The Top 5 Things Emerging eCommerce Brands Can Do to Control Their Supply Chain Destiny

The Top 5 Things Emerging eCommerce Brands Can Do to Control Their Supply Chain Destiny

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Whether it’s a lack of flexibility, an inability to meet customer demand, or outdated IT systems, it’s essential to understand specific areas of trouble in order to start making improvements.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.

Retail Trends: Returns management in eCommerce Omnichannel

Retail Trends: Returns management in eCommerce Omnichannel

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.

Building The Ultimate Unboxing Experience

Building The Ultimate Unboxing Experience

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.

Taking Your Customer Service to the Next Level

Taking Your Customer Service to the Next Level

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.

In Conversation with Eric Godshall of Nashua Nutrition

In Conversation with Eric Godshall of Nashua Nutrition

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

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1.   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.

  1.  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:

  1. 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.
  2. 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.
  3. 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.
  1.  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.

  1. 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.

How to Create a Global Ecommerce Order Fulfillment Strategy That Works for You

How to Create a Global Ecommerce Order Fulfillment Strategy That Works for You

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:

  1. Direct Fulfillment
  2. Drop-Shipping
  3. 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.

Should You Offer Free Shipping? A Data-Driven Answer

Should You Offer Free Shipping? A Data-Driven Answer

From ShipHero – The Top Pick Among Warehouse Management Software Companies

In the vastly competitive world of e-commerce, it can be a challenge to stand apart from the crowd. With limitless options available at their fingertips, consumers are always looking for the lowest price and the greatest value. As a business owner, you must walk the fine line between offering competitive prices and still keeping your head above water in terms of margins.

When it comes to grabbing the attention of consumers and converting them into paying customers, it is sometimes the little things that matter most. While most business owners understand the importance of branding, marketing, and advertising when it comes to improving sales, many underestimate the true value of offering free shipping.

You may be surprised to learn that high shipping costs are attributed to an astounding 55% of abandoned carts. So, the answer is clear — offer free shipping, and the sales will come, right? Well, it’s not that simple.

Keep reading to learn more about the pros and cons of offering free shipping and how to effectively make it work for your business without going bankrupt.

What’s So Great About Free Shipping?

One of the greatest benefits of shopping online is that it is incredibly easy to compare prices. Amazon, Jet, and even Google want to show you the highest rated products, at the lowest prices, with the least expensive (or free) shipping options. With so much competition out there, e-commerce stores need to find ways to convert visitors into paying customers and to keep those customers coming back.

That’s where free shipping comes in.
Free shipping is a huge benefit for customers, and it is often the deciding factor between one site and another. Though shipping is free for the customer, however, they are not free for the merchant, and those costs can add up quickly. That’s why you see so many websites offering free shipping for a minimum spending amount – the sale of those add-on items helps the company recoup the costs associated with shipping the order.

To give you an idea of just how powerful offering free shipping can be, consider recent research that showed 58% of shoppers will add additional items to their cart in order to qualify for free shipping at a set dollar amount. Not only that but shoppers will also spend 9.4 percent more when they need to meet a free-shipping minimum. So, while you may still be eating the cost of shipping yourself, by using free shipping strategically, you’re able to generate more revenue from it.

The Psychology Behind Free Shipping

The question any e-commerce business owner wants to know is, “Does free shipping really work?” The benefits for the customer are obvious, but how do you actually make it work for your business without dipping into your margins too much? The first step in answering this question is learning about the psychology behind free shipping.

First and foremost, it must be mentioned that free shipping is rapidly becoming the norm. Consumers are less likely to think of it as an option and more likely to think of it as a staple. Everyone from giant online retailers like Zappos and Wayfair to department stores and small businesses have begun to offer free shipping. For many of those companies, free shipping is only available for customers who meet a spending minimum but, for others, all orders ship free.

What’s the psychology behind the free shipping strategy? It all comes down to the consumers perceived value of shipping. Prior to purchasing, a customer determines the overall value of their purchase by performing quick subconscious math, weighing the costs and benefits associated with buying the product. If shipping ends up being too expensive for an item that we could just as easily get at a nearby store, the math doesn’t add up and the cart is abandoned.

Another reason why free shipping is so powerful has less to do with the shipping part and more to do with free part. According to Dan Ariely, Professor of Psychology and Behavioral Economics at Duke University, people change their behavioral patterns when something free comes along. In his book, “Predictably Irrational”, Ariely gives us a real-world example of the power of free in action. When Amazon introduced free shipping on some of its European sites, the number of orders increased dramatically. However, not in France. That is because instead of being reduced to zero, the shipping price in France was reduced to only 1 franc (about 10¢ USD). Yet this minor cost was enough to prevent a jump in sales.

How Free Shipping Is Typically Used

Though free shipping is everywhere, companies use this tactic in various ways. Here are some of the different free shipping techniques you’ll typically see in action:

  • Free shipping on all orders – no qualifications or restrictions.
  • Free shipping for members or subscribers only.
  • Free shipping on orders that meet a minimum threshold.
  • Free shipping on qualifying items.
  • Free shipping to a brick-and-mortar store for pickup.
  • Free shipping for buying during a certain window.

Every e-commerce store is different, so the free shipping policy you select will be unique to your company. You’ll need to find the right strategy that keeps your customers happy, that drives sales, and that helps you recoup the costs for offering the program.

What Are the Benefits for Your Company?

Though the idea behind free shipping is sound, it isn’t fool-proof. There will certainly be times when the customer simply isn’t interested in adding more items to their cart to qualify for the discount. There are also cases where the additional revenue from those add-ons doesn’t actually cover the cost of shipping. Additionally, and most importantly, free shipping may fail to work if the consumer isn’t in the right phase of the buying cycle.

The buying cycle begins when the consumer becomes aware of a need that must be filled. Next, the consumer considers ways (products) to meet that need and starts to assess the pros and cons of different options. Eventually, the consumer settles on a particular product and makes the purchase. Free shipping comes into play during the final stage of this process – the purchase. If the consumer isn’t ready to make a purchase, the lure of free shipping may not be enough to close the sale.

On the other hand, when free shipping DOES work, it provides several benefits. Here is a quick summary of the potential benefits free shipping has to offer for e-commerce business:

  • Increase in sales We’ve already covered the fact that offering free shipping increases sales, but how exactly does it do it? For one thing, offering free shipping leads to a reduction in cart abandonment – it helps push potential customers over the edge to close the sale. It can also set your company apart from the competition and increase perceived value.
  • Increase in ARPU – Average revenue per user (ARPU) is heavily affected by free shipping policies, especially when you set a minimum spending threshold. In a way, free shipping is an upsell technique you can use to increase the size of an average customer’s order.
  • Increase in loyalty – Offering free shipping makes your customers happy, and a happy customer is more likely to come back. When you offer free shipping as part of a loyalty or membership program, it helps to increase repeat sales. Just take a look at what Amazon Prime has done to increase loyalty in the Amazon marketplace.

Free shipping is a tool e-commerce businesses can use to increase conversion rates and keep customers coming back, but it is not a perfect system. Keep reading to understand how to make it work for your shop.

How to Make Free Shipping Work for You

If implemented properly, free shipping could make a big difference for your business. You’ll need to design a free shipping policy that suits your business and ensures that you recoup the costs of shipping on most orders.

Here are some simple steps to follow when designing a free shipping policy for your business:

  • Calculate how much you need to sell to recoup the cost of shipping. Spend some time running the numbers to see whether you can make up the money you lose by covering the cost of shipping yourself. This will help you determine whether you can offer free shipping for all orders or if you need to add some stipulations such as a minimum purchase.
  • Decide on a minimum purchase threshold. If you run the numbers and see that you could be losing too much money by offering free shipping on all purchases, consider adding a minimum spending threshold. By requiring customers to spend a hypothetical $50 or $100 to qualify for free shipping, you can guarantee that your profit margin on those orders will be higher and consistent.
  • Use free shipping as an incentive during short-term campaigns. If it simply isn’t feasible for your site to offer free shipping all the time, you can still use it as a promotional tool for short-term marketing campaigns. Seasonal sales and new product releases are excellent opportunities to drive sales and adding free shipping as a bonus can boost sales even further.
  • Consider offering free shipping on certain items. If your business sells a wide variety of products, the profit margins are going to be different for different goods. You can choose to offer free shipping only on items where the profit margins line up or on items you want to sell more of.
  • Offer free shipping as a benefit for membership, subscriptions, and loyalty programs. Membership and subscription programs are a great way to get repeat business, but you need to offer your subscribers benefits – free shipping is a good one.
  • Limit free shipping offers to returned items. If you’re not in a position to offer free shipping on all of your orders, offering it for returns is still a step in the right direction. It gives your customers peace of mind knowing that if they are unhappy with the product, it won’t cost them anything to return it.
  • Use free shipping as a loss leader. The definition of a loss leader is a product sold at a loss to attract customers. However, it can also be applied to free shipping. For example, if you owned a subscription based e-commerce business, you may find that offering free shipping on the first order may increase conversions. Whereas you can make up the cost of shipping due to the higher average lifetime value of the customers (since they’re recurring orders).

Any of these free shipping strategies might work for your business, but you’ll have to take the time to choose the right one. To give you an idea what these strategies look like in action, here are some statistics from companies that have successfully implementing a free shipping strategy:

  • According to research published by CNBC, offering free shipping on returns (a policy offered by Zappos) boosted sales by 357%.
  • Red Door saw a 90% increase in sales after establishing a minimum purchase threshold – free shipping on orders over 75%.
  • Research from Marketing Land revealed that 9 out of 10 customers were more likely to do their shopping online when offered free shipping. Of those, about 30% made weekly purchases.
  • According to David Bell of Wharton University of Pennsylvania, customers find a free shipping offer with an average savings of $6.99 to be more appealing than a product discount worth $10.

As you can see, there are many ways to work free shipping into your business plan. It may take some work to find the right tactic, but it is definitely worth implementing.

Simple Tips for Implementing a Free Shipping Strategy

Now that you have a better understanding of the psychology behind free shipping and the benefits of offering it to your customers, you may be wondering where to start. Here are some simple tips to help you implement a free shipping strategy for your online business:

  • Calculate your free shipping threshold. This number should be close enough to what your average customer typically spends but enough to cover your costs. To determine this number, look at data from your last 6 to 12 months of sales to find the sweet spot between setting your spending threshold too high and setting it too low.
  • See what your competitors are offering. Though the most important thing is to make sure you’re not losing money, you also want to see what your competitors are doing because you want to give potential customers a reason to choose you over them.
  • Do a test run before committing to a free shipping strategy. You don’t have to commit to any free shipping tactic right away – you can run a promotion for two to four weeks to test out your free shipping policy and then evaluate the data to see what works best given your unique e-commerce scenario.
  • Don’t forget about returns. Returns are a necessary evil in the world of e-commerce, and it is your challenge to find the balance between keeping your customers happy and keeping your business alive. Think about the options such as free returns, customer-financed returns, or a flat rate for customer returns.
  • Once you settle on a free shipping policy communicate it clearly. Customers want to know exactly what they’re getting when they make a purchase. Think of it less like a policy and more like a marketing tactic. Make sure everyone that lands on your site is well aware that you offer free shipping.
  • Work the cost into your product prices. If you really want to offer free shipping but you can’t afford to eat the costs yourself, you might be able to work the cost (or at least some of it) into your product pricing. Just make sure you don’t go so high that you lose out to your competition.

Though including free shipping on your e-commerce store has the potential to increase sales and customer loyalty, it might not be right for your business at this time. If your profit margins are already low, for example, adding free shipping to the mix may cut your profits even more or negate them entirely.

The Bottom Line

Free shipping is an excellent marketing tool that has led to incredible benefits for many e-commerce businesses. Before you tack on a free shipping policy for your own business, however, you need to weigh the pros and cons – you also need to think practically about whether it will work and how to implement a free shipping policy.

When considering a free shipping policy, there are three questions you need to answer:

  1. Are your margins high enough to cover the costs?
  2. Will you still be making a profit once all costs are covered?
  3. How do you plan to use free shipping as a marketing tool?

Answering these questions will help set you on the right path toward determining whether free shipping could be a beneficial tool for your company. If you decide that it is, take the time to choose the best policy and follow the tips you’ve received here to start implementing your policy.

Need great software to run your warehouse? ShipHero is a leader among warehouse management software companies. See what we can do for you here.

12 E-Commerce Trends to Watch Out for in 2019 From the Ecommerce Fulfillment Experts

12 E-Commerce Trends to Watch Out for in 2019 From the Ecommerce Fulfillment Experts

The ecommerce fulfillment experts at ShipHero on the top trends for 2019

The e-commerce industry has experienced unprecedented growth over the past decade and it shows no signs of slowing down. Research shows that e-commerce could account for $4.88 trillion in global retail revenue in 2021. But what factors are driving this change?

Today we’re going to be taking a look at the 2019 e-commerce trends that account for this massive growth and how you can utilize them for the benefit of your own business.
Let’s dig in…

1. Customer service is becoming more automated.

An e-commerce business can live or die by its customer service strategy, and advancing technology continues to provide new ways to engage with and meet the needs of your customers. Chatbots, for example, are a new trend that enhance the customer experience with minimal cost when compared to traditional customer service teams.

If you’re unfamiliar, chatbots are live chat services that run via an algorithm. Think of it as a “if the customer says X, the chatbot says Y”. Statistics show that the majority of consumers find the greatest benefit of chatbots to be 24-service. While these automated chat services are still in their infancy, they still give e-commerce businesses the ability to scale certain aspects of their customer service department.

If you’re interested in integrating a chatbot into your store, there are hundreds of different services and chatbot use strategies, based on your e-commerce platform, to fit your needs.

2. Direct-to-Consumer models are on the rise.

Consumers want to receive their orders quickly, correctly, and at the best price possible. A tactic many e-commerce companies are starting to use is direct-to-consumer sales. This model eliminates middlemen such as wholesalers and retailers while building a closer relationship with the customer.

Studies show that 52% of consumers will go directly to a businesses website in order to purchase their products. Why? Much of the reason comes down to the relationship that businesses are able to create selling direct. All channels — from marketing to shipping — are consistent under the umbrella of the brand itself. Businesses in all industries are taking notice of the direct-to-consumer rise. Tesla cut out car dealers in order to sell direct to their customers, Nike is predicted to grow their direct sales to $16 billion in 2020 and, remarkably, 61% of wine sales in 2017 came from direct-to-consumer sales.

To succeed in direct-to-consumer sales you need a top-notch ecommerce fulfillment partner. ShipHero can help.

3. Voice-enabled technology will become the new battleground for e-commerce.

According to new research, over 35 million Americans used a voice-activated device at least once a month in 2017 – this number represents a nearly 130% increase over 2016. Smart home assistants and voice recognition systems are on the rise for various aspects of home automation, and 2019 will see a rise in the use of these systems for e-commerce. E-commerce giant Amazon is betting heavily on it. According to an Amazon press release, customers use of Alexa for shopping more than tripled this year compared to last year. The reasoning behind its growth is simple — consumers are looking to technology as a way of gaining back their time. Rather than having to click around in search of an item you’re out of, you can simply request it from Alexa in seconds. The algorithm will scour your past purchases to make a relevant product suggestion and after you confirm, the order is placed.

4. Analytics will continue to advance.

Integrated technology and analytics platforms such as Google Analytics provide e-commerce businesses with valuable data about the performance of their customer base, sales, and products. However, current analytics is almost exclusively used to show what has happened in the past and not what could happen in the future. The relatively new field of Predictive Analytics provides e-commerce businesses with a deeper understanding of customer habits and preferences by analyzing past data and using it to help increase conversion rates. The best current representation of predictive analytics in action would be the rise in product recommendation sections on e-commerce sites. These products are not random. More often than not, they are unique to the visitor based on viewing habits, past purchases, and more. As technology advances further, machine learning will allow for even greater predictability and e-commerce personalization.

5. Amazon will continue to dominate the e-commerce market.

Over the years, Amazon has become an e-commerce powerhouse. In 2018 they dominated the industry with record profits and often hover around the most valuable company in the world. In 2019, it is likely that Amazon will continue to dominate the market, which leaves smaller companies with just one option – to find new ways to remain competitive.

The goal is not to compete directly with Amazon but find ways to integrate it into your e-commerce model by using their marketplace for your own products or fill in the gaps that Amazon has. One of the best ways you can do this is by building a remarkable brand on your own platform. Amazon, while widely used, doesn’t have the ability to offer a fully cohesive brand because they sell products from other vendors. Think of it as the difference between your local grocery store and Trader Joe’s — which has a greater brand appeal? By selling your products direct, as mentioned above, you have the ability to create a more consistent brand experience, which allows for a stronger relationship between your business and the customer.

6. The middleman will slowly disappear.

Each year, the supply chain for e-commerce businesses grow shorter. This no better visualized than in the meteoric rise of B2B marketplace, Alibaba. Today, all you need is an idea and some cash (or credit) to turn it into a reality. Don’t have access to investment capital? You can still bring your idea to market with sites like Kickstarter and Indiegogo. The middlemen and third-party distribution channels, are starting to fade away as the need for their services becomes obsolete.

7. Mobile payment platforms will become the norm.

Though there are still situations where cash is king, e-commerce platforms will always rely on digital payment platforms. However, the type of digital payment will begin to shift. As mobile traffic accounts for nearly half of global web traffic, it is estimated that global mobile payment revenue will rise from $450 billion in 2015 to over $1 trillion in 2019.

As an e-commerce business, review your analytics to see where your traffic and conversions are coming from. Are you seeing an upward trend in mobile visits? Consider implementing Apple Pay and Android Pay to allow for seamless payment. Remember this: Consumers are more likely to convert when there are less steps to completing a purchase.

8. Subscription services will continue to expand.

Over the past few years, subscription boxes like Dollar Shave Club have become extremely popular. While this realm of e-commerce began with the intention of delivering highly used consumer goods (e.g. meal delivery boxes) they have expanded to include almost every industry imaginable — from coffee to clothing. From 2014 to 2017, the subscription box market has grown by an incredible 890%. This growth is due to two factors. First, businesses are looking for every way possible to increase customer lifetime value by turning products into services. Second, customers are looking to receive highly-used products on a regular basis without having to put extra effort or thought into the purchase.

9. Social media will continue to drive sales.

In recent years, social media has become the number one channel for e-commerce businesses to grow and develop their brand. This, in turn, has led to an increase in sales. According to data from BigCommerce, online stores that have a social presence have 32% more sales on average than stores that don’t. Why is this? It comes down to the ability to build a relatable brand that stays top of mind. Also consider that organic social costs are relatively minor in the world of digital marketing and yet they play the biggest factor in building a relationship with customers.

10. Shoppable posts will become more common.

Social media platforms like Instagram already provide excellent opportunities for brands to convert followers to customers, and we’ll continue to see this as a major trend for 2019. Research shows that 80% of Instagram users already follow at least one business and 60% use Instagram to find new products. Furthermore, 75% of those who use the platform to find new products end up engaging further with the brands they discover. To put this trend to work for your business, upload your product catalog to Facebook. This will allow you to “tag” posts with products that will lead followers (Facebook and Instagram) back to the page on your site where they can make a purchase.

11. Augmented reality will change the way customers shop.

One of the downsides of shopping online versus in a brick-and-mortar store is that you can’t physically try the product before you buy. One way online retailers have started to bypass this hurdle is by incorporating mixed reality technologies into their e-commerce platform. For example, IKEA’s Place app makes it possible for customers to catch an augmented reality-powered glimpse into what the products would look like in their own homes. Though AR and VR technology isn’t a perfect fit for every e-commerce industry, it could help some retailers stand out from their competitors. To best analyze whether your business could benefit from augmented reality, ask yourself the following questions…

  • Is there a need to see the product in a certain environment?
  • Is there a benefit to the customer seeing or comparing different variations of the product in person?
  • Are there details of the product that need to be thoroughly examined prior to purchase?

If you answered “yes” to any of these questions, consider integrating augmented reality into the future of your e-commerce store. With e-commerce giants like Shopify investing in it for their customers, it’s becoming easier than ever to integrate into your own site.

12. International e-commerce will continue to expand eastward.

According to recent research, nearly 4 billion individuals (just over half the world’s population) can now be classified as “middle class”. Of that number, almost 9 in 10 of the next billion middle-class consumers will be Asian. With more money comes more purchasing power. Though expanding into international markets has its fair share of challenges, it does present a gigantic opportunity for some companies.

If you’re considering expanding into international markets, understand how you can properly serve this newly evolving Asian middle class. To put this opportunity into perspective, consider that research shows the middle class markets in China will account for $14.1 trillion and India will account for $12.3 trillion in 2030.

Final Thoughts

In the end, a successful e-commerce business is one that provides a valuable product or service and creates an overall satisfying customer experience (from interacting with the brand to using the product). Don’t feel compelled to utilize all of these trends in the coming year. Rather, review these trends and start to think about the current state of your own business to understand what areas of your supply chain or marketing strategy provide the most potential for growth.

Holiday Shipping Season Kicks Off Early

Holiday Shipping Season Kicks Off Early

Based on ShipHero’s sales volume, today, November 16, appears to be the unofficial kickoff of the holiday shipping season for DTC brands. It was ShipHero’s busiest shipping day ever. Three of our brands shipped over $1 million of goods today. Total volume was up 14% from last Monday and far eclipsed Cyber Monday of 2019.

ShipHero is here to handle your ecommerce order fulfillment, handling even the busiest days smoothly. Find out more here.

ShipHero Ecommerce Order Fulfillment Trends – Week in Review For November 23, 2020

ShipHero Ecommerce Order Fulfillment Trends – Week in Review For November 23, 2020

ShipHero provides warehouse management software and outsourced ecommerce order fulfillment to over 4,000 brands, processing an annual gross merchandise volume (GMV) of over $5 billion.
In an effort to provide useful data to the DTC community during Covid and the rapid changes occurring in our industry, we are sharing some of the broad segment trends from the products on our platform. Here is the data for the week ended November 23, 2020:

ShipHero Ecommerce Order Fulfillment Trends for the week ended November 23, 2020
More charts available on data.shiphero.com.
Do you find this information useful? Let us know! Twitter: @weareshiphero or Email al@shiphero.com.