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DTC ecommerce is growing. More and more consumers are ditching traditional retail for DTC brands, especially in health, beauty, and wellness industries.
And it’s not just in the US – the rising popularity of DTC health, beauty, and wellness products is a global phenomenon.
If you’re thinking about starting a health, beauty, or wellness online store, or if you’re looking to grow your brand to the next level, here’s what you need to know about the current industry and how to scale efficiently.
DTC health, beauty, and wellness brands are growing fast
DTC brands in the health, beauty, and wellness market are taking the ecommerce world by storm, and the industry continues to grow worldwide.
Here are some surprising stats that showcase its tremendous growth:
US health, beauty, and wellness market is forecasted to reach $91 billion in 2023
This indicates that the health, beauty, and wellness sector is one of the fastest-growing markets in ecommerce. It has also seen steady growth year-over-year – even in spite of the COVID-19 pandemic in 2020 and 2021 – and is projected to continue its upward trajectory through 2030.
Source: Grand View Research
Health and beauty ecommerce sales are projected to grow by 77% between 2021 and 2026, reaching $358.4 billion by 2026.
This indicates that online cosmetic companies are continuing to attract online shoppers, and that more DTC brands are staying competitive, despite the presence of leading online retailers like Glossier. Many DTC brands have started out locally and have grown to sell products all over the world with the help of a fulfilment partner.
CBD products alone are expected to reach $20 billion by 2024
CBD products fall under the health, beauty, and wellness category because of the health benefits they claim to provide like pain relief, better sleep, and more. Some ecommerce businesses have been hesitant to launch a CBD product online due to payment processing limitations (as CBD is considered a high-risk product), but fortunately there are many options available to carry out online CBD transactions and other tips to sell CBD online.
Are you ready to scale?
Scaling a DTC health, beauty, or wellness business is certainly possible. But the biggest question is: How do you scale? There’s more competition than ever, so having a solid strategy in place to scale your business is important.
One of the most critical aspects of your scaling strategy to think through is how you’re going to fulfil and ship orders – and how to do so affordably, and in a timely manner.
While self-fulfillment may be manageable for a little while, it’s not a scalable solution long-term. In fact, your business may already need a better fulfilment solution to keep growing. Here are some telltale signs that it’s time to abandon self-fulfillment, and find a partner to help you scale.
Your orders are increasing
If your orders volumes are rising – or if you anticipate sudden influxes of orders in the coming weeks or months – it may be a good time to switch to a fulfilment strategy that can support those volumes. Self-fulfiling orders will become a challenge as order volumes grow, and it will become harder to manage your inventory and get orders out the door in a timely manner.
Your customer base is expanding
You may have started selling on just one channel, and shipping just to local customers. But what if you want to sell on other marketplaces, or if orders start coming in from across the country or around the world?
As your customer demographics and geographies get bigger, you’ll need fulfilment that serves all customers effectively. Consider where your customers are shopping and where they’re located, and find a fulfilment partner that can streamline fulfilment across all channels and locations.
You’re having trouble keeping up
As your monthly order volume increases and your customer base expands, storing inventory and fulfiling orders yourself can cause a lot of headaches.
If you’re struggling to get orders picked, packed, and shipped quickly, or having a hard time keeping shipping costs down, it’s probably time to outsource to a partner. By handing off fulfilment to a trusted 3PL, you’ll be able to free up space and time to focus on more strategic priorities (like product development, building partnerships, and marketing), and make it easier to grow your business.
What to look for in a fulfilment partner
If you’re looking to scale your ecommerce business, you need to work with a third-party logistics (3PL) company that can handle order fulfilment and warehousing for you.
However, not all 3PLs are created equal. Here are a couple common issues you may find when evaluating 3PL partners.
An expansive fulfilment network
Your 3PL partner should have a fulfilment network that lets you store inventory close to customers, so that you can avoid high shipping costs and lengthy lead times.
For example, if you’re shipping a lot of orders to customers across the country (e.g., from New York to California), then storing inventory in a single warehouse in New York will make shipping expensive for you and keep your customers waiting.
A centrally located warehouse can be nice to get started, but be sure to partner with a 3PL that has locations in other regions so you can keep shipping fast and affordable as you grow.
“ShipBob has been a great ally as they have fulfilment centres all over the US, facilitating a 2-3 day delivery time for any customer in the US. This is helpful especially when weather challenges happen; being able to have different locations to ship from allows for a more seamless supply chain.”
Andrea Lisbona, Founder & CEO of Touchland
Integrations and partnerships with ecommerce tools
As you grow your business, you’ll also be growing your tech stack. Without the right logistics provider, it will be a challenge to synchronize fulfilment with all your other operations.
A good 3PL should have direct integrations with major ecommerce tools, platforms, and marketplaces, so that you can connect your network seamlessly and scale fulfilment easily.
“For our ecommerce tech stack, we use ShipBob, Klaviyo, Shopify Plus, Recharge, and Gorgias. What I love is how they all work together to manage communications and the customer experience in a streamlined way.”
Michael Peters, VP of E-Commerce Operations at TB12
The ecommerce landscape is constantly evolving, but not all 3PLs evolve with it. To keep up, your brand needs a fulfilment partner with an advancement mindset that utilises up-to-date technology throughout their operations.
Tech-enabled 3PLs leverage software and automation throughout their operations to streamline fulfilment for efficiency and cost. Make sure that your fulfilment partner of choice uses tools like barcode scanners, automated pick list generation, and box size selection algorithms to provide checks and balances, save time, and minimise waste.
Their merchant-facing software is also critical. A 3Pl’s software should be intuitive and easy to use, giving you visibility into operations and performance. Some 3PLs even track analytics and KPIs across your inventory, orders, and shipping, so your brand can glean new insights and identify areas for improvement.
Simple, straightforward pricing
Many 3PL partners seem to offer a great deal initially, only to surprise brands with hidden fees down the road. The right 3PL for our business will deliver transparent billing (complete with clear, itemized invoices breaking down every cost) and a simple pricing structure.
Turning fulfilment into a competitive advantage
With so much competition in the health, beauty, and wellness industry, it’s important to distinguish your brand. With the right partner, fulfilment can be a huge differentiator that adds value, builds customer loyalty, and even drives revenue.
Here are just some of the ways a 3PL like ShipBob can help you leverage fulfilment to scale your health, beauty, or wellness brand, and give it a competitive advantage.
A great unboxing experience
The unboxing experience is part of the product that customers are buying. The extra effort you put into packaging an order aesthetically has the potential to increase the perceived value of your product, and make the customer more inclined to buy again.
Some 3PLs partner with packaging companies, enable brands to use custom packaging, and even give brands the option of adding other touches, like marketing inserts and gift notes.
ShipBob, for example, offers several different packaging options and partners, so you can design a custom box or poly mailer with inserts that will delight customers.
Subscription order management
For most DTC health, beauty, and wellness brands, customer acquisition costs are high. That’s why it’s important to consider ways to keep customers coming back for more.
By offering customers a subscription box model, you can ship products to your customers on a regular, predetermined basis.
Many health, beauty, and wellness brands sell products that customers are going to use up and eventually need more of — think foods and beverages, dental hygiene, acne treatment, deodorants, vitamins, and more. With a good fulfilment partner to manage these periodic orders, a subscription model can be a great way to drive revenue and customer engagement with less effort.
ShipBob makes subscription fulfilment easy, integrating seamlessly with popular ecommerce website platforms and subscription tools (such as ReCharge, Ordergroove, and Smartrr) to get subscription box orders fulfiled automatically and reliably.
2-day shipping is no longer a nice-to-have for ecommerce shoppers – it’s the standard. As a result, DTC brands are quickly changing their shipping strategy to meet rising customer expectations, reduce cart abandonment, and maintain a loyal customer base.
ShipBob enables merchants to ship 2-day across the entire continental US, even from just one fulfilment centre. This way, health, beauty, and wellness brands can bring in new customers and drive repeat purchases.
By partnering with a 3PL that offers a large network of strategically-located fulfilment centres, you have the option to distribute inventory across multiple locations.
This enables your brand to fulfil and ship orders from the fulfilment centre closest to the order’s destination, which minimises transit times for customers and shipping costs for you.
With over 40 global fulfilment centres in its network, ShipBob enables you to store inventory in the warehouses that make the most sense for your business, and automatically route orders to the stocked fulfilment centre closest to the shipping destination.
ShipBob’s Ideal Inventory Distribution tool can even recommend a strategic inventory allocation plan for your business, so that you can reduce your average shipping cost per order.
You can also monitor inventory levels and fulfilment performance at each location through ShipBob’s dashboard, so no matter how far your reach, you still have visibility into your operations.
Scaling and shipping internationally can be tricky – but when done right, it allows you to build a global customer base and grow much faster.
“As we’ve grown internationally and in our general order volume, we’ve seen satisfaction go up. ShipBob was a key player and significant partner in helping manage what became unmanageable when we were shipping orders out ourselves.”
Matt Dryfhout, Founder and CEO of BAKblade
ShipBob operates an international fulfilment network, and can ship orders to all countries where the major shipping couriers deliver to. You can even store stock within the UK, EU, Australia, and Canada to further reduce shipping costs and lead times.
ShipBob also partners with FlavorCloud to enable DDP shipping, and with Flexport to run an end-to-end managed freight shipping program for ecommerce businesses shipping freight from China to the US faster and more cost-effectively.
Who has scaled their health, beauty, and wellness brands with ShipBob?
Health, beauty, and wellness businesses all over the world have partnered with ShipBob to achieve the next level of growth.
From offering affordable 2-day shipping to creating an unforgettable unboxing experience, ShipBob offers a wide range of fulfilment services, as well as the technology, fulfilment network, analytics, and integrations needed to scale efficiently.
Here’s what several of our health, beauty, and wellness customers have to say about partnering with ShipBob:
Oxford Healthspan: A nutraceutical company
England-based brand Oxford Healthspan wanted to take their anti-aging supplement Primadine all over the world, but they knew that self-fulfiling orders wasn’t a scalable solution. They needed a partner with global presence – and with ShipBob, Oxford Healthspan was able to store inventory on both coasts of the US and in the UK and Poland, and cut their average shipping costs and times considerably.
“ShipBob’s software helped us better understand where we should grow next. In the beginning, it was difficult to easily calculate how much we were selling in each region. ShipBob’s ideal distribution algorithm enabled us to see not only where our customers were based, but where we should allocate inventory to best meet demand.”
Natalia Lara, CMO of Oxford Healthspan
FlutterHabit: a faux-lash and cosmetics line
Cosmetics brand FlutterHabit handled fulfilment themselves, but kept running into pitfalls. After implementing ShipBob’s warehouse management system (WMS) in their own warehouses, they were able to improve inventory tracking significantly, achieve visibility through an intuitive dashboard, and even expand into Canada using ShipBob’s hybrid fulfilment model.
“In addition to using their WMS in our own US facilities, we ended up storing inventory in ShipBob’s Canada location. This has allowed us to reduce shipping times for DTC orders originating from Canada — and because ShipBob handles fulfilment at that facility, we don’t need to hire our own Canadian fulfilment team, lease a warehouse, and learn all the nuances of operating ourselves in a new country.
With Canadian orders getting to customers faster, we’re now ready to increase our sales and build wholesaling channels in Canada. Storing stock locally in ShipBob’s Canadian fulfilment centre means that salons and other businesses that want to sell our product will see reduced duties, taxes, and fees associated with carrying our products.”
Bethany Peterson, COO of FlutterHabit
Touchland: a stylish and natural hand sanitiser
Touchland is a fast-growing brand that has successfully upgraded the hand sanitizing experience to a whole new level. Touchland launched in 2018 and grew quickly after a successful Kickstarter campaign, and then grew even faster after the COVID-19 pandemic hit.
“We were already growing quickly when COVID began, then we completely sold out the first week of the pandemic. In three weeks, more than 34,000 customers were waitlisted on Touchland.com. We even did pre-orders to try and meet demand.
Between March and May 2020, we had up to 700 orders per day and sold 10,000 dispensers to industry-leading brands in those three months.
COVID changed the mentality of hand sanitation for most businesses, and this won’t go away after the pandemic.”
Andrea Lisbona, Founder & CEO of Touchland
TB12: Tom Brady’s health and fitness brand
As a fast-growing celebrity brand, health and wellness brand TB12 needed a 3PL that could help them expand geographically in the US and drive down shipping costs. By distributing their inventory across ShipBob’s network, TB12 is closer to major distribution hubs, shipping couriers, and more customers – enabling them to offer 2-day shipping while achieving cost-savings on shipping.
“We need to deliver quickly and inexpensively. Since switching to ShipBob from our previous 3PL, our fulfilment cost on comparable orders went down by 25%.”
Michael Peters, VP of E-Commerce Operations at TB12
Dossier: affordable yet luxurious perfumes
The CEO of renowned fragrances brand Dossier was fulfiling orders all by himself, and decided to outsource to ShipBob when he reached a breaking point. On top of ShipBob’s simple and competitive pricing, Dossier gained the analytics and insights from ShipBob’s dashboard needed to scale the brand from 0 to 100,00 orders.
“Logistics is something you never think about until it stops working, and we’ve never come to that point with ShipBob. Everything just works. We are super happy with ShipBob and very impressed by how well they’ve pumped out our large volume of orders.”
Sergio Tache, CEO of Dossier
Hero Cosmetics: an innovative skin care brand
Hero started with one SKU: their Mighty Patches. Over time, they have scaled to offer almost 30 products – all aimed at helping during different stages in the breakout lifecycle. As they’ve grown, they’ve trusted ShipBob as a fulfilment partner.
“Scaling is important to us. We’ve had many days when our sales will skyrocket because of press or influencers and it’s reassuring to know that orders will all just go out on time. That’s crucial to growth. It allows every team in our company to push the limits.
The fact that ShipBob is always scaling and expanding their footprint is very important to me. It’s difficult to scale, but ShipBob has figured it out. They’ve been a great partner in our growth.”
Dwight Lee, Co-founder and COO at Hero Cosmetics
When you’re ready to scale, ShipBob can help
The right 3PL will set you up for next-level growth by providing the resources and fulfilment expertise to compete with leading DTC health, wellness, and beauty brands.
If you’re looking to outsource fulfilment, ShipBob has partnered with thousands of merchants that have grown their businesses into new countries and channels.
To request fulfilment pricing from ShipBob, click the button below.