Feb 23, 2021 | Best Practices, Blog, Fulfillment, Warehouse Management Software
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 Multimodal and Intermodal Shipping. What is multimodal and intermodal shipping? What are the pros/cons of each? How do they compare/contrast and which one right for my business, if any? Let’s dive in.
(Check out our previous articles on Dropshipping, FaaS, and FBA/FBM. And be sure to check back for future articles where we’ll cover even more fulfillment methods)
What is Multimodal vs. Intermodal?
Multimodal transport is also known as ‘combined transport’ because the products are moved using different modes of transportation along the fulfillment journey, but under the terms of a single contract and facilitated by a multimodal transport operator (MTO). Whether by road, sea, air or rail, or a combination of them all, the MTO is liable for the entire journey from beginning to end, although they often use sub-contracted carriers that specialize in each mode of transportation.
Intermodal transport involves the use of an intermodal container which carries products throughout the entire fulfilment journey; regardless of the type of transportation, the same intermodal container will be offloaded from one method and loaded onto the next without ever moving the product inside.
The main difference between multimodal and intermodal transport is: 1) how the product is transferred between transportation modes, and 2) how the contracts are made with each carrier.
Product Transfer
With multimodal transport, the products or commodities are loaded and unloaded into transportation-specific containers when transferring, say, between sea and rail, rail and ground, etc. Excessive product transfer may result in product damage or loss; you may have heard the phrase “fallen out of a truck” when asking your relative about an expensive purse they clearly can’t afford. In fact, product damage during transportation costs up to $0.48 per pallet annually, which certainly adds up over time with larger supply chains.
This is the benefit of intermodal transport, because the products are loaded into a single intermodal container to be used for several modes of transportation. The products themselves will remain secure as the container itself is loaded and offloaded from a truck, train, ship or air freight.
Using one intermodal container allows for safer packing of products, which results in less damage and loss, as well as quicker and more efficient movement between freight methods. For this reason, intermodal transport tends to be less costly than multimodal transport.
Contracting Carriers
During a multimodal transport, the shipper creates a single contract with the Multimodal Transport Operator (MTO), which is wholly responsible for the cargo from the origin to the end destination. This allows the shipper to simplify the communication process by just working with a sole transport provider or agent. Also, the simplified communication allows for more accurate shipping updates, tracking notifications, and opportunities for optimization. On the other hand, the shipper must rely on the MTO to select the best/cheapest routes for their cargo, and flexibility is limited.
Conversely, during an intermodal transport, the shipper must create multiple contracts with individual carriers. While there is only one intermodal container, it will be passed between many liable parties, increasing the complexity for the shipper in terms of communication and optimization across carriers; however, the shipper has more flexibility to independently choose each leg of the fulfillment journey.
In summary:
Multimodal Transport
- Multiple carriers, one contract with MTO
- Product transfers containers between transports
- Enhanced communication and optimization, but heavy reliance on MTO routes
- More chance of product damage and loss
Intermodal Transport
- One intermodal container, multiple contracts with carriers
- Products remain secure in single shipping container
- More flexibility to choose your own routes along fulfillment journey, but more complexity for the shipper
- Less chance of product damage and loss
In conclusion, shippers must determine if multimodal or intermodal is the right choice given their circumstances, i.e., is your product fragile or at risk of damage/loss, do you have the resources to schedule and manage carrier contracts, etc. Thankfully, smart fulfillment providers and 3PLs like ShipHero can help you determine the best way to ship.
Be sure to stay tuned to our Shipping Methods Explained series as we deep dive into the specifics of fulfillment.
Learn more about ShipHero’s industry-leading warehouse management software.
Feb 24, 2021 | Best Practices, Blog, Warehouse Management Software
Look at those gains, bro. Over the last year, the dietary supplement industry has boasted bulging sales growth of 40%, outpacing overall e-commerce by 12%, and they swear it’s all-natural…
The pandemic has certainly brought more awareness to immunity, and overall health and wellness; in fact, 77% of American adults consume dietary supplements, and the average American spends around $56 per month on dietary supplements.
Of course, there are other ways to increase immunity and health, such as at-home workout products and healthy meal kits, but those haven’t grown at nearly the same rate as supplements. So that begs the question…
How have supplement companies dominated e-commerce?
After searching through the supplement industries’ gym bag of secrets, we found that the true secret to their success with the injection of three strategies:
(Serving size: one scoop of each)
- The Subscription Model
- Bundles and Stacks
- Smart Fulfillment
Disclaimer: Ingestion of the following strategies will give you and your e-commerce business a sick pump.
Strategy 1: The Subscription Model
The Subscription Model, or “Subscribe & Save”, is where customers subscribe to weekly, monthly or seasonal purchases and receive discounts upwards of 15% off. Think content streaming services like Netflix or Hulu, recurring subscription box companies like BirchBox, and more recently, supplement and vitamin companies.
Companies that employ the subscription model offer recurring products or services, rather than the traditional, one-time transaction. Brands and businesses that have utilized this approach have reported better customer relationships, improved aggregate data, and more diversity in product offerings.
Turn Customers in Subscribers
Most large companies report that new customers only generate 15 to 25% percent of their revenues, which means that return customers generate the bulk of the revenue. Focusing on return customers and subscribers reduces acquisition costs of targeting new customers, while cultivating brand loyalty.
Gather More Fruitful Customer Data
As reported by Shopify, modeling and storing subscription data allows your company to better engage with your audience and create targeted content along the customer journey.
In fact, many large brands develop separate marketing strategies for subscribers and non-subscribers, as well as strategies to convert non-subscribers to subscribers, including email campaigns and targeted discounts for subscription and account creation.
Sell the Same Product in Multiple Ways
The subscription model gives brands the creative freedom to understand how their customers would prefer to engage with their products and services.
Beyond the price discount, supplement companies could offer subscribers access to free delivery, early bird offers, free trials or samples, gifts with purchase, and much more. As you learn from your subscribers, you are free to adjust your product offerings to better meet their needs!
If you want to learn more about how to create a successful subscription model, check out our blog.
Strategy 2: Bundles
Bundles, or as they’re called in the dietary supplement industry — stacks. Supplement stacks are a bundled variety of supplements for one specific health goal; for example, popular supplement stacks are for the ketogenic diet, weight loss, muscle gain and more.
Bundling products allows companies to cross-sell, provide a more convenient shopping experience, and give customers more flexibility.
Cross-Sell
Bundles are the perfect way for supplement companies to cross-sell products. By intelligently combining multiple products into one item, supplement companies bundle their popular and top-selling supplements with products that normally might not sell on their own (looking at you L-Carnitine). Also, if you have multiple flavors of a gut-drink for example, you can bundle together a variety pack!
Convenience
With just one click, customers can purchase all the supplements that they need. And if you are using the subscription model, their supplements will be auto-fulfilled based on their desired cadence!
Flexibility
Some supplement providers like G Fuel offer their customers the flexibility of building their own bundles — BYOB but healthy!
Strategy 3: Smart Fulfillment
Any supplement company can promise a lucrative subscription model with convenient and flexible bundling options; but in reality, these are extremely complicated to pull off without the right inventory management and order fulfillment process.
In fact, most 3PLs and fulfillment providers simply don’t offer the customization and bundling options that supplement companies need. That’s why you need to supplement your business with the right fulfillment provider.
Convenient Bundling
Through traditional fulfillment methods, creating and shipping customized bundles, kits or bulk orders can be highly complex and downright costly. By offering a subscription service, your brand can sell a variety of items in a variety of ways, so brand owners must be able to group orders quickly and pick a lot of the same product at once, making the fulfillment process quick and simple.
That’s why ShipHero is dedicated to supporting our subscription-based and bundle supplement companies with our newest capability, BulkShip!
BulkShip is an intuitive interface to design preassembled bundles of products, such as a BodyBuilding Stack or a more flexible bundle that would get assembled at fulfillment – like the Build-Your-Own-Bundle option.
Safe Storage and Transport
Supplements must be stored in cool, dry areas, or they risk discoloration, odor, and deterioration. Make sure that your fulfillment provider can take the necessary precautions to protect your inventory in a safe, secure, and climate controlled environment, and take care during the transportation.
Reliable Shipping
Supplements and vitamins are taken regularly and on set cadences, so having a reliable shipping carrier with built-in resiliency is of the utmost importance.
This year has shown that even the most popular carriers, FedEx, UPS and Amazon, are all subject to delays and unreliable shipping times. That’s why ShipHero has seen a huge surge of supplement companies looking to diversify their shipping methods, so that their customers and subscribers receive their supplements when they’re supposed to.
Feb 26, 2021 | Blog, The Packet
Front and Center
Dirty Porch Pirates
E-commerce has certainly been in the spotlight this past year, but who has really been stealing the show? Thieves, of course. Package theft is on the rise, as illustrated in a recent report, which showed that approximately 43% of Americans reported having a package stolen, a 7% increase from 2019. Of these theft victims, 64% of them say they’ve had packages stolen more than once. What’s to account for the rise in theft?
More Opportunity
Approximately 59% (+5% YoY) of Americans receive a package at least weekly, and 10% (+5% YoY) receive a package daily. That’s way more packages being left on the doorstep, and although the average value of the items has decreased, this does not seem to stop porch pirates from throwing up their hood and grabbing what they can.
http://https://www.youtube.com/watch?v=a_TSR_v07m0
ICYMI: Watch the amazing Glitter Bomb 2.0 vs Porch Pirates video
Who’s liable?
“YOU ARE GOING TO PAY FOR THIS!” you may have exclaimed to the heavens when you watch a thief grab your $3 toe clippers on your home security system. “But, who actually pays for this?”, you may have wondered as you pace around with your hawk talons clacking against the hardwood floors. (true story)
Well the answer is, if the shipper says that the package was delivered and the buyer states that it was not received, the seller is no longer liable. However, in most cases of a stolen package, the retailer or seller issues a refund or agrees to replace the item to preserve their customer experience. Amazon’s A-Z Guarantee program pretty much guarantees that purchases made from their retail partners will almost always be refunded or replaced if the package goes missing.
Some businesses may ask customers to file a claim with the shipper before issuing a refund or replacement.
What about package insurance?
For sellers, traditional shipping carriers such as UPS, USPS, and FedEx offer optional shipping insurance for a fee; however, this only covers so much. FedEx caps their liability at $100 and will only increase this if the package is packed and shipped at a FedEx location. Even then, it only increases to $1,000 for items like jewelry, artwork, collectibles, and antiques.
What can brands do?
Ultimately, the brands are responsible for making sure that their products reach their customers. So besides installing guard dogs as a nice ‘gift with purchase’, the most effective way that brands can combat package theft is to offer customers more ways to receive their products. The most common have been curbside pickup and local delivery. You can also schedule for in-person delivery and require signatures.
When deciding to outsource your fulfillment, be aware of your 3PLs Terms and Conditions surrounding stolen goods, and ask what your fulfillment provider can do. For example, in the case of stolen goods, ShipHero files claims with Carriers on your behalf, up to a certain value. Read more about ShipHero Fulfillment’s stolen goods FAQ here and our T&Cs.
Back of the Packet
Ammonia Side Here
According to the International Maritime Organization, international shipping contributes ~3% of annual carbon-dioxide emissions. To combat this, shipping companies seek to replace petroleum with a new fuel source, ammonia (NH3).
Why ammonia? Well… *deep breath in* this colorless fuel emits no carbon dioxide when burned, It’s abundant, it can be made using renewable electricity, water, and air, both fuel cells and internal combustion engines can use it, it doesn’t have to be stored in high-pressure tanks or cryogenic dewars like hydrogen, and it has 10 times the energy density of a lithium-ion battery.
The only problem is that no shipping carriers today are equipped to use ammonia as a fuel source. But by 2024, Viking Energy is set to become the first shipping vessel propelled by ammonia fuel cells, powered by several Norwegian-based companies.
NASA Perseverance and an Early Easter
NASA successfully landed their Mars Rover, Wall-e — I mean, Perseverance on the Red Planet last week. The videos of the landing immediately went viral, and in typically nerdy fashion, people began uncoding Easter Eggs hidden throughout the footage. In one such hidden message, the parachute was allegedly stitched in binary code that read “Dare Mighty Things”, a quote from President Teddy Roosevelt.
USPS Unveils New Trucks
And they’re cute as hell.
ShipHero News
NEW CASE STUDY ft. Spotted by Humphrey
What would you do if your dog became an internet sensation? Well, that’s what happened with ShipHero customer Yong-Soo and his French Bulldog, Humphrey!
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.
Learn how they turned Instagram fame to a successful ecommerce business with our newest doggone ShipHero Case Study.
Gains, Bro
Need a sick pump for your e-commerce business? Learn how the dietary supplement industry used three simple strategies to get bulging revenue gains of over 40% this year, outpacing overall e-commerce by 12%… and they say it’s “all-natural”.
Multimodal vs. Intermodal Transport
These days, your products probably travel more than you do… But don’t be jealous, multimodal and intermodal fulfillment options are becoming more common as technology allows for seamless communication between carriers. On our Shipping Methods Explained series, we deep-dive into Multimodal vs. Intermodal fulfillment options, so you can determine if it’s right for your business.
ShipHero’s Innovation Wheel: Automation
Are you bogged down by the day-to-day tasks of running a business, desperate for time to focus on your strategy? Automation is the answer you need, and your fulfillment provider should be just the one to provide it. In ShipHero’s Fulfillment Innovation Wheel series – Automation, we give a glimpse into our Automation Cookbook to show you how automation can improve your speed and efficiency.
Mar 1, 2021 | Blog, Warehouse Management Software
Today we venture deep into the minds of our customers to answer the age-old, controversial marketing question: does offering a “free gift with purchase” actually do anything?
Spoiler alert: yes, it does… but it doesn’t have the effect that you may expect.
Using case studies and scientific research, let’s look at the psychological effects of the free gift with purchase (GWP) to determine if it’s right for your business, or if there are more effective promotional campaigns.
The “Free Gift With Purchase” Effect
First, why do companies provide a free gift with purchase? What are they trying to achieve?
Online retailers that offer a free gift with purchase (GWP), which is less than 50% of companies, believe that the added value of a free gift will inspire repeat purchases, increase brand loyalty, and stimulate social and word-of-mouth advertising. Companies that offer free GWP include:
Kinder (confectionary) — free toy
Eileen Fisher (apparel) — free organic ditty bag
Bentley (cologne) — free chrome Bentley key ring
And more…
These case studies have been reported by companies that specialize in creating customized GWP for their clients, but do the benefits hold up under scientific scrutiny?
Does GWP Have Scientific Backing?
The answer… yes, but not how you’d expect.
As retailers constantly innovate promotional offers to provide more value to their customers, the “two items for the price of one” sales method has been framed using two distinct promotional tactics: the free gift, and the bundle… and it turns out how you frame the exact same deal actually has different psychological effects on your consumers.
For example, if your business sells household supplies, your promotions could be either:
- “Buy a mop for $20, and get a bucket free!” — the free gift
- “Buy a mop AND bucket for $20!” — the bundle
Studies have shown that bundle offerings and free gift offerings tend to influence the perceived value of products themselves, rather than their opinions of the company offering the gift. Also, the promotional frame has an impact on product return rates!
Effects of Gift with Purchase
With a free gift promotion, the “free item” or “gift” is perceived as less valuable by the customer, while the focal item is valued more. Therefore, customers are less likely to buy the free item after the sale, but more likely to purchase the main item.
Of course, the likelihood of repurchase is directly related to how effective the gift promotion is in increasing the value of the main item, so if that value increases to surpass the customer’s intrinsic repurchase threshold, then they will buy again.
Additionally, with a free gift promotion, customers are less likely to return an item, because the perceived loss of giving back a “free” item is too high.
Effects of Bundle
In a bundle promotion, the opposite is true. The main item is perceived as less valuable, while the bundled item is valued more. Therefore, customers are less likely to purchase the main item as a single item, but the supplementary item is more likely to be purchased as a standalone
With a bundled promotion, customers do not mind returning an item included in a bundle.
TLDR; offer free gift promotion if you want to reduce return rates and sell more of the main product at the expense of the gifted product; offer a bundle if you want to sell more of the supplementary product at the cost of the main product.
In Conclusion
The proven effects of “free gift with purchase” promotion are not proven to inspire net-increase in repeat purchases; rather, the promotion should be used to increase/decrease the perceived value of one focal item at the expense of a supplementary item. Also, the free gift promotion reduces actual return rates as well as the customer’s desire to return.
HOWEVER, these studies imply only the probability that customers purchase again, and this likelihood varies based on the personalization and relevance of the free gift and/or bundle.
That’s why there exists a vast amount of consumer data analysis tools and companies that make large profits off of customized gifts with purchase.
P.S. Children are the Future… of GWP
There does exist a customer group where the free gift with purchase has had immense, proven success: with products geared towards children.
You’re certainly familiar with the Happy Meal toy, which was so effective at marketing to children that McDonald’s was sued by a California mother in 2010 who claimed that the fast food chain used toys to unfairly attract children.
In the listed case study above, Kinder successfully offers a free child’s toy with purchase of chocolate, and there exist highly lucrative marketing teams like Kidoz that offer safe advertising and Gift With Purchase creation for children.
The positive results from a child-facing GWP campaign stem from two main factors:
- Children perceive a free gift as more valuable than adults
- Because adults are the ones delivering the gift to their child, the child’s joy adds to the value of the product for the parent
We’re not saying all GWP campaigns should be geared towards children, it’s just that these are the only ones with a proven record for having net-increases in repeat customers and word-of-mouth advertising (they’re lovin’ it).
Mar 4, 2021 | Blog, Warehouse Operations
Want to know the most effective and the most important step towards optimizing your warehouse output?
There are plenty of opinions on the internet from reliable experts, with “50+ tips for warehouse efficiency”, that cover resolving certain issues or improving minor practices, but we wanted to cut through the noise to find the ONE suggestion that will have the most impact on your supply chain, inventory management and order fulfillment.
We searched for the single pearl of wisdom amongst many best practices and our own warehousing innovations. Notable suggestions to boost warehouse productivity included:
- Create a picking path by location
- Organize bins by popularity
- Separate bulk items from small picks
- Optimize stocking levels for easy inventory rotation
- Incorporate employee feedback to identify bottlenecks
- Reserve capacity for last-minute emergencies
- Track shipping status to predict inventory requirements
While effective, each of the aforementioned suggestions rely on one major capability, and without it, your supply chain will NEVER improve productivity. So, what is the #1 capability for improving your warehouse productivity?
Measure & Benchmark Your Supply Chain
Simply put, your business must have the right tools in place to measure and access vital data relating to the productivity of your warehouse in each departmental area. The quality of the information you receive directly impacts how effectively you set realistic productivity goals and speed up work pace in a sustainable manner.
Picking, packing, and inventory replenishment are the three areas of focus when beginning to make systemic improvements to your warehouse. It’s important not to measure everything at once; rather, start by identifying your biggest cost-drivers or bottlenecks and address those first, such as labor hours, units of work, etc. In each area of focus, ask yourself the following questions:
Picking
Picking is the process of walking through the warehouse and selecting products that constitute one or more orders. You can begin measuring this process by asking the following:
- Picking time and routes: Do you know how long it takes to pick items and complete orders? What routes to pickers take? Are picking routes efficient?
- Worker productivity: Who are the workers that are more productive and less prone to errors? Are you compensating these workers accordingly? Are you properly staffed?
- Warehouse layout: What are your most-picked products or combination of products? Do you adjust SKUs based on sales velocity to reduce picking time?
- Employee suggestions: Are you listening to your employees? Do you have a place to log their suggestions and take action?
Packing
Packing is the process of verifying the order contents and putting the ordered items into the shipping package. You can begin measuring this process by asking the following:
- Overall evaluation: Every operation is different. What are the major factors that make or break the speed of your packing operation?
- Workstation design: Is your workstation designed as efficiently as possible? Are there improvements to be made to the top size or worker spacing?
- Material availability: Are cartons, inserts, and any personalization items available and sufficiently stocked at each station?
- Automation opportunity: Are there processes that can be automated, such as envelope insertion, box building, etc.
- Employee suggestions: Are you listening to your employees? Do you have a place to log their suggestions and take action?
Inventory Replenishment
Inventory replenishment is the process of restocking bins with products so that orders can be picked, and errors in replenishment can result in serious cascading bottlenecks in the picking and packing processes. You can begin measuring this process by asking the following:
- Replenishment levels: What inventory levels trigger your restocking process? Are these built to scale with bulk orders?
- Distribution duration: Is your replenishment process intelligently informed by manufacturing and distribution times? Does your network of warehouses communicate to overcome any unexpected shortages?
- Employee suggestions: Are you listening to your employees? Do you have a place to log their suggestions and take action?
The most efficient supply chains run on information. The key to improving warehouse productivity is asking the right questions, measuring the actual outcome, and planning for incremental improvements. Without measurements and benchmarks, you will be stuck reacting to issues, rather than proactively planning and systematically working towards a better warehouse.
ShipHero’s HeroBoard
ShipHero WMS constantly strives to provide you with the information that you need to make intelligent decisions regarding your warehouse management and order fulfillment. That’s why we built the HeroBoard — a personalized dashboard designed to give an at-a-glance view of your fulfillment operations.
The HeroBoard overview dashboard refreshes every 30 seconds for real-time monitoring of your shipments. Want to get into the specifics? HeroBoard users can easily drill down into specific order information for better customer service and flexible decision-making.
The Live Shipping Board is the newest update to the HeroBoard that gives you a view into the stats for each packer, remaining orders, and more!
Schedule a demo today.
Mar 5, 2021 | Blog, The Packet
Front and Center
Shipping’s Decarbonization Starts Now
Sustainability has reared its beautiful head towards the supply chain industry, and started with its biggest polluter, ocean shipping. In what has been dubbed shipping’s decarbonization ‘moonshot’, a $5 billion proposal has been formally sent to the International Maritime Organization (IMO), calling for mandatory contributions from every shipping company in the world at approximately $2 per tonne of bunker fuel.
The proposal, backed by all major global shipping associations, aims to quickly advance R&D for zero-carbon maritime technologies and the development of working prototypes, as well as CO2 reduction projects in developing countries.
In a joint press release from nine of the world’s largest global shipping companies, they state “zero-carbon technologies do not yet exist that can be applied at scale to large ocean-going ships. A well-funded R&D programme, which the industry has agreed to pay for within a global regulatory framework, needs to commence immediately under the supervision of the UN IMO.”
Don’t Call It a Tax
Since the European Parliament voted to include the shipping industry in their 2022 carbon market, and also backed a -40% greenhouse gas efficiency target to be reached by 2030, the US and China have also been evaluating similar emissions trading schemes.
Shipping associations hope that this proposal will curtail regional legislation efforts that would impose higher carbon taxes and more stringent regulation. Some environmental groups have claimed that this “moonshot” and $5 billion figure is much too small, and merely a tactic to avoid government interference
IT’S HAPPENING!
Yes, it is. With this proposal, the shipping industry must pay, one way or another, for their carbon footprint. It won’t be long for the spotlight to shine on the rest of the supply chain, and it is put under the same scrutiny as shipping. The proposal backers hope to get it ratified at the next IMO’s Marine Environment Protection Committee (MEPC) later this year. If you haven’t already looked at the sustainability of your supply chain, now is the time.
Back of the Packet
Sweet Relief Package
On Wednesday, the final version of President Biden’s $1.9 trillion coronavirus relief bill (AKA the American Rescue Plan Act) was approved by the House and sent to Biden’s desk for signature.
The American Rescue Plan will send $1,400 in direct payments to those with an annual salary up to $75,000, and it also includes:
- $350 billion for state and local governments aid
- $14 billion towards vaccine distribution
- $130 billion to schools for safe reopening
- $300 billion in weekly jobless benefits through September
- Expanded tax credit of up to $3,600 per child, which could raise 4 million children out of poverty.
Aaahhhh, sweet economic stabilization.
Unwelcome to Walmart
Walmart announced that they will be repurposing one North Dallas location into a fulfillment center dedicated entirely to online delivery and curbside pickup, with no more in-store shopping. As a proverbial canary in the low-price coal mine, this could signal a permanent shift towards local delivery and curbside pickup over conventional brick-and-mortar shopping.
Continuing their effort to modernize and keep up with eCommerce culture, Walmart has begun offering free samples with their grocery pick-up and also for customers that sign up for the Walmart+ subscription service.
Buddha-ful Statue
What’s trending on China’s online shopping platform Taobao? A statue of Trump as Buddha with the slogan ‘make your company great again’, of course! A Trump toilet brush is also among Taobao’s top-rated Trump-related merchandise.
ShipHero News
Episode FORE: Objects! With ShipHero
Quiz for the true golfers: Cabretta leather is obviously the key ingredient for golf gloves… but did you know it’s not actually leather? Learn with us on Episode FORE of Objects! with ShipHero the rough business of golf gloves with Adam Karger, co-founder of Scotch & Skins. And remember: if the glove don’t fit, you must check out Scotch & Skin’s line of premium golf gloves and accessories.
Influencer’s Guide to Becoming a CEO
Success stories of influencers turned CEO exemplify the new American Dream. Just look at our adorable canine friend Humphrey and his owner’s brand, Spotted by Humphrey! Learn how to monetize your brand and engage with your audience with The Influencer’s Guide: How to Become a CEO Using Private Labelling.
ShipHero’s Innovation Wheel: Sustainable Fulfillment
Does Greta Thunberg haunt your dreams? Maybe it’s time your business starts cutting down its packaging and supply chain waste. Learn how with ShipHero’s Fulfillment Innovation Wheel series — Sustainable Fulfillment.
Mar 10, 2021 | Blog
Do you want to monetize your brand? Do you want to engage your audience through real, non-digital means? Are you ready to become the InfluentrepreneurTM (Influencer + Entrepreneur) you were always meant to be?
Today, more and more influencers use private labelling – selling pre-made products under your own branding – to earn revenue and provide followers with a high-quality product that they can trust, because it’s yours!
As an influencer, you already have an online audience. And if you currently promote products on your page, then you also have a solid base of people who rely on your product recommendations. With this, becoming a CEO is as easy as:
- Pick a good product
- Apply your logo and brand
- Choose a shipping provider
- Sell your products online
There are many success stories from influencers turned CEOs, like our adorable canine friend Humphrey and his owner’s brand, Spotted by Humphrey. And companies like inKLOUT exist to help influencers design and market their own products.
But if you’re among the brave souls that want to tackle this journey yourself, this how-to guide will break down each of the three steps (especially the complicated logistics-side of things) to get you on your way to becoming CEO of your own e-commerce brand.
4 Steps to Become an Influencer + Entrepreneur
The private labelling business is very straightforward. You pick a product from a manufacturer, you brand the product, you sell the product, and you get the product to the customer’s doorstep.
You may have heard the term Dropshipping before, but this simply means that the manufacturer handles the final step for you and ships the product to your customers. We’ll get into this later on in Step 3…
So let’s get into the four steps to start your very own e-commerce private label business.
Step 1: Pick a Good Product
The most important thing to do when starting a private label business is to ask yourself the important questions, like:
- Why do people follow you?
- What is your passion or niche?
- What are your peers selling?
Answers to these questions will help you pick a product that is relevant to your personal image and content.
The search begins. Depending on your theme or category, whether it’s fashion, beauty, wellness, etc., you want to search for trending products in your personal domain, or products that you personally use and believe in.
Avoid over-saturated items. You want to stay ahead of trends, not lag behind them. Whatever product you choose, make sure that there isn’t too much competition. Typically, products that have a smaller amount of reviews (<1,000) on Amazon or on the private label manufacturer website are good candidates, as long as they are high quality.
Pick Your Manufacturer. Search on sites like Thomasnet, Alibaba, AliExpress or Google. Simply type “*your product* private label” and see the list of results. Be sure to ask about cost of goods, shipping cost, and turnaround time for any order.
Here is a list of Private Label manufacturers based on category. And as mentioned earlier, companies like inKLOUT can help you design or select a product for your brand.
Note: Most manufacturers do only use cashier’s check or a money wire for payment.
Step 2: Apply Your Logo and Brand
Your company now needs a name, a logo, a product label, and a slogan. This is your opportunity to tell your story, so have some fun with it.
Company Name
It’s important to select a name that resonates with your brand and with your audience. It’s equally important to make sure the name you choose isn’t already taken, because you will want to be able to trademark your name for a site domain and social media.
Shopify has a Business Name Generator that you can use to search for and create your perfect business name.
Company Logo
When you think of logos, what comes to mind? The Nike Swoosh? The McDonald’s Golden Arches? Right from the start, these companies knew that a thoughtful logo has a huge impact on your audience.
If you already have a great idea for your logo, sketch it out! Then, if you aren’t already a master at Photoshop, consider using a Graphic Designer to create a digital copy of your logo. We also recommend using a professional because you will need multiple image sizes for product labels, social media, website, and more.
Graphic Designers can also help you brainstorm ideas for a logo if you don’t already have one. Sites like 99designs, Fiverr, and Upwork have loads of freelance Graphic Designers that can help you create your logo.
Product Label
Typically, the private labelling manufacturer creates the product label for you, once they have your company logo and name. Given the manufacturer, you can customize the labelling as much or as little as you’d like, so be sure to ask about the manufacturer’s capabilities during your search.
Company Slogan
“Just Do It.”– Nike
“I’m Lovin’ It.” — McDonald’s
“We Throw in Extra Parts to Mess With You” — Ikea (not really)
Your slogan is your one sentence summary of your company and your brand. It should be something to grab your audience’s attention and showcase your company.
Step 3: Choose a Shipping Provider
In the most simple terms, you have three options when it comes to shipping.
In-House
The manufacturer sends you the product directly, and you store it in your home … or a warehouse, storage locker or shed. From there, you pack the product in a box/package and use USPS, FedEx or another delivery service to send it to the customer. This is called in-house fulfillment, because you do it entirely by yourself, most likely in your house.
This is the cheapest option, with just an upfront investment for a $200 label printer, but also the most time-consuming and the most difficult to guarantee quality service. Not to mention, you are responsible for handling product returns.
Keep in mind you are competing with brands that offer 2-day shipping and free returns. And when you start to sell a lot of products, you may find it hard to grow your business while spending all your time putting your products in boxes and taking trips to the post office.
Outsource
A company will store the product in their large network of warehouses and will ship the products on your behalf. For a set per-item fee, an eCommerce fulfillment company like ShipHero can help you deliver within two days, help you handle returns, and help you manage inventory.
Fulfillment-by-Amazon (FBA) is a popular example of outsourced fulfillment because you send your product to their warehouse, and for a per-item fee, Amazon will deliver your products.
Dropshipping
The factory/wholesaler will also pack and ship it directly to your customer, bypassing you entirely. This allows business owners to take a hands-off approach to the operation of their business, and customer satisfaction lies entirely in the hands of the manufacturer.
As a cheap and convenient option, dropshipping also results in lower profit margins, longer shipping times, and less control over your business. But CEOs that want to have a more hands-off approach will choose dropshipping for the minimum involvement required.
Step 4: Sell Your Product Online
With a fully-branded product and a shipping method in place, all that’s left to do is sell.
Whether you want to spread your products to everyone or keep it exclusive is up to you and your brand. You can sign up for Instagram Shopping to post a New Catalog of your products, or you can connect to your website. Instagram allows integrations with Shopify, BigCommerce, Magento and WooCommerce.
Besides your social media channels, you can sell on platforms like Shopify and Amazon to reach a large audience, but Shopify lets you design your own website and gives you more control to build your brand.
There you have it!
The four steps to becoming brand owner and CEO of your very own eCommerce private label company. ShipHero created this influencer how-to guide to help you on your entrepreneurial journey, because ShipHero’s mission is to help businesses deliver their eCommerce.
We’ve shipped over $5 billion orders to date. Each day, more and more businesses are signing up with ShipHero to receive 2-day shipping, return handling and the eco-friendly shipping option with priority ground shipping.
Mar 11, 2021 | newsroom
“Aaron Rubin has been fending off venture capital for his company, ShipHero, since 2015. ShipHero is an e-commerce software provider and runs nine warehouses so shippers can outsource order packing and shipping. In 2015, the company was only making a software-as-a-service play when competitor Stitch Labs raised a $15 million Series B round and the VCs came knocking.”
Mar 19, 2021 | Blog, The Packet
Front and Center
Hey theEre Packeteers,
Happy FRiday from your hmble Packet writer! Did yuu take it easy this Saint Pattyricks’s day like I did?! Yuu celebrating Saint Josepph’s tooday? NO I didn’t spend all my stimmy on whisky.. Hey I’m fine to write this, seriously I’mFINE. Gimme the laptop. I can tYpe.
…
Seeing Green
Even if you didn’t wear green, Americans were certainly seeing green this St. Patrick’s day when the second round of pandemic stimulus checks bagen to hit their bank accounts. The most recent $1,400 direct payment will help a lot of individuals pay for very basic necessities like rent, food and utilities. (Track your stimmy here.)
Economists believe that the stimulus checks could provide a much needed boost to the hard-hit retailer sector. Did that peak your interest? Well, it certainly didn’t for…
The FED
On Wednesday, the U.S. Federal Reserve announced that there will be no interest hikes until 2023, keeping prime interest rates near 0%. What does this mean? Borrowing money from banks will continue to be extremely cheap, which makes it easier for people to get the capital they need to start a business or make a major purchase. In the same announcement, the Fed increased their U.S. GDP estimate and lowered the unemployment estimate… so things are looking up for the economy?
Yup.
Not to mention, vaccine production is ramping up, about 8% of the population has been vaccinated thus far, and the first American baby has been born with antibodies against COVID-19 after the mother received the Moderna vaccine whilst pregnant. Adorable and ground-breaking.
Thank you.
After 14 beautiful weeks at the helm of the Packet, I wanted to take a moment to thank all of the Packeteer subscribers that have joined us every Friday. I hope you enjoy reading it as I enjoy writing it, and if you ever have interesting topics to cover or want to connect, email us here.
…
SEe I TOLD you I could do it…
Back of the Packet
Lab-made Human Embryos
Bold title to lead in with, explain. This week, research papers have revealed for the first time that scientists have created living organisms that resemble human embryos. Using stem cells or reprogrammed skin cells, scientists were able to create clumps of cells that look just like pre-embryos.
Daylight Savings Time
It happened, in case you didn’t know why you’ve been late to everything this week. Thanks farmers.
ShipHero News
Futuristic Logistics & Emerging Tech
We can rebuild it, we have the technology. We can make it better than it was. Better, stronger, faster… The next generation of supply chain is almost here, and it’s digital.
Supply Chain 4.0 incorporates emerging technology — blockchain, AI, autonomous trucks, drones, 3D printing, augmented reality, and more — into every aspect of the supply chain, rendering it nearly unrecognizable from today’s capabilities.
What does the future of logistics hold? Check out our newest blog Futuristic Logistics & Emerging Tech to find out.
Mar 24, 2021 | Best Practices, Blog
How To Build Your Customer Loyalty Programs… with Science!
An eCommerce Science Lesson
Welcome to your eCommerce Science lesson on Customer Loyalty. Simply put, customer loyalty is that conditioned behavior of “human want thing, company has thing”.
- I want shoes, Nike has shoes.
- I want coffee, Starbucks has coffee.
- I want the meats, Arby’s has the meats.
You get the picture. In fact, a 2021 Customer Experience Trends Report just proved that we’re creatures of habit, with 3 in 4 shoppers making purchasing decisions based on their past experience. So how do you get your company into that equation? With a generous and truly engaging customer loyalty program, of course!
What is a Customer Loyalty Program? It’s a customer-facing program that aims to increase customer retention and motivate repeat purchases… which is a high-falootin’, fancy business school way of saying:
Going the extra mile to really engage with your customers will keep them coming back for more than just your products (like when the waitress calls you “sweetie”.)
In this article, we’ll describe the benefits and best practices for each type of customer loyalty program so that you can start building a customer loyalty program of your very own.
Benefits of Customer Loyalty Program
Customer loyalty programs have been proven to inspire customer retention, drive customer referrals, and save your sales team some budget.
Inspire customer retention. While it’s always nice to see a familiar face, members of customer loyalty programs typically spend nearly 20% more than typical customers. Not to mention, existing customers are 50% more likely to buy a new product of yours.
Drive customer referrals. With loyalty programs that create community or competition, beyond traditional word-of-mouth, people will organically share your loyalty program efforts, contribute positive reviews, and even generate content of their own by way of UGC or ambassadorships.
Save costs: Companies must spend 500% more to convert a new customer compared to an existing one. For example, if you spend $100 flagging down an Average Jane from the street, giving her the business, and closing the sale; you’ll only need to spend $20 to close the sale with them next time.
Building a Customer Loyalty Program
There are six distinct types of customer loyalty programs used by major brands today.
- Points
- Paid Membership
- Tier Rewards
- Progress and Competition
- Community
- Subscription
Let’s dive into a description and best practices for each type. Keep in mind, every type can be used in combination with the other to create hybrid loyalty programs.
Points Program
The points program allows customers to accrue points through various actions, and spend those points on rewards. It is a brilliant way to gamify the shopping experience, and is used by retailers with high volumes and inexpensive items, such as grocery stores, fashion outlets, or fast food chains (hi McDonald’s Monopoly).
You can start by creating a simple points systems, which has two components:
- What actions will customers complete to accrue points? Many retailers equate a $1 spent to 1 point, and increase points if it is a product you need to push.
- How will customers use their points? You can offer discounts, free gifts, samples, and just about anything.
Offer relevant and personal rewards. Beyond product discounts, rewards should be something that truly resonates with your target audience, such as free tickets to a relevant event or cool swag.
Consider using points program software like Smile.io, which allows you to build customized point systems for your online and physical stores.
Paid Membership
The paid membership program invites customers to pay a “joining fee” for members-only club access and VIP benefits, where the perceived benefits of joining the program far outweigh the cost.
You can start by offering exclusive benefits, discounts and product releases to your paid members, and unless you’re already a recognizable brand with strong social proof, this program is best-suited when targeting existing customers.
Be sure to incorporate your business values into the program to build stronger relationships. If your business revolves around certain cause, like Toms for example, you could engage your membership base to feel closer to the contribution
Once your paid membership program is operational, ask your members for feedback and reviews, and widely advertise those perks to convert your non-members into paid members.
Tier Rewards
The tier rewards program offers another way to gamify engagement, and incentivizes customers to ascend tiers that reward with increasingly desirable perks e.g., Silver, Gold, Platinum, Uranium Status on airlines. This provides a satisfying experience, and even a little bragging rights, for your regular customers.
To get started, decide how many tiers you’ll offer based on your available perks. Keep the levels to a minimum or else customers will tire out climbing the seemingly never-ending tiers. Not to mention, customers at your top tier will have the greatest levels of customer retention, so don’t make it too challenging to get there. Aim for a solid distribution of customers at each tier.
Next, you’ll want to decide all the different conditions that a customer can climb tiers, whether it’s dollar amount spent, frequency/volume of orders, or some other form of engagement.
From there, map out available perks based on their value and assign them to each tier. You want to keep it simple and easily understood. Be sure to offer truly valuable and exclusive benefits for the higher tiers.
Progress and Competition
The Progress and Competition loyalty programs publicly issue engagement-related goals or competition, with rewards granted to the top performers. Common examples include Pelaton’s leaderboard, Trivia HQ, Nike Run Club’s public progress tracker, and more
When you publicly set a goal or issue a competition, there will be people that strive to win… it’s just human nature. What’s more, customers who believe they are close to achieving a goal or performing well in a competition become more committed to their efforts — this is known as the endowed progress effect.
To get started, create fun and attainable goals or a challenging game that peaks people’s interest and beckons to their competitive instincts. The goals or game need not focus entirely on buying a product or even engaging in your company at all; rather, the best way to capitalize on this loyalty program is to position your product as the competitive edge you need to reach these goals and win the game.
Be sure to visually encourage progress and comparison with progress bars, leaderboard, and various nudge tactics.
Community
The Community program strives to create a platform where your members can interact with other like-minded individuals to connect and share content, get access to exclusive benefits and events, and stay-in-the-know about your company (causing excruciating FOMO for those not-in-the-know).
To get started, find your target audience by leveraging existing social media platforms to develop a sense of community. Play around with concepts that create bonds not only between your company and customers, but among customers themselves.
Many companies have branded their base by calling them a cute pet-name (hi Barbs), or rallying behind a common cause. In fact, about 66% of customers are more willing to trust brands that take stances on social and political issues that resonate with them.
As long as you encourage discussion that is relevant to your brand, there is no wrong way to create a community-focused loyalty program.
Subscription
The Subscription loyalty program, commonly known as “Subscribe & Save”, allows customers to subscribe to weekly, monthly or seasonal purchases and receive discounts upwards of 15% off. Notable examples are GNC, Trunk Club, Butcher Box, and any brand that ships offers recurring purchases or subscription boxes. (We cover the subscription model extensively in our blog.)
To get started, develop a pricing and bundle strategy that incentivizes customers to sign-up for repeat purchases. Examples include freemium options, early bird offers, free trials, bundles and more. From there, provide an easy way for customers to manage and even customize their subscriptions.
Subscription models have shown to yield better customer relationships, improved aggregate data, and more diversity in product offerings. Not to mention, it gives brands the creative freedom to understand how their customers would prefer to engage with their products and services.
Wrap It Up
By using one or all of the customer loyalty programs above, your company will offer exciting and fun ways to engage with your company, and incentivize repeat customers in the meantime.
While just about any eCommerce company can promise a lucrative subscription model or rewards program, the reality is that these are extremely complicated strategies to pull off without the right inventory management and order fulfillment processes to back them up.
In fact, most 3PLs and fulfillment providers simply don’t offer the customization options that eCommerce companies need to pull off loyalty programs. That’s why you need to make sure you are giving your loyalty to the right fulfillment provider.
That’s why more and more eCommerce companies rely on ShipHero’s advanced bundling and customization capabilities to power their loyalty programs with reliable 2-day shipping across the contiguous U.S.
