rates.
Here’s how it works: When a fulfillment event happens in ShipHero, a text message reminder is sent via Klaviyo to the customer that their order is out for delivery.
Apps used: ShipHero, Klaviyo
Alloy also has delivery update automations for Omnisend SMS, PostScript, SMSBump, and Tone.
Learn more about Alloy’s ShipHero integration here.
ShipHero is a leading provider of SaaS 3PL software for ecommerce fulfillment.
Dec 16, 2020 | Blog, Fulfillment, Warehouse Management Software
It’s official! Returnly and ShipHero have teamed up, and ShipHero users have access to an exclusive deal. This breakthrough integration allows ShipHero users to offer an end-to-end product return experience. So, what does this mean for ShipHero users?
Automation
Returnly helps Shiphero users create a fully branded, self-serve return center, complete with all the necessary automation and policy controls to reduce operating costs and give customers all the options they want upfront.
Returnly Credit
Mistakes happen. If you ship the wrong order, send the right one immediately and Returnly will accept the risk of the customer actually returning the order. Returnly lets shoppers return or exchange items for a different size, color, or something new without contacting your business.
If a shopper opts for a refund, Returnly offers an instant credit to shop your site while the return is processed. And when you save the sale, Returnly pays for the order so your customer gets the right item before returning the wrong one, completely risk free. This decreases your shipping time and increases the return experience for the customer.
Convert Returns to Repurchases
ShipHero and Returnly seamlessly transfer data to manage and track the return process within ShipHero’s platform. This improved data integration with Returnly makes returns seamless for you and the customer, better positions you to convert returns into repurchases, and saves time and holiday revenue for your business.
Exclusive Offer
To help you successfully navigate the upcoming return season, ShipHero has secured our customers access to an exclusive deal — two months free when you sign-up for a Returnly Premium plan before January 31, 2021.
To learn more and claim your offer, click here.
Dec 28, 2020 | 3PL Warehouse Management, Best Practices, Blog, Warehouse Management Software
Happy Holidays from everyone here at ShipHero! Black Friday has officially kicked off the gift-shopping extravaganza and like you, we’re all scrambling to find that perfect gift for that relative we haven’t seen in-person for the past 10 months… should be easy. (Hint: pajamas). While gift giving was difficult before, with 34% of Americans reporting to return gifts after the holiday season, knowing what to get your friends and family in 2020 is near impossible. So… just make sure to put that receipt in the box.
For retailers, the process of handling product returns, also known as reverse logistics, has always been a messy business, especially after the gift-giving season. According to Shopify, approximately 40% of customers have returned an online purchase in the last 6 months, and 42% of customers report buying a product with full intentions to return some or all of the order in the future. Product returns impact conversion rates, increase costs, and complicate inventory management. So, how can retailers minimize returns, all while making sure that they maintain a good relationship with their customers?
To celebrate our latest partnership with reverse logistic solution company Returnly (and the exclusive holiday deal), Shiphero proudly presents the following the three steps you can take to lower your return rates, improve your customer experience, and in fact develop a competitive advantage through an effective reverse logistics strategy.
Step #1: Offer a Clear and Generous Return Policy
Of course, return rates will drop with a no-refund or strict refund policy, making customers jump through hoops to return your item; however, this will drastically lower your conversion rates at checkout, lower the incentives for new customers to become repeat customers, and ultimately hurt your brand in the long run. Important topics to include in a return policy are:
- Specific products that can’t be returned, like high-ticket items or discounted items
- Additional fees such as restocking fee or shipping
- How long the customer has to return the item
- Conditions for return such as if the receipt is required, or tags, or that it hasn’t been used
- Reimbursement method like cash or store credit, and qualifiers for each method
Behind free shipping, free returns are a huge driver for customers to shop online, and 96% of customers reported that they would shop with a retailer again based on an easy return experience. Many retailers have offset the cost of free returns through increases in price or having customers pay for shipping.
The key takeaway is that your return policy should inspire confidence in your customers to buy from you the first time, and then provide an enjoyable shopping experience (albeit a return) to incentivize them to shop again, and maybe even tell a friend.
The return policy needs to be clear, concise and widely distributed. The policy language should be as easily understood as possible, devoid of legal jargon and fine print. Once set, it should be communicated clearly to both your customers and your employees. In fact, many companies place their return policy in several locations on their landing page and throughout their checkout process, and if it’s generous enough, they advertise it proudly.
And now that Black Friday 2020 has officially kicked off the holiday shopping season, offering a customer-centric return policy will certainly attract more holiday sales, as well as inspire repeat business in the future.
Step #2: Reduce Rates of Return
Simply put, fewer returns means lower costs — with each returned item adding restocking, processing, and possible refurbishing or scrapping fees. So the next thing to focus on is reducing the amount of returns that your company receives
MIT Sloan breaks down returns into two components: controllable returns and uncontrollable returns. Controllable returns are the result of errors or mistakes by the business or customer; as such, each controllable return has an identifiable root cause or causes that can be addressed and mitigated.
For example, the image below lists the most commonly reported causes for returns in 2020, alongside the percentage that they occur.
Around 80% of returns were the result of a damaged or broken product, and 7.5% were from a delay in delivery. These are controllable returns showcasing issues with your fulfillment process, which can be addressed through better packaging, better care, or a better third-party fulfillment provider.
Next, we see 64% of returns were the result of a mismatch between product and description. This is also a controllable return highlighting the need for better online product images or descriptions, or an updated sizing chart for clothes and shoes, to more accurately present the product. In fact, many clothing and footwear companies have minimized product returns by employing a “size and fit” specialist, contactable via phone or chat boxes on the company website.
The last controllable return we see making up 7.5% is poor value, which can either be addressed through your manufacturing process or marketing strategy.
The remaining factor is that the customer just didn’t like the product. This is an uncontrollable factor in some respects, in that it could have been a gift or perhaps the customer had a change of heart; but on the other hand, this could even be broken down into smaller factors — some of them controllable. Why didn’t the customer like it?
Finding the answer to the above question is where a well-designed return process needs to come in. Among other things, your company must ensure that all necessary data points are collected throughout the return process in order to further improve your return rates… which brings us to step 3.
Step #3: Optimize Your Return Process
According to MIT Sloan, an efficient reverse logistics strategy has the potential of reducing processing costs by up to 50% or more. For that reason, companies that have a systematic approach to handling returns hold a massive competitive advantage over those companies that treat returns in an ad-hoc way, and major corporations hire departments specifically dedicated to handling returns and optimizing the return process.
At a high level, every return process has the following steps: Receive, Sort, Analyze, Decide, Execute. The retailer receives the returned product, sorts it based on certain factors like reason for return, analyzes its condition, decides what to do with it, then executes on that decision whether it is restocked, refurbished or scrapped.
Make Decisions Upfront
What are your options when you get a return? Creating proper decision trees (IF, THENs) with clear conditions stemming from your return policy gives your company a roadmap to processing returns. This could have many different variations and nuances per your specific business, but as an example it could look like the below:
- IF there’s no issues, THEN restock and process refund
- IF the product is broken AND still fixable THEN refurbish, process refund, and sell through other channels
- IF the product is defective THEN send back to manufacturer for rebate
- IF the product is no longer salvageable THEN scrap
For refurbished products, find other channels to sell your returned items. The loss margins on returns can be minimized through effective and creative measures like selling refurbished goods in other regions or to different markets.
Pretty straightforward but until recently, the return process has been an extremely labor-intensive endeavor, from sorting to analyzing to deciding, thereby requiring loads of labor hours to process just one return. The answer to this sticky situation just so happens to be what an Australian calls his car.
Auto, mate
But seriously, automation is the key. Retailers have found enormous success automating as much of the process as they can, while making the process self-serve for the customer. From the printing of return labels to the issuance of credit, companies that automate the process see large boosts in efficiency and cost-savings. According to Returnly, during a return process, customers expect, at a minimum, to be able to:
- Print labels
- Track their returns
- Know the status of their refund
This may require having a dedicated portal for refunds. And if you’ve made the necessary decisions upfront, these can be automated as well, further reducing your processing costs and allowing your return team to focus on any extenuating circumstances.
Along with automation comes data aggregation. Knowing why your customer returned the product along with other data points can paint a very clear picture on your reverse logistics landscape, allowing your company to address the various pain points and reduce your return rates.
This, among many other reasons, is why ShipHero has partnered with Returnly to automate the return process for any 3PL or retailer using the ShipHero platform, thereby minimizing human touches, improving accuracy, and reducing costs and errors in the return process, all while keeping the merchant updated in real-time.
This leads to faster returns processing time, faster issuance of refunds to the customer, and faster restocking or resale of the returned goods. Everybody wins, mate.
Outsource
Processing returns necessitates much more than a part-time effort. Using a third-party provider to process your returns is a good solution if your company lacks the time, resources or know-how to process returns, or if you have a low amount of returns.
Because some specialize in processing product returns, third-party providers can perform product returns quickly and accurately, often through the use of industry-leading software solutions, thereby lowering costs and increasing revenue.
Also, if your company does not have dedicated personnel or procedures for handling product returns, you consider instituting a third-party to improve the process by delivering state-of-the-art inventory management solutions and data aggregation capabilities.
Conclusion
In summary, to handle the growing impact that returns have on your business, it is important to have a clear and generous return policy that fits your business needs, to consistently find and address the causes for returns, and to optimize your return process through automation or outsourcing.
ShipHero is proud to announce our partnership with Returnly to help empower retailers and 3PLs using the ShipHero platform to take control of their product return process.
And to help you successfully navigate the upcoming return season, we’ve secured our customers access to an exclusive deal — two months free when you sign-up for a Returnly Premium plan before January 31st.
To learn more and claim your offer, click here.
Jan 6, 2021 | 3PL Warehouse Management, Blog, Fulfillment, Warehouse Management Software, Warehouse Operations
“We’re hiring” seems to be hanging from just about every warehouse door these days. With more people sending more packages, third-party logistics (3PL) companies like Amazon and ShipHero must grow to keep up with the soaring ecommerce industry. And now more than ever, we depend on our people to get the job done.
While there has always been a blend of traditional employees and gig workers, like seasonal workers coming in to help with the holiday rush, 3PL companies are now keeping these workers on longer to keep up with the increased shipping volumes from COVID-19.
Pick-and-Packers and fulfillment specialists are in high demand these days. Are you considering joining the growing number of gig workers that are taking on warehouse jobs? If so, let’s take a look at the future of warehouse work, and why more and more 3PL companies are partnering with the Gig Economy.
The Future
As customers have come to expect same-day or two-day delivery, logistics companies and ecommerce fulfillment providers are under pressure to get faster. For that reason, 3PL companies have started increasing the size of their team and investing heavily in people and technology.
There are 400,000 current job openings in US Manufacturing, which is only predicted to increase significantly over the next decade. 3PL companies need to get talent on their team now, or risk getting flogged down with too many orders and not enough people to fulfill them. In order to hire quickly and effectively, 3PL companies are turning to gig workers.
Technology Leads to Trust In the Gig Economy
For 3PL companies and fulfillment providers, the biggest expense is warehouse worker salaries. The next largest expense is investing in the training and tools to attract the best candidates and produce highly effective teams.
For that reason, warehouse jobs are being posted on sites like Indeed, ZipRecruiter, GigSmart, and more, so that the companies can quickly and thoroughly find a candidate pool that’s large enough to fill their demand. Companies can choose the right applicants that match their needs, and oftentimes the platform facilitates payment and provides support for gig workers.
Through advancements in technology and interconnectedness, companies and workers both have reason to trust in the Gig Economy.
Flexible Workforce Management
Hiring gig workers provides flexibility for work schedules, and allows the warehouse manager to only hire for what they need. Flexible workforce management reduces overall cost to the customer, and allows the 3PL company to offer its gig workers more competitive hourly wages. For that reason, warehouse and fulfillment jobs are extremely popular gigs on most job-hunting platforms.
Not only that, gig workers in the logistics industry are often hired for a certain expertise or for seasonal availability. These specialty workers can offer their services for a well-defined scope of work.
It’s More Than a Gig
When you start a warehouse job, what you’re joining is a traditional team of employees as well as some gig workers like you. We engage our temporary workers and regular employees the exact same way, where other industries may treat gig workers like commodities. For that reason, more and more seasonal gig workers are becoming regular employees, because when the gig is up, they feel part of the organization.
Ready to find your side hustle? Whether you’re looking for temporary/seasonal work, or maybe something more long term and fulfilling (excuse the pun), consider a warehouse gig with the local 3PL companies, fulfillment providers or warehouses in your area. Hey, you could even become a ShipHero!
We’re currently building an experienced warehouse team to pick, pack & ship orders in our 150,000 sqft warehouse located in Pennsylvania. You’d be part of a team that helps ship over $5 billion of e-commerce orders a year.
ShipHero is a leading provider of SaaS 3PL software for ecommerce fulfillment.
Jan 7, 2021 | Best Practices, Blog, Fulfillment, Warehouse Management Software, Warehouse Operations
5 Ways Online Stores Can Navigate COVID-19 and Impress Online Shoppers
Even as the holiday decorations go back into storage and Mariah Carrey retires her microphone for another 11 months, business is still ba-hooming for online brands and retailers. With the encroaching cold of January and talks of more lockdowns on the horizon, more and more shoppers are turning from their old brick-and-mortar ways, to finally enter the new era of online shopping.
As online brand owners and digital retailers, we owe these potential new customers a great first impression into the online shopping community. So let’s look at five things you can do to delight your new and existing customers as they evolve to meet the new world around them.
Fulfillment at the Forefront
Someone has to say it. In today’s understatedly hectic marketplace, with traditional carriers like USPS, UPS, FedEx and even Amazon stretched to their limits due to the massive surge in online shopping, the most important step you can take during right now to secure the success of your online store is to solidify your Fulfillment strategy AKA make sure that customers can actually get your product.
At a time when market uncertainties and shopper anxieties are at an all time high, online retailers must take every precaution to retain their customers’ trust. Retailers that have relied solely on traditional carriers or FBA (Fulfillment by Amazon) in the past are now finding resiliency in their operation by diversifying their shipping methods and outsourcing to third party logistics (3PL) companies.
3PL companies easily handle warehousing, forwarding, packing, consulting, order fulfillment, brokerage and transportation documentation, while offering fulfillment management software that seamlessly integrates into your business systems; e.g., Shopify.
Not only that, high shipping costs and long shipping durations are the leading factors in stopping people from purchasing online. Online stores that have been able to reduce both are realizing immense competitive advantages and quickly growing their customer base, as would-be brick-and-mortar customers are confidently becoming online shoppers.
Whether you are just starting an online business or already operate a successful brand, prioritizing your fulfillment strategy is the #1 way to navigate the ecommerce realm during the COVID-19 pandemic.
Know Your Customer Base and How It’s Changing
You may have already noticed, but customers have been forced to change their shopping habits quite a bit. According to a study by JP Morgan, e-commerce now accounts for 16.1% of all U.S. sales, up from 11.8%, and news outlet BBC reported that COVID-19 has effectively eliminated the marginal store revenue accrued through a customer browsing in-person.
What this means is that online retailers need to have a clear picture of their online shoppers and their in-store shoppers, as well as how both of them engage with the digital store. You may already know your customers and have well-defined customer segments and demographic information, so you mustn’t reevaluate who they are, but rather how they now act.
Traditionally, technologically-native shoppers in the Gen Z or Millennial generation have been more inclined to browse in-store followed by purchasing online, while the older generation has statistically favored in-store transactions. COVID-19 has flipped this mantra for some, especially those that are less willing to venture out to shop.
So be sure to understand who is visiting your site now that wasn’t before. You may be welcoming new shoppers that could get frustrated with complicated browsing and checkout processes, or perhaps your customers are engaging with your brand in an entirely new way.
Optimize Your Shopping Journey
Since online shoppers lack the ability to physically touch, try on, and compare items, they may need more product information to feel comfortable completing a purchase. Not only that, customers will be less likely to return a product that is accurately displayed on your store.
For that reason, consider implementing the following to provide the most accurate information to your customers:
- Clear sizing charts
- Product comparison tools
- High-quality product images, including dimensions and materials
- Customer reviews
Once your customer decides to purchase, make it as easy as possible with a frictionless checkout process. Up until now, the majority online shoppers have been technological natives (i.e., younger), so many retailers may have settled on overly-complicated websites that rely on the customer being tech savvy.
Be aware that new online shoppers could get frazzled by complexity and subsequently abandon the checkout process when it loses them. To avoid this from happening, reevaluate your user journey from landing page to checkout confirmation, paying special attention to:
- Product categorization
- Product page layout and information
- Personal information collection
- Cart view and editing
- Payment, shipping and return options
Customer support options like a live chat box needs to be clearly visible so the customer can reach out if they need assistance. Additionally, consider using heat-mapping or other anonymous tracking tools to find where exactly customers are getting frustrated and abandoning the process. This method of discovery along with design and testing is an important way to improve the user experience (UX) of your shopping journey.
Manage Your Returns, Don’t Let Them Manage You
Returns are the unavoidable fallout of online shopping, and the best thing online companies can do is to prepare for them to happen. In our past blogs we’ve detailed the rising number of returns and how online retailers can turn returns into a profitable venture.
When making an online purchase, your brand’s return policy is often the very first thing a customer will look for, along with your shipping options and data privacy policy. So make sure your returns policy is highly transparent and overly generous.
Beyond that, a smooth returns process creates loyal, repeat customers. Be sure to give your customers the ability to, at a minimum, print labels, track their returns, and know the status of their refund.
Refunds are a messy business, and that’s why many 3PLs like ShipHero are partnering with returns management companies like Returnly to automate the return process including the issuance of credit/refund, to make it as easy as possible for the retailers and their customers.
Stay in Touch With Your Customers
The most effective way to weather a crisis and maintain relationships is to keep sustained communication with your customer base, according to Harvard Business Review. In times of chaos, customers may seek to know how your brand is responding, and determine if their brand loyalty should remain. HBR suggests the following approach to communicating with your customer base during a crisis, and it has a lot of HEART.
- Humanize your company
- Educate about change
- Assure stability
- Revolutionize offerings
- Tackle the future
By following the above five recommendations, your brand will be sure to win your fair share of the growing number of online shoppers, whether it’s their first time or their millionth.
Ready to tackle fulfillment for your online store? ShipHero is a leading provider of SaaS 3PL software for ecommerce fulfillment that is trusted by over 4000 ecommerce brands and 3PLs every day.
Learn more about ShipHero’s industry-leading warehouse management software.
Jan 13, 2021 | Best Practices, Blog, Fulfillment, Warehouse Operations
“Necessity is the mother of Invention.”
–Plato, philosopher
“When Necessity rapidly consumes the globe in a pandemic, Invention calls its brother Fulfillment.”
–ShipHero, fulfill-osopher
While our shipping quotes may be better than our written quotes, the principle holds true: a good product is only as good as its ability to reach customers. A bird in the hand is worth two in the bush… okay, no more proverbs.
At its onset, the global pandemic caused a shortage of goods that people relied on with no way of receiving them. But then came the shift to digital, and the ecommerce industry saw tremendous growth. When more people started sending more things, we in the ecommerce fulfillment industry experienced growth of our own.
Fulfillment as a Service (FaaS) companies like ShipHero began partnering with online brands to provide fast and reliable fulfillment services powered by SaaS-based fulfillment software. In under a year, ShipHero became trusted by over 4,000 ecommerce brands and 3PLs every day to get their products in the hands of their customers, on time and on budget with their Warehouse Management Software (WMS).
How did we obtain and manage such high-speed growth? The answer lies in our steadfast set of criteria that we developed to know when the time has come to expand our operations, and through what means. Let’s dive into this Warehouse Buying 101 guide, so you can understand when and how to grow your own network of warehouses.
Know When To Expand
We’ve found that taking a data-driven approach is essential to know when to expand your operations. Through real-time data monitoring and executive oversight, we get the right data to the right people to make the best possible decisions.
We know it is time to expand our operations when one of the following occurs:
- We reach physical storage limits for inventory
- We reach shipping capacity, in terms of the number of orders that can be shipped in a day
- We recognize regional bottleneck trends, e.g., a distribution center on the East Coast is frequently shipping to the West Coast
We let our business tell us when it is time to expand, not the other way around.
Make sure you are tracking the right data, like ‘Miles Travelled per Order’ or ‘Time to Fulfill’ in order to assess the state of your operations before expanding. Because adding new warehouses to your network can be expensive and very difficult to undo, you need to ensure that there are no simple fixes for your current fulfillment woes.
Expansion Strategy
Once you are certain that it is time for 3PL to grow its network of warehouses, the next step is to analyze your options and choose the strategy that best satisfies your needs. It is through in-depth research and quality information that allows ShipHero to make smart decisions.
Step 1: Determine Location
Location, location, location (technically not a proverb).
For ecommerce fulfillment, choosing the right location for your warehouses makes all the difference. Having a widespread network of warehouses improves the cost-efficiency and speed of your order fulfillment, but having multiple operations in one area provides resiliency.
Understand where your brand and your brands’ customers are located. What is the competition in that area? Is there an airport nearby and how are the road conditions for trucks? Does the area have an adequate talent pool to employ and run your operations smoothly?
By determining your location, this allows you to set a more defined area to search for expansion opportunities.
Step 2: Understand Timing
Are you looking for immediate expansion to solve an urgent need, or is this a long-term decision to ensure future success? Why are you expanding now? What are the underlying forces that are driving your growth, and will they still be there in the future?
By understanding your timing, this helps you align to your long-term business goals and mitigate risks caused from short-term thinking.
Step 3: Set Expectations for Cost
How much are you willing to invest? How much free capital can you afford to spend? Think in terms of proportions of your current and projected orders.
Knowing where you want to expand, how quickly, and how much you are hoping to spend will give you all the information for the final step.
Step 4: Execute Expansion Method
With the above considerations in mind, the final step is to execute your desired expansion method. ShipHero has employed a blend of the following strategies to successfully and quickly grow their network of warehouses:
Build from Scratch
The first strategy is to set up a brand new warehouse. As the most time consuming option, ShipHero is able to spin up a brand new warehouse in 30 days, which we did recently in our Pennsylvania warehouse (now hiring). It is also the most costly option, but allows for the greatest level of autonomy in running your operations.
Partnership with Existing 3PL
Existing 3PL companies that have additional capacity to spare may contractually agree to fulfill your customers’ orders for a percentage of the profits. Partnering with an existing 3PL is the fastest way to add capacity to a certain region, so if you are in a time crunch to start getting orders out the door, this is a smart way to go.
Keep in mind, with regards to quality of service, your company will wholly rely on the existing 3PL to deliver, so make sure you partner with the 3PL that matches your standards of excellence.
Buyout an Existing Operation
If there’s a suitable candidate, buying an existing operation is a great way to expand your network. For example, ShipHero recently purchased Radio Shack’s DFW Fulfillment Center, and because they already used our software, we began fulfilling ShipHero orders practically overnight.
Transitioning an existing operation to suit yours is less costly and time-intensive than building a warehouse from scratch, and it allows more autonomy and capacity than a partnership. So keep an eye out on your existing partners or your clients, as they may become a good target for acquisition.
This concludes our Warehouse Buying 101 tutorial, and we hope that you can use it to expand your operations and effectively fulfill on behalf of your online brands and retailers. And if you’re looking to unlock your ecommerce fulfillment superpowers, ShipHero is a leading provider of SaaS 3PL software for ecommerce fulfillment. We give you the tools to quickly master your ecommerce operations with a cloud-based software solution trusted by ecommerce and retail brands of all shapes and sizes.
Learn more about ShipHero’s industry-leading warehouse management software.
Jan 27, 2021 | Best Practices, Blog, Fulfillment, Warehouse Management Software, Warehouse Operations
Welcome to our Shipping Methods Explained blog series. In this series, we will deep dive into fulfillment methods – that is, how businesses fulfill their online orders and get products to their customers.
Sounds simple right? Well, in theory it is. You could hop on your itty-witty bicycle and hand-deliver your product, mission accomplished. But consider the complexity when your company fulfills hundreds to thousands of orders daily, not to mention the skyrocketing shipping costs that could price you out of the market.
Managing inventory, navigating each carriers’ specific requirements, calculating the lowest cost from thousands of shipping options… it’s a daunting task. That’s why more and more businesses are outsourcing their fulfillment methods.
Are you ready to outsource your fulfillment? Let’s analyze your options to help you decide the best method for your business. In this article, we’ll discuss Dropshipping. What is dropshipping? What are the pros/cons? When is it right for my business? Let’s dive in.
(And be sure to check back for future articles where we’ll cover even more fulfillment methods)
What is Dropshipping?
Dropshipping is the term used when a product is shipped directly from a manufacturer, supplier, or wholesaler, bypassing the retailer that made the sale entirely.
SOURCE: https://www.shopify.com/blog/what-is-dropshipping
- A customer visits your company’s website and purchases an item.
- Your website automatically notifies the dropshipping supplier
- The dropshipping supplier receives the order info and customer’s shipping information
- Your dropshipping supplier fulfills the order directly
How to Start a Dropshipping Business
Dropshipping businesses are extremely common nowadays, due to the allure of making a passive income matched with the simplicity of setting up a dropshipping business. All it takes is 3 easy steps to get you on your way.
Step 1: Choose a Product/Niche
The first step you take in starting a dropshipping business is to choose what you are going to sell.
Your product could be a brand new gadget, or a low-cost version of a luxury item, or a luxury version of a low-cost item. As long as there is a market for it, there are no wrong choices here. So do your due diligence and find a product that you think you could sell. ABC… Always be closing.
Step 2: Find a Dropshipping Supplier
Once you choose your product, find a dropshipping supplier.
You can search a supplier database like Dropship Direct, Alibaba, or AliExpress. (Although be sure to stay up-to-date on news concerning Chinese dropshipping providers)
Alternatively, you can use an integrated supplier directory. This means that when you build your online store, say in Shopify (see Step 3), the dropshipper will be linked directly to your online store.
Shopify recommends the easiest integration is with the Oberlo marketplace. From here, choose from millions of products and upload them directly to your store.
Step 3: Build Your Online Store
After you have your product and supplier, have some fun building your online store! This will serve as the grand entrance to your brand.
Websites like Shopify, Wix and 3DCart allow you to build your online store from scratch, or select from pre-made templates. When choosing between your options, make sure your choice gives you the ability to easily integrate with your dropshipping supplier.
When designing your store, keep in mind who your target audience is, and build your website to reflect their wants and needs. Not just in appearance, but in website functionality. You can turn customers into repeat shoppers through a convenient and fluid shopping experience.
Dropshipping Pros and Cons
Is dropshipping right for your business? Or would you benefit from a third-party logistics provider or another fulfillment method? Let’s look at the pros and cons of dropshipping so you can decide for yourself.
Dropshipping Advantages
Dropshipping is the perfect business model for those that want to earn a passive income. It’s simple to start, with little to no cash investment. You can quickly test your ideas with limited risk to you. The three main advantages to dropshipping are:
Less Capital is Required
Dropshipping eliminates the need to invest heavily in inventory, warehouse fees, transportation fees, etc. so anybody with a laptop and a dream can start an online business.
Able to Offer Wider Range of Products
With dropshipping, you don’t have to purchase inventory until the sale is made, which significantly reduces the risk to you. So this gives you freedom to offer a large array of products on your site.
Simple to Start
With companies like Shopify that basically make the entire process a drag-and-drop activity, starting an online business has never been easier.
Dropshipping Disadvantages
The pros listed above explain why so many people have started an online dropshipping store, and why they use dropshipping to expand their product lines. But for the very same simplicity and low costs that attract these entrepreneurs, dropshipping also presents a set of challenges.
Low Profit Margin
Because the barriers to enter the dropshipping market are very low, the competition is fierce. Having many sellers in the market pushes down the cost as they compete with each other. Sure, you can differentiate based on branding, customer service, etc. but at the end of the day, $$$ talks.
Little to No Customization
Because you are at the will of your supplier, they rarely offer any customization to your products, your packaging, or your unboxing experience. Say you want to make the slightest tweak to the look of your item, or you want to pack it a certain way or in a bundle, this will most likely not be possible.
Some Alibaba dropshipping suppliers will accommodate and customize, but even then, they fully control the product and could even turn around and sell your customized goods to the next retailer.
Little to No Control
You entrust the entire fulfillment process to the supplier, and accept the quality of service that they provide. If there are errors or mistakes, you cannot blame your supplier and it will be your brand that pays the price. Maybe not in dollars, but certainly in reputation.
So, is dropshipping right for your business? If you’re not sure, stay tuned for our next article as we dive into third-party logistics (3PL) and fulfillment providers like ShipHero.
Learn more about ShipHero’s industry-leading warehouse management software.
Jan 28, 2021 | Best Practices, Blog, Fulfillment, Warehouse Operations
Welcome to our Shipping Methods Explained blog series. In this series, we will deep dive into fulfillment methods – that is, how businesses fulfill their online orders and get products to their customers.
Sounds simple right? Well, in theory, it is. You could hop on your itty-witty bicycle and hand-deliver your product, mission accomplished. But consider the complexity when your company fulfills hundreds to thousands of orders daily, not to mention the skyrocketing shipping costs that could price you out of the market.
Managing inventory, navigating each carriers’ specific requirements, calculating the lowest cost from thousands of shipping options… it’s a daunting task. That’s why more and more businesses are outsourcing their fulfillment methods.
Are you ready to outsource your fulfillment? Let’s analyze your options to help you decide the best method for your business. In this second article, we’ll discuss Fulfillment-as-a-Service (FaaS). What is FaaS? What are the pros/cons? When is it right for my business? Let’s dive in.
(Check out our first article on Dropshipping here. And be sure to check back for future articles where we’ll cover even more fulfillment methods)
What is FaaS?
Simply put, Fulfillment-as-a-Service (FaaS) is where your company employs a third party company or warehouse to prepare and ship orders for you. This allows you to tap into fulfillment capabilities with no upfront investment of capital, and only pay for the services that you use.
Think about it like a subscription to Netflix. As long as you pay the subscription price, you have access to the content and services. Same with FaaS. As long as you partner with a third party logistics (3PL) provider, you can use them to pick, pack, and ship your product.
Now consider the alternative: in-house fulfillment, where companies must invest heavily in warehouse space, labor, management, and software to keep things running smoothly. With FaaS, this is all included in one subscription price, and you can pick and choose the specific capabilities that you need.
We wrote previously about how to choose which fulfillment method is right for you. Take a look here.
How to Start Shipping With FaaS
With seamless integration between your business systems and their fulfillment cloud-based platforms, getting started with a fulfillment provider has never been easier. All it takes is 3 easy steps to start delivering the goods.
Step 1: Find your Fulfillment Partner
The first step to outsourcing your fulfillment is to find the right FaaS partner for you.
There is an endless list of fulfillment companies vying for your business. So when you are vetting each, ask questions like:
- Does the 3PL provider have the capabilities to fit your business needs?
- Can the 3PL provider integrate with your business systems?
- Does the 3PL provider have a proven track record offering reliable services?
- What are the costs? Do they charge per hour, per unit or packet? Are there transactional fees or recurring costs?
Not all 3PLs operate the same way: some value customization over speed, some strive to be the low cost option at the expense of service, so be sure to select the fulfillment partner that aligns with your specific strategic goals.
Step 2: Integrate
Once you decide on a fulfillment provider, it’s time to integrate.
FaaS providers offer cloud-based software solutions so that your business can utilize their warehouse management capabilities to control the flow of your products. These solutions offer great value to your business because this allows for highly customized options when it comes to fulfillment – custom packing, custom unboxing, custom bundles – you name it.
Also, smart fulfillment companies like ShipHero provide you with the ability to create automated workflows and a frictionless return process through strategic partnerships with companies like Alloy and Returnly.
Step 3: Send Your Inventory
The final step is to send your inventory to your 3PL’s warehouses and get to shipping.
Once the inventory is received, the warehouse will begin to pick, pack and ship your products for you. If you picked a good fulfillment provider that is built for performance and scale, the 3PL will also disperse inventory across their network of warehouses, bringing the products closer to where the orders are coming from.
ShipHero is able to provide 2-day ground shipping for the contiguous US due to intelligent forecasting solutions powered by AI. We bring the products to where your customers are located, instead of a central fulfillment hub. This allows us to lower costs and our carbon footprint through an emphasis on ground transportation.
Fulfillment-as-a-Service Pros and Cons
Is FaaS right for your business? Or would you benefit from dropshipping or another fulfillment method? Let’s look at the pros and cons of fulfillment-as-a-service so you can decide for yourself.
FaaS Advantages
Business with big goals, fluctuating sales, and not enough time all find great value in the FaaS model. Beyond the obvious benefit of saving time and effort by having a third party fulfill your order for you, FaaS provides advantages in terms of skill specialization, agility, and scalability.
Flexible Pricing
As you grow, 3PLs are able to adapt to your needs and adjust costs accordingly. Conversely, when your business goes through a bit of a slow down (hopefully not), the costs can reflect this as well, and you won’t be weighted down with high overhead. FaaS allows you to forego the high costs, risk, and commitment of leasing and operating your own warehouse.
Skill Specialization
When you choose FaaS, you don’t just get a fulfillment provider, you get a business partner. Most 3PLs employ teams of logistics experts and support staff to help you with your shipping needs, and this comes standard with years of experience with fulfillment best practices and software solutions.
Not only do they provide shipping expertise, but also when handling the dirty business of returns. As online shopping continues to grow, so do the number of returned products. 3PLs can help you manage the nightmare of returns and offer a frictionless return experience for your customers.
Agility
If there is one thing that FaaS providers do well, it’s move quickly. Whether it’s shipping times or software development, 3PLs embody the spirit of agility. Many fulfillment providers like ShipHero offer 2-day shipping to anywhere in the US; this would require an immense investment from a business, so more and more retailers are partnering with 3PLs to achieve a level of agility they otherwise wouldn’t achieve.
FaaS Disadvantages
The advantages above explain why more and more retailers are partnering with third party logistics providers and fulfillment specialists. Despite the pros, FaaS is not right for every business.
Need Consistent Orders
If you are a startup or a small business still getting their feet wet, it may be better to handle your orders in-house due to the costs associated with fulfillment-as-a-service. But when customers are knocking down your door and you can’t handle the growing number of orders, 3PLs are standing by to help you as needed.
Lose Full Customization and Control
You’d be surprised with the range of customization that 3PLs can offer, but still there is a limit when compared to the full autonomy that you would have with in-house fulfillment. So if you have very detailed and highly specialized requirements when it comes to fulfillment, handling your fulfillment in-house may be a better option.
So, is FaaS right for your business? If you’re not sure, stay tuned for our next article as we dive into Fulfillment by Amazon (FBA).
Learn more about ShipHero’s industry-leading warehouse management software.
Feb 3, 2021 | Best Practices, Blog, Warehouse Management Software, Warehouse Operations
By all accounts, gig workers are redefining the American Dream. To date, over one third of Americans take advantage of the Gig Economy to enjoy the freedom of setting their own work schedule and chasing projects that resonate with their passions.
There is only growth for gig workers forecasted on the horizon.
While US regulations are finally catching up to the speed at which the Gig Economy continues to grow, more and more major companies are adding freelancers and gig workers to their workforce at varying positions and ranks, up to about two thirds of major companies currently. And 80% of companies are planning to make the switch to independent work in the coming year.
Specifically, several sectors like the warehouse and ecommerce fulfillment industry are ramping up their use of gig workers due to the flexibility and expertise that they provide. Not only that, gig workers in these industries are constantly being offered full-time work if they need more stability. There’s just too much work in ecommerce fulfillment right now.
Gig workers have more control of their work life now more than ever.
Greater acceptance of remote work has proven to be a win-win situation for gig workers. That’s because their work can now transcend the boundaries of where they can physically show up to work, and at the same time, the demand for work that does require in-person attendance is only skyrocketing.
With the advent of staffing platforms like Indeed and AngelList, it’s never been easier for businesses to find and team up with quality and trusted independent workers. This has led to many predictions that virtual organizations and solely-online retailers will continue to rise through the consistent employment of gig workers.
Gig workers are always adept at finding that next big project.
76% of gig workers claim satisfaction in their work life, despite the pressure to continually find projects. But perhaps it is this pressure, rising to the challenge, designing a personal work style and life, that entices gig workers to this style of work in the first place.
Today, 15% of independent workers have side-gigs, and with services like Indeed and ecommerce platforms like Shopify that allow people to market and sell their services and goods like never before, this proportion is sure to grow.
Are you a Gig Hero?
We at ShipHero are seeking gig workers to become Gig Heroes at our warehouses as Pick-and-Packers and fulfillment specialists, because we value the expertise and flexibility that they bring to a work environment. We are currently hiring experienced warehouse team members to join our team to help us pick, pack & ship orders in our 150,000 sqft warehouse in our network in Pennsylvania. You’ll be part of a team that helps ship over $5 billion of e-commerce orders a year, and there’s always options for full-time employment.
Learn more about ShipHero’s industry-leading warehouse management software.
Feb 18, 2021 | Blog, Case Study, Warehouse Management Software
Move over Air Bud… Humphrey the French Bulldog may not be able to sink a three pointer, but he can sell dog accessories while saving the planet like it’s nobody’s business. Except, it is his business! Enter: Spotted By Humphrey — a specialty dog boutique with a playfully curated selection of thoughtfully-designed, well-made, premium dog accessories, which comes along with a promise of net-neutral climate emissions.
Spotted By Humphrey – “with its quirky name for a shop that has the personality to match” – is a community-driven online destination for dog parents around the world who are looking to find something special and unique for their dogs.
Humphrey aka Spotted Humphrey (@spottedhumphrey) has over 120K followers on Instagram, and is the inspiration behind the business, as founders Sandy and Yong-Soo Chung (also Humphrey’s parents) wanted to create a shop that would make the experience of shopping for your dog just as fun and community-oriented as Humphrey’s Instagram.
Naturally, social media plays a key element in the shop’s marketing strategy; however, both Sandy and Yong-Soo believe that their success largely comes from establishing a strong operational foundation, which ultimately creates a better experience for their customers.
Having founded his own ecommerce shop Urban EDC Supply prior to the launch of Spotted By Humphrey, Yong-Soo leveraged his existing ecommerce experience to establish Spotted By Humphrey, which Sandy has taken on and grown organically ever since. Yong-Soo eventually founded an all-encompassing ecommerce brand accelerator with the first ever net-negative carbon emitting 3PL in the industry, so every shipment that goes out actually benefits the planet instead of harming it.
“Frustrated by the lack of accountability and execution, I decided to take fulfillment in-house. First, we used another WMS other than ShipHero. It was slow, we had a lot of mis-shipments, and it was difficult tracking inventory. When I finally stumbled upon ShipHero, it was a game changer. The software was intuitive to use and it had a lot more features that made it easier to streamline our fulfillment operations.”
— Yong-Soo, Founder and CEO of GrowthJet
Yong-Soo utilizes ShipHero’s warehouse management software across his ecommerce brand accelerator, GrowthJet, along with his two internal brands, Spotted By Humphrey and Urban EDC Supply, a boutique everyday carry shop. So we asked Humphrey and Yong-Soo to ‘sit, stay and roll over’ what made ShipHero the right choice for his business.
ShipHero: Humphrey, tell us about your business(es).
Humphrey: OUAF OUAF!
SH: Ah, I don’t speak French. Yong-Soo, care to translate?
Yong-Soo: “In a nutshell, GrowthJet is an ecommerce brand accelerator with two internal brands, Urban EDC Supply (launched 2015) & Spotted By Humphrey (launched 2018).
Urban EDC Supply is an everyday carry shop with a strong focus on the EDC and knife community. We collaborate with world-renowned designers like Jesper Voxnaes to create stylish and functional everyday carry gear for our community of gear enthusiasts. Taking a page out of the streetwear clothing culture, weekly drops feature a limited supply of exclusive goods that sell out within hours, and sometimes minutes, or even a few seconds. While there’s a wide range of goods available for sale, some of these high-end collectibles can sell for as much as $2,000.
Spotted By Humphrey is a specialty dog boutique inspired by our french bulldog, Humphrey. As of today, Humphrey has 120k followers (@spottedhumphrey) on Instagram. We wanted to create a shop that would make the experience of shopping for your dog fun and community-oriented. Sandy and Humphrey made an appearance on the first episode of Shopify’s “Guess My Hustle” series (produced by Portal A, an award-winning digital studio), as well as Shopify’s “New Money” series (episode titled, “How To Make Money In The Million Dollar Dog Accessories Industry”).
Having built two fast-growing brands, in 2019, several colleagues approached us asking about our product photography, our fulfillment operations, and other e-commerce related ops questions. We decided to build and launch GrowthJet as the backbone infrastructure support to grow e-commerce brands. We’ve been growing very quickly through word-of-mouth ever since.”
SH: During your journey, you went from using a third party logistics (3PL) provider to fulfilling on your own. What was the catalyst for this switch?
Yong-Soo: “When I launched Urban EDC Supply back in October 2015 from my one-bedroom apartment in San Francisco, I did a tremendous amount of research on finding the best 3PL. After weeks of digging in, I settled on a 3PL that was based here in the Bay Area, and one that had the best reviews and ratings.
Unfortunately, I had one of the most frustrating experiences with this particular 3PL. I lost close to $5,000 worth of inventory due to negligence by the fulfillment staff. There was one particular instance where one of the employees opened up the box that was being shipped to my customer, took the item out, and then shipped out an empty box to my customer in Alaska. It turns out that this particular employee’s last day was the next day. When confronted with this news, the employee never returned to collect his final paycheck the next day.
Frustrated by the lack of accountability and execution, I decided to take fulfillment in-house.
SH: Sounds like they were in the doghouse, eh Humphrey?
Humphrey: RUFF!
SH: Too true, too true. So when you were searching for WMS solutions, what were your main fulfillment goals?
Yong-Soo: “When we took fulfillment in-house and launched GrowthJet, the main goals were to improve order accuracy through proper barcoding, speed up the process of fulfillment, and generally, have more accountability and insight into our shipment data.
For us, the [most important criteria] was our ability to have an open dialogue with our fulfillment center. When we needed something, calling a phone number and being greeted by a “voice mailbox is full” message is never fun. Neither is sending out an urgent support email and not receiving a response for over a week. So for GrowthJet, we made it a point to be transparent and open to communication. Also, the ability to flex and work collaboratively with the 3PL is an important part of what we do at GrowthJet.”
SH: And why did you choose ShipHero?
Yong-Soo: “First, we used another WMS other than ShipHero. It was slow, we had a lot of mis-shipments, and it was difficult tracking inventory. When I finally stumbled upon ShipHero, it was a game changer. The software was intuitive to use and it had a lot more features that made it easier to streamline our fulfillment operations.
Integrating ShipHero was relatively easy, especially with one of the Solutions Engineers Matt D. helping us.”
First, we used another WMS other than ShipHero. It was slow, we had a lot of mis-shipments, and it was difficult tracking inventory. When I finally stumbled upon ShipHero, it was a game changer. The software was intuitive to use and it had a lot more features that made it easier to streamline our fulfillment operations.
SH: Every ShipHero customer is assigned a Solutions Engineer to help simplify the onboarding and integration process because we look after our customers, dawg.
Humphrey: …
SH: So what was your inspiration for the climate neutral pledge, and how do you plan to become a Carbon Negative 3PL?
Yong-Soo: “When we launched GrowthJet, we realized how bad the waste and carbon footprint is for logistics and fulfillment. We think a lot about ecosystems not only for the environment, but the entire lifecycle of every item that comes through our warehouse including packaging materials, pallets, used equipment, etc.
We want to reduce as much as possible, then reuse, then recycle what we can before we decide to throw something away. Even then, we offset the carbon footprint of our garbage by purchasing carbon credits through ClimateNeutral.org.
On top of our Climate Neutral certification, we will be implementing our own tree-planting initiative in 2021. As far as we know, we will be the first carbon negative 3PL in the world. This means that for every package we ship out for our brand partners, we’re actually helping our planet fight against climate change. Counter-intuitive, isn’t it?
SH: Planting trees to help climate change, care to comment Humphrey?
Humphrey: BARK!
SH: Surprisingly on topic. And what has been the response from your customer base?
Yong-Soo: “Overall, the response from our brand partners has been very positive. They love and appreciate our proactive commitment to saving our planet, rather than being part of the problem. We’re also different from most 3PLs in that we’re more selective about who we bring on as a partner. We want to make sure we’re aligned on values first and foremost. Like any relationship, it’s a two-way partnership. We have a bias for thinking long-term so we want to make sure there’s a fit first before making a long-term commitment.”
SH: Finally, how has your business been impacted by the COVID-19 pandemic and lockdowns?
Yong-Soo: Our business actually saw an increase due to COVID. With e-commerce getting a huge boost, we were fortunate to be in a position of leverage during the pandemic. Of course, there were additional costs such as PPE equipment and being more cognizant of social distancing within the warehouse, but all in all, we feel very lucky to come out of the pandemic stronger than before.
SH: Amazing, thank you for sharing your story and allowing us to write this case study. Humphrey, final thoughts?
Humphrey: WOOF WOOF!
Follow Humphrey and the Spotted By Humphrey’s journey at their website and Instagram.
Website: https://spottedbyhumphrey.com/
Humphrey’s Instagram: https://www.instagram.com/spottedhumphrey/
Spotted By Humphrey Instagram: https://www.instagram.com/spottedbyhumphrey/
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