Ecommerce Fulfilment Guide
The secret revenue driver of the world’s top ecommerce brands.
It doesn’t matter if you have the best email copy, website design, or Instagram ads — If you don’t have the right ecommerce fulfilment strategy in place, you’re not going to cultivate loyal customers.
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What is ecommerce fulfilment?
Ecommerce fulfilment is the entire process behind getting an order delivered to a customer after they order it online. This part of the supply chain entails receiving and storing inventory, processing orders, picking items, packing boxes, and transporting the items to the customer’s shipping destination.
Ecommerce fulfilment services can be handled by a 3rd party fulfilment company that usually charges by weight, dimensions, volume, storage, or some combination. Fulfilment services from a 3rd party can be particularly helpful to ecommerce businesses with no physical location or storage facility.
ShipBob is a topnotch ecommerce fulfilment service that provides experience to meet today’s customer expectations and help direct-to-consumer brands be more successful online. This is made possible with our network of fulfilment centers and technology.
Fulfilment drives revenue
Ecommerce fulfilment is at the core of meeting today’s customer expectations. Ecommerce brands will be left behind and shoppers will go elsewhere if they can’t get the 2-day shipping and delivery experience they’ve come to expect.
The best ecommerce fulfilment services and strategies help transform logistics from a cost centre to a revenue-driver by improving conversions and driving more sales. Ecommerce businesses using ShipBob’s fulfilment services have seen the following:
- 18% reduction in shopping cart abandonment rate
- 25% savings on shipping costs
- 13% cost savings to bottom line
- 24% increase in average order value
- 120+ hours saved per week
- 70% reduction in US shipping costs
- 291% growth year over year
Common misconceptions about ecommerce fulfilment services
There are many ideas ecommerce businesses have when it comes to what the best ecommerce fulfilment strategy is — here are some of the most misunderstood order fulfilment concepts.
Myth: I need a fulfilment centre close to home
Fact: Your fulfilment centre(s) should be close to your customers. Rather than choosing a fulfilment centre location or ecommerce fulfilment company simply because of the proximity to you, it’s a best practice to utilise data and let the analysis guide your decision.
Such data includes shipping destination zip codes from your order history, the shipping zones your orders are going to, your average shipping cost by zone, and your average time in transit. Being aware of these things can help you understand how to optimise for quicker deliveries and lower shipping costs by using fulfilment centers that are in advantageous locations for your ecommerce business.
Myth: A rural order fulfilment centre will save me the most money
Fact: While the cheapest option may seem to be a fulfilment centre that’s in the middle of nowhere, you may actually end up paying more in shipping costs over time because orders have to travel farther to reach where your customers actually live — in big cities. The more urban fulfilment centers you use, the more money you may save.
The more shipping destinations your inventory is already close to, the more orders will ship to Zone 1, 2, or 3 instead of more expensive, farther away zones like 6, 7, and 8. This also helps you meet consumer expectations and make lifelong customers: 38% of customers say they’ll never shop with a retailer again following a negative delivery experience, making it all the more important to provide fast, inexpensive shipping every time.
Myth: Warehousing and ecommerce fulfilment centers are the same thing
Fact: While warehousing is one element of ecommerce fulfilment, fulfilment centers are designed to turn inventory over quickly — not for long-term storage. If you need space to hold a lot of products that won’t sell for a while, a traditional warehouse, storage unit, or on-demand warehousing solution may be best.
If your products are selling fast, a fulfilment centre can store them and get them shipped out quickly. Fulfilment companies charge a separate storage fee for each item and more expensive than a storage-only centre, which can quickly add up if your products just end up sitting around.
Ecommerce businesses that have a low SKU count (e.g., selling 1-20 products total) can justify paying for ecommerce fulfilment services even if 5-10 of those products aren’t hot sellers compared to the others.
On the other hand, a company that sells a lot of different products (e.g., an apparel brand that has 500 pieces of clothing, each coming in 4 sizes and 5 colors for a total of 10,000 SKUs) may not want to use an ecommerce fulfilment company, because of the high warehousing fees they will encounter — unless all 10,000 of those products are selling quickly.
Myth: It’s cheaper to fulfil ecommerce orders myself
Fact: Sometimes it is, but not always — let us explain. When you are just getting started with your ecommerce business or have a low order volume (e.g., around 50 orders per month), you will absolutely save money if you handle ecommerce fulfilment yourself. You can likely manage packing boxes and running to the post office yourself and still have time to work on other tasks.
Once you’re spending all of your time on ecommerce fulfilment, have to hire others to help pack boxes, or have no time to focus on growing your business, that’s when retail fulfilment companies can really help.
Both direct costs — like shipping rates and labour — and the more difficult to measure opportunity costs — such as the time you can spend on revenue-generating activities and the ability to meet customer expectations — make a difference at this point for scalability and taking your ecommerce business to the next level.
If your ecommerce business is large enough to purchase land, lease a large warehouse, and get a warehouse management system, you will need to compare the costs of shipping out of one fulfilment centre against the geographic footprint you can utilise with a 3PL that has multiple fulfilment centers, which help significantly reduce average shipping costs and deliver to more customers quicker.
Ecommerce fulfilment services
“Ecommerce fulfilment” is really the sum of many individual services and workflows. Below we define each step and related function, and explain the differences between similar terms.
Order fulfilment services are often used synonymously with ecommerce fulfilment. At the simplest level, a fulfilment service refers to a company picking, packing, and shipping orders to customers. Every ecommerce business is responsible for order fulfilment — whether they self-fulfil orders or work with a fulfilment company. Outsourcing your fulfilment to a service like ShipBob can turn your fulfilment into a revenue driver.
“We are very impressed by ShipBob’s transparency, simplicity, and intuitive dashboard. Their shipping costs are very reasonable, and their platform makes fulfilment feel so easy.”
Harley Abrams, Operations Manager of SuperSpeed Golf, LLC
The trigger for the order fulfilment process to begin is when a customer makes a purchase online. There must already be inventory on-hand to start the process or a stockout occurs. Once the item(s) are picked and packed in the warehouse or fulfilment centre, its delivery journey occurs.
Order management is the broad concept of overseeing all purchases your customers make. It involves receiving, keeping track of, and fulfilling customer orders across sales channels. Ecommerce businesses should be able to manage all orders in one place, from when they are placed to when they are shipped.
This helps you track the individual status of any order (such as processing, on-hold, delivered, etc.), order trends over time (including changes in volume, customers’ buying behaviors, preferences, and locations), returned orders, orders with mistakes, and if orders can’t be fulfilled because of insufficient inventory levels.
Inventory management is the monitoring of an ecommerce business’s stocked goods including storing inventory, ordering and restocking inventory, and inventory forecasting.
One of the most important parts of inventory management is figuring out how much inventory you should have on hand: Too much inventory, and you risk poor cash flow, paying too much for storage, and having outdated products; Too little, and you’ll run out, fail to meet customer demand, and miss out on potential sales.
At any point in time, you should be able to check inventory quantity on hand and units sold per day. Properly managing inventory also means proactively
to prevent stockouts and
. Many fulfilment companies let you store inventory in strategically located ecommerce fulfilment centers across the country to keep inventory near your customers.
Ecommerce shipping refers to the delivery methods you offer online shoppers and how much you charge for them. Your ecommerce shipping capabilities and the services you choose will depend on where you’re shipping from, where your customers are located, the type of products you sell (e.g., heavier and larger items will be more expensive, HAZMAT products must use ground shipping, etc.), the delivery speeds you want to offer to customers, the technology and resources you have at your disposal, among other factors.
Small or young ecommerce businesses may load their car with packages and drive to the post office or local UPS Store to ship them out. Bigger, more established ecommerce companies will rate shop carriers to get the best discounts for their larger monthly order volume.
Fulfilment companies provide bulk discounted rates, so ecommerce businesses can offer the fastest, most affordable shipping. Fulfilment companies also have shipping carriers pick up packages from their fulfilment centers daily.
Warehousing is the storage of inventory before orders need to be fulfilled. Warehouses safely and securely store items in an organised manner so they can be easily and quickly located once orders are placed. With ecommerce fulfilment, products are shipped from the fulfilment centre directly to the consumer.
For small or new ecommerce businesses, ecommerce warehousing may be done from the owner’s garage, basement, or apartment until they outgrow the space. At that point, an ecommerce business will have to rent storage space, lease a warehouse, or outsource logistics to a third-party and store inventory in their fulfilment centre.
Returns in ecommerce fulfilment involves receiving, assessing, and processing returned items back into the available stock. Operationally, facilitating the returns process get more expensive and time-consuming as the procedures get more involved (e.g., inspecting and refurbishing electronics or ironing and folding clothing).
But having the right return policy in place is critical as ecommerce customers often make a purchase decision without ever having interacted with or experienced the product in person, causing a higher return rate than brick-and-mortar retail.
Some fulfilment services provide prepaid return labels, share return tracking information, support integrations that will automatically text return and refund updates to customers, and even let returns be sent to the ecommerce business rather than the fulfilment centre.
Ecommerce fulfilment software automates inventory and order management as well as picking, packing, shipping, and delivery processes. It’s the technology that connects ecommerce stores to the people who are working in the fulfilment centers to provide real-time ecommerce order tracking information, visibility into inventory levels, and forecasting projections.
Fulfilment software even routes each order to the fulfilment centre that is closest to the customer. ShipBob’s proprietary software is one example of fulfilment software used by ecommerce businesses and also powers its network of fulfilment centers.
International fulfilment refers to fulfilling orders for customers who live in countries outside of where your ecommerce business is based. This can either mean working with a fulfilment company located abroad or shipping orders to other countries. (For example, you may wish to start selling in the US or be able to offer affordable shipping to customers in countries outside the US.)
Although online shopping allows access to your products from customers all over the globe, international order fulfilment services present entirely new challenges. Different countries have various regulations, tariffs, taxes, and requirements for incoming shipments, making it difficult to navigate the international landscape.
Working with an experienced fulfilment expert can help you easily expand your international shipping capabilities, and know all the logistics costs involved before you ship. For example, ShipBob is an international fulfilment company with warehouses across the globe.
Pick-pack fulfilment is the traditional operations model in a 3PL’s fulfilment centre. Warehouse picking refers to using a picking list to retrieve item(s) from storage as soon as an order is placed online, and packing is the act of placing all ordered items in a box or poly mailer along with any necessary packing materials.
Each of these processes should be optimised for efficiencies, whether that involves batch picking or setting up packing stations that serve unique purposes.
One of the less common ecommerce fulfilment services is kitting. Used to accommodate a unique way that items are shipped to customers, kitting helps fulfilment centre associates understand how to specifically arrange items in an order when it deviates from a normal process.
Most often, kitting occurs to assemble multiple components that arrive separately but need to be manually prepared or put together before they are shipped to a customer. Given the extra steps, kitting can be a very expensive, inefficient, and time-consuming service to complete.
B2B fulfilment, also known as wholesale fulfilment, is the preparing of inventory to ship to another business. Some fulfilment companies offer both ecommerce fulfilment and B2B fulfilment, but most fulfilment centers specialize in one or the other.
This is because B2B orders typically require a lot of storage space, making a rural warehouse a perfectly acceptable option, whereas ecommerce fulfilment is about speedy direct-to-consumer deliveries, which is ideally stored near the end customer in more populated metro areas.
B2B orders are complex and strict when it comes to EDI compliance, and more expensive than ecommerce fulfilment. This is because you need to prepare a large quantity of product at once for freight shipping, with the additional effort leading to higher picking fees and labour costs.
Ecommerce logistics refers to the moving, storing, and shipping of inventory for an ecommerce business. This includes freight shipping, inventory management, warehousing, ecommerce fulfilment, and other activities that occur within the supply chain.
Ecommerce logistics starts with transporting inventory from the manufacturer and lasts until it’s delivered to the end customer. Systems must be in place to ensure every shipment is delivered to the right place on time.
Distributing or splitting inventory means you are storing products in multiple locations or regions. This helps keep product close to customers who live in different parts of the country to reduce the distance each package travels, time in transit, and shipping cost.
With consumer demand driving rapid progress in ecommerce fulfilment,
and even next-day shipping have become standard. Distributed inventory is the strategy behind FBA and also very common for ecommerce fulfilment when you work with a fulfilment company.
Some ecommerce businesses may choose to have a fulfilment company lined up in advance of their launch. This is especially helpful when the ecommerce business has a big launch plan and the announcement will reach the masses (e.g., coming from a celebrity or social media account with a huge following, TV appearance, etc.).
While demand can be difficult to predict from scratch, if you at least know there’s a possibility of your startup being in a position of suddenly needing to fulfil thousands of orders at one time, it’s best to play it safe with an ecommerce fulfilment company.
Subscription fulfilment is the shipping of products from an ecommerce business to a customer on a regular, predetermined basis. These orders can be the same each month, such as razor cartridge refills or deodorant, or a different selection of curated products each time.
Subscription boxes that follow the latter are much more complex and are often best fulfilled in-house, or assembled before shipping to a fulfilment company. The right technology must be in place for recurring orders so that the order is fulfilled at the same time each month, unlike the trigger for fulfilling a regular one-time ecommerce order as soon as it’s placed.
Ecommerce fulfilment costs can be very difficult to calculate based on the methods, models, fulfilment services, and channels involved, and there are many factors that must be considered.
When your ecommerce business is small and handling ecommerce fulfilment in-house, there are several non-obvious costs outside of paying for shipping:
- Tools and packing supplies (packing tape, dunnage, bubble wrap, packing peanuts, air pillows, boxes, poly mailers, envelopes, labels, paper, printers, ink)
- Transportation costs (gas and general wear and tear on your car, or pickup fees for carriers to come to you)
- Inefficiencies (expensive rates due to low volume or only shipping from one location, and lack of integrated technology and automation)
- Dealing with unhappy customers (customer service tickets, jeopardizing future business from making your customers wait)
- Opportunity costs of completing higher value, revenue-generating tasks.
Most 3PLs charge for their ecommerce fulfilment services in slightly different ways. The most common fees you’ll encounter are for:
- Onboarding or implementation, receiving inventory (the acceptance and stowing of incoming product)
- Storage costs for the space your inventory takes up (per-SKU or a fixed fee for each bin, shelf, or pallet used)
- Pick and pack (a fee for each item included in an order)
- Packing materials and boxes (sometimes plain, standard packing materials are free of cost, but you may have to pay for storing custom branded boxes)
- Kitting (assembling items ordered in a special way)
- Shipping (postage)
Because fulfilment companies work with thousands of ecommerce businesses, they get bulk discounted rates.
When an ecommerce business hits a certain point of growth, they will either work with a 3PL or invest in the infrastructure, facilities, equipment, and workforce to handle order fulfilment themselves. The 3PL option is the easy choice for brands that didn’t start their ecommerce business to become a fulfilment logistics experts and allows them to focus on marketing, enhancing their products, and ultimately getting more customers.
Brands also don’t have to worry about the capital expenditures including purchasing land, leasing a warehouse, buying shelving units, pallet racks, forklifts, conveyors, technology, and packing supplies, or paying taxes, utilities, office supplies, staff wages, benefits, workers’ comp, liability insurance, and more.
FBA is notorious for its fees and high fulfilment costs to the seller. Amazon charges all sellers 15% of the product’s selling price on each product sold, regardless of the fulfilment method. Outside of the seller fee, there are FBA inventory storage fees: monthly inventory storage (per cubic foot) and long-term storage (per cubic foot) for 181 to 365 days as well as over 365 days.
Additionally, there are FBA fulfilment fees (per unit) for both standard size and oversized shipments, as well as inventory removal (per unit) for returns and disposals. The FBA fulfilment fee includes the entire picking, packing, and shipping process for each order shipped. FBA also tacks on an additional per-item fulfilment fee for apparel. Ultimate FBA fulfilment fees will depend on what exactly you’re selling.
Fulfilment centers are at the core of any ecommerce fulfilment strategy. Their location, square footage, and amenities will directly impact your shipping costs, capabilities, and scalability.
Fulfilment centers are the facilities from which an ecommerce business’s orders are shipped. Inventory is stored in the fulfilment centre so it is ready to be shipped as soon as an order is placed. With ecommerce fulfilment, fulfilment centers aim to get orders to customers in a timely fashion. When a brand outsource ecommerce fulfilment , the 3PL is completing the process from their fulfilment centers, which often contain inventory of many other ecommerce businesses.
ShipBob’s fulfilment centers
ShipBob is a global ecommerce fulfilment company that has fulfilment centers across the United Kingdom, European Union, Australia, Canada, and all regions of the United States. Positioning fulfilment centers throughout the country helps serve customers residing in every region of the US, while reducing transit times and shipping costs for ecommerce businesses.
ShipBob’s fulfilment centers are located across the world including (but not limited to):
- Melbourne, VIC Australia
- Sydney, NSW Australia
- England, UK
- Ontario, Canada
- Poland, EU
- Chicago, IL
- Dallas/Ft. Worth, TX
- Los Angeles, CA
- Bethlehem, PA
- Several cities in NJ
- Atlanta, GA
And many more! See all locations here.
ShipBob serves ecommerce businesses from all over!
ShipBob’s strategic network of fulfilment centers means they are able to serve businesses from all over. In fact, it usually doesn’t make sense logistically to only store and fulfil inventory in the city your business is based in, especially if you’re looking to outsource with a 3PL. Here are just a few examples of other US cities ShipBob serves:
- Atlanta, GA
- New York, NY
- Seattle, WA
- San Diego, CA
- Miami, FL
- Houston, TX
- Phoenix, AZ
- Denver, CO
- Las Vegas, NV
Don’t see your city listed above? Don’t worry! This is just a short list of cities ShipBob serves. If you want to learn more about how partnering with ShipBob turns your fulfilment into a revenue driving machine, download our guide to distributed inventory here.
Fulfilment examples: 20 industries that benefit from using a 3PL
There are many types of businesses that use fulfilment companies to help them scale. Here are a few common industries that often outsource ecommerce fulfilment.
Fulfilling accessories such as hats, gloves, mittens, scarves, belts, pins, purses, watches, and jewelry can be tough. Many ecommerce businesses turn to 3PLs to seamlessly connect their sales channels, showcase their brand, easily manage inventory, and ship orders out to customers quickly and safely.
“I had a misconception that if we worked with ShipBob when our brand was still young, we’d get overlooked since they also work with a lot of really big brands. I’m happy to say that is not the case by any means. We’re given so much attention.”
Torii Rowe, COO & Co-Founder of MANSSION
When fulfilling cosmetics products and shipping makeup such as lipstick, lip gloss, eyeliner, mascara, foundation, concealer, eye shadow, blush, contour, bronzer, eyelashes and glue, powders, primers, and makeup brushes, it’s important to keep your brand front and centre. Word of mouth is one of the most powerful forms of marketing in the cosmetics industry, and this extends to the delivery and unboxing experience.
If you sell apparel — including shirts, shorts, underwear, socks, jackets, outdoor gear, athletic wear, winter coats, or other clothing — you can work with a 3PL to fulfil orders fast. Depending on the number of styles, sizes, colors, and types of items you sell, you’ll want to work with a fulfilment company that can realistically take on your SKU to shipment volume.
“Last time we shipped our own packages, it took us 3 weeks. It took ShipBob less than 2 days. I couldn’t wait to delegate this business over, because the stress level was through the roof. I am just so grateful for ShipBob.”
Andrea Hamilton, founder of The Finer Things 1920
Additionally, if you only sell online, a customer’s first in-person interaction with your products is when they receive their order and try it on. As such, apparel fulfilment is notorious for having a high return rate. Make sure you work with a 3PL that offers the returns services you need or you are prepared to handle returns yourself.
The market for vitamins and supplements including dietary tablets, capsules, powders, drinks, energy bars, and probiotics continues to grow. Unlike prescription medications, dietary supplements and herbal remedies are not regulated by the US FDA; However, many consumers take them on a daily basis and will value a timely delivery.
“From day one, I felt like ShipBob was a partner on our team. Having confidence in scaling fulfilment is hypercritical for us. With ShipBob, we find comfort in knowing we can scale and have orders fulfilled in a quick manner.”
Tim Fink, Co-Founder of EnduroSport
3PLs can ship orders out the same day and keep customers in the loop through automated shipping tracking. Since supplements have a shorter shelf life, a 3PL can also provide lot numbers for inventory storage to make sure that older products are shipped first, recalled products can be tracked, and no expired products ever get shipped out.
Fulfilling electronics and technology products such as headphones, heated products, wearable devices, camera equipment, and adapters requires secure storage in fulfilment centers. Given the more expensive nature of consumer electronics, you must be able to answer questions customers have about their orders. A tech-savvy fulfilment company that can accommodate your returns process is key to fulfilling electronics orders.
Selling plush toys, dolls, action figures, collectibles, puzzles, board games, or arts and crafts can be difficult to manage. Toy fulfilment fluctuates seasonally with the greatest demand falling over the holidays. Some fulfilment companies can help you plan for this with the right forecasting and inventory tools.
Whether you need to get orders shipped out in time for Christmas or take care of the influx of returns shortly thereafter, working with a 3PL that integrates your sales channels with their fulfilment software and supports your needs is key.
Fulfilling accessories such as collars, leashes, food or carrier bags, beds, crates, and toys for dogs, cats, and other pets requires working with a 3PL that is tech-enabled, geographically diverse, and fast at shipping orders out.
Customers place their trust in your brand when they purchase pet accessories from you, and they expect transparency not only about the items they’re purchasing for a beloved member of their family, but the status of their shipment.
“In doing our research, it seemed that ShipBob filled in all of the gaps that we were experiencing with our previous 3PL. Since partnering with ShipBob, we’ve found that the fees are transparent, packages are getting lost less (which means we file less claims), and customer service is much more responsive and attentive. Plus, the shipping is actually faster!”
Peter Liu, Co-founder of RIFRUF
While one-off Ebay, Etsy, and Facebook Marketplace sales still cover this gap, there’s a growing market for new collectibles.
Ecommerce brands that sell collections, sets, and other memorabilia in bulk often need help storing inventory and fulfilling orders. That’s where collectibles fulfilment from a 3PL like ShipBob comes in.
ShipBob takes over the collectibles fulfilment process, so that you can focus on growing your brand. We’ll collect your inventory and store it in our fulfilment centers. When your customers place an order, we’ll automatically pick, pack, and ship it to their doorstep.
From NutriBullets and Keurig machines, to Berkey Water Filters and Instant Pots, new kitchen appliances are always popping up — and there is serious demand for them. These innovative kitchen products are often purchased online. ShipBob can help brands that sell kitchen appliances by taking order fulfilment off your hands. We’ll stock your products, help manage your inventory, and fulfil and ship your customer orders so you can focus on growing your business.
Luxury goods are often fragile, and they also require secure warehousing and storage. ShipBob takes great care with handling your luxury products throughout the fulfilment process; we have virtually no cases of broken or damaged goods. Thus, luxury brands have been able to grow faster and sustainably with ShipBob.
People love all types of games, physical or digital, and the games industry makes up a significant portion of the ecommerce market. If you have a great idea for a game, then it’s a great ecommerce market to launch into. However, it can be a competitive space, and the one way to really stand is by optimising your retail fulfilment process.
“Working with ShipBob has allowed us to focus on the important parts of running our business and lets someone else take care of the shipping.”
Brett Miller, CEO, BRIK
ShipBob provides a growing fulfilment network, proprietary technology, best-in-class support, and expertise that helps brands that sell games drive more sales.
The outdoor equipment and gear ecommerce market has become increasingly competitive in recent years. To stay ahead of the curve, your business needs a strong fulfilment logistics strategy in place. It can be a challenge to keep up with a high volume of monthly orders without the proper fulfilment infrastructure and technology.
“I found myself on vacation constantly checking on new orders, finding wifi to print labels, and shipping inventory out of the back of my car. Now, I’m free. I could not have gone backpacking for 3 days without ShipBob.”
Anastasia Allison, founder of Kula Cloth
Outdoor equipment fulfilment can be tricky, but ShipBob offers the expertise needed to help outdoor gear ecommerce brands optimise their order fulfilment process.
For healthcare brands expanding their online store, a proper fulfilment process is crucial for long-term growth. Since healthcare fulfilment involves many ‘essential’ products that need to be delivered directly to consumers on time, your business needs the right location(s) to store inventory, the right technology to manage inventory and orders in process, and the right team to help pack and ship orders to customers.
If you choose to work with ShipBob, you can split inventory in the fulfilment centre(s) of your choice, and expand into other locations as you grow. ShipBob offers a growing international fulfilment network with locations across the globe. (View all locations here.)
Ecommerce home and household brands have a lot to manage, and one of the most challenging tasks of running an online store is fulfilment. ShipBob’s team consists of highly skilled fulfilment experts that can help optimise your supply chain while saving you time and money as you scale your brand.
“ShipBob’s customer service continues to improve with direct contacts that know our account, real-time follow through, and a better customer delivery experience. They are a fulfilment partner that is truly an extension of our brand.”
Manuel de la Cruz, CEO at Boie
With ShipBob, online home and household ecommerce businesses can offer faster, more affordable shipping to improve delivery speeds and increase conversion rates — without having to worry about doing it all themselves.
Starting an online skincare store is a great market to launch into, but it can be a challenge to beat the competition. Not only will you have to compete with more established health, beauty, and wellness brands, but you’ll also need a fulfilment and logistics plan in place so you can scale your business and meet customer expectations.
Many fast-growing skincare brands partner with ShipBob to gain access to fulfilment infrastructure, technology, and support you need to compete with other ecommerce businesses.
“Because ShipBob has a lot of people to handle our orders and additional warehouses we can expand into, we can scale up with ease as we continue to grow quickly. If we ran our own warehouse, it would be much harder to hire people and we’d inevitably outgrow the space.”
Oded Harth, CEO & Co-Founder of MDacne
Despite the rise of e-readers and digital disruption, physical books are still a popular and high-demand product. ShipBob is a tech-enabled 3PL that works with ecommerce booksellers to fulfil and ship books safely, affordably, and on time. Our goal is to make the fulfilment and shipping process as seamless as possible, so you can focus more of your time and energy on growing your business.
More than ever, consumers rely on ecommerce businesses to get food and drinks delivered. Since so many foods and beverages are perishable, it can be a challenge to fulfil and ship them safely, which adds an extra layer of complexity. That’s why so many ecommerce businesses turn to trustworthy tech-enabled 3PL like ShipBob to help with fulfilment and logistics.
“From expanding into a second ShipBob fulfilment centre, we are excited to be able to offer 65% of our customers with 2-day shipping, up from 32% by only having a single West Coast facility. Soon, this will be 100%. Not only is this better for our customers but we also gain a 13% savings to our bottom line.”
Pablo Gabatto, Business Operations Manager at Ample Foods
Many sports and fitness brands partner with a 3PL so they can focus their time and energy on growing their business and building customer relationships, rather than packing and shipping orders. ShipBob is an international, tech-enabled 3PL that helps sports and fitness ecommerce brands get products into their customers’ hands faster and at the most affordable cost.
“Customers get accustomed to a certain shipping service level at a low price — often free — and want it faster over time. Ever since we started our partnership with ShipBob in the summer of 2018, they’ve been able to deliver the customer service level we need at the right cost.”
Michael Peters, Vice President of TB12
Finding the right 3PL provider to manage hair care fulfilment is an important step in growing your ecommerce business. ShipBob offers expertise in this industry and provides best-in-class ecommerce fulfilment option for growing hair care ecommerce businesses.
Albums, vinyls, and other media has a prominent stake in the ecommerce market. With so many orders to fill in short time frames, it’s tough for record labels, recording artists, and other media companies to keep customers happy.
“I found ShipBob’s self-onboarding Growth Plan program to be straightforward and the user interface is really easy. The instructions on how to get started with ShipBob are step-by-step. Whenever I got stuck, I just emailed ShipBob’s support team, and they came back with screenshots or fixed the issue for me.”
Lee Nania, Founder of SubSubmarine
With ShipBob, music artists and labels can offer faster, more affordable shipping to better improve delivery speeds and increase conversion rates — without having to worry about doing it all themselves.
Ecommerce fulfilment service models
There are many methods of fulfilling ecommerce orders across channels. The way products are stored and shipped vary as do the timelines, efficiencies, and supply chain technologies that accompany each of them.
Self-fulfilment, or in-house fulfilment, is when the seller fulfills orders themselves including storing inventory and picking, packaging, and shipping products. Self-fulfilment come in many sizes — you can be a small business, storing inventory in your house, packing boxes yourself, and running to the post office, or large enough to invest in a warehouse, either purchasing land or signing a lease and hiring a team of fulfilment associates.
Dropshipping is when a factory handles the production, storage, picking, packing, and shipping of an order directly to the customer that orders it online. The seller acts as the middleman — connecting the seller to the product — and is never in possession of the products sold.
When a customer places an order, the order is sent to the manufacturer, who sends it to the end customer. Having the manufacturer located overseas means transit times can be very long and delivery very expensive for dropshipping as compared to shipping domestically. Dropshipping is very competitive because the barriers to entry and overhead are so low.
“When we first got started, we were dropshipping. It was nice because we had no money tied up in inventory, but we also had no quality control. With no control over the customer experience and very poor shipping times, we quickly realised dropshipping was not a long-term solution. It was good for proving out an early concept, but we had to move to a professional fulfilment company.”
Gerard Ecker, Founder & CEO of Ocean & Co.
3. Amazon FBA
Fulfilment by Amazon (FBA) is when an Amazon.com seller sends their products directly to Amazon fulfilment centers where they are stored and orders are fulfilled. FBA is only for products on Amazon that have the Prime status and is the most expensive order fulfilment service option when selling on Amazon.
Sellers that use FBA have their orders shipped out within two days in Amazon Prime packaging. Alternatives to FBA include Seller-Fulfilled Prime (SFP) and Fulfilled by Merchant (FBM), which involve someone other than Amazon fulfilling orders placed on the marketplace.
4. Third-party logistics (3PL)
Also known as outsourcing fulfilment, working with a 3PL means that a professional fulfilment company handles ecommerce fulfilment on your behalf. A 3PL’s fulfilment process includes storing inventory in their fulfilment centre(s), packing items, and shipping orders to the customer who ordered it.
Ecommerce businesses partner with fulfilment companies so they don’t have to create their own infrastructure, hire their own workforce, manage a large scale operation, or invest in equipment, technology, workers’ comp, liability insurance, and more.
How to choose an ecommerce fulfilment provider
All ecommerce businesses want to grow. Customers want faster, more affordable, and more reliable shipping. Making the decision to view leverage fulfilment as a revenue drive, not a cost centre, is exciting – but is it right for you?
Asking yourself the following questions might help determine if it’s the right time for your business to partner with a 3PL:
- Is fulfilment currently a burden for my business?
- Am I able to fulfil more orders myself?
- Am I running out of space to store my inventory?
- Are my shipping margins too narrow?
- Do my customers want faster shipping?
- Do I plan on scaling my business?
Top 3 best ecommerce fulfilment companies compared
Below we look at three of the top fulfilment companies for ecommerce businesses and how they compare on some of the most important offerings and services that help brands stay competitive today.
|Services||ShipBob||Red Stag Fulfilment||Rakuten Super Logistics|
|2-day shipping network in the US||x||x||x|
|Global fulfilment network||x||x|
ShipBob’s ecommerce fulfilment partners and integrations
Your ecommerce tech stack can have a huge impact on your shipping strategy, from your shopping cart software to any shipping APIs you use. As an order fulfilment company ShipBob integrates with the leading ecommerce platforms and sales channels to be one of the best ecommerce fulfilment partners, streamline the flow of information, send important information back and forth.
ShipBob has helped thousands of sellers with Shopify and Shopify Plus sites fulfil orders quickly and cost-effectively to meet customer expectations every day. Shopify seamlessly integrates with ShipBob’s software to automate fulfilment and inventory management, letting you focus on growing your business — not worrying about Shopify shipping.
You can track how much stock you have available at ShipBob’s fulfilment centers and receive automatic alerts when you need to reorder inventory for your Shopify store.
ShipBob helps ecommerce businesses on BigCommerce meet customer expectations with fast, affordable shipping. ShipBob’s order fulfilment company software integrates seamlessly with BigCommerce to automate ecommerce fulfilment and inventory management, letting you focus on growing and scaling your business.
ShipBob’s technology offers full transparency into every order on your BigCommerce store, from picking and packing through delivery. You can also forecast demand and prevent stockouts with real-time inventory tracking and forecasting for your BigCommerce store in the ShipBob dashboard.
ShipBob helps ecommerce businesses using WooCommerce exceed customer expectations with faster WooCommerce shipping. ShipBob’s ecommerce fulfilment software seamlessly integrates with WooCommerce to automate order fulfilment and inventory management for a more optimised supply chain.
The ShipBob Express WooCommerce app is a WordPress plugin that can be installed by the ecommerce business and connects with ShipBob Express to enable express shipping options such as 2-day delivery at a fraction of the cost of expedited air shipping.
Visit Squarespace’s Extensions page and you’ll find that ShipBob is the fulfilment partner of choice. Squarespace seamlessly integrates with ShipBob’s technology to automate the ecommerce fulfilment process. Once you connect your Squarespace store and send your inventory to ShipBob’s fulfilment centers, your orders will automatically be routed to ShipBob to be picked, packed, and shipped to your customers.
This integration streamlines fulfilment and lets you get back to what’s important: running your business. Also, the backend work is already done for you, so it’s easy to get started.
Amazon fulfilment is the process of picking, packing, and shipping products ordered on Amazon.com. ShipBob integrates with Amazon and can help fulfil orders that don’t have Prime status. The fulfilment method that ShipBob supports for Amazon is Fulfilled by Merchant (FBM), and the seller’s inventory is stored in ShipBob’s fulfilment centers.
Unlike FBA, ShipBob allows Amazon sellers to use their own custom packaging to make for a more branded unboxing experience. Instead of having ‘Amazon Prime’ all over the box, the ecommerce business can better explain who they are to their customers.
With Wix, online brands can easily create a website with over 500 designer-made store templates to choose from, or they can fully customise their store, from product pages to checkout.For fulfilment, ShipBob’s Wix integration allows you to to split inventory across ShipBob’s fulfilment centre location and automatically have orders placed be picked, packed, and shipped.
ShipBob is Square Online’s first 3PL integration partner. After integrating your store with ShipBob’s technology, any orders that are placed from your Square store will automatically be sent to ShipBob to the fulfilment centre where inventory is stored. From there, a ShipBob fulfilment expert will pick, pack, and ship your order for you. Click here for an overview of the features and capabilities for ShipBob’s Square integration.
ShipBob has a Developer API platform that allows anyone to integrate with our fulfilment technology and standardize the data flowing in and out of ShipBob’s system to ensure a seamless customer experience. If you want to build something custom, you can use the API.
ShipStation is a shipping software that helps brands streamline their order fulfilment wherever they sell online and however they ship. ShipBob integrates with ShipStation and is a Platinum Partner. ShipStation also acts as a middleman for stores not listed above that do not directly integrate with ShipBob, as ShipStation integrates with dozens of additional ecommerce platforms.
ShipStation can also be used to bridge all stores together and have all orders sync through one main portal. ShipBob provides fulfilment services for ShipStation users that want to outsource ecommerce fulfilment.
ShipBob is a tech-enabled 3PL, meaning we use our own proprietary software across our fulfilment network which pushes back to our customers so they can keep track of real-time inventory levels and orders as they are being picked, packed, shipped, and delivered.
Once your store is connected, orders are automatically sent to our warehouses, where inventory is picked, packed, and shipped (and tracking info is pushed back to your store and shared with your customers). Our fulfilment services help you optimise for time and cost, and use the delivery experience to beat customer expectations and own more of the customer relationship.
Using ShipBob’s global fulfilment centers, you can strategically distribute your inventory across our locations to get your products delivered faster and for cheaper, as storing inventory near your customers helps reduce the shipping zones and costs associated with shipping orders to faraway destinations. Whether you ship from one or multiple fulfilment centre locations, you can offer 2-day shipping to 100% of the continental US using ShipBob’s 2-Day Express shipping option.
To provide you with visibility into our operations and performance, and also hold ourselves accountable, ShipBob offers data and analytics to help you with everything from year-end reporting to better supply chain decision-making. We show which fulfilment centers you should stock, days of inventory left before you run out, impact of promotions on stock levels, each shipping method’s average cart value, shipping cost, and days in transit, your fulfilment cost per order, storage cost per unit, and much more.
Ecommerce fulfilment FAQs
Choosing the right fulfilment partner for your ecommerce shop could be a game changer. Here are the questions we’re most often presented with:
What is a fulfilment partner?
A fulfilment partner (like ShipBob) provides ecommerce fulfilment services including order processing, warehousing, and shipping of orders for an ecommerce shop. Fulfilment partners can boost efficiency by getting packages out to customers fast, without an ecommerce business needing to lease their own warehouse, purchase equipment, hire a team, and handle the day-to-day of ecommerce fulfilment logistics. Many ecommerce fulfilment partners not only pick, pack, and ship orders but also provide technology and data for businesses to make better decisions across their supply chain.
What do fulfilment centers cost?
This depends on two situations: if you’re partnering with an ecommerce provider like ShipBob to handle fulfilment for you, or looking to buy your own fulfilment centre. For the former, the cost of working with a professional fulfilment centre can vary based on its location, your SKU count (and product sizes and units), your order volume, the fulfilment services you need, the cost of shipping (depending on the shipping destination, service/speed, weight, dimensions, and more), and other potential fees that the 3PL charges.
For the latter, you’d need to either purchase land and build a fulfilment centre or lease a warehouse, which is often associated with a long-term contract. On top of that, you’ll need to purchase equipment, insurance, hire labour, get worker’s comp, and much more. Read up on the pros and cons of each of these scenarios here.
What is direct order fulfilment?
Direct order fulfilment, or order fulfilment, is the process of packaging and shipping orders to customers as they are placed on an ecommerce site. Orders are sent directly to the consumer’s home and typically include tracking information.
How do fulfilment centers work?
Does ShipBob have a minimum for storage every month?
How many locations does ShipBob have?
ShipBob is always expanding its total fulfilment centre count. Please refer to this page for the most up-to-date list of ShipBob’s dozens of fulfilment centre locations across the United States, Canada, Europe, and Australia.
How does ShipBob charge taxes?
This depends on where you’re shipping to and from.
For example, if you are shipping inventory from outside the US to one of ShipBob’s United States-based fulfilment centers, shipments must be Delivered Duty Paid (DDP) and not Delivered Duty Unpaid (DDU), and should never be marked as ‘bill receiver” for duties and taxes. Your company should always be listed as the Importer of Record, and ShipBob should only be listed as the delivery location.
Additionally, as of July 1, 2021 the European Union has enforced a new regulation when importing into Europe. If sending inventory from the US to Ireland or the United Kingdom, you will be required to register your own VAT/EORI information to cover the import taxes and duties as ShipBob will not be held liable or responsible. Learn more here.
Finally, to sell in Canada, you need to register for your Goods and Services Tax (GST) and become a Non-Resident Importer (NRI). Natural health ecommerce businesses also need to set up a Natural Product Number (NPN). If you do not have this set up today, we recommend Canusa or Avalara, and are happy to provide a direct introduction to their teams.