Best Practices For Ecommerce Shipping

Imagine Barry's frustration as 40% of his e-commerce margins vanished into shipping costs. 📦💸 His business was growing, but profitability felt like an endless battle against logistics expenses. Ever faced a similar challenge? Barry's situation was all too common in our industry. Expensive carriers for every shipment, oversized packaging driving up costs, and zero visibility into supply chain operations were creating the perfect storm. Here's how we streamlined operations at our state-of-the-art facilities and achieved a remarkable 60% cost reduction: 🚀 Optimized carrier selection: We analyzed shipping patterns and matched each order type with the most cost-effective solution, reducing average shipping costs by 35% 📦 Right-sized packaging solutions: Implemented automated packaging optimization that eliminated dimensional weight charges and cut material costs by another 15% 🏢 Strategic 3PL partnerships: Connected Barry with facilities in optimal locations, cutting warehousing costs by 25% while improving delivery times 📊 Enhanced real-time visibility: Integrated inventory management systems that prevented costly stock discrepancies and boosted customer satisfaction scores by 40% The results went far beyond cost savings. Barry's delivery times improved from 5-7 days to 2-3 days for 97% of his customers. Through white label fulfillment solutions, his brand maintained its identity while customer complaints dropped by 70%. Most importantly? Barry shifted from wrestling with daily logistics fires to focusing on business growth and scaling his operations. The key insight: Complex supply chain challenges require strategic, data-driven approaches rather than quick fixes. What logistics challenge is currently holding your business back? 🤔 #EcommerceSolutions #LogisticsExcellence

Shipping costs can drain your margins. But most businesses make the same 3 mistakes. They don't negotiate. They don’t optimize packaging. And they don’t plan for zones. Here’s a quick checklist to get your shipping expenses under control: → Negotiate carrier rates. Most carriers are flexible, especially if you're shipping in bulk. Even small discounts compound over time. → Downsize your packaging. Shipping a 5 lb. product in a 15 lb. box? You’re wasting money on dimensional weight fees. Right-size your packaging to reduce costs. → Leverage regional carriers. Big names aren't always the cheapest. Regional carriers often offer lower rates for short-distance zones. → Optimize your shipping zones. Distribution centers close to your key markets save time and reduce costs. Every mile adds up. → Invest in automation tools. Platforms that compare rates and manage shipments in real-time pay for themselves quickly. Shipping isn’t just a cost—it’s a controllable variable. Small adjustments here = big savings later. Where do you see the biggest gaps in your shipping strategy?

Because inventory causes exponential pain with multiple warehouses... This infographics shows how to manage inventory in this context: ➡️ Centralize Inventory Visibility ↳ Issue: not knowing inventory levels across locations can lead to overstock in one warehouse and stockouts in another ↳ Action: Implement an inventory management system/ ERP that shows real-time inventory positions for all warehouses in one snapshot ➡️ Classify Products and Prioritize ↳ Why: Not all SKUs deserve the same treatment; some are high-value, others are seasonal ↳ Action: Use ABC analysis to rank products by focusing on A-items for tighter control ➡️ Define Replenishment Rules by Warehouse ↳ Why: Different warehouses cater to different regions or demand patterns. One-size-fits-all reorder points (ROP) won’t cut it ↳ Action: Tailor ROP, safety stock, and min-max levels by location. Consider lead times from central distribution centers or suppliers for each site ➡️ Breakdown Forecast by Warehouse ↳ Why: Each warehouse faces unique market dynamics ↳ Action: Generate warehouse-level forecasts, combining local sales trends with broader S&OP inputs ➡️ Plan Transfers Strategically ↳ Why: Sometimes it’s of lower cost or faster to transfer stock than reordering from suppliers ↳ Action: Set up a transfer framework; regularly review surplus vs. deficit at each location. Automate triggers for transfer orders when it’s cost-effective. ➡️ Monitor KPIs Proactively ↳ Why: Multi-warehouse complexity can hide inefficiencies when not tracking the right metrics ↳ Action: Track fill rate, inventory turnover, stock aging, and transfer costs at each site. ➡️ Plan Direct Dispatches & Save Costs ↳ Why: Dispatch directly from the plant to save logistics costs ↳ Action: Prepare daily dispatch plans targeting direct replenishment from the plant and use these warehouses for milk runs for distributors Any others to add?

“I got 90% off base shipping rates. I know a guy, I can connect you.” RUN. 🚩 When merchants ask for advice on how to optimize costs, there is always someone who “knows a guy” or someone who claims to be an amazing negotiator who can grind down your carrier. If you hear that, you should run. This isn’t exhaustive, but here are the real ways to save on shipping costs: 1) Is your inventory in the right place? Understanding where your demand comes from will dictate where to locate your inventory.  Placing your inventory in the right place drives down the distance that a package travels, and therefore drives down your cost.  If you aren’t doing a network analysis before you start, you are already off on the wrong foot. 2) Can you leverage scale? One reason 3PL’s exist is that they are points of aggregation. Labor can be shared across multiple accounts for order processing, and a carrier can pick up packages from multiple brands at one location, reducing the total cost. 3) Can you utilize multiple carriers? Different carriers focus on different weight bands and locales.  There are great carriers for lightweight packages and better ones for heavier products.  Regional carriers might serve one region really well, but not be nationally focused. 4) Do you have the technology in place to realize these gains? It’s a non-negotiable to have a system that can dynamically route orders to the correct fulfillment location.  Ask if your provider uses "rateshopping." This should not be hardcoded based on zip code. It should be dynamic based on your inventory levels and the location of the buyer.  Second, if you are utilizing multiple carriers, you want to ensure you have software that can shop for rates in real-time, looking at packages, destinations, and rates from the carrier. 5) Can you optimize your packaging materials? It is expensive to ship air.  Making sure you have the right boxes and are creating denser packages drives better returns. If someone’s “advice” for better rates is to talk to “their guy,” they are full of it. Run. There are concrete ways to optimize costs.   It takes great software and a plan to make it happen. There are also so many talented consultants who can help you with this (a few come to mind below). Nate Skiver, Kathleen Sullivan Garman , Robert Clemons, Timur Eligulashvili, John McClymont, Aaron Alpeter

If you're in search of a 3PL, you're going to want to read this: A brand once sent me a 3PL quote and said, “Looks solid. $1.50 pick and pack. Way better than the $2 quote we got elsewhere.” I asked, “Did you check the additional fees section?” Here’s what we found: Additional $2.00 per order for handling fees Additional $0.50 per order for labeling fees So while 3PL A advertised $1.50, the actual cost for a simple one-item order was closer to $4.00. Meanwhile, 3PL B quoted $2.00, and actually meant it. When people talk about "hidden fees" in this industry, this is exactly what they are referring to. Instead of presenting the full cost up front, some 3PLs show only a portion of it and bury the rest in fine print. Another common example is shipping quotes. Some providers will exclude fuel, residential, or delivery surcharges, making their rates look lower. Those missing dollars are often enough to sway a brand's decision in the wrong direction. So, how do you protect yourself? In your RFQ, include your last 100 orders and ask each 3PL to provide two things: 1. The total fulfillment cost [including order processing, pick and pack, labeling, packaging materials, and anything else that would appear on the invoice] 2. The total shipping cost [including all surcharges, such as fuel and delivery area fees] If you do this, you are no longer comparing pricing sheets. You are comparing sample invoices.

I heard this week at TIA that several brokers are seeing jumps in volume, meaning that we could have a semblance of 'peak season' this year. With consumer spending on the rise, many are already starting their holiday shopping, which means (hopefully) increased demand for freight services. The 2024 peak shipping season is expected to be milder than previous years, but still requires strategic planning. Factors influencing this year's peak include: • Ample capacity due to a soft market • Ongoing inflation concerns • Early start to holiday shopping by consumers (over 40% have already begun) 🔑 Key Holiday Commodities During the holiday season, certain commodities see increased demand: 📱 Electronics: Smartphones, gaming consoles, and smart home devices 🧸 Toys and Games: Always a holiday staple 👕 Apparel and Accessories: Winter clothing and fashion items ⏲️ Home Goods: Decorations, kitchenware, and small appliances 🍶 Food and Beverages: Specialty items, alcohol, and non-perishables 💄 Beauty and Personal Care Products: Gift sets and luxury items 💪 Strategies for Success • Secure Capacity Early: Despite the softer market, it's wise to lock in capacity early to avoid peak-season surcharges and ensure the best rates. • Leverage Technology: Invest in tools that provide visibility and optimize your routes. Real-time tracking and automated workflows can streamline operations and enhance efficiency • Develop Contingency Plans: Have backup carriers and alternative shipping methods ready.. even consider small parcel carriers for emergencies, despite potentially higher costs. • Strengthen Carrier Relationships: Now is the time to build and maintain strong partnerships with your carriers. A reliable network will help you manage unexpected challenges. Brokers, any other holiday commodities I’m missing here?

In the last 12 months, we’ve dramatically scaled our 3PL partnerships at Two Boxes. As a result, I’ve learned a lot about what really makes a great 3PL (and what qualities brands should look for). Here are my top 3 recommendations for vetting a partner: # 1 – What are the facilities like? If you’re running a brand, make sure to see a 3PL’s facilities in person. Are they clean? Are they organized? Do employees seem happy? If you can’t answer “yes” to all these questions, run in the other direction and look for a new partner. # 2 – What’s their protocol for handling returns? When meeting 3PLs, start by asking what their protocol looks like from end to end. Dive deep into how they receive inventory and which warehouse management system they use (if they’re using software to begin with). TLDR: only work with the most efficient teams. # 3 – What metrics do they prioritize to stay accountable? Every 3PL partner you’re considering should be able to describe their processes in detail – and walk you through their software step by step. If they can’t articulate how they measure their own success and stay accountable, they won’t be invested in your success either. Before you sign a contract with a new 3PL, make sure they check these boxes ✅ #ecommerce #returns #3pllogistics #twoboxes

Is your profit leaking out the back door? 🕵️♂️💸 Ever wonder if your distribution process is secretly robbing your profits? 🔍 Case Study: The Missing Margins Imagine you’re running a growing e-commerce business. Your sales are booming, but profits seem stubbornly flat. What gives? A closer look reveals a sneaky culprit: inefficient distribution. Here’s how it plays out: Shipping delays: Orders are stuck in limbo. Customers are grumbling and cancellations are creeping up. Each delayed shipment isn’t just an unhappy customer; it's a direct hit to your profit margins. Tactical fix: Implement a real-time tracking system. By providing accurate ETAs and instant updates, you keep customers in the loop and reduce cancellations. Overstocking and understocking: Your warehouse is either bursting at the seams or bare-bones empty. Overstocking ties up cash, while understocking means missed sales. Tactical fix: Use data analytics to forecast demand accurately. Implement automated inventory management that adjusts stock levels based on real-time sales data. Inefficient returns handling: Returns pile up, creating a logistical nightmare. This inefficiency not only incurs costs but can also delay new orders. Tactical fix: Streamline your returns process with a user-friendly portal. Encourage customers to provide feedback on returns to identify and address common issues. High shipping costs: Are you still using one-size-fits-all shipping rates? That could be eating into your profits. Tactical fix: Negotiate with multiple carriers for the best rates and use a shipping cost calculator to find the most cost-effective options for each order. By solving these distribution mysteries, you can plug those profit leaks and see a noticeable boost to your bottom line. Got any distribution dilemmas you’re itching to solve? Let’s chat in the comments! Are you at Retail Industry Leaders Association (RILA) ? Come say hi! Booth #1435 Custom Goods #distribution #shipping #CargoMargo #RILA

"How do I get the best rates on parcel delivery?" ^We get this question a lot, esp from the younger, growing brands in our pipeline. My 2c > depends on which stage you're in. 1️⃣ <$1m/yr GMV (@ $100/order: ~10k orders/yr, ~40 orders/weekday): >> Operate your own fulfillment. At this stage, your biggest challenge is finding the large audience that will buy and driving retention from the folks that have already purchased. No better way to accomplish both than to touch every order before your customers do. >> get shipping rates from platforms like ShipStation, Shippo, or Shopify. All of these platforms give strong discounts from the big carriers and have wide integration libraries. Each allows you to easily connect to your shopping cart + other store apps. The rates are good, not great -- but good is fine. >> [a little secret] all these platforms have the same discounted rates. The Big 3 Carriers (UPS, USPS, FedEx) have standard discount programs. What's not standard is the rev share that each platform makes on the back-end off each parcel 🤐 2️⃣ Between $1m - $5m/yr GMV (up to 50k orders/yr, 200/weekday): >> consider a 3PL (+ using the 3PL's in-house shipping rates) >> Core q: is the pick/pack process drowning me/my team? If "yes", and throwing labor in wouldn't solve, then move towards a 3PL. *Remember* the longer you can keep fulfillment in-house, the more you'll learn, better inventory control, faster resolutions on customer issues. >> Use an expert like Matthew Hertz at Third Person, Joe Spisak @ Fulfill (Fulfill.com) | 3PL Finder, or Scott Glassman. They live/breathe 3PL <> brand matching, will secure a better 3PL than you can solo. >> if you go with a 3PL, I recommend going with the 3PL's shipping rates. They're likely to have better rates, even after they add a mark-up. This is good for both parties -- give you better last mile rates, and gives the 3PL a rev source that's not you paying more for pick/pack or storage. It's fair. 3️⃣ >$5m/yr GMV, esp > $10m/yr GMV >> You could go direct to the carriers on shipping rates. Begin negotiations to size your discounts -- but acknowledge that this is a project and plan accordingly. >> I recommend using experts in the small parcel negotiating space to unlock the max discounts -- folks like Nate Skiver, Timur Eligulashvili, Nicholas F., Aaron Dones, Deyman Doolittle. >> If the carriers offer strong rates on your volume >> if still self-fulfilling, begin using your bespoke rates + reap the savings right away. If you're using a 3PL, start conversations with the 3PL on either using your rates or staying with their rate (but w a deeper discount on each parcel for you). Stay flexible with your 3PL, if they're legit they'll play ball. This is bare bones advice. There are many other items to consider -- your assortment, balance sheet, appetite for Ops + Cost headaches. Jump in the comments w questions or your advice! #shippersfirst #volumefollowsvalue

Impressing customers right out of the gate isn’t the easiest thing to do nowadays… Even if you have the most amazing product, slow delivery times and high shipping costs can instantly scare customers away. If you are a brand owner you know what I'm talking about. Looking at all the abandoned carts and thinking about how much money you spent to bring a customer so far down the line, just for them to slip off. While it’s frustrating, there are ways to fix it. Before we fixed our checkout process, almost 15% of customers were abandoning the sale at the shipping page. High shipping costs and standard delivery options just weren't cutting it. We needed a straightforward and simple solution. We got a suggestion from PrettyDamnQuick to give first time customers free shipping as an extra incentive to push the conversion. This approach was designed to: Exceed customer expectations right from the start Create surprise where there’s usually extra costs Make their first experience with Obvi memorable The results? Conversion rates for first time customers increased 4.1%... With free expedited delivery, we transformed those initial friction points into moments that helped initiate a customer relationship. This hands-on #proudpartnership made sure that the new shipping option was a sustainable improvement that truly made a difference with new customers.