Today, consumers expect products to arrive in two days or less. Anything longer than that feels like a lifetime. The logistics and fulfillment landscape for Shopify brands has rapidly shifted over the past few years, in part due to COVID-19 and technological advancements.
Aside from supply chain woes, online stores are constantly navigating the issue of order fulfillment as demand grows, especially amidst the holiday season. To learn more about how ecommerce fulfillment services are evolving to meet brands and consumers alike, we sat down with Casey Armstrong. He’s the CMO at ShipBob, an end-to-end global fulfillment provider working with brands such as Hero, Muddy Bites, and TB12.
Get ready to dive deep into:
- Shipping challenges for small businesses
- How brands can set themselves up for success before international shipping
- What to look for in a fulfillment partner
Ecommerce Fulfillment isn’t One-Size-Fits-All
So much of a business can be automated, but what about order fulfillment? That’s a different story.
Before 2014, the ShipBob founders had their own ecommerce business. Similar to many brand owners, they realized they could automate a good portion of their startup operations, but when it came time to nail down how to automate order fulfillment, they had a hard time finding an effective solution.
One of their biggest challenges was finding a fulfillment company that could meet their size, scale, and business needs as a SMB. Stuck in that gray area where they needed help but weren't large enough to qualify with certain service providers, they decided to create an ecommerce fulfillment solution independently. Enter: ShipBob.
The challenge of finding a fulfillment provider highlighted the bigger picture: major retailers (Target, Walmart, and Amazon) are fulfilling orders on a massive scale, often with same-day or next-day delivery. Now, that’s become the consumer expectation, even for small brands.
“Small and medium-sized DTC businesses are expected to step up and operate on the level of Target and Amazon. There’s the ‘Amazon Expectation Gap’ and brands of all sizes need to overcome that,” Armstrong explains.
So how can DTC brands keep up with customer expectations, and what can brands do to create a 10/10 customer experience and evolve as shopping habits change? Find the right ecommerce fulfillment partner.
Before selecting a warehousing and overall fulfillment partner, Armstrong suggests brands look at:
- Where are the majority of customers located?
- What’s the final destination for the largest percentage of packages?
Proximity to inventory is a huge piece of the puzzle. ShipBob runs 40 fulfillment centers across six countries. With over 7,000 customers, they seek out the most advantageous locations for new warehousing centers, ones that are close to where large order volumes are placed.
“This helps with shipping speed and reduces shipping costs for our customers,” says Armstrong. “Those savings can help them run a more profitable business with lower shipping rates, or it even allows them to provide free or low-cost shipping.”
Plus, today’s DTC brands are shipping ecommerce orders, both domestically and internationally. This adds another layer of complexity to order fulfillment services and shipping.
Pair that with different ecommerce platforms and multi-language or multicurrency needs, and without a doubt, brands need to think bigger moving forward.
“Customers expect brands to have a global reach. DTC businesses will either need a fulfillment solution that can fulfill globally, or they’ll need to find a new way to distribute inventory worldwide.”
Ecommerce Fulfillment Evolves to ShipBob’s Omnifulfillment Solutions
In addition to evolving customer expectations around fulfillment, Armstrong notes a shift in general shipping and selling behaviors.
“Brands have been using platforms [Shopify, Big Commerce, Instagram] to sell directly to consumers, but there’s been a shift. Now, these brands also see value in selling through different, online retailers,” says Armstrong.
Branding themselves as a “global omnifulfillment solution,” ShipBob strives to meet the needs of DTC brands while providing additional support, especially for those who sell through various sales channels (even B2B and B2B2C).
“More and more DTC brands are selling through different online retailers such as Target, Nordstrom, and Amazon Prime. In addition to fulfilling and shipping products to consumers, they need to fulfill and ship orders to other stores or the retailer’s distribution centers too,” explains Armstrong.
Plus, there’s a growing demand for customization. The unboxing experience is one area of focus for ShipBob. Recently, they’ve seen a huge influx of requests for customized tissue paper, gift notes, and even branded tape. The package itself is an opportunity to surprise and delight the customer and further improve the customer experience.
So, how does ShipBob offer customization when every brand has different inventory and SKUs?
It comes down to simplification.
ShipBob has its own proprietary warehouse management system (WMS), which powers their entire ecommerce fulfillment network. Their unique method standardizes order processing, even in the case of customization. By streamlining the order fulfillment process and the types of customization capabilities offered, ShipBob has created a workflow across their entire fulfillment network that works for any ecommerce business, regardless of size or quantity of goods.
For example, when ShipBob prints a custom note, they zoom in on the supply chain with an emphasis on “chain.” The team asks themselves, “Where in the supply chain do these customizations fit?” Then, they nail down a way to make it work within the existing workflow/fulfillment process, whether they’re filling goods in Southern California or Australia.
“Where do you get a 100% open rate? It’s in the packages you ship to customers. Creating a special experience in order fulfillment makes a difference.”
Challenges and Opportunities for DTC Brands
Looking for a shipping and fulfillment provider?
First and foremost, Armstrong recommends shopping around and then doing a test run with a fulfillment company. Starting small helps brands finetune options before putting in the time and effort into outsourcing on a larger scale.
If international shipping is on the table, diving into the metrics first is most helpful, particularly around which countries have the highest demand for goods. Then, brands can start to explore other challenges that might come up, such as additional shipping costs or duties. Additionally, understanding and meeting different codes, criteria, and regulations for products entering a country are crucial (and not easy). ShipBob offers help; they have a team of international experts who simplify the process and offer advice.
“There are so many ways people should harness data, and we have an analytics reporting tool built into the ShipBob dashboard for customers,” says Armstrong. “It all comes down to understanding where your end customer lives and how you can effectively manage inventory storage.”
Inventory management is a key part of the whole fulfillment equation. Noting recent inventory issues—items sitting on shelves for longer than expected and taking up space—more brands need to look into the inventory level data, notes Armstrong. One look at the data and brands can have a greater understanding of what to reorder and order, what products are moving (or not), and which items should be placed on sale or go in a bundle. Otherwise, it’s a sunk cost.
Take TB12, Tom Brady’s brand. They started with one ecommerce fulfillment center, and then after evaluating many 3PL providers, they switched to ShipBob. Now, they have three different fulfillment centers, which reduced shipping costs by 25%. With ShipBob’s fulfillment network, they can now offer free shipping thresholds and two-day shipping, improving customer satisfaction as a whole.
“Your fulfillment strategy—whether domestic or global—is always going to be an essential factor for a brand, large or small. One way to know when it’s time to look for a provider is when the fulfillment process starts taking up too much time that would better be spent on running the business.”
Armstrong’s Advice for DTC Brands
Armstrong reminds brands, “If you have customer orders, you’re always fulfilling.” Optimizing fulfillment all boils down to pricing, weight, and zones.
First, how many zones are you shipping across? That’s where effective inventory management comes into play. At the end of the day, your inventory should be close to your largest concentration of end customers. To help ecommerce companies find the right location, ShipBob does a time and transit analysis.
Then, all brands should look at their dimensional weight. Many ShipBob customers have gone through product and packaging design iterations to ensure products can fit in smaller boxes. That’s one way to save on fulfillment costs.
Finally, think through how you ship items—do you fulfill it in-house or through a service provider like ShipBob? Regardless, brands (or their ecommerce fulfillment center) need to receive goods as cleanly as possible.
“Garbage in, garbage out as the saying goes,” says Armstrong. “Work with your manufacturer to make sure the goods are sent in the cleanest way possible so that everything can be accurately stored and shipped out on time.”
“Make sure your products are as close to the largest concentration of end customers as possible.”
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