Conducting an Inventory Audit

Jul 11, 2023 | Blog

Periodically conducting an inventory audit is an important part of effectively managing an eCommerce business. During an inventory audit, financial records are double-checked against inventory records which is a good way to make sure records are accurate. This may uncover possible issues such as damaged or missing items.

An eCommerce business may perform an inventory audit at any time to check inventory on hand in order to get a better idea of where things stand. Businesses may choose to audit all or part of their inventory periodically. Regular inventory audits can help prevent inventory shrinkage and can identify issues such as SKUs that are consistently off.

How Often Does an Inventory Audit Need to Be Done?

An inventory audit should be done at least annually. An inventory auditor may engage in a variety of inventory audit procedures to confirm that the amount stated as inventory is accurate. An annual audit may be done each year for tax purposes or it may be done to get a clear idea of what products are on hand and when they need to be restocked. An inventory auditor may be someone on staff or a third party from an outside auditing company. 

What Methods are Used to Verify Inventory?

To describe methods used to verify inventory, it’s a good idea to start with your inventory audit objectives. Every inventory audit includes counts of inventory and data analysis and is a way to check inventory to ensure it matches the information within your automation system. Examples of methods that may be used to verify inventory include:

Full Audit

This method involves counting all items in stock, which may be time-consuming. To obtain accurate results from this method, you’ll need to pause the actions of your business while the count takes place. Cutoff testing ensures that nothing goes in or out of the storage areas while the inventory audit is done. This means operations such as shipping and receiving are paused.

Cycle Count

Using this method, you cycle through part of your inventory based on SKU. Selected products are audited each cycle rather than auditing the entire inventory at once. One way to divide inventory for partial auditing is by using ABC analysis. This means grouping items by value such as “A” products are high-value items, “B” products are mid-tier and category “C” consists of the lowest value products. 

ShipHero has a cycle count feature that makes it super easy to execute this inventory method. Check out this video to find out more.

Spot Check Inventory

Another approach is to periodically do a physical inventory of just a few items. Regular spot checks may make it unnecessary to do an audit of your entire inventory very often which may be the best option for large companies with a large number of items in stock.

A partial inventory count may be done periodically to make sure items counted match inventory records, and if they don’t match, a full audit may be done. An eCommerce business must consider not only stock that’s on shelves but also stock that’s in transit to and from the fulfillment center. 

Inventory Auditing Best Practices 

Accurately tracking the value of your inventory helps you to budget for future inventory decisions. Auditing inventory can be time-consuming but devices like barcode scanners can help track inventory electronically. Point-of-sale tracking using SKUs allows for real-time tracking of inventory balances keeping inventory counts up to date and providing important information on what stock needs to be replenished.

Warehouse audit best practices include auditing items in the warehouse and reviewing the effectiveness of warehouse processes. This includes determining whether warehouse operations are complying with safety standards and policies. Having two people count each item and checking that their numbers match is a good way to improve accuracy.

What is an Inventory Findings Report?

Once an inventory audit is completed, an inventory findings report is done to provide detailed information on the value of your inventory which offers clarity on inventory accounting. This report can identify operational errors, help identify any inefficiencies in current inventory procedures and provides information needed to make budgeting decisions such as deciding whether to discontinue certain items that may have a surplus or it can provide insights into where funds could be redirected. Routine inventory audits provide one of the best ways to optimize inventory control.

Does Your eCommerce Business Need to do an Inventory Audit?

If your eCommerce business is small, you may think inventory audits aren’t yet needed, but audits can be beneficial whether your business is large or small. Performing regular inventory checks helps you implement good inventory management practices that will continue to benefit your company as it grows.

When you’re running an eCommerce business, effective inventory management helps you to have a handle on the size and condition of your inventory. Regular audits enable you to make sure that you have what you think you have in stock, and that you have enough inventory without having too much. When you know exactly what’s in stock and where it is, your business will run more smoothly and efficiently for your staff so that they can better serve your clients. 

How to Perform an Accurate Monthly Inventory Report

Aug 3, 2023 | Blog

Are you tired of constantly finding inaccurate inventory counts? Does it seem like your products have a secret life of their own, wandering off into the wild? Fear not, the world of monthly inventory reports can be conquered. Learning how to perform these reports with the accuracy of a seasoned mathematician (or at least, with the accuracy of someone who knows how to use a calculator) is easy. So sit back, relax, and get ready to turn your inventory woes into inventory wows for your organization! 

How to Perform an Accurate Monthly Inventory Report

Here are the steps to perform an accurate monthly inventory report:

#1 Build Inventory List

The first step is to create a comprehensive inventory audit report which includes all of the products in your inventory, along with key information such as SKU numbers, descriptions, and current stock levels. This can be done using inventory management software, spreadsheets, or other tools.

#2 Establish a Timeframe

Next, you need to establish a timeframe for your inventory report. Monthly reports are common, but you can also choose to run reports on a weekly or quarterly basis, depending on your needs.

#3 Choose a Report to Run

There are several different types of inventory reports you can choose from, including physical inventory reports, sales reports, order reports, reorder reports, and forecasting reports. Decide which type of report is most relevant to your needs and the demand of your business.

#4 Run that Report

Once you’ve chosen the type of report you want to run, use your inventory management software or reporting tool to generate the report for the specified timeframe. This report should provide you with a detailed overview of your inventory levels, including how many items you have in stock, which items are selling well, and which items may need to be restocked.

How Often Do You Need Inventory Reports?

The frequency in which inventory report documents should be generated depends on the specific needs and operations of a business. In general, it’s recommended to perform inventory reports at least once a month to ensure that inventory levels are accurate and up-to-date. However, some businesses may need to perform reports more frequently, such as weekly or even daily, if they have a high volume of sales or perishable inventory.

Inventory Reporting Tips

Inventory reporting is a critical component of inventory management, and there are several tips businesses can follow to ensure accurate and efficient reporting. Here are three important tips to keep in mind:

Hire an Inventory Specialist

For businesses with complex inventory needs, hiring an inventory specialist can be a smart investment. These professionals are trained to manage inventory and ensure accurate reporting procedures are in place.

Keep an Organized Stockroom

Maintaining an organized stockroom makes inventory reporting more efficient and accurate. By ensuring products are properly labeled, categorized, and stored, it becomes easier to track inventory levels and avoid errors. An organized stockroom can also help reduce the risk of stockouts, overstocking, and lost inventory.

Audit Inventory Regularly

Regularly auditing inventory is another important practice. By performing spot checks or conducting full audits, businesses can identify discrepancies and correct them before they become larger problems. 

Key Takeaways

Congratulations, you’ve made it to the end of this inventory reporting guide! We hope you’ve gained a deeper understanding of the importance of accurate inventory reporting and how it can help businesses streamline their operations, improve customer service, and optimize their profitability. Remember, accurate inventory reporting is an ongoing process, and it requires regular attention and care. But with the right tools, practices, and mindset, you can turn your inventory woes into inventory wows and take your business to the next level!

Monthly Inventory Report FAQs

What Data Is in an Inventory Report?

An inventory report typically includes a comprehensive list of products or assets in stock, along with their descriptions and relevant details such as quantity and identifying information like serial numbers or SKU codes.

What Are the Methods of Reporting Inventory?

There are two main methods used when reporting inventory: periodic and perpetual. The periodic method involves taking a physical count of inventory at regular intervals and updating the inventory records accordingly. In contrast, the perpetual method involves continuously updating inventory records in real-time using technology such as barcoding or RFID. While the periodic method is simpler and less expensive, the perpetual method provides more accurate insights and timely information about inventory levels and movements.

How Do You Calculate Monthly Inventory Usage?

To calculate monthly inventory usage, begin by taking a physical count of inventory at the beginning and end of the month. Then, subtract the ending inventory count from the beginning inventory count to determine the total inventory usage for the month. Finally, divide the total inventory usage by the number of days in the month to determine the average daily inventory usage. 

7 Warehouse Picking Strategies to Improve Efficiency

Jul 14, 2023 | Blog

Warehouse picking is an important part of any eCommerce business that is big enough that you have to store products in a fulfillment facility. Your goal is to choose the most efficient method for your warehouse picking process. Factors to consider include optimization of safety for warehouse workers and warehouse managers and increasing warehouse efficiency to reduce operating costs.

Warehouse Picking Strategies

There is not one single best warehouse picking strategy for every business or every warehouse.  For some types of products, such as perishable or nonperishable foods, it makes sense to use a first in, first out (FIFO) strategy to reduce waste, with the caveat that the warehouse pickers check the expiration dates on the food packages and ensure that the product will reach the customer before the expiration date. Last in, first out (LIFO) could be a better strategy if the products are not food and if the product line changes quickly, with new products being the most popular.

What Is Warehouse Order Picking?

Warehouse order picking is the same thing as order fulfillment or product fulfillment. It is where warehouse workers, with the help of technology, find the items requested in a customer’s order in the warehouse and prepare them for their trip to the customer.

Why Is a Warehouse Order Picking System Important?

Choosing the best picking methods has a major impact on supply chain logistics. When you organize your warehouse so that warehouse workers do not have to travel to different areas and zones to find the pallets they need, the order fulfillment process goes much more quickly.

Makes Pickers’ Jobs Easier

A well-thought-out order picking system makes warehouse workers more productive and improves worker morale. It is also safer. When workers are not going back and forth between different areas in the warehouse, there are fewer possibilities for accidents and injuries.

Improves Customer Satisfaction

The less time it takes warehouse pickers to find the pallets they need, the sooner the products can leave the warehouse and continue their journey to the customer. The fewer steps the warehouse has to go through to ship the products, the less expensive the shipping is for the customer. Competitive shipping costs are important to the success of any eCommerce business.

Reduces Warehouse Costs

The benefits of an efficient warehouse picking system are obvious for businesses that have their own warehouses. If you use efficient picking methods, you will be able to fulfill orders quickly with fewer errors.

The 7 Top Warehouse Picking Strategies

These are the seven most popular picking methods in the order fulfillment process. Which method you should choose varies according to the layout of your warehouse and the types of products you ship.

1. Zone Picking

Zone picking is a popular picking strategy. To implement this picking method, you must divide the warehouse into zones and dedicate each zone to a certain category of products. Items that customers often order together should be near each other in the same zone. For example, mouthwash should go in the oral care zone, because customers often order it with toothpaste and dental floss. It should not be in the “liquids in plastic bottles” zone, because customers do not typically order mouthwash in combination with pancake syrup and salad dressing.

2. Batch Picking

Batch picking is a practical picking strategy for large warehouses. The warehouse managers assign a group of similar orders to a given employee for a given day. The effect is that each employee spends most of the day within one zone or within several adjacent zones.

3. Discrete Picking

Discrete picking is a great way to reduce errors if you have a small warehouse with a limited number of SKUs. A warehouse employee just goes through the list of items in the order and picks them one by one, even if it means traveling among different areas of the warehouse in a non-linear way. It is efficient and error-proof because human workers find it intuitive, like following a grocery shopping list.

4. Wave Picking

In the wave picking method, an employee might be assigned to pick items from many different zones to fulfill all of his or her orders for the day. In wave picking, however, the management divides the day into “waves,” which are time slots during which certain employees are in certain zones. If Brenda is assigned to zone A from 9:00 until 10:30, she picks all of her zone A items for all of her assigned orders for the day during that time slot. Then she goes to zone B during the next wave and gets all of the day’s zone B items. This method is efficient because it reduces travel and errors. At the end of a wave, warehouse workers can double-check their lists to ensure they have picked all the necessary items from the relevant zone.

5. Zone-Batch Picking

This order picking process is a combination of zone picking and batch picking. The warehouse managers divide the warehouse into zones. They also base each employee’s daily assignments on limiting that employee’s movement among zones during his or her shift.

6. Zone-Wave Picking

This fulfillment method is a combination of zone picking and wave picking. The management divides the warehouse into zones. They also assign each worker to spend certain time blocks throughout the day in certain zones.

7. Zone-Batch-Wave Picking

This warehouse picking strategy combines the zone method, the batch method, and the wave method. The warehouse has different zones for different items. The workers can go to different zones at different times of the day if their orders require this. Meanwhile, in any given shift, some workers are assigned to fulfill orders where all the items are in the same zone.

Warehouse Picking Efficiency Best Practices

Choosing an efficient picking strategy is just one of the ways that you can improve the efficiency of your warehouse and your entire supply chain. Your choice of technology and the instructions you give to workers for implementing your chosen strategy also make a difference. Efficient management of a warehouse comes down to choosing the best strategies for managing time, space, and resources.

Use the Right Tools

Using the right technology makes the order fulfillment process more effective. For example, devices that respond to voice commands can help employees find their items quickly and keep their eyes focused on one piece of equipment at a time. You should also provide multiple ways for employees to enter SKU numbers, in case one method experiences a glitch.

Did you know that faulty equipment contributes to a large share of workplace accidents? Proper maintenance of pallets, forklifts and other pieces of equipment in the warehouse can prevent injuries that lead to costly workers’ compensation claims and, in severe cases, to OSHA fines.  When you revisit your picking strategy, also be sure to inspect your warehouse equipment.

Set Productivity Goals

Goal setting has clear advantages in every industry, including warehouse fulfillment. Setting productivity goals for individual employees can help the entire warehouse perform more efficiently. Setting unattainable goals makes worker morale worse. Collect data to see how many items, on average, one employee can retrieve from one zone during one wave. If it is less than you had hoped, the solution could be to change the layout of the zone or even the length of the waves. Productivity should not just be a buzzword; managers should facilitate worker productivity instead of just bossing their employees around.

Minimize Walking Time by Optimizing Warehouse Layout

The warehouse layout is one of the factors that can reduce travel time and increase fulfillment speed. Another factor is the picking strategy you use, such as zone picking or batch picking.

Strategically Place Frequently Picked SKUs

The most frequently picked SKUs should be in easily accessible locations. This way, workers can reach them quickly, and the workers who replace the empty pallets of these products will not have to get past a lot of other pallets to replace them.

Key Takeaways

Warehouse logistics requires a lot of planning. Choosing the right layout for your warehouse and the right picking method can help you fulfill the greatest possible number of orders accurately and safely.

Warehouse Picking Strategies FAQs

These are some common questions that warehouse managers ask about warehouse picking methods and the benefits of each method.

How Can I Improve My Pick Rate?

You can improve your pick rate by setting up an error-proof layout in each zone. This way, employees in that zone can quickly learn which items are where.

What is the Most Efficient Order Picking?

Discrete picking is most practical for small warehouses with a limited inventory. Larger warehouses should use zone picking, batch picking, wave picking, or some combination of these.

How Do You Pick and Pack Faster?

Picking and packing quickly takes practice. It also helps to have the most efficient warehouse picking method for your fulfillment center.

What is a 3PL System? Third-Party Logistics Definition and Process

Jul 14, 2023 | Blog

What is a third-party logistics provider (3PL) and how could it improve your business? In a world of continual shipping restraints and high customer expectations, a 3PL could be your solution. Below we will detail exactly what you can expect from using a 3PL and the benefits you’ll gain when using one for your business. Let’s dive in! 

What is a 3PL?

A 3PL is a company that offers outsourced logistics and supply chain management services to businesses. These services can include transportation, warehousing, inventory management, and other related functions. When contracting with 3PLs you are provided a cost-effective solution for companies that do not want to invest in their own logistics infrastructure, allowing them to focus on their core competencies. Have you ever felt unsure of what to do next when you encounter a logistical problem? That’s another area 3PLs can help. They often have specialized expertise and technology so you can optimize your supply chain operations and improve efficiency.

Third-Party Logistics Definition, Process, & Resources

The infrastructure within a 3PL is rather impressive. They have poured their revenue into streamlining logistical operations with technology many others couldn’t afford to utilize if they tried to create their own logistics infrastructure. 

With this infrastructure, they utilize a wide range of processes and resources to manage logistics and supply chain operations for their clients. These processes can include: 

• Transportation management involves coordinating the movement of goods by road, rail, air, or sea. 
• Warehousing and distribution, which involves storing and distributing goods in an efficient and cost-effective manner. 
• Inventory management involves tracking and managing stock levels to ensure that products are available when customers need them.

To support these processes, 3PLs often invest in sophisticated technology. These technologies allow them to automate and streamline logistics operations, so they can provide real-time visibility into inventory levels, delivery schedules, and other key metrics to their clients. Often, they will also utilize a wide range of resources, such as a fleet of vehicles, warehouses, and equipment, to support their logistical processes. These technologies and resources work in tandem with a skilled workforce that includes logistics experts, transportation planners, warehouse managers, and inventory analysts who work to optimize their client’s supply chain operations.

Lastly, a main part of most 3PL processes includes working closely with their clients to understand their specific logistical needs and to develop customized solutions that align with their business goals. They also continuously monitor and analyze logistics trends and market conditions to identify opportunities for cost savings and process improvements. Basically, they are like a logistics superhero your business can call upon to make their logistical operations as efficient as possible! 

Third-Party Logistics (3PL) Basics

When you’re setting up your business with a 3PL provider, they’ll need some basic information from you in order to get things moving. They’ll need to know all about the products you’re shipping, like their dimensions, weights, and any special handling requirements. They’ll also want to know your current and projected shipping volume, so they can plan accordingly. Additionally, they’ll need to know your preferred shipping methods and carrier preferences, and any specific delivery requirements, restrictions, or compliance requirements you might have. 

Are 3rd-Party Logistics the Same as Order Fulfillment?

Third-party logistics is a service in which a company outsources its logistics and distribution functions to a third-party provider. This provider takes on the responsibility for all or some of the company’s logistics operations, such as transportation, warehousing, and distribution.

Order fulfillment, on the other hand, refers to the process of receiving, processing, and delivering customer orders. This process includes tasks such as receiving the order, picking and packing the items, and shipping the order to the customer. Order fulfillment can be handled by a company’s own logistics and distribution team or by a third-party provider.

In summary, 3PL is a broader term that encompasses all logistics and distribution functions, while order fulfillment is a specific aspect of logistics that refers to the process of fulfilling customer orders. A company may use a 3PL provider for both logistics and order fulfillment, or it may handle logistics in-house and use a separate 3PL provider for order fulfillment.

3PL Services vs. Drop Shipping

Third-party logistics companies offer a wide range of benefits over traditional drop shipping methods. One of the biggest benefits of 3PL services is the level of control and visibility they provide. With a 3PL provider, businesses have real-time access to inventory levels, shipping costs and information, and other logistics data, allowing them to make informed decisions about their entire supply chain. This level of control and visibility is often not possible with drop shipping, where businesses may have limited visibility into the logistics process. 3PL providers also bring specialized knowledge and expertise in logistics and supply chain management. They have the resources, technology and experience to optimize the entire logistics process, which can result in cost savings, improved efficiency, and increased competitiveness in the market.

Benefits of Third-Party Logistics

Are you tired of spending countless hours and resources managing logistics and supply chain operations for your business? Are you looking for a way to streamline your logistics processes and improve efficiency? Then look no further than third-party logistics. 

By outsourcing logistics and supply chain management to a 3PL, you can free up valuable time and resources to focus on your business’s core competencies. A 3PL can handle the transportation, warehousing, and inventory management on your behalf, allowing you to focus on growing your business.

They can also help you save money by finding more cost-effective solutions for logistics and supply chain management. They have the expertise and technology to optimize logistics operations and improve efficiency, which can result in significant cost savings for your business.

Moreover, a 3PL can help you improve delivery times and increase customer satisfaction by optimizing logistics operations to meet customer demands. They can also help you improve inventory management by implementing inventory management systems that provide real-time visibility into inventory levels and stock management.

By outsourcing logistics and supply chain management, you can also take advantage of their networks of resources, such as transportation and warehousing facilities, and their skilled workforce, which includes logistics experts, transportation planners, and inventory analysts. Partnering with a 3PL will help your business grow. Instead of spending precious time and revenue packing orders, you can get those same orders to your clients faster and cheaper! 

Will Your Business Benefit From Third-Party Logistics?

Here are several signs that indicate a business could benefit from using a third-party logistics provider: 

1. Lack of logistics expertise: If your business does not have the necessary expertise in logistics and supply chain management, it may be beneficial to outsource these functions to a 3PL.
2. Capacity constraints: If your business is experiencing growth and is struggling to keep up with the demand for logistics services, a 3PL can provide additional capacity and support.
3. High logistics costs: If your business is spending a significant amount of money on logistics and supply chain management, a 3PL may help you reduce costs by finding more efficient solutions.
4. Difficulty in meeting customer demands: If your business is struggling to meet customer demands for delivery, a 3PL can help you optimize your logistics operations to improve delivery times and increase customer satisfaction.
5. Difficulty in tracking and managing inventory: If your business is struggling to keep track of inventory levels and manage stock, a 3PL can help you implement inventory management systems to improve visibility and control.
6. Difficulty in managing returns: If your business is struggling to manage returns and reverse logistics, a 3PL can help you handle these processes more efficiently.

If any of these sound familiar, your business will absolutely benefit from a third-party logistics solution! 

The Third-Party Logistics Process

Are you curious about the inner workings of a 3PL fulfillment center? It can be difficult to understand the process if you’re new to outsourcing shipping. But the truth is, the 3PL fulfillment process is not as mysterious as it may seem. Let’s dive into the ins and outs of what happens in a 3PL eCommerce warehouse from the moment a customer clicks “submit order” on your online store to the final delivery. 

eCommerce Platform Integration

An eCommerce platform is the software that powers your online store. Many 3PL companies have an eCommerce platform integration that will connect seamlessly with your store. This means when a customer is ready to check out and provides their billing and shipping information, this information is then processed by your 3PL partner. It goes to the fulfillment center where it is received and the order begins its journey. 

Inventory Management

As the 3PL provider begins to check the inventory for the order they will often consult inventory management software which is usually connected to both your eCommerce platform and your overall inventory. That way the 3PL provider can know right away if the product is available, and can update stocking levels for you both to view.  

Picking, Packing, and Shipping

Once the inventory is confirmed, the 3PL provider’s team will pick the items from the warehouse shelves. They use barcode scanning or other identification methods to ensure that they are picking the correct items and quantities. After the items are picked, they are packed and prepared for shipment. This may include packaging the items in protective material, creating shipping labels and invoices, and any other necessary preparation for shipping. After the order is packed, the 3PL provider will ship the order to the customer using the shipping method specified on the order. The 3PL provider may also provide tracking information to the customer so they can track their order during transit.

Same-Day Shipping

To achieve same-day shipping, a 3PL company requires a combination of strategic warehouse locations, fast and efficient order processing, real-time inventory management, expedited shipping options, and effective communication with the customer. Having strategically located warehouses that are close to major population centers allows the 3PL provider to quickly and efficiently ship items to customers within a certain radius. To achieve same-day shipping, the 3PL provider typically offers expedited shipping options such as overnight delivery or express shipping. 

Reverse Logistics

When a customer initiates a return, the 3PL provider will typically receive the returned product and inspect it to make sure it’s in good condition. If there’s an issue with the product, the 3PL provider will contact the customer to resolve it. Once the return is approved, the 3PL provider will then process the return by updating the inventory, and if necessary, restocking the product. 

Key Takeaways

Convinced yet? We know now that 3PLs stand out from other logistical solutions because they offer tailored solutions, specialized expertise, scalability, sophisticated technology, access to resources and handle reverse logistics processes. Plus they work closely with their clients to understand their specific logistics needs and develop customized solutions that align with their business goals. Which means you have more time to become the next big thing! 

What Is a 3PL System FAQs

What is the Role of 3PL in a Company?

The main role of a 3PL is to handle the logistics functions that a company does not want to handle or cannot handle in-house. This can include transportation, warehousing, and distribution, as well as other logistics-related services such as inventory management, order fulfillment, and reverse logistics. By outsourcing logistics and distribution to a 3PL provider, a company can focus on its core competencies and business operations. This can help the company to save costs, improve efficiency, and increase its competitiveness in the market.

How Many Types of 3PLs Are There?

There are four types of 3PLs. First-party logistics (1PL) refers to in-house transportation services where a company handles its own logistics and distribution functions without the involvement of any additional parties, such as a florist using their own delivery van to drop off purchases to local buyers. Second-party logistics (2PL) involves the use of outside logistics providers, such as courier services like USPS, FedEx, or UPS, which are not integrated with the company when contracted. Third-party logistics companies create an integrated system that allows for real-time data sharing between the company and the 3PL, resulting in a streamlined, efficient, and reliable long-term solution in complete synchronicity with the business. Fourth-party logistics (4PL) is much like a 3PL, but logistically the company’s relationship with the consumer is often brokered by a middleman.  

What Is the Difference Between 2PL, 3PL and 4PL?

Jul 14, 2023 | Blog

You’re probably familiar with the term third-party logistics (3PL). But did you know there are other logistics services like second-party logistics (2PL) and fourth-party logistics (4PL)?

So, what are the differences, and which one is the best? Read on to find out.

Successful eCommerce Needs Strong Logistics

An eCommerce business lives or dies at the hands of its logistics. Smaller local businesses can operate fine with first-party logistics, handling deliveries in-house. However, many eCommerce businesses get customers from all over the world, making in-house deliveries nearly impossible.

If you can’t get products to customers safely and punctually, customer satisfaction will drop and you’ll likely lose sales. To ensure that doesn’t happen, you must partner with great logistics solutions providers.

What’s The Difference Between 2PL vs 3PL vs 4PL?

The main differences between 2PL, 3PL and 4PL are the complexity and parties involved. Here’s a quick breakdown of each logistics operator type and how many parties are involved:

• A 2PL involves your company and the freight forwarding or transportation service. This means you handle receiving and order processing yourself, only working with the shipper when you’re sending things out to customers.
• A 3PL is more hands-on in that the third-party logistics provider takes over most, if not all, of your order fulfillment process. The 3PL company will receive, store, pick, pack and send items out to customers through shipping companies. 3PL companies are the most popular logistics operator with eCommerce businesses because companies can be hands-off with their logistics and inventory management operations.
• A 4PL expands the scope of 3PLs by managing your company’s entire supply chain management. This means offering a wide range of services, including finance, procurement, IT and logistics assistance.

2PL – Second-Party Logistics

Second-party logistics are mostly responsible for transporting your items from the warehouse to customers. As far as logistics go, second-party logistics operators have the simplest task since they only do one thing – get your products to customers.

2PL Pros

The advantages of working with 2PL companies are:

• You can reduce your business workload.
• You can minimize risk of product loss or damage.
• You can offer multiple methods of transportation you couldn’t offer in-house.

2PL Cons

Meanwhile, the disadvantages of working with 2PL companies are:

• Your shipping performance is entirely dependent on the shipping carrier
• 2PL companies don’t support other aspects of your logistics operations, like warehousing.

3PL – Third-Party Logistics

Third-party logistics are much more involved with your operations since they’re responsible for receiving, storing, picking, packing and sending your products. Some of them even handle customer returns and complaints.

Lots of companies work with third-party logistics companies since they don’t have the space or budget to run their own warehousing operations. Instead, they send their products to 3PL fulfillment centers where the logistics operator will take care of everything.

Some of the best print-on-demand companies also offer 3PL-like services where they take customer orders, print the items and send them out without the client’s intervention.

3PL Pros

Here’s what you get by working with 3PL companies:

• You can outsource an entire section of your business to experts with years of experience.
• You get timely shipping and professional warehouse management.
• You can focus on other aspects of your business.

3PL Cons

On the other hand, 3PL also has some drawbacks, like:

• Your business will be dependent on a vendor to ship items out.
• It can be tough to change the way your vendor works if you receive complaints.

4PL – Fourth-Party Logistics

A fourth-party logistics provider is even more hands-on in managing your supply chain operations. They offer integrated logistics solutions – they don’t just work with what’s there but also come up with new ideas and offer additional services to address possible issues to achieve efficient supply chains.

Essentially, fourth-party logistics companies are supply chain operators and consultants. They’ll advise you on whether you need discreet shipping and packaging for products, what kind of shipping you should offer and many other aspects of logistical operations.

4PL Pros

Working with a 4PL service provider gives you most benefits offered by a 3PL, in addition to these perks:

• You get the best shipping rates without negotiating with carriers yourself.
• You can receive advice on how to manage a comprehensive supply chain solution.
• You can take advantage of their professional project management services.

4PL Cons

Meanwhile, the disadvantages of working with 4PLs are:

• 4PLs have higher costs, which makes them prohibitively expensive for smaller companies.
• You have less say in your supply chain operations since 4PL companies are more like strategic partners than vendors.

Examples and Practical Applications

How these logistics providers work might seem a bit abstract, especially if you’ve just now heard about them. Here, we cover simple examples of how 2PL, 3PL and 4PL companies work.

How 2PL Works

If Company X works with a second-party logistics provider, how it gets goods to customers would go something like this:

1. Company X receives its products from the vendor or manufacturer.
2. The company’s warehouse team stores products in the warehouse.
3. When an order comes, Company X’s warehouse team picks and packs the items in preparation for shipping.
4. The warehouse team takes the products to a shipper for delivery.
5. The shipping company sends the items to customers.

How 3PL Works

If Company X works with a third-party logistics company instead, you’d see a process like this:

1. Company X sends its products to the 3PL company’s fulfillment center.
2. The 3PL provider’s warehouse crew stores the product.
3. Company X’s online storefront forwards orders to the fulfillment center, where the warehouse crew picks and packs items for shipping.
4. The 3PL company’s warehouse team passes the items to a shipping company.
5. The shipping company takes the items to customers.

How 4PL Works

If Company X works with a fourth-party logistics company, the workflow will look a lot like the 3PL version. However, the 4PL partner will find the most affordable shipping companies and may communicate with Company X’s vendor to increase or decrease production, depending on how many products are in the warehouse.

2PL, 3PL and 4PL By the Numbers

Costs matter in choosing a logistics strategy, especially when it comes to prices. 2PLs are usually the cheapest because they only ship your items. Depending on the company, you might pay for every shipment individually or get subscriptions for discounted shipping costs.

3PLs usually work on a monthly or yearly subscription model, but some may charge per item delivered. Costs vary depending on the size of your business and can be as low as a few cents per item to thousands of dollars per month.

4PLs are the most expensive of the three options since they offer consultancy services and logistics assistance. 4PL companies usually offer custom pricing, so each partner will charge you differently.

What Software Does Your Business Need?

Your business needs different types of logistics providers and software, depending on your business goals and needs. A 3PL is the most common option, but you can opt for a 2PL if you’re already doing in-house logistics management or a 4PL if you want to outsource your entire supply chain and logistics process.

If you don’t know which one to pick, meet with 3PL consultants and ask them about which option is best for your company.

Key Takeaways

The main difference between 2PL, 3PL and 4PL companies is their scope of work. 2PL providers are essentially shipping carriers, 3PL companies take over your inventory and warehousing operations while 4PL companies control almost your entire supply chain network.

All three logistics company types offer different things, so talk to consultants and do some research before choosing which type of logistics provider is the best for you.

2PL vs 3PL vs 4PL FAQs

What are the 3 Types of Logistics?

The three main types of logistics are:

• Inbound logistics, which involves moving goods from suppliers to producers. An example of this is sending car parts to car manufacturers.
• Outbound logistics, which involves moving finished products to customers. For instance, sending a handbag from the warehouse to the person who ordered it.
• Reverse logistics, which involves moving products from the customers back through the supply chain. This usually happens when the customer returns their product due to defects or other reasons.

What is the Difference Between 3PL and 4PL?

The main difference between 3PL and 4PL is its scope. 3PL companies take over your supply chain and logistics operations but don’t have the power to make decisions on their client’s behalf. Meanwhile, 4PL companies are more like partners in that they can negotiate with shipping carriers and influence production for the client’s benefit.

Is a Freight Forwarder a 2PL?

Freight forwarders are a 2PL because their main business activity is sending products from a company to the customer.

What Is a 3PL Environment? And What Do Third-Party Logistics Companies Do?

Jul 14, 2023 | Blog

The third-party logistics (3PL) environment refers to everything in a 3PL company, from its activities and manpower to its software. Business owners who work with third-party logistics providers should know what goes on in the 3PL environment because it helps them decide whether a 3PL company is right for them.

Read on to learn more about the 3PL environment and what third-party logistics operations providers do.

What Is a 3PL Environment?

A 3PL environment is everything that makes up a 3PL company’s business and activities. The 3PL environment encompasses logistics activities, warehouse and other logistics personnel as well as software. Third-party logistics operations providers can improve their 3PL environment by upgrading their tools, manpower and business processes.

What Do Third-Party Logistics Companies Do?

Third-party logistics companies offer various storage and order fulfillment services to their clients. Most of the time, they take over the client’s entire logistics operations from receiving to shipping. Some even handle customer returns on behalf of the client.

Who Should Consider Outsourcing Their Fulfillment Logistics to a 3PL?

Business owners who don’t have the manpower or budget to handle their own warehousing operations should consider outsourcing logistics functions to a 3PL.

By outsourcing order fulfillment to a 3PL, you won’t have to spend lots of time and money to fund warehouse operations or hire a logistics team to run an in-house fulfillment division. Instead, you can have a vendor send finished products to the 3PL company’s fulfillment centers, and the team there will handle everything.

Another reason to outsource your fulfillment logistics to a 3PL service provider is sustainability. Current sustainability trends in third-party logistics and the market at large mean you may need to minimize the environmental impact of your business to attract customers. Many 3PL companies now offer eco-friendly logistics processes to ensure businesses can stay true to their sustainability promises and reduce their carbon footprint.

What Are the Benefits of Working With a 3PL?

The main benefit of working with a 3PL is workload reduction since the company takes over your logistics processes. Logistics in the supply chain are complicated, so you want to find a comprehensive solution that meets your needs. Here are some other benefits of working with 3PL companies:

Leverage Industry Expertise

Order fulfillment is a complex task, and learning to do it in-house is challenging. Working with third-party logistics service providers gives you access to their expertise and experience. In some cases, 3PL partners can be logistics consultants that help you improve your supply chain and logistics processes.

Save Time and Money

Leasing a warehouse, hiring and training logistics personnel, buying storage equipment and other order fulfillment functions result in high overhead costs. Instead of handling all of those tasks yourself, a 3PL can take over all of them on your behalf – all you need to do is pay their subscription fees. You can then use the time and extra cost savings to develop other business core competencies.

Expand Your Reach

Third-party logistics providers are popular with businesses looking to scale because they can greatly expand your reach. They often operate multiple fulfillment centers across the country or even globally, helping your business sell to more people in other regions and countries.

3PL vs 4PL: What’s the Difference?

The main difference between 3PL and Fourth-Party Logistics Providers (4PL) is their scope of work. 3PLs only take over your order fulfillment, while 4PLs take control of your entire supply chain management process. 4PLs also have more power over your business processes since they’re more like partners than vendors.

In addition to 3PL and 4PL, there’s also 2PL, which essentially involves shipping carriers or freight forwarding services. You’re still responsible for handling all inventory, warehousing and logistics processes except for shipping.

There are many differences between 2PL, 3PL and 4PL. Each logistics outsourcing option offers differing levels of services, so do some research before picking the type of logistics provider to work with.

The 3PL Order Fulfillment Process

Most 3PLs in the logistics service industry follow a similar order fulfillment process to get products to your customer base. Here’s an overview of how 3PL order fulfillment works:

3PL Warehousing

3PL warehousing is one of the main services a third-party logistics provider offers. The company provides warehouse space in its fulfillment centers, and you can ask vendors or manufacturers to send items there.

Receiving

The 3PL order fulfillment process starts with receiving or accepting inventory items and storing them in the warehouse. Different third-party logistics providers have different receiving procedures, but it generally entails letting the 3PL provider know that your products are coming so they can prepare the storage space for them.

Picking

Picking happens when a customer places an order on your eCommerce storefront. 3PL companies usually offer integrations with online storefronts, so they’ll receive the order as soon as the customer pays for their shopping cart. The warehouse crew will create a picking list of what items the customer needs, collect them and prepare for shipping.

Packing

When everything on the picking list is picked, the warehouse crew will pack them securely. Some 3PL providers offer packing methods like cardboard boxes, bubble mailers, poly bags and more.

Shipping

Once everything is packed, the third-party logistics service provider will print shipping labels and send the items off to shipping carriers to send. Third-party logistics providers usually have a carrier partner they frequently work with. However, some have a selection of carriers or freight forwarders that you can choose from based on which one offers the best rates and makes timely deliveries.

Returns

Third-party logistics providers can also help you handle product returns. This usually happens when customers receive the wrong items or defective products. Having your 3PL partner handle returns means you don’t have to spend as much on customer service expenses, helping you raise customer satisfaction at a lower cost.

Most Valuable 3PL Services to Look For

Some 3PL companies may offer other services beyond order fulfillment. Here are some useful 3PL services to look for if you want to level up your logistics operations:

Inventory Management

Inventory management is a system companies use to ensure balanced stock levels at all times – not too much, not too little. 3PL companies can help regulate your stock by advising you on when to send in new products, keeping the inventory levels at their warehouse optimal.

Distributed Inventory

3PL companies with multiple distribution centers or warehouses often offer distributed inventory. This means your items will be spread out across the company’s distribution centers, and your 3PL partner will contact the closest fulfillment center to the customer to handle the delivery.

Returns Management

3PL companies can handle customer returns on your behalf whenever they get the wrong item or receive a defective product. The warehouse team can send a replacement product to the customer, then send the defective item back for refurbishment or disposal, depending on its state.

Kitting and Customization

Kitting and customization happen when a customer buys customized product bundles. For instance, let’s say someone buys a bundle containing a bottle of shampoo, a toothbrush and a tube of toothpaste – three items you also sell separately. The 3PL company is responsible for picking each item in the bundle and placing them in one package to ship to the customer.

Advanced Data Analytics

Many 3PL companies use inventory and warehouse management software to handle your logistics operations. In addition to automating various manual processes, their software can also provide you with reports on inventory levels and other relevant data. These reports give you the information necessary to make informed decisions about your order fulfillment and production strategies.

International Fulfillment

Many eCommerce businesses can expand their reach globally with the help of 3PL logistics services. Some third-party logistics companies operate fulfillment centers in different countries, which means you can promise timely deliveries and low shipping costs to international customers.

Key Takeaways

The 3PL environment covers everything a third-party logistics company has and does, including manpower, software and logistics activities. As a business owner, you can work with 3PL companies to improve your order fulfillment process, expand your reach and leverage their expertise.

If you want even more assistance managing your supply chain, you can work with 4PL companies that will take over your entire supply chain operations and develop improvements where needed.

What Is a 3PL Environment FAQs

What is the difference between 3PL & 4PL?

The difference between 3PL and 4PL is their scope. 3PL usually helps you handle order fulfillment and inventory management, while 4PL takes over your entire supply chain management process.

What is the biggest 3PL company?

The biggest 3PL company in the world is Kuehne + Nagel, which posted almost $40.8 billion in gross revenue in 2021.

Is 3PL the same as outsourcing?

3PL is the same as outsourcing because you’re hiring a third-party company to handle your order fulfillment.

What is Discreet Shipping? And Should You Use It?

Jul 14, 2023 | Blog

As shopping behaviors continue to develop, businesses must find ways to stay ahead. Discreet shipping has gained traction in the last decade, offering customers greater privacy and peace of mind when their goods are delivered. What is discreet shipping? We’ll explore what it entails, its practical applications for eCommerce, and how you can leverage these benefits for your business.

What is Discreet Shipping?

Discreet shipping refers to packaging and shipping items that don’t reveal their contents or identity. The packaging may be plain or unmarked, and the sender’s name or return address may be omitted. The goal is to protect the privacy of the person receiving the package, even during shipping.

Why Use Discreet Shipping in eCommerce Fulfillment?

There are several reasons why eCommerce businesses might choose to use discreet shipping:

1. Privacy: When ordering sensitive or personal items, some customers may wish to keep the contents of their packages private. Shipping discreetly allows them to do so without worrying about others discovering what’s inside.
2. Branding: Discreet shipping may enable some businesses to avoid any potential negative association between their brand and specific products.
3. Security: Discreet shipping helps protect the contents of the package from theft or damage.
4. Avoidance of Embarrassment: A package with an explicit label may embarrass some customers.

Discreet shipping can help eCommerce businesses cater to a broad range of customers, protect their brand, and ensure the security of the package.

Why do people prefer Discreet Shipping?

Discreet shipping has become increasingly popular with customers in recent years, providing a higher level of privacy when purchasing certain items. Rather than having the store or sender’s name printed on the outside of the box or mailer, discreet packaging is designed to be more generic and concealed, often using plain brown boxes and tape with no identifiable features. 

This reassures customers that their personal choices are kept private while ensuring they can trust their items will be adequately protected during transit. On top of preserving customer privacy, discreet shipping also helps maintain consumer loyalty and trust in a brand. Customers are more likely to return to a store if they know that their items will arrive securely without jeopardizing their safety or exposing them to unwanted attention.

How to Prepare your Store for Discreet Shipping

Preparing for discreet shipping can be accomplished in a few steps:

• Create an option for discreet shipping at checkout: Make sure customers can choose discreet shipping. This could be a simple checkbox or a drop-down menu where customers can select the type of shipping they prefer.
• Use plain packaging: Use simple, unmarked packaging for discreet shipping orders. Avoid company branding or logos; consider using plain brown or white boxes or envelopes.
• Remove identifying information: Remove any identifying information from the packaging, such as the company name or return address.
• Train employees: Train employees on the importance of discreet shipping and how to handle and package these orders properly.
• Communicate with customers: Communicate with customers about your discreet shipping policy and how you will handle their orders. This will help them understand what to expect and feel more confident in their purchase.
• Be aware of legal requirements: Be mindful of any legal requirements for shipping certain products, and make sure that your discreet shipping practices comply with these laws.
• Track and Monitor: Keep track and monitor the process of discreet shipping orders to ensure that everything is going well and to be able to resolve any issues that may arise.

Where Can You Buy Discreet Shipping Boxes?

With a range of options from packaging suppliers, online marketplaces, specialized shipping supply stores, and custom packaging companies available – there’s no excuse not to go discreet when mailing out your items.

• Packaging suppliers: Packaging suppliers often offer plain, unmarked boxes that can be used for discreet shipping. Your packaging can also be custom printed without branding.
• Online marketplaces: Online marketplaces such as Amazon and Alibaba sell plain, unmarked boxes that can be used to ship discreetly.
• Shipping Supply Stores: A shipping supplies store like Uline or Packaging Supplies By Mail typically stocks plain, unmarked boxes that can be used for discreet shipping.
• Custom Packaging companies: A custom packaging company can also create plain packaging tailored to the specific size and shape needed without branding.

Many eCommerce platforms, such as Shopify, BigCommerce, and WooCommerce, offer discreet shipping add-ons, which you can integrate into your store’s checkout process. The add-ons also allow you to choose plain packaging from the options available.

Benefits & Barriers Of Being Subtle

The subtlety of discreet shipping has the following benefits: 

Discreet shipping provides an invaluable service, benefiting both customers and businesses alike. It ensures privacy when ordering sensitive items and avoids potential embarrassment for consumers; all while protecting companies’ branding assets. Furthermore, proactive security measures are implemented to ensure packages arrive safely at their destinations – making discreet shipping a win-win solution in many situations.

Some barriers to discreet shipping include the following:

However, for some products and services, opting for discreet shipping may not be the right choice. Extra charges such as packaging costs, labor fees, and additional shipping expenses are to be taken into account before settling on this mode of delivery. 

Businesses must abide by all legal policies associated with their package contents in order to avoid any serious repercussions that could arise from improper compliance. With these various considerations at play when considering discreet shipment methods it behooves organizations to assess them thoroughly prior to making a decision about how they ship out goods

What Discreet Packaging Looks Like

Discreet packaging is outer packaging that typically looks plain and simple, often with no branding or identifying information on the outside. It may be a plain brown or white box or a plain envelope. The packaging may also be unmarked or have minimal labeling that does not reveal the contents of the package. It’s also important to note that the package may not have any indication of the store or the sender. Instead, the return address may be a PO Box or a fake address. It might also have a generic label such as “shipping department” or “fulfillment center” instead of the company name.

Some examples of discreet packaging include:

• A plain brown box with no branding or identifying information on the outside.
• A plain white envelope with minimal labeling and no indication of the sender or contents.
• A plain box or envelope with a generic label such as “Shipping Department” or “Fulfillment Center” instead of the company name.
• A plain box or envelope with a return address that is a PO box or a fake address.

It’s important to note that while discreet packaging may be plain and simple, it should still be sturdy and protect the package’s contents during transit.

Discreet Packaging and the Unboxing Experience

Unboxing experiences can be influenced in several ways by discreet packaging. Certain brands can use minimalist packaging to create a clean aesthetic and create a sense of luxury as well as privacy and surprise once the package is opened. 

At the same time, branding your outer packaging with logos or slogans can also enhance the unboxing experience for customers who recognize and associate with that brand. However, some customers may find that discreet packaging does not create an exciting unboxing experience if they are unaware of its purpose. 

In general, discreet forms of packaging can have a positive or negative impact on the unboxing experience, depending on the customer’s expectations and preferences. The seller needs to communicate their policy clearly and professionally so that customers know what to expect from their purchase.

Discreet Packaging Examples

Protect yourself from prying eyes with discreet shipping solutions! This secure system ensures sensitive goods such as medical supplies and lingerie are delivered to your doorstep without risk of judgment or embarrassing exposure. Some examples of items that are often sent discreetly are below.

1. Adult products: It is common for companies that sell adult products to use discreet shipping to protect their client’s privacy.
2. CBD products: CBD companies often use discreet shipping to protect their products from theft and damage and comply with legal requirements.
3. Medical products: For patients’ privacy and to prevent customs seizures, some medical devices require discreet shipping.
4. Beauty products: Some beauty companies use discrete shipping to protect their branding from being associated with certain products.
5. Pharmaceuticals: Pharmaceutical products are generally shipped discreetly to protect the privacy of their customers.
6. Vape products: In some instances, vaping companies use discreet shipping to prevent theft or damage to the package contents and to satisfy legal shipping requirements.
7. Luxury items: Shipping discreetly is a tool luxury brands use to protect high-value products by preventing theft and enhancing their customer experience.
8. Subscription boxes: In addition to protecting the contents of subscription boxes from theft or damage, some subscription box companies use discreet shipping to comply with shipping laws.

Discreet Packaging and Everyday Products

Traditional Discreet Shipping

Traditional discreet shipping means packaging and materials that don’t explicitly show the inside contents, such as cardboard boxes, single-color paper, and generic labels. Businesses can take advantage of their local postal service’s flat-rate unmarked boxes that provide quick shipment while keeping the package hidden. 

To further conceal what is inside the box or for international shipments, companies might utilize a third-party logistics system (3PL) and list them as the sender and their return address if a customer isn’t satisfied. Adopting these traditional discreet shipping methods will help ensure confidential products stay private.

Hiding in Plain Sight

It may seem counterintuitive, but an essential aspect of discreet shipping is actually ensuring that your package doesn’t stand out from the others. This has become easier with the rise of eCommerce and its plentiful packages sent out daily; if you’re able to blend in with other parcels using similar materials, no one will be any wiser. 

For instance, Amazon’s particular box shapes and sizes can be replicated without their company logo, while mirroring the same type of broad tape they use will also help keep it under wraps. With a little effort and intelligent shopping, everyone can ship their goods anonymously without drawing attention to them.

USPS Discreet Shipping

USPS Discreet Mail Service provides a secure shipping and delivery policy to ensure customer satisfaction. They track the order from start to finish, and customers can have their package delivered to a USPS PO Box for an added level of security. 

Customers can place an order with their local USPS Discreet Mail Service office to request discreet service and choose from three available shipping services – USPS Priority Mail, Retail Ground, or Priority Mail Express. This reliable mail service is dedicated to providing customers with fast, secure, and discreet delivery of their packages.

FedEx Discreet Shipping

FedEx offers discreet shipping services at no additional cost to ship to their customers, delivering packages in plain boxes with only the company logo. The delivery person follows a strict courier policy, assessing overall environmental conditions and re-attempting delivery if they deem it unsafe. 

Whether you need your package overnight or two days later, FedEx provides three services: Ground, First Overnight, and 2 Day. These options guarantee secure and timely delivery while keeping privacy at its core.

Amazon Discreet Shipping

Amazon understands the value of protecting customers’ privacy and has created a discreet shipping policy that ensures all items are shipped with only their brand name on the box. The policy guarantees that all packages will be contained in unmarked boxes, with no indication of what is inside. Perfect for occasions when someone is sending or receiving gifts such as toys and musical instruments, sensitive electronics, and accessories, or expensive gadgets and laptops. 

Discreet International Shipping

When shipping goods internationally, it’s important to ensure that the correct paperwork is in place and all relevant information has been provided. Failure to do so can result in expensive customs fees or even the seizure of shipped items. Using generic packaging materials for international orders should be sufficient; however, attempting to hide contents from authorities can lead to serious consequences. Additionally, if customers request you mark a package as a “gift” or something else in an attempt to avoid taxation concerns – this too needs special consideration on the part of sellers before agreeing which could potentially put their business at risk!

 Key Takeaways

1. Discreet shipping is used to protect customers’ privacy by not revealing the contents of the package. It is typically used for sensitive or personal items such as adult products, CBD products, medical products, beauty products, pharmaceuticals, vape products, high-value items, and subscription boxes.
2. Discreet packaging typically looks plain and simple, often with no branding or identifying information on the outside. It may be a plain brown or white box or a plain envelope. The packaging may also be unmarked or have minimal labeling that does not reveal the contents of the package.
3. Discreet packaging can affect the unboxing experience in several ways. It can make customers less excited to receive the package. However, brands can take the opportunity to spend money on the branding of the box’s contents instead of the packaging itself.
4. Businesses may choose to use discreet shipping for various reasons, such as protecting their brand, protecting the privacy of their customers, and complying with legal requirements.
5. The seller needs to communicate clearly and honestly with the customers about the discreet packaging policy and how it will affect the unboxing experience.
6. Different types of discreet packaging are available, such as plain brown boxes, plain white boxes, plain mailing envelopes, Jiffy bags, bubble wrap envelopes, and custom-made plain packaging.
7. The specific packaging used may vary depending on the item being shipped and the needs of the business or customer.
8. It’s important to note that while the external packaging design may be plain and simple, it should still be sturdy and able to protect the contents of the package during transit.

Discreet Shipping FAQs

Is Amazon Discreet With Shipping?

The company ensures that no one can see what’s inside the package or even know to whom it’s addressed before it gets delivered. No labels on the outside of the box give away its contents. However, some items sold and shipped through third-party sellers may not be as well-packaged, so if you’re concerned about your privacy, check this before making a purchase.

How Do I Discreetly Receive a Package?

Most retailers and online stores offer discreet shipping during the checkout process. It is common for courier companies to provide this type of confidential shipping service at no extra charge to their customers. As a result, porch theft can be prevented, and customers’ privacy can be protected.

Customers who want their orders delivered to a PO Box rather than a residence can request that service. A return address must be provided by the customer for this method. However, customers can request in-house delivery while still maintaining anonymity.

How to Ship Anonymously

Companies looking to provide a secure and confidential shipment of their products can take advantage of traditional discreet shipping methods. This includes using packaging materials such as cardboard boxes, single-color paper, generic packaging, and labels or utilizing the local postal service’s flat-rate unmarked boxes for quick delivery that keep the contents hidden. Companies may also wish to employ third-party logistics systems with return addresses if customers are not satisfied – all helping ensure confidentiality is maintained throughout transit and arrival.

A Complete Guide to Warehouse Management Systems (WMS)

Aug 4, 2023 | Blog

What is Warehouse Management?

Warehouse management is the process of overseeing all operations and activities in a warehouse. This generally includes receiving, picking, packing and shipping goods, planning workloads, training staff and handling customer returns.

While warehouse management is barely visible to customers, it’s integral to ensure goods are delivered on time. Good warehouse management ensures every activity is run as efficiently as possible, from maximizing inventory storage to organizing goods for easy picking to ensuring returns are handled professionally.

However, running a warehouse can be costly, especially for smaller eCommerce businesses. Instead of managing their own warehouses, they sometimes hire third-party logistics (3PL) companies. Outsourcing warehouse operations helps eCommerce businesses focus on expansion and sales instead of spending considerable time and resources to manage inventory and take customer orders. 

What is a Warehouse Management System?

A warehouse management system (WMS) is software that assists you in the warehouse management process. A warehouse management system gives you real-time updates on your inventory levels, warehouse team productivity and order fulfillment progress.

Warehouse management systems are essential for managers because they can use them to gauge work performance and spot improvement areas. They also provide managers with the data and reports to make informed business decisions.

The best warehouse management systems assist your company with five key processes:

Inventory Receiving and Storing

One of the primary purposes of a warehouse is to receive and store inventory items from a manufacturer or distributor. Warehouse management systems let you scan and organize each new item upon arrival and storage, so you’ll know which items have arrived and where they’re stored.

Inventory Tracking

Inventory tracking ensures you get real-time updates on your stock levels. This helps in determining how many items you can sell and whether you should order more items based on accurate forecasts of consumer demand.

As your eCommerce business grows, inventory tracking will become even more important because you may handle hundreds of goods and dozens of different product types simultaneously. Manual inventory tracking is more prone to human error and may result in costly mistakes.

Picking and Packing

When employees pick and pack items, they take the goods from warehouse shelves and pack them for shipping. Warehouse management systems can generate picking lists that instruct your warehouse team to pick items as efficiently as possible.

Your warehouse management system also automatically generates shipping labels, which packers attach to products after packing them.

Shipping

Warehouse management solutions let you track the shipping progress in real time. You can also show the shipping progress to customers so they know where their items are at any time.

Reporting

Your warehouse management system should provide advanced reporting features that cover order fulfillment accuracy, inventory forecasting and warehouse expenses. 

Automating report creation means you don’t have to spend much time gathering data. Instead, you can immediately use the insights from these reports to improve your warehouse operations. 

Why Should I Use a WMS?

You should use a WMS because manual warehouse management is prone to human error, especially if you run a large eCommerce business.

Here are five other reasons why you should use a WMS:

Enhance Inventory Management Efficiency

Warehouse management systems improve your inventory management by monitoring its levels, increasing pick and pack efficiency and improving order fulfillment processes. By automating these various inventory management processes, you’ll get all the information needed to run your warehouse smoothly without spending precious time asking around or looking for data.

Improve Customer Happiness

While customers don’t directly interact with your warehouse, it plays a big part in their satisfaction. Smooth warehouse operations with the help of a WMS means customers receive orders quickly and accurately. Even if their item is defective, a good WMS can help you handle product returns to ensure customers get their replacement goods quickly.

Get Larger Profit Margins

The right warehouse management software improves your sales and order processing speed without adding new warehouse staff. This means you can process more items and sell more products without a considerable increase in cost, ultimately improving your profit margins.

Gain Insights for Future Improvement

Warehouse inventory management systems generate reports on essential warehouse performance parameters like order accuracy, orders fulfilled and staff efficiency. By analyzing these reports, your management team can develop plans to improve your eCommerce business further down the road.

Stay Updated With Local Regulations

In addition to keeping up with customer demand, businesses must also follow local regulations and rules. A good WMS should give you the tools necessary to stay compliant with these regulations by recording real-time data, making your company easier to audit.

How Do Warehouse Management Systems Work?

Warehouse management systems work by monitoring and automating key warehousing processes. Here’s a look at how warehouse management systems help you in those areas:

Inventory Receiving and Shipping

Tracking the goods that enter and exit your warehouse is one of the primary functions of a WMS. 

For incoming items, the WMS will register them in the system and send the products to the appropriate shelf or container for storage.

For outgoing items, the WMS will show you which shipping service is delivering the products and provide real-time tracking information. The WMS can also show the tracking information to the customer, so they know when their products will arrive.

Inventory Management

A WMS helps you track and manage physical inventory levels in the warehouse. When inventory stock starts to get low, the WMS can notify you to order more from the distributor or supplier before stock runs out.

Picking and Packing Orders

When a customer order comes in, your warehouse crew picks and packs the items to get them ready for shipping. Warehouse management systems create picklists to help your team pick items faster. The WMS also creates shipping labels, so the items can be ready for shipping as soon as they’re packed.

Warehouse Performance Reporting

Real-time warehouse reporting is one of the greatest strengths of a WMS. You can easily get insights into your warehouse’s operation by generating real-time reports. Instead of spending hours gathering data, you can immediately use this information to make informed decisions and improve your warehouse team’s performance.

Advantages of Using a Warehouse Management System

While it may be a considerable investment, a warehouse management system pays for itself in many ways. Here are eight great benefits you’ll get by implementing a WMS:

Inventory Control

Inventory control involves managing your warehouse’s inventory levels to prevent understock and overstock. Automating inventory control through a warehouse management system means you don’t have to spend time checking inventory levels regularly. Instead, your system will notify you when it’s time to order new products.

Traceability

Transparency and traceability are essential for both businesses and customers. Tracking where products are in real-time allows you to identify bottlenecks and delays in the supply chain. On the customer side, real-time product tracking ensures they know when their items are arriving.

Some product safety regulations also require your goods to be easily traceable to prevent fraud and counterfeiting. From a safety standpoint, knowing where a product comes from and where it’s going also makes product recalls easier when necessary.

Improved Customer Service

The relationship might not be immediately clear, but a warehouse management system contributes to customer service. Your WMS gives you real-time updates on how many items are in stock and which ones are out of stock, which means customers likely won’t order something that’s out of stock. 

Warehouse management improvements help you ship products quicker, satisfying your customers’ demands for fast deliveries.

Task Management

There are many tasks in your warehouses or distribution centers, like picking and packing orders, loading trucks and handling returns. Your WMS can create these tasks and assign them to the relevant employees immediately based on where they are in the warehouse. 

Your software’s task management features also prevent workers from walking from one end of the warehouse to another when completing their work by assigning them to well-defined work zones, increasing overall warehouse efficiency.

Containerization

Containerization is when you merge multiple individual shipments into a single container to ship together. You can save on shipping costs by sending multiple items in one big batch. 

Your WMS assists in containerization by choosing which items go into which container, ensuring they stack well and nothing gets crushed or damaged in transit.

Increased Speed of Orders

A warehouse management system increases the overall order processing and fulfillment speed by making product picking, packing and shipping more efficient. You can deliver more items to more people by increasing order speed, increasing total revenue and customer satisfaction.

Labeling

Without a WMS, you may need to create shipping labels manually, which takes a lot of time and effort. A warehouse management system can automatically generate shipping labels, so your warehouse team only needs to attach them to packages before sending them to the carrier.

Labor Tracking

Labor management features provided by a WMS track your warehouse staff performance in real time, giving you insights into how your team works. Tracking labor lets you identify possible logistics bottlenecks, pinpoint improvement areas and learn which employees may need extra training to succeed.

Types of Warehouse Management Systems

There are four warehouse management system types, each with unique benefits and drawbacks. Here’s a look at each WMS type:

Standalone System

A standalone warehouse management system is the most basic WMS in this list because it only offers warehouse management features and nothing else. A standalone WMS is usually installed on-site, meaning the vendor will come to your warehouse and install a physical server for the WMS.

Standalone warehouse inventory management software is typically the most affordable due to its limited features, but it may not be enough if you need extra functionality from your WMS. Standalone warehouse management systems are best for businesses without a large software budget and limited warehousing needs.

Cloud-Based System

A cloud-based warehouse management system means the vendor provides its services through the Internet without any physical on-premise installations. Cloud WMS users usually pay a subscription fee to use these services instead of an upfront expense, making them more affordable for new businesses without large premises.

Cloud-based WMS is scalable, meaning you can pay for extra accounts and features if necessary. It’s also easier to update since the vendor can do it online. However, as with most cloud-based services, you need a strong and stable Internet connection to make the most out of a cloud-based WMS.

ERP Module

ERP (enterprise resource planning) is a software bundle that merges numerous business functions like accounting, inventory and human resources in one package. It’s a good choice if you want to merge all your company information into one dashboard that’s accessible by all employees.

While ERP systems often have a warehousing or inventory management module, it’s not the system’s core functionality. Additionally, implementing ERP is often expensive and time-consuming, so you may be better off implementing dedicated warehouse management software if you can’t commit to full ERP implementation.

Supply Chain Modules

Supply chain management systems work at a much broader scope than a WMS but generally still provide warehousing features. These modules work best for companies that work with numerous supply chains, like manufacturers and retail businesses.

How to Choose the Best WMS

Choosing the best WMS means picking the one that caters to all of your warehousing needs at a reasonable price. Here are five tips to help you pick the right WMS for your business.

Identify Your Needs

You should first identify what you need out of warehouse inventory management software. Create a list of feature priorities based on your requirements as a guide when shopping for warehouse management systems. Don’t blindly follow the latest warehouse technology trends because what other companies need may not be what your company needs.

Define Your Budget

Ensure you have a budget before shopping for a warehouse management system. Search for popular WMS providers online, and estimate how much you’re willing to spend on the features you need.

Consider Your Company’s Product Demand

These days, manual demand forecasting can be unreliable, and you may find yourself out of stock in periods of high demand or overstocked in periods of low demand. 

If your product demand fluctuates according to the seasons, it might pay to choose a WMS with demand forecasting. A warehouse management system’s demand forecasting can use historical sales to predict popular product demands, letting you increase or reduce orders based on the forecasts.

Research the Vendor

Purchasing a warehouse management system isn’t a one-and-done deal. You need to build a relationship with the vendor because they’ll provide technical support and apply updates regularly. To pick the right vendor, note how helpful their representatives are and how in tune they are with your needs and requirements.

Plan for Scalability

When shopping for warehousing software solutions, make sure they provide you with room to grow. Ask your vendor representative about how much scalability and customizability their software has – this ensures it can meet your business needs even when your company grows.

Key Takeaways

A warehouse management system makes your warehouse processes more efficient through various features like automated reports, pick list generation and shipment tracking.

While a good WMS offers many benefits, it’s often a major financial commitment, so you need to choose the right one before implementing it. To do so, you need to identify your company’s needs, define a budget and pick the right WMS provider that can scale with your business.

Warehouse Management System FAQs

How do you Improve Warehouse Management?

You can improve warehouse management by measuring your current performance and identifying areas for development. From there, you enhance your warehouse management by:

• Automating time-consuming warehouse processes
• Implementing a WMS
• Training your warehouse staff

What Does a WMS Do?

A WMS (warehouse management system) assists you in the warehouse management process by giving you real-time inventory updates, automatic report creation and demand forecasting, among other features.

What’s the Cost of a Warehouse Management System?

The cost of a warehouse management system varies depending on the vendor and the features you choose.