In the vast and competitive world of e-commerce, staying ahead of the game is essential for business success. Whether you’re a seasoned Amazon seller or just starting out, one of the most valuable strategies you can adopt is investing in thorough market and product research. This investment can significantly boost your online profits and help you make informed decisions about which products to sell and how to sell them. In this comprehensive guide, we will explore the importance of market and product research on Amazon and how it can maximize your return on investment (ROI).

Understanding the Amazon Marketplace

Amazon is the world’s largest online marketplace, offering an extensive range of products to consumers across the globe. This immense platform presents both opportunities and challenges for sellers. To succeed, you must first understand the dynamics of the Amazon marketplace:

• Competition: Amazon hosts millions of sellers, and each product category is highly competitive. Knowing your competition is essential to carve out your niche effectively.
• Consumer Behavior: Amazon’s search algorithm, A9, determines product rankings based on various factors, including customer reviews, keywords, and sales history. Understanding how customers search for products can help you optimize your listings.
• Fulfillment Options: Amazon offers different fulfillment methods, such as Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM). Each has its pros and cons, and your choice can impact your profit margins.
• Pricing Strategies: Dynamic pricing is common on Amazon, so keeping an eye on your competitors’ pricing strategies and adjusting yours accordingly is vital.
• Reviews and Ratings: Positive reviews and high ratings can boost your product’s visibility and credibility, increasing sales.

The Foundation of Successful Amazon Selling

Before delving into the specifics of market and product research, it’s crucial to understand why it’s the foundation of successful Amazon selling. Here are some key reasons:

Avoiding Costly Mistakes

Without proper research, you’re essentially operating in the dark. You may invest in products with little to no demand or are oversaturated with competition. These mistakes can result in significant financial losses. Market research helps you avoid these pitfalls by providing data-driven insights into what products will likely succeed.

Adaptation and Growth

E-commerce is a dynamic space. Consumer preferences, market trends, and competitors’ strategies can change rapidly. By investing in research, you not only identify opportunities but also adapt to changing circumstances. This adaptability is crucial for sustained growth in the long term.

Enhanced Decision Making

Data-driven decision-making is the hallmark of successful Amazon sellers. With the correct information at your fingertips, you can make informed choices about product selection, pricing strategies, and marketing efforts. This increases your chances of success and profitability.

The Benefits of Market Research

Market research involves analyzing the Amazon marketplace as a whole to identify trends, opportunities, and gaps in the market. Here’s why investing in market research is crucial:

• Identifying High-Demand Products: By analyzing search trends and historical data, you can identify products with high demand but limited competition. These niches present lucrative opportunities.
• Evaluating Competition: Market research helps you assess the strength of your competition. You can identify weaknesses in their offerings and develop strategies to outperform them.
• Pricing Insights: Analyzing price trends can help you set competitive and profitable product prices.
• Understanding Customer Needs: By examining customer reviews and feedback, you can gain insights into what customers like and dislike about existing products in your chosen niche.
• Seasonal Trends: Market research allows you to identify seasonal trends and adjust your product offerings accordingly.

Understanding Market Trends

Understanding current market trends is one of the first steps in effective Amazon market research. Market trends encompass consumer preferences, product demand, and industry shifts. Here’s how to harness this knowledge:

Track Seasonal Variations

Many products experience seasonal fluctuations in demand. You can optimize your product listings and marketing efforts by tracking these patterns. For example, if you’re selling holiday-themed items, you’ll want to prepare well in advance to capture peak seasonal demand.

Analyze Historical Data

Historical sales data is a goldmine for understanding market trends. It can reveal long-term patterns and help you forecast future demand. Analyzing this data can guide your inventory management and product selection strategies.

Competitor Analysis

Competitor analysis is another critical aspect of Amazon market research. Understanding your competitors can give you a competitive edge. Here’s how to go about it:

Identify Key Competitors

Start by identifying your main competitors in your niche. Look for sellers with similar products and target demographics. Tools can provide a comprehensive list of competitors.

Analyze Pricing Strategies

Study your competitors’ pricing strategies. Are they pricing lower to capture market share, or do they maintain premium pricing? Understanding their pricing approach can help you position your products effectively.

Monitor Sales Volumes

Knowing how well your competitors are performing can inform your own strategies. If a competitor is consistently outselling you, it’s worth investigating their marketing tactics, product listings, and customer reviews.

Product Research: Finding Profitable Products

While understanding market trends and analyzing competitors are crucial components of Amazon’s success, product research is equally important. Here’s how to identify profitable products:

Niche Selection

Start by selecting a niche that aligns with your expertise and interests. Look for niches with a balance between demand and competition. Avoid overly saturated markets where it’s challenging to stand out.

Identify High-demand Products

Use tools like Algopix to identify high-demand products with the potential for consistent sales. Look for products that are evergreen and not subject to seasonal fluctuations.

Evaluate Profit Margins

Calculate potential profit margins by considering the cost of goods, Amazon fees, and shipping costs. Ensure that your chosen products offer a healthy profit margin to sustain your business.

Check for Trends and Seasonality

Examine whether your chosen products have consistent demand throughout the year or if they are subject to seasonal trends. Seasonal products can be profitable but require careful planning.

Optimizing Product Listings

Optimizing your product listings is a continuous process that involves keyword research and customer-focused content. Here’s how it can impact your profitability:

Keyword Research

Identify high-performing keywords for your products. Incorporate these keywords naturally into your product titles, descriptions, and backend search terms. Effective keyword optimization can improve your product’s visibility in Amazon’s search results.

Compelling Product Descriptions

Write compelling product descriptions that highlight the benefits and features of your products. Use high-quality images and ensure that your listing is complete and informative. A well-optimized listing can lead to higher conversion rates.

User-generated Content

Encourage customers to leave reviews and answer questions on your product listings. Positive reviews and helpful answers can build trust and boost sales. Respond to customer inquiries promptly to provide excellent customer service.

Minimizing Risks

Investing in market and product research isn’t just about increasing profits; it’s also about minimizing risks. Here are some strategies to reduce potential losses:

Diversify Your Product Portfolio

Avoid putting all your eggs in one basket. Diversify your product portfolio to spread risk. If one product experiences a downturn, others can help balance your overall profitability.

Monitor Your Inventory

Overstocking or understocking can lead to financial losses. Regularly monitor your inventory levels and adjust your orders accordingly. Consider using Amazon’s Fulfillment by Amazon (FBA) program to streamline your inventory management.

Stay Informed and Agile

Keep a pulse on industry news, changes in Amazon’s policies, and emerging trends. Be prepared to pivot your strategies when necessary. Staying informed allows you to make proactive decisions.

Conclusion

In the competitive world of Amazon e-commerce, success isn’t guaranteed, but it’s attainable with the right strategies. Investing in market and product research is a smart move that can significantly increase your online profits. By understanding the Amazon marketplace, identifying high-demand products, and thoroughly researching potential offerings, you’ll be better equipped to make informed decisions, optimize your listings, and ultimately grow your e-commerce business. Remember that continuous research and adaptation are key to staying competitive in the ever-evolving world of online retail.

Or Hillel, Algopix

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At Cahoot, we believe today’s eCommerce industry needs next-generation shipping software. But before we talk about this amazing technology, it’s first worth asking – why is now the time? After all, legacy shipping software has been around for years. Thousands of sellers are already using these tools – why make the switch? 

We believe the present moment is perfect because eCommerce is dramatically different from how it looked just twenty years ago. The event that changed everything was the introduction of Amazon Prime in 2005. Just like the first iPhone revolutionized society’s experience with personal technology, Prime’s introduction transformed everything in the eCommerce industry. Sellers had to throw out old strategies and create entirely new ones to run their businesses. 

The differences are stark, but we’ve summarized them in this table: 

Let’s begin by going back to the 1990’s and early 2000’s to see what the ‘old world’ of eCommerce looked like, for sellers and customers. 

The ‘Old World’ of eCommerce

Lower Complexity

Just One Channel to Manage

In the old world, Amazon was not the ‘everything store’ yet. It was largely a first-party seller of a few products like books, CDs and DVDs. They did not face much competition – Walmart and Target restricted themselves to physical stores, while shopping cart platforms like Shopify and BigCommerce did not exist. All this meant that sellers did not have multiple sales channels to sell and take care of customers on. There was usually just one channel – their own website. With just one channel to support, it was also possible to operate with smaller sized teams. 

Minimal Competitive Pressure

In the 1990’s, online marketplaces did not exist. Amazon launched their third party marketplace only in 2000. In this environment, customers did not have a lot of choices. Sellers had to ensure they drew customers to their website through good marketing. Once they found you, it was not easy to do comparison shopping across different listings, brands or platforms. There was little pressure on sellers – it was unlikely a competitor would undercut you on price, or beat you on shipping speed. 

Low Customer Expectations

Perhaps most importantly, customers had no expectation of free and fast shipping. Before Prime’s introduction in 2005, customers had never tasted that experience. They were willing to wait 7-10 days for orders, and covered the cost of shipping. Even if they did not like this experience, there was no social media platform at the time where they could share their frustration.

Single Warehouse, Single Carrier

The combination of lower customer expectations and sales through a single channel meant that sellers could get by with operating from a single warehouse location, or two if they really needed the space. Customers living far away were okay with waiting as long as 1-2 weeks for their orders. And because customers were willing to cover shipping costs, sellers saw no reason to compare and find the lowest rate among multiple carriers. It was easier to just sign a contract with the one carrier with whom you could negotiate decent rates. Why bother with cost optimization when it was the customer paying the bill? 

Small and Simple Orders

In the old world, lower basket sizes (units per transaction) were common because customers were yet to trust making payments over the internet. The least risky way to test eCommerce was to just buy one item. As customer confidence grew, so did basket sizes. In the old world, Multi-Line, Multi-Quantity (MLMQ) orders were less frequent. MLMQ orders require sellers to provide workers on the warehouse floor with various kinds of boxes. Workers also need to spend more time on MLMQ orders, figuring out the best sized box to use. In the old world, order processing complexity was lower – you could order a few boxes of standard sizes, and your team in the warehouse could pack orders faster. 

In summary, sellers faced little complexity in running their businesses in the old world. The environment was favorable – they had to sell on just a single channel, faced minimal competitive threats and could easily satisfy their customers. All of this translated into simpler operations across the shipping lifecycle – be it warehouses, carriers or packing boxes used.

Lower Costs

We’ve taken a look at how operationally simpler it was to run an eCommerce business in the old world. But this was not the biggest advantage sellers had – we’ll now explain how costs were lower back then. 

Shipping Cost was Cheaper

Carrier General Rate Increases (the annual rate hikes made by the shipping carriers) held steady at 4.4% to 4.9% through the entire 1990’s, well into the 2010’s. This provided sellers better predictability and control over operations. 

Labor was Cheaper

In the old world, Amazon did not have a massive logistics network, requiring hundreds of thousands of workers. Walmart and Target did not have eCommerce operations. Without a large proportion of the labor pool being diverted to these large players, Sellers could easily staff their warehouses at wages that protected their margins. 

Space was Cheaper

The number of warehouses in the country has stayed relatively flat between the old world and the new world of eCommerce. But back in the old world, there were far fewer sellers requiring this space. Warehouse space has never been easy to find – after all, they were not lying around vacant, waiting for the eCommerce boom to happen. However, because the competition for limited space was much lesser back then, sellers could find space more easily, and at lower lease rates.

Across the order fulfillment workflow, sellers had lower costs, which gave them more certainty and confidence. They could have reasonable confidence that carrier rates, labor wages and warehouse lease rates were going to stay steady. They did not have to worry about any of these expenses creating a negative impact on margins.

Inefficiency in Operations Did Not Impact Margins

In a world without marketplaces, there was no significant threat forcing merchants to optimize costs. With customers willing to pay shipping fees and no social media for them to voice their feelings, there was no need to creatively innovate to find savings. And with it being comparatively much easier to hire workers and lease warehouses, there was no pressure to maximize resource utilization, or scrap to cut costs. After all, margins were protected without having to do any of those things.

The ‘New World’ of eCommerce

Now that we’ve taken a look at the old world of eCommerce, it’s time to remind ourselves of the world we live in today – Prime’s launch in 2005 changed everything about eCommerce, for both sellers and customers.

High Operational Complexity

Many Channels to Manage 

Today, Amazon’s massive third party marketplace has made it the ‘everything store’ it dreamed of becoming. Major retailers – including Walmart and Target – have now expanded into eCommerce, while shopping cart platforms like Shopify and BigCommerce help merchants sell directly to customers. Even firms like Macy’s and Nordstrom, which stayed focused for a long time on their physical department stores, are now aggressively investing in eCommerce. This means sellers now need to run marketing, sell, and support customers on multiple channels. This has also meant they need to hire larger teams to manage this complex operation.

Intense Competitive Pressure

The rise of online marketplaces has meant that sellers now face more intense competition than they ever did in the old world of eCommerce. Today, no seller can relax once their marketing has attracted a customer to their listing or website. Customers have almost infinite choice and constantly compare products, prices and shipping speeds across different platforms before they checkout. There is a constant threat of someone undercutting you on price, or offering faster shipping. Worst of all, there is a growing trend of knock-off products which erode the sales of the original brand by shipping faster or being lower priced.

Sky High Customer Expectations

 The biggest change is that customers are now used to the 1-day and 2-day free shipping experience. They abandon their carts if they do not see free and fast shipping offers. And if they see any drop in quality, they can use the power of social media to hurt your brand equity and customer sentiment. 

Multiple Warehouses, Multiple Carriers

Free and fast shipping has become central to today’s customer experience, but making it happen is neither easy nor economical for sellers. Prime raised customer expectations to a whole new level. To highlight just how dramatic the shift has been, consider this. When Prime introduced free 2-day shipping in 2005, it took competitors like eBay and Walmart over a decade to catch up, with the launch of their competing services in 2017. However, when Amazon announced its plans to move Prime from 2-day to 1-day shipping in 2019, competitors responded almost immediately. This highlights just how important free and fast shipping has become across every channel today. However, offering free shipping on every order is not an easy task. The only economical way for sellers to make it happen is through distributed fulfillment. Inventory needs to be spread across a strategically located network of warehouses. This ensures that products are placed closer to customers, shortening transit times. It also ensures a reduction in the number of shipping zones packages must cross, making operations more economical for sellers. To preserve margins and profits while still offering free shipping, sellers must now also work with a wide mix of carriers to ensure they can pick the cheapest label on every shipment.

Large and Complex Orders

Orders are more complex to process in the new world of eCommerce, with a higher proportion of Multi-Line, Multi-Quantity (MLMQ) orders. This has been driven by two major reasons. The first is that not everyone is deep-pocketed enough to offer free shipping on every single order. To make the economics work, sellers set high free shipping thresholds (you’ll get free shipping if you order $50 worth of items). This means orders are likely to be larger and contain multiple items. The second is that consumer confidence in making payments and purchasing products over the internet has increased significantly today. Customers are more likely to add multiple items to their cart today than they were in the old world of eCommerce. However, with more complex orders, you need to provide your team on the warehouse floor with more boxes of various sizes. This also means your team has to spend more time on orders, figuring out the best box to use to pack them. 

Today, sellers face a lot of challenges running their business. The environment can seem hostile – there are multiple channels to sell on, competitive pressure is unrelenting and customer expectations are sky high. All this has resulted in having to reinvent every step of the shipping workflow – through distributed fulfillment, multi-carrier rate shopping and figuring out how to effectively process larger orders.

Rising costs

We’ve now seen how complex it is to run an eCommerce business today. To compound the problems of sellers, costs in the new world are significantly higher. 

Shipping Cost is Expensive 

It is becoming increasingly difficult for sellers to absorb the costs associated with making deliveries. Carrier GRIs which held steady for nearly three decades are now increasing. UPS and FedEx imposed a 6.9% GRI for 2022, while their 2023 and 2024 increases are 5.9%. These increases are significantly higher than historical trends and exceed the prevailing inflation rate, making it difficult for sellers to handle the impact. These increases after years of stability have provided sellers with little time to adjust their operations and budgets. 

Labor is Expensive

Sellers also have to deal with increased competition in the warehouse labor market, which is driving wages up. Amazon is no longer the only major employer of warehouse workers. The company is now facing competitive pressure from Walmart, Target and other retailers getting into eCommerce. Workers now have a variety of options to pick from – driving up the wages and benefits packages that companies must offer workers. Warehouse staff now expect to be paid $19 / hr on average. At this rate, this is no longer a minimum wage occupation. And with the pool of workers being diverted to these major players, it has become very difficult for other brands and retailers to staff their warehouses sufficiently. 

Space is Expensive

Lastly, warehouse availability is at an all-time low, driving leasing rates up. Conventional wisdom would suggest that the number of warehouses would have increased proportionally with the growth of eCommerce, ensuring sellers today paid roughly the same to lease warehouses as those in the old world. The reverse is actually true – the number of sellers is ever increasing, while the construction of warehouses lags well behind. According to research from real estate firm JLL Inc, the average US warehouse is 42 years old! A 2021 Cushman and Wakefield LLC study found that as many as 70% of America’s warehouses were built before 2000. This has meant that a huge number of sellers are now competing for the same limited space – driving leasing rates up. 

Sellers today are caught in a tough spot – while they’re trying really hard to catch up to customer expectations, they’re also facing cost pressures on many of the elements required to make it happen. With carrier rates, leasing rates and labor wages all beginning to climb upward after years of relative stability, it adds to the stress and uncertainty that sellers are already facing in today’s deeply competitive environment.

Efficient Operations Essential for Margins and Profits

In the world of marketplaces, sellers need to constantly find innovative ways to drive down costs to stay ahead of competition. If they do not find creative ways to offer free and fast shipping, customers will simply abandon their carts and go to a competitor. And in a world where everything has become more expensive, maximum resource utilization is vital. Today, scrappy and smart solutions to pool resources and cut costs are essential. In the new world of eCommerce, it’s the only way to preserve margins, stay competitive and win.

Why Sellers Need to Switch to Next-Gen Shipping Software

Now that we’ve taken a look at the old and new worlds of eCommerce, you might be wondering what role does shipping software play in all of this? 

We believe that legacy shipping software was designed and built from the ground up for the old world of eCommerce. We are not saying these tools are bad – they worked well in the old world that they were designed for, but we believe they are not well-equipped to handle the challenging demands of the new world of eCommerce. We’ve already seen how costs were lesser, hiring was easier and operations were simpler in the old world. Legacy software does not provide sellers meaningful automation or cost savings, because there was no need for it in the old world. In the new world, it is actually adding to the problems sellers face by increasing costs and consuming their time. Rather than automating and simplifying, their technology creates more problems.

We think a small tweak or minor enhancements will not cut it. Today’s sellers need purpose built, next generation shipping software designed for the new world of eCommerce. As we all know, operations are complex, costs are rising and staffing is harder today. Sellers need all the automation and cost savings that technology can generate. They need technology that helps, not hinders. 

The next generation eCommerce shipping software must solve 3 key problems which are at the heart of the differences between the old and new worlds: 

• Simplify the operational complexities of the new world of eCommerce 

• Drive operational efficiencies and productivity gains for your team

• Generate meaningful cost savings across each step of the shipping and order fulfillment workflow 

In the coming sections, we’ll dive deeper into each of these aspects, and explain how legacy software fails to solve these challenges. We’ll also explain how our next generation software is purpose built to address these key requirements.

The differences are many, so we’ve summarized them into this table for a quick overview: 

Simplifying Operations: Making Today’s Complex eCommerce Effortless

Based on research we’ve conducted, a merchant seeking to cover the continental US (the lower 48 states) with 2-day shipping requires inventory to be positioned in 4 strategically located warehouses. If they’re seeking to achieve 1-day delivery, that number rises to 9 fulfillment centers.

As the number of sales channels and warehouses increases, the operational complexity increases exponentially. Legacy shipping software was built for the old world, where fulfilling orders from just a single warehouse location was the norm. It was never built to handle the complexities of distributed fulfillment. Too many things at the core of the software would have to change to elegantly handle distributed fulfillment. This means merchants often try to get by with complex, convoluted workarounds that keep breaking. 

Today’s multi-warehouse, multi-channel environment creates many problem areas for sellers to manage: 

• When inventory is spread across such a large number of warehouses, which location should each order be routed to? 
• Distributed fulfillment offers possibilities if there are problems at any one warehouse location – such as receiving orders after the cut-off time, running out of inventory or inclement weather. How can software make identifying such exceptions and rerouting them easier?
• How can fulfillment be handled across multiple sales channels while ensuring a consistent, cohesive experience for customers?
• Can the system natively integrate with best-in-class fulfillment networks to unify your logistics technology and operations?
• With eCommerce growing all the time, people are sharing more sensitive data than ever online. With an increased consumer demand for privacy protection, how does your shipping software keep data secure?  

We’ll now take a look at each of these, examining the differences in the way legacy and next-generation eCommerce shipping software handle them.

Automatic Order Routing and Label Generation

Legacy Software – Crude and Primitive Routing

Many of today’s popular legacy software have automated order routing features. However, do not be fooled – these capabilities are limited and prone to error. 

In systems like ShipStation, a “Ship From” location can be set based on specified criteria – such as the SKU ordered or the customer’s address. However, a large number of clunky automation rules have to be written – for example, writing a rule to have all orders from West Coast customers be shipped from your California warehouse. Similar rules mapping other states to respective fulfillment locations have to be manually written. Similarly, if you have certain SKUs available only in specific locations, you need to write rules to assign orders accordingly. 

Creating such a large number of automation rules is an error-prone, painful process for many reasons. Here are a few of them:

• So much to configure. Merchants need to ensure they’ve captured every business process through a rule. If they forget to set up any rule (quite possible, given the high levels of operational complexity today), it can create problems and cost leakages. Even the simplest of workflows require rules to be defined. For example, imagine that you wish to use only certain carrier services to make deliveries to residential addresses. Even in that case, you need to define automation rules mapping the address type to appropriate services. 

• You’re guessing and hoping. Because your rules are manually defined by mapping SKUs or customer addresses to fulfillment locations, there could always be cases where the rules don’t make the most optimal decision. Without doing a deep, time-consuming manual investigation, you’ll never be able to actually tell.

• Requires constant maintenance. Rules become obsolete if carriers change or update their services. For example, when USPS introduced Ground Advantage, your rules don’t automatically update to factor in the new service. This means you’ve to spend hours updating and rewriting them.

Slow process. Sellers don’t feel comfortable beginning shipping with the software until they’re confident they’ve captured all of their processes through automation rules. This delays go-live, ultimately increasing your time to value.

Next-Gen Software – Intelligent, Powerful Routing Technology

Cahoot’s next generation shipping software comes with end-to-end intelligent automation. When you receive an order, the system intelligently compares multiple warehouse locations, inventory levels, carriers and shipping services to pick the cheapest label that will meet the delivery SLA committed to the customer. 

With our technology, you won’t face the automation problems that we’ve highlighted with legacy software. Our intelligent order routing capabilities provide sellers with many benefits: 

• Nothing to configure – it just works. You don’t need to spend time worrying whether you’ve captured all your business workflows through automation rules. Cahoot factors in all variables like shipping services, warehouse locations and inventory levels to pick the optimum fulfillment location on every order automatically. 

• Based on the lowest cost, no more guessing. There’s no need to worry about whether your automations have been configured correctly to truly pick the best location every time. You can rest assured knowing that the decision is in the hands of technology, which makes the right choice on every order.

• No maintenance. The system automatically factors in any changes that carriers make to their services. There are no hand-written automation rules to update or overwrite. When new services like Ground Advantage are launched, the system factors in this additional information, and continues to automatically route orders correctly. 

• Ready-to-go.Sellers can begin shipping in days or weeks, not months with our software. There’s no need to spend time wondering whether you’ve captured workflows through elaborate automations. This means you’ll be able to go live faster, and shorten your time to value.

Multi-Warehouse Exception Management

Legacy Software – Limited Rerouting Capability

With legacy software, it’s difficult to plan for the unexpected. Let’s imagine you have 2 warehouses – one in Chicago, and the other in Southern California. Suppose a blizzard strikes the Chicago location. 

When working with legacy systems, you don’t have an easy way to temporarily suspend locations. All you’re looking for is a way to temporarily put fulfillment from your Chicago location on hold, while you wait for the weather to improve. 

In legacy systems like ShipStation, each SKU is mapped to a list of warehouses from where it can be shipped. You will need to update this mapping between SKUs and fulfillment locations to stop fulfillment from one of your warehouses. This is a painful workaround that you have to perform for a very short period of time – once the weather improves, you’ll have to repeat the process to restore the original configuration. 

 All this adds to what is already a stressful time, making it difficult for your business to quickly adjust to, and recover from unexpected events.

Next Gen Software – Agile, Flexible Order Rerouting

With next generation shipping software, adverse events don’t have to mean disaster for your business. If one of your fulfillment locations goes down, you can quickly toggle it off – and Cahoot will do the rest. The system will automate shipping from the other available locations, helping you keep your customer promises and continue selling. 

There are other scenarios when you might require intelligent exception management which need not be emergencies – for example, if one of your warehouse locations needs to close for a holiday, the system can exclude that location and continue to simplify shipping for you across the other active locations.

There are no automations to undo or rewrite. You don’t have to spend a lot of time restoring your system to its original system once the affected location is back up and running again – it’s just a simple toggle to flip on. This ensures that your business can continue operating normally during such events, and quickly recover from them with minimal impact. 

Multichannel Capabilities

Legacy Software – Many Integrations, but of What Value?

One advantage that legacy software has by virtue of having been around for a longer time is its long list of integrations. These tools, such as ShipStation, Desktop Shipper and Shipping Easy all have a long list of integrations with shopping cart platforms, online marketplaces and other tools that eCommerce sellers use. 

However, while this is definitely a positive, we think this is a case of winning the battle, but losing the war. In the above sections, you’ve seen some of the limitations of these tools (keep reading to see more deficiencies), and how they can hamper your productivity and hurt your costs on every single order. You might save a little time with out-of-the-box integrations to more platforms, but does it really matter if these tools negatively impact your bottom line? 

Next-Gen Software – All the Integrations You’re Used to

Cahoot’s next-generation shipping software is tightly integrated with all leading online marketplaces and shopping cart platforms, including Amazon, Walmart, Shopify, eBay, BigCommerce, WooCommerce and Magento. We’re also integrated with all leading shipping carriers and eCommerce tools that sellers use today. 

What really matters is the depth of integration between the channel and your shipping software. A simple integration may fetch orders from Shopify or Amazon into your shipping software, but fail to sync inventory or push back tracking information. With our integrations, Cahoot automatically fetches all information required to fulfill an order from the sales channel, and intelligently pushes back tracking information to the channel. We also maintain an inventory sync, ensuring that you won’t accept orders on out-of-stock items, preventing overselling. The system also provides you with color-coded alerts to quickly alert you to dipping inventory levels, enabling timely, proactive replenishment rather than reacting to customer frustration on canceled orders.

While our list of integrations might be comparatively smaller (but growing!), you won’t feel the difference – our API allows you to connect Cahoot with any other system you’re using. And as we’ve highlighted in the above sections (keep reading for more!), the system offers real cost savings and productivity gains on every single order.

Integration With Fulfillment Networks

Legacy Software – Cobbled Together and Disjointed

Legacy eCommerce shipping software works well if you’re fulfilling a small number of orders from your own warehouse location. However, if you’re partnering with multiple 3PLs, have a combination of in-house and outsourced fulfillment, or are working with order fulfillment networks, cracks start to emerge. This stems from the lack of native integration with fulfillment networks that legacy software have. 

With tools like Deliverr, you can’t expand nationwide coverage through their network while still running your own operations. For example – what if you wish to fulfill certain orders from your own warehouses if you have inventory and rates are cheaper? Deliverr seeks to capture all volume even if it is inefficient to do so because they don’t integrate with all your fulfillment nodes. Many legacy software have a similar problem, where they find it difficult to manage a combination of in-house and outsourced fulfillment. Rather than the system intelligently identifying which orders need to be outsourced, the seller has to define this – which is time consuming and error-prone.

Other forms of chaos can emerge when you’re trying to force a legacy shipping software and 3PL vendor (like Flexe, for example) to work together. The 3PL might require you to figure out which orders you’re going to ship with them, generate a PDF with all that information and send it over to them. If you’re trying to participate in a program like Seller Fulfilled Prime, you have tight cut-off times and very little room to maneuver. Imagine scrambling in the limited time you have between the cutoff time and the carrier pickup to send over this information to them. You have to hope and pray that you haven’t made a mistake, and that you’ve sent the information in time for your 3PL to process the shipments. 

Lastly, let’s imagine a scenario where you’ve partnered with multiple 3PLs to achieve nationwide coverage. You’ve to either use the shipping software to print labels manually and hand that over to each of the 3PLs, or share your credentials with all of them. This increases the number of parties your carrier credentials go to, increasing risk and vulnerability for your business.

If you’re experiencing some of these frustrations and want to migrate from your existing fulfillment partner, we know that it’s easier said than done. The process can be uncertain, confusing and stressful for your business. We’ve put together a step-by-step guide to help you make the switch from one fulfillment partner to another, which you can read here!

Next-Gen Software – Natively Integrated

Cahoot’s shipping software is tightly integrated with our order fulfillment network (having over 100 warehouses in the US). The system is also flexible enough to accommodate any fulfillment locations you run your own operations from – making handling scenarios where there is a combination of inhouse and outsourced fulfillment easy to manage. In such cases, the system is able to intelligently and automatically identify the orders where fulfillment is cheaper through outsourcing rather than being handled at your own warehouse. This frees up your time and ensures you’re getting the best deal on every order.

You also don’t need to spend time acting as the middleman between your shipping software and 3PL, where you drown in busy work generating PDFs and handing them over to your fulfillment partner. With us, your fulfillment partners see all orders instantly, and can print labels in one click. This agility and simplified workflow is just one of the reasons that help sellers using our fulfillment network meet and surpass the challenging cut-off times and demanding criteria that Amazon expects them to meet on Seller Fulfilled Prime. 

It’s not just SFP where requirements are challenging. On Walmart, merchants hoping to see increased conversion and sales must offer free nationwide 2-day delivery with over 95% of orders expected to reach customers by the promised time. 

And while you may scale to use many warehouses on the Cahoot network, none of our fulfillment partners know your carrier credentials – you share that only with us on the platform. This reduces risk and keeps your credentials safe, while scaling nationwide fulfillment for you.

Information Security and Data Protection

Legacy Software – Poor Security and Privacy

Legacy eCommerce shipping software provides minimal data protection measures. Everything is fine if you own your own warehouses and are using these tools to fulfill orders. However, if you’re partnering with a 3PL (and they use legacy tools to process orders), you’ve handed over all your brand and customer data to them. 

While you may sign agreements to prevent misuse, personally identifiable information about your customers (full name, email) and proprietary business data is openly available to your 3PL. While they may operate with good intentions, your confidential data is now at the mercy of their information security practices. 

This increases the risk and exposure for your business, with little safeguards in place to protect sensitive information.

Next Gen Software – Robust Data Protection and Governance

With next generation shipping software, we ensure that only the essential information needed for order fulfillment is transmitted to your fulfillment partner. We hold back or redact other information – for example, even on a shipping label, your fulfillment partner sees only the initial of the last name of the customer – making it difficult for them to reconstruct personal customer data. 

We also keep non-essential customer, brand and product information walled off and accessible only to you. This ensures that your data is secure and accessible to only one party – you. 

Efficiency: Supercharge Productivity for Your Team

We’ve now discussed how shipping software needs features that help you simplify the complex new world of eCommerce. But sellers are not just focused on simplifying operations inside their businesses. Pressure from outside continuously bears down on them – whether it’s rivals on online marketplaces, multiple channels to market and sell on or demanding customers. 

And all this is happening amid a competitive labor market, where staffing has become expensive and challenging. It isn’t good enough if an eCommerce shipping software is capable of reducing operational complexity. It must do so in a way that requires minimal human intervention and resources, allowing you to do more with less. Crucially, the software must unlock productivity gains for today’s small teams, allowing them to focus their attention on value-adding higher order work.

In the previous section, you might’ve seen that legacy software has features that can simplify operations complexity. However, those features are often painful and convoluted to implement by a small team of seasonal or part-time workers. We think there are 3 major areas where shipping software must streamline workflows efficiently: 

• Does the software have humanless automation across shipping workflows? Can it free up your team to concentrate on other work, or does it require constant babysitting? 

• In a world with increasing basket sizes, your team on the warehouse floor loses time on every order, figuring out the best packaging box to use. Can it unlock time savings for your team, allowing them to get orders out the door faster? 

• How easy is it to use the product? Can it be used by seasonal or part-time workers, or does it need staff with specialized training to take care of it?

In the coming sections, we’ll take a look at each of these areas, examining how legacy software reduces productivity and consumes your team’s time in deploying and managing it. We’ll also highlight how next-generation shipping software is built to ensure your team gets back time they’ve been losing, boosts their productivity and drives greater efficiency across your business. 

Automated Shipping Workflows

Legacy Software – Labor Intensive and Painful

The most important thing that teams do inside shipping software is route orders to fulfillment locations, and identify the cheapest label to use to ship an order.

Legacy shipping software has manual processes for printing labels which are labor intensive, repetitive and prone to error. On most of these tools, the process takes multiple steps and clicks, and looks something like this (after logging in, and identifying the orders that need to go out today): 

1. Open an order
2. Fix address issues 
3. Identify which warehouse has the SKU in stock 
4. Assign a Ship From location based on customer address
5. Make packaging choice 
6. Rate shop across all carriers and services
7. Pick the cheapest service 
8. Print Label 
9. Go back to step 1 for the next order

Some of these steps can be automated through crude, hard-coded automation rules but those are time consuming to configure and can still be inaccurate. A rule is needed for almost every single workflow. Here are some reasons why this process is so elaborate and painful: 

• Automations in most legacy software require certain criteria to be defined. When orders meeting these criteria (for example, orders for a certain SKU) enter the system, the rule is triggered to execute certain actions (like assigning a certain carrier or service). But what are all these rules defined for? Their ultimate aim is to find the lowest priced shipping label on every order. These rules simply trigger certain actions to occur, rather than rate shopping for the cheapest label by comparing carriers and services. 

•  Even simple steps of the process need a rule. For example, if you’re delivering to a residential address, then only certain services can be used – like FedEx Home Delivery, for example. A rule needs to be written to ensure this mapping is considered by the system. All this makes it enormously difficult to cut down the number of keystrokes and clicks. 

• ShipStation’s ‘Auto-routing’ feature which is currently in Beta, only factors in which locations have a product and their distance from the customer before assigning orders to a fulfillment center. It still does not support comparing shipping carriers and services to actually make a full and final decision, based on the actual rates.

In our estimation, it would take the average human over 5 hours to print labels for 1000 orders! 

And as we all know, a human is not a computer. When doing a repetitive task for such a long period of time, fatigue and the possibility of errors increase dramatically. It’s also worth asking – why should a human be engaged in such repetitive, low-value work all day long?

Next-Gen Software – Humanless and Seamless

With next generation shipping software, the difference is like night and day. The system intelligently compares warehouse locations, carriers, shipping services, inventory levels and packaging boxes to instantly and automatically generate shipping labels for every single order. 

Here’s the sequence of steps to accomplish the same goal on Cahoot (after logging in) 

1. Verify the address corrections made by the system 
2. Print labels in bulk 

The system automates multiple steps that legacy software doesn’t – it spots potential issues with addresses and makes suggestions to fix them, only considers warehouses that have inventory available, makes packaging choices and rate-shops for the cheapest service. 

It’ll take the average human just 15 minutes to print labels for 1000 orders on Cahoot. We’ve made a video where you can get a glimpse of how this works, and how we stack up against popular legacy shipping software ShipStation (if you’d like to see a little more about how Cahoot compares to them, read our comparison here!) You can sit back and relax, knowing that the optimal selection was made using technology on every single order. You can also free up your time to be doing other tasks that add more value to the bottom line. If you’re finding it difficult and expensive to hire more people, you can ensure that the people you do have are focused on the problems that matter the most.

Making Large, Complex Orders Easy to Handle

Legacy Software – Left to Humans and Heuristics

Legacy shipping software is mainly focused on one portion of the fulfillment workflow – printing shipping labels. In a world of rising basket sizes, merchants have complexity in other steps of the shipping process, including packaging selection. 

This is a common problem that customers of legacy software like ShipStation face. On complex orders which might require multiple boxes of various sizes, they are forced to enter the box dimensions manually each and every time based on the SKUs in the order. The customers from their forums below are requesting for a pull-down list of the common boxes they use, so that they can quickly make the selection rather than manually entering dims.

The customer is also highlighting a more important issue – they can add a set of boxes as a “base” in ShipStation. This feature aims to serve as a default, which can be applied on most MLMQ orders. However, unless you’re lucky that most of your MLMQ orders consist of the same unique combination of SKUs, such a feature is pointless.

The list of hard-coded automation rules (mapping SKU combinations to boxes) to write can be dizzyingly long, and involves you having to figure out all the possible SKU permutations.

As the classic saying goes, customers are great at highlighting problems, but not identifying solutions. We think this is a big pain point which next generation software can solve for. 

Next-Gen Software – Powered by Machine Learning

Cahoot’s next generation shipping software solves both of these problems. We don’t think the solution is a drop-down list, because you’re just replacing keystrokes with clicks. It’s still human effort. 

Our software remembers the box selection you make the first time, and applies it by default the next time. This ensures you’re freed up from repetitive manual entry and clicks. 

We don’t believe the solution to pick the most optimal box on every MLMQ order is an arbitrary default or crude automation rules. Our system comes with breakthrough innovation, with our 3D Package Manager. Whenever you receive MLMQ orders, the software uses 3D Bin Technology to intelligently evaluate the % fit of items in boxes, making sure the most optimal box is selected every time.

This frees up your team’s time from data entry and having to spend minutes on every order figuring out which box to use. This unlocks time savings for your team to focus on more valuable tasks that grow your sales and business.

Savings: Stay Ahead and Boost Margins Despite Rising Costs

We’ve now identified two key things that a next-generation eCommerce shipping software must do – it must simplify operations in today’s complex world, while also doing so in a way that boosts your team’s productivity and frees up their time. 

However, the biggest pressure merchants face today is around costs. In a world where carrier GRIs, worker wages and warehouse leases are all going up, sellers need to scrap to save every penny, to protect and increase their margins. It can make the difference between going out of business and finding success. 

Legacy software does a poor job of unlocking savings because it was built for a world where resource optimization or cost-cutting was not needed. We believe there are 3 key areas of the shipping workflow where software must be able to unlock cost savings: 

• Does the software pick the cheapest shipping label every time? 

• Does the software optimize packaging and shipping costs in a world of large, complex orders? 

• Is the software easy to use, with minimal human oversight? Does it allow you to do more with limited resources? Can it work even if those resources are untrained, seasonal or part-time labor? 

Pick the Cheapest Label Automatically, Every Time

Legacy Software – You’ll Never Know if You’re Saving Money

As we’ve seen in the sections above, legacy software requires a lot of manual automations to be written to capture workflows. But why do merchants go to all this trouble and take the time to do so? The answer is simple – identify the cheapest shipping label on every order.

However, the automations (mapping SKUs and customer addresses to fulfillment locations and carrier services) are simply a means to an end. There is no way to actually tell whether the rules are ensuring that the cheapest option is being picked every time. 

To actually identify that, manual and deep cost comparison analysis has to be done to figure out the reality. The possibility of cost leakage is a real one. And in a world where customers expect free and fast shipping on every order, every last dollar and penny matters. You need certainty and confidence in the labels your shipping software is picking. 

Next-Gen Software – Savings on Every Label

Cahoot’s software eliminates the maze of complex human-defined, hand-written automation rules. With these rules gone, you don’t need to worry about whether you’ve optimized your automation rules for maximum savings. The system intelligently factors in all available parameters to make the right choice, every time. 

It’s possible to overlook many possibilities when defining automation rules by hand – for example, a 1 unit order of a certain SKU might weigh less than 1 lb, allowing you to use USPS Ground Advantage. But what if someone orders 3 units? Or 6 units? In each case, the system factors in all data and parameters to make the right decision. 

You don’t need to spend time doing a deep, detailed investigation into whether you’re actually saving money. You can rest assured knowing that you’re getting the best label every time. 

Pay the Right Shipping Fees, Even on Complex Orders

Legacy Software – Cost Leakages From Human Error

We’ve highlighted how legacy software makes it more complicated for your team on the warehouse floor to handle Multi-Line, Multi-Quantity Orders. By leaving the judgment of which box to use in the hands of humans, you don’t just sacrifice productivity – you could also lose money on every order. 

The shipping carriers set their rates based on dimensional weight. If your team uses a box of a larger size than is actually needed, the item can have higher DIM weight, costing you more money on the rates you pay the shipping carriers. 

With no automation or decision guidance from your shipping software, the decision is left to the eyeball judgment of your team, which increases the possibilities of errors.  

Next-Gen Software – Pay the Optimum Rate Every Time

With Cahoot’s 3D Package Manager and powerful automations on Multi-Line, Multi-Quantity Orders, you can rest assured knowing that you’re using the right box on even your most complex orders. 

This means that items go in the most optimum boxes, and that you pay only what’s needed to the shipping carriers. With decision making guided by technology, the possibility of errors is reduced, ensuring that you save every last penny. 

Ease of Use

Legacy Software – Needs Staff to Babysit the Tool

As we’ve seen, legacy software is clunky and complicated to use. At every turn, the tool requires manual data entry, workflow configuration and updating by humans. Once you configure these tools, you can’t ‘set it and forget it’. Changes from the carriers or updates to your product catalog break automations and configured workflows, requiring someone to constantly babysit and oversee the tool. 

Most sellers hire dedicated resources or even teams just to configure, deploy and maintain their eCommerce shipping software. In a world of rising costs, this means you lose money on expensive staffing. To make matters worse, those members of your team are perpetually stuck maintaining legacy software, rather than contributing in other, more valuable areas.

Next-Gen Software – Anyone Can Use it

With Cahoot’s next generation software, most workflows are taken off your team’s plate and are automated by the system. Changes that occur at your end or from the carrier’s are easily factored in by the system’s automation. This ensures that you don’t need to deploy dedicated resources to implement or maintain the system. 

It is possible for untrained, part-time or seasonal employees to quickly learn and use Cahoot. In today’s competitive labor market, this can unlock competitive advantage by allowing you to do more with less. Your team members are also freed up to focus on more value adding tasks, rather than spending all day ensuring that your shipping software doesn’t fall apart.

Conclusion: Next Generation Software is Critical to Winning in the New World

We believe everything has changed in eCommerce, and highlighted how Prime has changed the industry in a manner comparable to how the iPhone changed society’s experience with technology.

Prime transformed one aspect of eCommerce more than any other – shipping. However, as we hope you’ve seen from the sections above, this is the area where the least technological advancement has occurred. We believe legacy tools are costing sellers time, money and productivity on every order. In a world of competitive online marketplaces, sky-high customer expectations and rising costs, sellers have it extremely hard as is. They don’t need technology adding to their list of worries. They need software that helps them compete and win in this world. 

Such a tool must be capable of addressing some of the key challenges of the new world of eCommerce – simplifying operational complexity, providing efficiency and productivity gains for your team to focus on the things that matter most and providing savings that restore margins in an intensely competitive environment. We believe our tool does exactly that.

We believe this tool can provide you with strategic and competitive advantages in today’s complex eCommerce industry. Are you ready to make the switch?

Offer 1-day and 2-day shipping at ground rates or less.

Recent Blog Posts

The best eCommerce brands and sellers are constantly looking for new sales channels to expand their footprint. Most people think of Macy’s and its sister brand Bloomingdale’s as retailers that are heavily focused on their brick and mortar stores, who trail well behind the likes of Amazon in eCommerce. Therefore, they are likely not the first names that come to a merchant’s mind when they consider expanding beyond Amazon. However, in recent times, Macy’s has begun to catch on to the surge in eCommerce and realizes that it represents an opportunity through which it can boost sales and revive stalling growth.

In 2022, Macy’s reported it has around 45 million active shoppers, of which 29.1 million are Star Rewards members – a sizable audience for an online seller to target. In a bid to increase the product mix that it offers, the company launched its online third-party marketplace in late 2022. Unlike Amazon’s marketplace, where nearly anyone can start selling, Macy’s platform is curated. This could be done to ensure they serve their customers with the brands and products they think will most appeal to them. If you’re reading this, it probably means you’ve been selected by them to feature your assortment – congratulations! 

One of the key benefits of this 3rd Party Marketplace is its Vendor Direct Program – which allows merchants to receive orders that customers place on Macy’s website, and fulfill those orders on their own. This offers significant advantages for a couple of reasons.

Why is The Macy’s Vendor Direct Program Great For Sellers?

Simplified Inventory Management

As Macy’s allows sellers to fulfill their orders independently, you do not need to send some of your inventory to a Macy’s warehouse. This is a welcome relief for sellers who might already have sent some inventory to Fulfilled By Amazon (FBA) or Walmart Fulfillment Services (WFS), and are overwhelmed by keeping track of all these different marketplace-specific order fulfillment solutions. Macy’s allows you to manage your order fulfillment entirely on your own, just like you might be doing for your Shopify storefront, for example. This ensures that you don’t have to work with another logistics solution that is specific to a single sales channel. 

Whatever The Logistics Setup, Everyone Has a Fair Chance

Amazon’s A9 algorithm for search rankings, as well as the Buy Box algorithm, both assign high preference to listings that are fulfilled by the company’s inhouse FBA logistics network. Additionally, when delays or issues occur with FBA, Amazon faces no penalties – whereas Sellers fulfilling their own orders face severe penalties if they make a mistake, including having their product listings suspended. With Macy’s, there is no such competing network that stacks the odds against you – everyone competes equally, and the brands with the best products who achieve the highest order fulfillment excellence will win.

While all this offers sellers and their businesses operational and strategic advantages, the program still has high expectations from participating brands. Your choice of a 3rd Party Logistics Provider is a crucial factor in determining your success, and there are a few key factors to consider. 

What Should You Look For in a Macy’s 3PL?

Full Compliance With Macy’s Vendor Direct Fulfillment (VDF) Tech Stack

Macy’s requires that sellers integrate with their platform via CommerceHub. Within 1 hour of a purchase order being made, sellers must push acknowledgement to Macy’s via this integration. Also, the order must be shipped within 2 business days, and merchants must push confirmation that the order was fulfilled to Macy’s via this connection (with carrier tracking information). Your Macy’s 3PL fulfillment partner must be able to work with this configuration and ensure your orders are shipped on time. 

““Cahoot is very responsive and organized in all aspects. Everything is prepared to give anyone the best experience ever. They’re the right partner to help you accomplish your business purpose.” 

–Italian Food Online Store 

Speak to a Fulfilment Export

Flexibility to Work With The Carrier Account Macy’s Provides

Macy’s will provide you with a UPS account for you to use, that must be used exclusively for fulfilling VDF orders. Your 3PL partner must be able to have flexibility and agility in both their software and operations which supports sellers bringing their own accounts.

Ultrafast Shipping

Macy’s requires that 98.5% of orders are shipped (leave the warehouse) in under 2 business days. However, the consumer expectation today is for fast, free shipping across every channel – when you operate either from a single warehouse you own, or work with a traditional 3PL (usually with just a couple of fulfillment center locations), aiming to cover the entire country from a limited number of locations becomes extremely challenging. Additionally, with Macy’s carrier accounts, you can only pick the UPS SurePost or Ground services to fulfill orders. Imagine if your 3PL only has a California fulfillment center, but you’re having to ship orders to New York – customers will have to wait 4-5 business days to get their order in the era of ultrafast same or next-day delivery. With a platform like Cahoot, you can leverage a network of strategically located warehouses to place your inventory closer to your end-customers and shorten delivery speeds. 

Adherence to Macy’s Packing Requirements

The little things are often the most important – merchants are required to place a Macy’s branded packing slip inside every carton shipped to customers. You need a fulfillment partner that is fully aware of all these requirements, and will sweat the details to ensure you are compliant with all aspects of the VDF program. 

Responsive and Reliable Customer Support

As part of the VDF program, Macy’s audits and reviews the performance of sellers on the program – any mistakes or errors that your 3PL commits directly affects your brand reputation and customer experience. It becomes essential to have a customer support team that is responsive and ready to resolve any issues that you may run into.

Experience Working With Macy’s Sellers

As we mentioned before, Macy’s marketplace is curated – meaning that there’s not a huge number of brands or sellers on it, unlike Amazon. This therefore means there are a limited number of order fulfillment services out there that have experience working with merchants who are part of Macy Vendor Direct. Make sure to identify a company that has demonstrable social proof of its track record supporting Macy’s merchants. Here’s what one of our customers, Glo International, had to say about their experience shipping Macy’s orders with Cahoot:

“Cahoot allowed us to reduce the monthly shipping cost and the support service is really responsive and efficient!” 

–Glo International

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Top Macy’s 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi Channel Fulfillment (MCF) is a service through which you can deploy Amazon’s logistics network to fulfill orders on other channels, such as Macy’s. 

ShipBob

Cahoot: The Best Macy’s 3PL

Cahoot’s order fulfillment network is built for the future of eCommerce. Our network of warehouses is strategically located at different locations in the US, enabling Macy’s merchants to offer ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs (including the ones that the typical Amazon fulfillment center may struggle to process) – small, lightweight, seasonal, slow-moving, heavier and oversized. 

We are also fully compliant with Macy’s technology and packing requirements – and provide you the flexibility to use the UPS account provided by them to you without any hidden fees. Lastly, our US based customer service team is always available if something needs to be fixed – ensuring that you’re continuing to sell more and delight your customers.

Cahoot is committed to helping Macy sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Nordstrom order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles:

1. How to Choose the Best 3PL for Your Shopify Store
2. How to Choose the Best 3PL for Wayfair
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Offer 1-day and 2-day shipping at ground rates or less.

Recent Blog Posts

Nordstrom is one of the most iconic department stores in the US. As of 2017, the company had 9 million shoppers. For most people, the first thing that comes to mind when they think of Nordstrom are its brick and mortar stores. The company serves American customers through 352 locations. Most eCommerce sellers might therefore ignore the retailer in pursuit of players with a larger digital presence, such as Amazon or Walmart. However, online is becoming an increasingly important part of Nordstrom’s operations – according to Statista, 38% of the company’s sales were driven through digital channels in 2022. In 2020, the company had the 3rd largest online revenue among department stores in the US, raking in $3.34 billion in sales. 

The Direct Drop Ship program is a way for you to access this large segment of shoppers. Through the program, sellers can feature their product assortment on Nordstrom’s website. When customers place orders, merchants must pick, pack and ship the products either from their own warehouse, or through a 3rd Party Logistics Provider (3PL) to the customer. 

Before we dive into how you can find this 3PL partner, it’s worth asking an important question – why is the program worth doing? 

Why is the Direct Drop Ship Program Great?

Invite-only Marketplace Where You Can Grow Sales

Nordstrom’s Direct Drop Ship program is currently invite only – like the 3rd party marketplaces at Macy’s and Target. Nordstrom may be doing this to simplify the product assortment customers see, making it easier for them to find things they really like. For sellers, this is great because it provides them access to Nordstrom customers with much less competition compared to a sales channel like Amazon, where nearly anyone can sell.

Nordstrom Provides Full Assistance With EDI Integration

Nordstrom requires transmission of information between themselves and their sellers through Electronic Data Interchange (EDI). The company does this through a CommerceHub platform called DropShip Commerce (DSCO). Whenever purchase orders are received, Nordstrom will transmit the information via EDI to the seller. Similarly, sellers must pass updates from their side (acknowledgements of Purchase Orders, Advance Shipment Notifications with tracking information etc.) through the DSCO platform. 

Some retailers require the seller to take care of configuring this technology on their dropshipping programs. Nordstrom provides both the platform and assistance in integrating it with their systems. 

Nordstrom Covers All Shipping Costs

One of the great advantages of the program is that shipping fees are paid for by Nordstrom. While other elements of order fulfillment, such as packaging and storage fees are still the responsibility of the seller, shipping labels are a significant cost that Nordstrom takes off their shoulders. 

Sellers must make sure that they use the UPS billing account that Nordstrom provides them – so long as merchants comply with this, they will be reimbursed shipping costs across a variety of services – including Ground, 3 Day Select, 2nd Day Air and Next Day Air Saver. 

What Should You Look For in a Nordstrom 3PL?

Achieve a Fulfillment Rate of 98%

Nordstrom requires that sellers keep cancellations extremely low – 98% of orders must be fulfilled before the defined due date on the DSCO system.

Traditional 3PLs that operate with a single warehouse location may not be ideal – in the event of any disruption at that location (extreme weather, carrier services disruption etc.), your ability to ship products on time to customers will be impacted. 

Additionally, traditional 3PLs may be limited to basic spreadsheets or worse, manual bookkeeping to keep track of your inventory. If you run out of stock and purchase orders continue flowing in, you will be forced to cancel them, affecting your fulfillment rate metrics. Cahoot’s software intelligently decrements the count of inventory as it leaves our warehouses, and provides color-coded alerts to you on a dashboard so that you always replenish products in time to keep your sales going. 

Ability to Ship 97% of Orders On Time

Nordstrom defines its shipping SLAs based on whether the order requires Standard or Expedited Shipping. 

Achieving this high level of performance comes down to ensuring that your fulfillment partner has excellent pick/pack and order fulfillment practices to get every order out within time.

Make sure to conduct extensive research into the standards at your 3PL’s warehouse. On Cahoot’s order fulfillment network, warehouses must pass a 44-point checklist to be eligible to fulfill orders for our sellers.  

“The Cahot team have been great to work with — always trying to provide great service and address any concerns and issues quickly and effectively. We’ve been very impressed with their shipping performance and communication on status of delivery for packages.” 

–Fenix Light Store

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Have a UPS Account, and Experience Working With the Carrier

Nordstrom requires that sellers use their own UPS account – your 3PL must provide you one, or give you the flexibility to use your own UPS account. Perhaps more importantly, the 3PL must have experience working with UPS – this will ensure that daily pickups and carrier scans are conducted in a timely fashion – thereby streamlining your Nordstrom order fulfillment. 

Help you Meet Nordstrom’s Eco-Friendly Packaging Standards

In Nordstrom’s words, they ‘strive to be an environmentally friendly company’. They also encourage sellers to avoid excess packaging. 

With many traditional 3PLs, you may find that items often ship in boxes larger than the SKU actually needs. The problem is that most traditional 3PLs have a very limited configuration of boxes of standard sizes. Items are simply thrown into the next available box, without taking care to identify if it is truly the most optimal one. 

The problem worsens with Multi-Line, Multi-Quantity (MLMQ) Orders. These orders can often be unnecessarily split into multiple boxes. With Cahoot’s MLMQ automation features, our system learns from SKU and box dimension data, as well as past data to intelligently identify the most optimal box for every order. 

This ensures that you save costs across every order, while also meeting Nordstrom’s (and the customer’s) expectation for more environmentally responsible, sustainable packaging.

Fully Compliant With Nordstrom Packing Slip Requirements

Nordstrom requires every shipment sent to customers to have a branded packing slip, as well as a return label (the company will bear the cost): 

This is how an example packing slip looks like

This is how a return label looks like:

Your 3PL fulfillment partner must sweat the details and ensure that this requirement is complied with – the little things matter enormously toward ensuring both continued enrollment in the Direct Drop Ship program, as well as customer satisfaction. 

Fully Compliant With Nordstrom EDI Technology

The 3PL must be able to work with the Direct Drop Ship Program’s tech stack (DSCO platform) and ensure that you comply with all the requirements around data transmission to Nordstrom. 

Responsive, Reliable Customer Support

Order fulfillment is a complex operation, involving multiple, intricate steps in the process from click to delivery. Things don’t always go as planned, but what is crucial is ensuring that your 3PL has a responsive, reliable customer support team whom you can rely on to fix problems fast, with minimal disruption to your business operations. 

Most traditional 3PLs may not have personnel with the experience and expertise required to troubleshoot and fix problems fast – costing you precious time and sales. It is important to identify a Nordstrom fulfillment partner with a reliable, responsive customer support team – who will be ready to dive in and solve problems quickly, so that you’re always selling and keeping your customers happy.

So now that we’ve taken a look at the important criteria that guide your choice of a 3PL for Nordstrom, let’s look at the options that are actually available to you, and the pros and cons of each of them:

“Cahoot’s support is prompt and personal, not monolithic and apathetic as some large companies tend to be. Cahoot is not only a great 3PL provider but also a strategic partner that goes above and beyond for its clients. They are a 5-star team of people who make it their business to care about yours.” 

–VERSACART

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Top Nordstrom 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s service through which you can fulfill orders on sales channels outside Amazon, such as eBay and Target Plus. 

The service deploys the same infrastructure and resources that power Amazon’s in house Fulfilled By Amazon (FBA) logistics network.

ShipBob

Cahoot: The Best Nordstrom 3PL

Cahoot’s peer-to-peer order fulfillment network is built for the future of eCommerce. Our network of warehouses is located at strategic locations across the US, enabling Nordstrom Direct Drop Ship merchants to offer their customers ultra fast shipping. Our fulfillment centers are well equipped to handle all types of SKUs – including heavier, seasonal, larger-sized and slow moving ones (which the typical Amazon Fulfillment Center may struggle to process). 

We are compliant with all aspects of the Direct Drop Ship program. Our US based customer support team is always ready and responsive to ensure that your order fulfillment operations are running smoothly all the time.

Cahoot is committed to helping Nordstrom sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Nordstrom order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles:

1. How to Choose the Best 3PL for Your Shopify Store
2. How to Choose the best 3PL for Your Macy’s Orders
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for Wayfair

Offer 1-day and 2-day shipping at ground rates or less.

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Wayfair is commonly referred to as the “Amazon of the Furniture and Home Goods” industry. As of 2022, the company has 22 million active customers. While this may seem a small number compared to the number of people shopping at the likes of Amazon and Walmart, Wayfair is unique. The company has managed to retain its dominance in the Furniture and Home Goods category despite these massive competitors. In its latest financial results, the company brought in $3.17 billion in revenues. 

The company’s business model is similarly unique. While Amazon has invested heavily in building its inhouse logistics network, and Walmart and Target are slowly growing eCommerce in addition to the brick and mortar channel that fueled their growth, Wayfair is different. The company relies heavily on a drop-shipping model. In this model, when Wayfair customers place orders, they are sent directly to sellers to be picked, packed and shipped. According to estimates, the company drop ships as much as 95% of the products that it sells to customers. 

Given how top of mind it is to consumers looking for products in its focus category, Wayfair is an attractive channel for sellers and brands. In a channel where 95% of sellers are drop shipping, it becomes crucial to identify the right 3PL partner – one that can both help you scale revenues and delight customers. 

Before we jump into finding a 3PL, it’s worth asking – why is selling on Wayfair great for sellers?

Why Selling on Wayfair is Great For eCommerce Merchants

Lesser Competition Than on Other Marketplaces

Wayfair sources its products only from 23,000 suppliers, which is miniscule compared to the 2.5 million 3rd party sellers on Amazon’s marketplace and still very low compared to the 150,000 on Walmart. This allows brands to be much more prominently featured and visible to customers, enabling increased sales and profitability.

No Marketplace Referral Fees

Wayfair buys products from its suppliers at wholesale prices, and then charges retail prices to its end customers. This can be a more attractive model to sellers, compared to the referral fee based model that Amazon operates on.

Wayfair Covers Shipping Fees

Like other marketplaces, Wayfair covers the cost of shipping for its sellers. All shipments are billed to Wayfair’s Small Parcel (FedEx), LTL or White Glove shipping accounts. Merchants can either choose to use prepaid shipping labels from Wayfair or print their own shipping labels and then bill Wayfair for the associated charges. 

“Cahoot has a great app and tech platform for e-commerce and has been a great partner. I evaluated numerous competitors and they provided by far the most compelling combination of good pricing and service. Their people are top-notch and there to help you succeed as a partner.” 

–VENTAPAK

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What Should You Look For in a Wayfair 3PL?

Automated Inventory Level Monitoring

Sellers on Wayfair are encouraged to send Inventory Feeds (updates on how much stock of product is available at warehouses) as frequently as possible. This is because Wayfair wants to ensure a good customer experience by only shipping products that are in-stock.  

With traditional 3PLs, stock-keeping of inventory levels is often conducted on spreadsheets, or worse, by hand. These inefficient tools create many problems in staying on top of the inventory levels in your warehouses. 

If you overcommit on orders you cannot actually fulfill, then you’re forced into cancellations that ruin your relationship with both Wayfair and your customers. 

With Cahoot’s intelligent software, inventory is automatically decremented and you get color-coded alerts as you start running out of stock – this ensures you’re always proactively replenishing your inventory and boosting your sales, rather than scrambling to fix problems. 

Ability to Offer Late Same Day Cut Offs

Wayfair encourages sellers to deliver a great experience to their customers by ensuring that cut-off and pickup times are set as late as possible, so that customers can experience fast shipping. This might also be Wayfair’s attempt to keep themselves competitive and relevant in the era of ultrafast fulfillment. 

Most traditional 3PLs struggle to meet the demanding expectations from today’s customers. Cahoot is used to meeting expectations for late cutoffs, weekend pickups / deliveries through our expertise in helping Amazon sellers thrive on the Seller Fulfilled Prime (SFP) program. Through our network’s best-in-class fulfillment capabilities, you can meet and surpass the expectations of Wayfair customers. 

Minimum Lead Time – Every SKU Ships Fast

If different SKUs will ship in different timelines, Wayfair expects merchants to proactively communicate that to customers. However, today’s demanding customer expects ultrafast order fulfillment across every SKU. To meet that, you need to ensure that your 3 PL deploys excellent pick-pack practices and has high quality order fulfillment operations in their warehouses. 

Consider working with a partner like Cahoot – to fulfill orders for our sellers, a warehouse must pass a 44-point checklist. This ensures that only the very best fulfillment centers join our network. These fulfillment centers are well equipped to handle a variety of SKUs – small, light, slow and fast-moving, heavy, larger-sized and seasonal. 

“I highly recommend Cahoot to anyone looking to outsource fulfillment for their business. They go above and beyond to help make sure your needs as a business are met. I reached out to 20 other 3PL’s, and fulfillment centers. Cahoot was the best option for business relations, services, and pricing by far.” 

–GN Products LLC

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Responsive, Reliable Customer Support

Needless to say, order fulfillment is a complex operation and things don’t always go to plan. When you run into issues, customers or Wayfair won’t blame your 3PL – it’s your relationship and brand equity that’s at stake with these key stakeholders. While things can go wrong, it is crucial to ensure that your 3PL offers responsive, reliable customer support to fix the problem and restore your operations to normalcy quickly. 

Most traditional 3PLs lack personnel with either the experience or expertise required to quickly troubleshoot issues. It is essential that you identify 3PLs that have a dedicated and qualified support team, ready on hand to resolve problems and ensure you’re constantly selling more to your customers.

Cahoot – The Best 3PL for Wayfair

Cahoot’s peer-to-peer order fulfillment network is built for the future of eCommerce. Our network of warehouses is located at strategic locations across the US, enabling Wayfair merchants to offer their customers ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs – including heavier, seasonal, larger-sized and slow moving ones.

We are compliant with all expectations Wayfair has from its dropshippers. Our US based customer support team is always ready and responsive to ensure that your order fulfillment operations are running smoothly all the time. 

Cahoot is committed to helping Wayfair sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Shopify order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles:

1. How to Choose the Best 3PL for Your Shopify Store
2. How to Choose the best 3PL for Your Macy’s Orders
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Offer 1-day and 2-day shipping at ground rates or less.

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Nearly every American has shopped at a Target – the retailer holds a level of popularity comparable to that of Amazon and Walmart. The Minnesota headquartered retailer’s brick and mortar footprint is well spread. As of 2023, Target had 1948 stores in the U.S and hauled in $106 Billion in revenue. More importantly, the company holds a huge audience for sellers and brands to target – according to Business Insider, 8 out of 10 US shoppers are Target customers. The average Target customer makes 23 trips a year to one of their stores. But while Target has had a sizable customer base for years, eCommerce sellers and brands have largely focused on their competitor, Amazon. However, in recent years, Target has begun expanding its online offerings. In 2019, it launched its third party marketplace on its website – Target Plus. This has opened up a massive new audience for eCommerce merchants to expand into. 

In this article, we look at the advantages Target Plus offers sellers, the key factors merchants must consider when evaluating a 3PL for their Target Plus orders, the options that are available to them and our recommendation of the best 3PL.

Why Target Plus Is A Great Option For Sellers

Invite-Only Marketplace With a Large Audience

Target Plus was introduced by the retailer in 2019 as an invite-only platform. The company said it was doing this to carefully curate the assortment of brands and products available to customers on its website. According to Marketplace Pulse, the company started with 30 sellers on Target Plus in 2019. Four years later, that number has grown only to 650. 

This represents enormously exclusive digital real estate for brands. In certain product categories, there may be just one brand featured. This means that all the customers visiting Target’s site focus exclusively on this limited selection, boosting sales enormously for the featured brands.

Autonomy Over Logistics and Fulfillment

Brands have freedom from having to work with another platform-captive fulfillment solution, such as Fulfilled By Amazon (FBA) or Walmart Fulfillment Services (WFS). Target Plus enables them to handle their logistics and order fulfillment however works best for them – through their own warehouse, a traditional 3PL or order fulfillment networks. 

This also means freedom from the fees and surcharges associated with these platform captive fulfillment solutions. Lastly, it allows merchants to manage their inventory in a centralized location – rather than having to send more inbounds to a warehouse owned by a marketplace sales channel, they can simply pull from a centralized pool of inventory that they use for their own website, or Shopify storefront, for example. 

A More Equitable Marketplace – No Inhouse Competitor like Amazon FBA

Target Plus allows merchants to send orders out to customers, Target stores or Target fulfillment centers through whatever logistics operation works for them. Additionally, because Target does not have its own competing logistics network (such as FBA on Amazon), there is no preferential treatment provided to sellers who use certain logistics providers. 

The model is simple – let the merchants compete, and may those with the best products and order fulfillment standards win. 

While Target Plus is a great growth opportunity, the marketplace is still invite-only – Target themselves reach out to the brands that they think would be a good fit for them, explaining the exclusivity. Their website has a form for merchants to fill out if they’re interested in being part of the marketplace, but it is not clear what the chances of getting approved are.

What Should You Look For In A Target Plus 3PL?

In Target’s own words, the items from 3rd party sellers featured on their website appear exactly the same as all other listings, meaning that these merchants are responsible for upholding the experience customers expect from Target through their product assortment and order fulfillment standards. 

Through the invite-only process, Target ensures the product assortment is what customers expect. However, the order fulfillment standards are entirely your responsibility – your ability to maintain enrollment in Target Plus largely depends on the 3PL that you work with. 

We’ve outlined the criteria that we think are most important when choosing a 3PL partner for your Target orders:

Ability to Fulfill Orders in 1 Business Day

Target Plus requires participating brands to fulfill their orders (get it out the warehouse) in 1 business day. This requires warehouses that have excellent picking and packing practices, as well as order fulfillment standards. For example, warehouses in the Cahoot order fulfillment network are vetted through a 44-point checklist, ensuring that only the very best make the cut.

Ensure Order Delivery in 5 Business Days

The marketplace requires that brands / products deliver orders to the end-customer in under 5 business days. However, customers today expect fast, free shipping in under 2 days across every channel. Amazon and their Prime loyalty program have created this customer expectation. With Cahoot’s nationwide network of strategically located warehouses, you’ll be able to delight customers nationwide with shipping in less than 2 days, while also saving costs by using economical ground shipping. 

Flexibility To Use All Shipping Carriers and Services

Target Plus expects participating sellers to be able to accommodate a variety of carriers and shipping services. 

With Cahoot’s next generation shipping software, you get much more than that. Our system intelligently rate shops across different carriers, services and warehouse locations on every single order to ensure that the cheapest shipping label that will meet the 5 day delivery timeline is picked on every order. 

This ensures you see savings on every order, which gives you back money to invest in growing your brand and sales. 

Ability to Produce a Target.com Branded Packing Slip on Every Shipment

On every order that is sent out from the warehouse, Target requires a branded packing slip to be part of the shipment. This is something that needs a 3PL who will sweat the details and ensure that the little, but very important things are taken care of. Cahoot is fully compliant with these requirements, ensuring that you’re always meeting all of Target’s criteria for the program.

Full Compliance with Target’s EDI Requirements

Target requires merchants to be able to receive and push communications via Electronic Data Interchange (EDI). These communications are automated. Target will use EDI to push purchase order information to merchants. To provide acknowledgement of order receipt and notify Target that the order has been shipped from the warehouse, the merchant must EDI to push this information back. 

There are a variety of EDI systems that you can use to connect to Target. Importantly, your 3PL must be able to help you stay fully compliant with these requirements. 

Responsive, Reliable Customer Support

Order fulfillment is a complex operation, involving multiple, intricate steps in the process from click to delivery. Things don’t always go as planned, but what is crucial is ensuring that your 3PL has a responsive, reliable customer support team whom you can rely on to fix problems fast, with minimal disruption to your business operations. 

Most traditional 3PLs may not have personnel with the experience and expertise required to troubleshoot and fix problems fast – costing you precious time and sales. It is important to identify a Target Plus fulfillment partner with a reliable, responsive customer support team – who will be ready to dive in and solve problems quickly, so that you’re always selling and keeping your customers happy.

So now that we’ve taken a look at the important criteria that guide your choice of a 3PL for Target Plus, let’s look at the options that are actually available to you, and the pros and cons of each of them:

Top Target Plus 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s service through which you can fulfill orders on sales channels outside Amazon, such as eBay and Target Plus. 

The service deploys the same infrastructure and resources that power Amazon’s in house Fulfilled By Amazon (FBA) logistics network.

ShipBob

Cahoot: The Best Target Plus 3PL

Cahoot’s peer-to-peer order fulfillment network is built for the future of eCommerce. Our network of warehouses is located at strategic locations across the US, enabling Target Plus merchants to offer their customers ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs – including heavier, seasonal, larger-sized and slow moving ones (which the typical Amazon Fulfillment Center may struggle to process). 

We are compliant with all aspects of the Target Plus program. Our US based customer support team is always ready and responsive to ensure that your order fulfillment operations are running smoothly all the time. 

Cahoot is committed to helping Target Plus sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Shopify order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles:

1. How to Choose the Best 3PL for Your Shopify Store
2. How to Choose the best 3PL for Your Macy’s Orders
3. How to Choose the Best 3PL for Wayfair
4. How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Offer 1-day and 2-day shipping at ground rates or less.

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While each of Amazon, USPS, FedEx, and UPS are implementing peak surcharges for parcel delivery this holiday season, they’re all going about it in different ways.

Amazon, relatively new to the surcharge game, has added flat percentage fee increases to key services throughout the year. For peak, though, they have a sliding scale that will predictably hit bigger packages with bigger cost increases. Their peak surcharge will be added on top of the existing fuel and inflation surcharge they put into effect this summer, further squeezing seller margins.

Similar to Amazon, USPS will be using a sliding scale that increases the surcharge based on the parcel’s weight and zone. Flat Rate Boxes and Envelopes will see big jumps of $0.75 to $0.95, which will pinch the sellers that rely on these shipping options to keep their logistics costs down while selling inexpensive items.

FedEx, on the other hand, has more flat fees to add as surcharges, including a $2.50 per Ground Economy package charge during Black Friday and Cyber Monday. On top of that, they’ve introduced a “peaking factor” calculation to apply to their largest shippers. The more large shippers outstrip their summer volumes during peak, the more they’ll pay per package.

Like FedEx, UPS will use a dynamic pricing scale that will charge large shippers more when they far outstrip their summer volumes. Unlike FedEx (and the others), though, UPS won’t add a flat surcharge to all packages.

Let’s get into the details.

Amazon FBA Peak Surcharges 2022

On August 16th, Amazon announced that for the first time ever, they will implement a Holiday Peak Fulfillment Fee to take effect from October 15th, 2022 to January 14th, 2023. Per Amazon, The fee will be an average of USD $0.35 per item sold using US and Canada FBA.” Even in isolation, a 35 cent increase in order fulfillment fees can be difficult for sellers to absorb. Considering the enormous pressure that inflation is already putting on sellers and other FBA price increases, this could be the straw that breaks the camel’s back.

At an average of another 35 cents on top of the other increases, there are few, if any, items that haven’t shot up over a dollar in cost to fulfill through FBA this year. When you consider that many smaller items only cost $3 or $4 to fulfill through FBA, that’s a staggering 25%+ increase in one of the most important operational costs in one year. Sellers with small, $10 items have now likely seen over 10% more of their revenue disappear in FBA fees in just over half a year.

To add to FBA seller woes, storage costs for FBA will nearly triple from $0.83 to $2.40 per cb. ft. While this has long been Amazon’s policy and thus is expected, it doesn’t hurt margins any less.

USPS Peak Surcharges 2022

USPS announced their rate adjustments for the 2022 peak holiday season on August 10th, covering both commercial and retail parcels in most classes: Priority Mail Express, Priority Mail, First-Class Package Service, Parcel Select, and USPS Retail Ground. The surcharges are set to go into effect on October 2nd, 2022, and to last until January 22nd, 2023.

There are some notably large increases in prices among the surcharges – for instance, Commercial Priority Mail and Priority Mail Express Flat Rate Boxes and Envelopes will rise by $0.75 each, while their Retail counterparts will increase by $0.95 each. Here’s a full list of increases for their most popular services:

Priority Mail and Priority Mail Express Rate Adjustments:

• Commercial:
  • $0.75 increase for PM and PME Flat Rate Boxes and Envelopes.
  • $0.25 increase for Zones 1-4, 0-10 lbs.
  • $0.80 increase for Zones 5-9, 0-10 lbs.
  • $0.75 increase for Zones 1-4, 11-25 lbs.
  • $2.80 increase for Zones 5-9, 11-25 lbs.
  • $3.00 increase for Zones 1-4, 26-70 lbs.
  • $6.50 increase for Zones 5-9, 26-70 lbs.
• Retail:
  • $0.95 increase for PM and PME Flat Rate Boxes and Envelopes.
  • $0.30 increase for Zones 1-4, 0-10 lbs.
  • $1.00 increase for Zones 5-9, 0-10 lbs.
  • $0.95 increase for Zones 1-4, 11-25 lbs.
  • $3.20 increase for Zones 5-9, 11-25 lbs.
  • $3.25 increase for Zones 1-4, 26-70 lbs.
  • $6.45 increase for Zones 5-9, 26-70 lbs.

First-Class Package Service, Parcel Select Ground, and USPS Retail Ground:

• Commercial:
  • $0.25 increase for Zones 1-4, 0-10 lbs.
  • $0.40 increase for Zones 5-9, 0-10 lbs.
  • $0.75 increase for Zones 1-4, 11-25 lbs.
  • $1.60 increase for Zones 5-9, 11-25 lbs.
  • $3.00 increase for Zones 1-4, 26-70 lbs.
  • $5.50 increase for Zones 5-9, 26-70 lbs.
• Retail:
  • $0.30 increase for Zones 1-4, 0-10 lbs.
  • $0.60 increase for Zones 5-9, 0-10 lbs.
  • $0.95 increase for Zones 1-4, 11-25 lbs.
  • $2.70 increase for Zones 5-9, 11-25 lbs.
  • $3.25 increase for Zones 1-4, 26-70 lbs.
  • $5.85 increase for Zones 5-9, 26-70 lbs.

FedEx Peak Surcharges 2022

Unlike USPS, FedEx’s peak surcharges will kick in much earlier, in September. They are taking a much more granular approach to surcharges and fees that split out many different ways in which they’ll increase cost, and those cost increases will vary based on the particular date in peak. Not only will they vary by the particular date, but they’ll also vary by a new “peaking factor” that FedEx will use to dynamically charge more to the sellers that have the biggest spikes in sales. The better you do, the worse your margin will become.

Source: FedEx.com

FedEx’s basic surcharges will start with an additional $1.50 per package for Ground Economy services, in effect during November and from mid-December to mid-January. During the most busy time of Black Friday and Cyber Monday, that surcharge will jump up to an even higher $2.50 per package.

The “peaking factor” charge will be added on top of that, and it will be in effect from October 31st to January 15th. Thankfully for SMBs, it will only apply to enterprise customers that ship more than 20,000 Ground Economy packages per week, but it’s important to keep an eye on for the future regardless. What starts as a limited surcharge often spreads to apply to more people in subsequent years. The peaking factor will be calculated based on the ratio of volume shipped during peak as compared to an average to volume shipped during the relatively sleepy summer weeks of June 6th, 2022 – July 3rd, 2022. A seller that doubles their volume during peak will pay an extra $2.50 per Ground package and an extra $3.50 per Express on top of the previously mentioned surcharges. Quadruple your volume, and you’ll pay an extra $6.00 for Ground and $7.00 for Express, eating heavily into your margin.

UPS Peak Surcharges 2022

Finally, UPS shared their plans for peak surcharges in their September 9th update. Compared to USPS and FedEx, their surcharges are limited in scope and will affect fewer sellers. They have a range of surcharges that cover most international shipments, while their domestic surcharges will operate largely in the same way that FedEx’s “peaking factor” will work.

It will only apply to sellers that have been billed for more than 20,000 packages during any week since October 2021, and the surcharge will vary based on the type of service and the extent to which the seller’s peak volume outstrips their “Baseline Volume”. The baseline volume will be calculated as the customer’s average weekly volume for June 2022.

Source: UPS

UPS’s surcharges come out at a very similar level to FedEx’s peaking surcharges – for instance, a seller that doubles their baseline volume and uses UPS Ground Residential will pay $2.50 more per package, while Next Day Air Residential will cost $3.50 extra per package. Those numbers are identical to those of FedEx, as are many of the other surcharges.

UPS’s international surcharges will add cost in a linear fashion based on package weight. For instance, international shipments from the US to Europe will cost $0.15 per lb more via UPS Worldwide Express Plus. Most of their international surcharges are going into effect on September 25th, and notably, they haven’t provided an end date to the rate increases.

Reduce Shipping Costs with Cahoot Distributed Order Fulfillment

Cahoot has created an Amazon-like ecommerce order fulfillment network that makes low cost, fast and free shipping a breeze for every eCommerce sales channel. We use our large number of warehouses to strategically stage merchant inventory in multiple locations close to their customers, which minimizes their Zone profile. This both saves on shipping costs and time, which expands margin for the sellers and delights customers with short delivery times.

Cahoot is the next generation of tech-enabled order fulfillment services networks. Unlike other networks that are collections of third party logistics warehouses, Cahoot’s innovative approach empowers merchants across the country to fulfill orders for one another. Our peer-to-peer network is a collective of highly vetted eCommerce retailers who offer up excess warehouse space and resources to provide high-quality order fulfillment to other merchants. Since they fulfill their own DTC orders, they know how important top-notch order fulfillment is, and they put the same care and energy into your orders as they do for their own.

With a peer-to-peer network, multi-channel fulfillment with nationwide 1-day and 2-day delivery at economy shipping rates is the norm.

Offer 1-day and 2-day shipping at ground rates or less.

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Technology platforms govern consumer experience in a huge way. Users simply come to the platform, search for what they want, and start using it. Behind this consumer behavior, is the implicit trust in the platform that its users will act in the best interest of other customers. Apple’s App Store, Amazon’s Marketplace and Mastercard’s payment services are some examples.

Technology platforms govern consumer experience in a huge way. Users simply come to the platform, search for what they want, and start using it. Behind this consumer behavior, is the implicit trust in the platform that its users will act in the best interest of other customers. Apple’s App Store, Amazon’s Marketplace and Mastercard’s payment services are some examples.

Apple vs. Amazon on governing its customers

Apple has been very careful about who it allows to operate on its platform and regularly weeds out apps which might exploit its users, such as the recent case of a few dating apps. They were removed from Apple’s App Store because they allowed children as young as 12 to access them.

On the other end of the spectrum is Amazon. Amazon has aggressively expanded its third-party seller base. Now it accounts for about half the revenue generated by the e-commerce division of Amazon.

But in the process, they have been accused of being lax about the quality of merchants they have allowed on the platform. This has enabled counterfeits and sometimes, dangerous items to be sold on the biggest online marketplace in the US.

3rd party seller avoiding responsibility for defective goods

Recently, a federal court has ruled that Amazon can be held liable for defective goods sold on its site by third-party sellers. This has come after a long battle where earlier a lower court had ruled in Amazon’s favor.

CNBC reported, “The decision on Wednesday related to a case in which a Pennsylvania customer, Heather Oberdorf, purchased a retractable dog leash on Amazon.com from a third-party vendor, The Furry Gang. While walking her dog in 2015, Bernardo was blinded after the leash suddenly recoiled. Neither Oberdorf nor Amazon have been able to contact The Furry Gang.”

How will Amazon deal with the backlash?

So why is Amazon being held responsible? The central point is the customer’s trust in Amazon. Amazon only allows customers to contact the seller through Amazon. This means that the merchants can conceal themselves from the customer, putting the onus squarely on Amazon in case of malfeasance.

There are a couple of paths Amazon can take from here. One, it can increase the scrutiny for the quality of merchants, making it harder to sell on Amazon. On the other hand, it can allow direct access for customers to merchants, losing control of customer experience. Given Amazon’s obsession with customers, we can only expect an innovative solution just around the corner.

Offer 1-day and 2-day shipping at ground rates or less.

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Some drawbacks are obvious – you’ll have to put Amazon branding all over your checkout and post-purchase experience, for instance. Many others are harder to spot, though, and they affect the entire customer experience that you’ve worked so hard to create. 

In this blog, we’ll walk you through the basics of what Buy with Prime (BWP) is, how it’s going to affect the ecommerce industry, and how it negatively affects your customer experience. Finally, we’ll share our perspective on how you can get the key benefit of Buy with Prime (fast and free shipping) without surrendering your brand to Amazon.

What is Buy with Prime?

Amazon Buy with Prime gives DTC sellers the ability to offer their customers the Amazon Prime checkout and delivery experiences. When a seller integrates with the service, they’ll get:

• The Prime logo and expected delivery date in their checkout process
• Checkout financing operated by Amazon Pay
• Checkout will pre-load customer information if they’re already Prime members
• Fulfillment from Amazon FBA, Amazon’s fulfillment network
• Shipping by Amazon Logistics
• Amazon-branded packaging
• Option to adopt Amazon Prime’s returns policy

As we mentioned above, the benefit is obvious: Amazon Prime is the gold standard for speedy online delivery, and you’ll get it on your site. Prime has consistently raised customer expectations for fast and free delivery over its history, to the point where slow shipping and paid shipping are two of the biggest drivers of cart abandonment.

If you don’t currently offer fast and free shipping, Buy with Prime will immediately fix that issue for you. The theory behind Buy with Prime is that the boost in ease of transaction and expectations for fast delivery will increase conversion rate, thus increasing your web store’s growth.

How Buy with Prime Shifts the Ecommerce Landscape

Buy with Prime will leave DTC sellers with little choice but to improve their delivery experience to meet the standards long set by the marketplaces. 

Online brands have long maintained that their curated shopping experiences, community building, and custom boxes counterbalance the raw power of fast and free delivery from marketplaces. A look at ecommerce transaction value in the United States suggests otherwise, though.

US consumers spend nearly four times as much on Amazon, Walmart, and Target’s ecommerce sites than they do on all DTC ecommerce sites combined. And on top of that, the marketplaces are growing faster. We attribute a huge part of the marketplaces’ advantage to the fast and free shipping that they offer by default on most goods. After all, online consumers cite fast and free shipping as a baseline expectation in survey after survey.

Buy with Prime will ratchet up US consumer expectations for fast and free shipping even further. Now, DTC sellers aren’t just putting their superior brand and shopping experience up against the convenience of the marketplaces. They also have to fight against competing DTC sellers that sign up for Buy with Prime and thus combine the power of their brand with Amazon’s famed fulfillment network.

The above example isn’t real – yet. But imagine if your top competitor installs Buy with Prime on their site and blows your delivery speed out of the water. Online consumers love comparison shopping, and you’ll be at a severe disadvantage on your Product Display Page (PDP) and in checkout. You can expect your cart abandonment rate to skyrocket.

In short, your slow delivery experience will become an even bigger liability than it already is.

How Buy with Prime Interrupts Your Customer Experience

So, the answer must be simple, right? Just sign up for Buy with Prime and see your sales skyrocket.

If only it were that easy.

Unfortunately, Amazon Buy with Prime is a much better deal for Amazon than it is for DTC sellers, and it’s all in the way BWP will impact your customer experience and ability to retain loyal buyers.

To Amazon, Buy with Prime is about much more than extending its fulfillment network, Amazon FBA, to DTC sellers. In fact, they care much more about their ability to get your browsing and purchasing data and use it to their advantage. With BWP, a seller has to use Amazon Pay for transactions. That means that Amazon will get all of your customer data, and not to mention they’ll bank tons of transaction fees.

While Amazon is laughing its way to the bank, it will be interrupting your customer experience at every step of the journey. 

How BWP Affects Discovery

We’ll start at the beginning of the customer journey: product discovery. Here, DTC stores are already at a severe disadvantage: a majority of US shoppers say that they start their online product searches on Amazon.

It’s already an uphill battle trying to get customers to your website. If you install Amazon Buy with Prime, you’ll give Amazon even more ammunition to prevent shoppers from ever making it to you. 

It’s simple: if you give Amazon rich data on what your customers are purchasing, they’ll know exactly what to suggest to the customer the next time they stop by Amazon. Since most of these shoppers are Prime customers, it’s a sure bet that they’ll do so. And when they visit, they’ll see product recommendations perfectly targeted to them, thanks to the additional information that you gave Amazon through Buy with Prime.

Fewer customers will make it to your site organically, because more of them find what they’re looking for on Prime without ever turning to a search engine. You’ll have to react by spending more on digital advertising, raising your ACOS and hurting your margin.

How BWP Affects Conversion

As a plug-in that will prominently live on the PDP and checkout pages, Amazon Buy with Prime most obviously affects conversion.

While the Prime button promising fast and free shipping from Amazon should help lower cart abandonment rate from shoppers that want fast shipping, it raises a whole host of other issues that counteract the benefits.

First, and perhaps most obviously, Buy with Prime will repeatedly remind shoppers that they should check Amazon before completing a purchase on a DTC website. Price checking is already a core part of many shoppers’ online purchasing behavior, and the Prime logo will only serve to further solidify this trend. 

When the price check occurs, the DTC brand can only lose. The customer may see that Amazon has the same item for less (a common occurrence because Amazon strictly enforces their “lowest price” rule), and they’ll also see a host of competitive offers.

Taken together, the increased risk of losing a customer to Amazon counteracts the benefit of fast and free shipping.

On top of that challenge, Buy with Prime also removes a key DTC seller tool to boost AOV. Many sellers use free shipping as a carrot to induce customers to sign up for loyalty programs or to increase their cart size. “Free shipping for orders over $49” is a tried and true tool to increase profit, but with Buy with Prime, it goes out the window. Larger order sizes and customer loyalty programs are key pillars in DTC profitability, because each maximizes profit dollars relative to overhead and marketing spend. Amazon will interrupt your ability to use these tools, and instead it replaces your tools with its own loyalty program – Prime.

Finally, Buy with Prime will hurt conversion because it will likely increase cart abandonment rate. According to BigCommerce, the average cart abandonment rate is nearly 70%, and that number rises to a whopping 86% for mobile shoppers. Most DTC sellers know the truth behind that large number – many shoppers use online carts as a “save for later” feature, and they come back to complete their purchase at a later date.

Buy with Prime will interrupt that process and steal customers that are carefully considering a purchase. It’s simple: they know what’s in your customer’s cart, and they’ll be sure to show that customer competitive options when they visit Amazon.com.

How BWP Affects Post Purchase

Since Buy with Prime is so new, we don’t yet have a complete picture of its price structure, but sellers expecting FBA’s low rates will likely be disappointed. Amazon already lets sellers use FBA for their DTC orders through its re-branded offer, Amazon Multi-Channel Fulfillment, and the prices aren’t great.

Cahoot’s analysis of FBA rates versus MCF rates reveal that MCF is over 50% more expensive than FBA – and that’s with small items that Amazon loves to ship. Sellers that have done the math to consider Amazon FBA vs FBM already know that FBA is a bad deal for items larger than a few pounds, and Amazon’s history suggests that Buy with Prime will be an even worse deal.

On top of that, Buy with Prime will replace your beautiful custom branded box with an Amazon Prime box. No more free marketing from unboxing videos, no more custom inserts to boost repeat rate, and no more amazing first impressions: Amazon now owns your post-purchase experience. Yes, the experience is improving in terms of delivery speed, but it’s degrading in every other way. And to add insult to injury, you’re now marketing for Amazon by using their ubiquitous packaging – not to mention the literal ads they often put on the boxes or the packing tape.

How BWP Affects Repeat Purchases

Last but certainly not least, Amazon Buy with Prime will also interrupt your ability to win repeat purchases from your customers – the linchpin of sustainable profitability.

You’re up against some daunting statistics – according to Fool.com’s survey of over 1,500 Prime customers, 85% visit Amazon at least once per week, and 45% make a purchase at least once per week. 

And now, every time they visit Amazon, they’ll see recommendations to buy your products right then and there instead of going back to your website.

Amazon can and will use the data it gains from its Buy with Prime plugin on your site to sell to your customers with pinpoint precision. With Prime users visiting Amazon.com just about every week, they’ll quickly start buying your product (or a competitor’s) on Amazon instead of your site.

Amazon is touting Buy with Prime as a way that you can tap into Prime’s huge customer base.

In reality, it’s Amazon’s way to tap into your customer base.

Alternatives to Amazon Buy with Prime and FBA

DTC sellers must feel like they’re stuck in between a rock and a hard place: on one side, they’re squeezed by demanding customer expectations for fast and free shipping. On the other, they’re faced with the incredible expense of providing fast and free shipping. And now Amazon comes along promising to help with the latter challenge – but it’s a poison pill that comes with an invasion of their customer experience. 

The major players in ecommerce all want to extract as much value from sellers as they can at every step of the journey. We’ve already covered Buy with Prime at length, but Amazon is far from the only one building a fulfillment network: Walmart is building Walmart Fulfillment Services, and Shopify just acquired a 3PL network for $2.1 billion to reinforce the failing Shopify Fulfillment Network. 

The common theme among each is their desire to control sellers – they won’t work with one another, and so if you want to enjoy a successful multichannel fulfillment and sales strategy, you’ll have to duplicate inventory. This in turn will significantly increase your carrying costs and overhead, and it will be impossible to optimize.

Thankfully, there’s a better way.

Amazon can provide fast and free shipping affordably across the country thanks to its ability to distribute inventory to multiple locations and tightly control fulfillment with intelligent, automated rules. Ten years ago, they were on the forefront of this revolution in fulfillment, but now they’re far from the only ones that can affordably power fast and free shipping.

Cahoot is at the forefront of boosting profitable growth for online sellers by enabling fast and free shipping across all channels. Unlike Amazon Buy with Prime, Cahoot fulfillment operates in the background, leaving you to own your customer experience – but with new and improved fast delivery. And again unlike Amazon Buy with Prime, it works for all sales channels: Buy with Prime certainly won’t be available for Walmart and other major marketplaces, and it likely won’t be available for Shopify either.

And more than Amazon – and other distributed 3PL networks – Cahoot offers unparalleled flexibility in fulfillment to support the exact needs of DTC sellers. We offer efficient B2B fulfillment alongside our fast B2C fulfillment, and we also can integrate seamlessly with existing merchant-operated warehouses. If you have one warehouse on the East Coast, and shipping across the country is killing your margin, we can stand up a West Coast location for you and install our market-leading technology to intelligently govern your new, nationwide fulfillment network. Of course, if you need a full service solution, that’s in our wheelhouse as well.

Contact us to speak with a fulfillment expert and learn how we can boost your growth while cutting costs and headaches today.

Offer 1-day and 2-day shipping at ground rates or less.

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We hear it all the time – you start out on your own with a Shopify store, fulfilling orders from your garage. Your ecommerce website catches on, and soon, what started as a side-hustle has turned into a full-time boxing and label-printing and shipping operation. The success is great, but your back isn’t happy with all the box-lifting. 

It’s time to outsource your Shopify Order fulfillment to a third party logistics (3PL) company who can solve your operational headaches and let you get back to what you do best – creating and selling amazing products. There are so many 3PLs and warehouses out there. How do you choose one that’s right for your ecommerce business?

In this post, we’ll dive into what makes the best Shopify 3PL, and evaluate a few of the leading order fulfillment options in the industry today.

What Makes a Good 3PL for Shopify Sellers?

If you’re an ambitious ecommerce seller looking to boost your growth, you should know that the right Shopify 3PL can be a revenue driver, and not just a cost center. The best 3PLs will improve your delivery experience, delight customers and open new avenues for growth. 

Here are the most important things to look for in your a 3PL for your Shopify store:

1. Nationwide USA warehouses

Don’t sell yourself short. Even if you’re small now, you can still distribute your inventory across the country to unlock affordable fast and free shipping without huge expense. That is, if your Shopify 3PL has nationwide warehouses.

You’ll want to make sure your Shopify 3PL has at least 4 order fulfillment centers across the USA, but ideally the best 3PL will have many more warehouses so that they can fine-tune exactly where your product inventory is placed to be near your largest customer base.

The best 3PLs offer true national order fulfillment services by placing inventory in 4+ locations strategically across the country. The benefit to you is that these networks cover 99%+ of US consumers with 2-day shipping at economy shipping rates. No matter where your customer wants their product shipped, you’ll have inventory nearby. They will get their products quickly, and you’ll pay the cheapest shipping rates possible. 

If you aren’t already offering free 2-day shipping, it’s a recommended upgrade that can truly turbocharge your ecommerce growth. A recent McKinsey study found that a whopping 90% of US online shoppers expect free one-day and two-day shipping. Amazon metrics show that turning on the Amazon Prime badge can net up to 50% growth for a product!

Adding a banner or top bar to your Shopify store that says “Fast and free shipping” can boost your ecommerce conversions and revenue. See example below.

Source: Shopify App Store Free Shipping Bar

2. User-friendly shipping software

As a business owner, it’s tough to give up control and outsource to other companies. The best Shopify 3PLs know that, so they provide their customers with easy-to-use shipping software that provides proactive notifications and robust reporting on how they’re doing. If you can’t get real-time updates on the status of your orders, your inventory levels, and shipping and order fulfillment costs, then you’re not working with a cutting-edge 3PL.

One key benefit of great 3PL shipping software is proactive notifications. Unfortunately, things go wrong all the time in the shipping logistics world. It can be as simple as an undeliverable address incorrectly input by the customer, or, as complex as a worldwide supply chain and shipping crisis. The best Shopify 3PLs don’t leave it up to you to identify order fulfillment problems. Their shipping software should alert you when a customer places an order with an undeliverable address. You can immediately fix the issue before it turns into a late order shipment, and you’ll keep the customer happy.

“I use Cahoot to process our shipping labels. Their auto label creation feature is a huge time saver. We are continuing to use Cahoot over our previous shipping label provider.”  

––Home and Garden Supply
Speak to a Fulfilment Export

3. Achieve a 99% Order Fulfillment Rate

Reviews are the lifeblood of your ecommerce business, and a happy customer is a repeat customer. You can probably recall more than a few lost customers and poor reviews that were due to errors in order fulfillment and shipping process that were not your fault.

The best Shopify 3PLs should minimize these issues have on-time fulfillment rate of 99.9% or higher. Anything less signals a Shopify 3PL that isn’t built for the rigorous demands of modern ecommerce.

Top 3PLs designed for ecommerce order fulfillment also integrate technology like barcode scanning into their warehouses to eliminate errors. Simple but effective innovations like these stop issues before they happen, and they also fuel the functionality of the software mentioned above.

4. Multi-carrier shipping discounts and carrier flexibility

Shipping fees eat up a significant chunk of every ecommerce merchant’s profits, but where there’s extra cost, there’s an opportunity to save. The best 3PLs who ship huge volumes of packages every year will negotiate preferred rates with major and regional parcel carriers, and they should pass those savings on to you.

Source: ShipStation

Beware though. A trick in the 3PL industry is to consolidate pricing into a single one line item, and not itemize what you’re paying for every component of their service. While it can feel helpful to be quoted one simple price, keep in mind this enables the 3PL to charge you more for shipping than what they’re paying the carrier, and keep the difference without you knowing. 

The best Shopify 3PLs work with all shipping carriers, not just one. The reason why is simple. Different carriers have the best rates for different routes and package sizes, and types of products. If you’re locked into just one carrier, you’re not getting the best shipping prices.

5. Pre-built ecommerce integrations and open APIs

It shouldn’t be hard to connect your Shopify store to your 3PL. The best 3PLs have pre-built integrations that will do it in a few clicks.

This goes for other ecommerce platforms too. Many merchants are scaling into multiple sales channels to maximize growth, and your 3PL should be able to integrate easily with all of them.

Not every ecommerce merchant can work with pre-built integrations, especially larger ecommerce merchants with custom and complex order and inventory management systems. For that, your Shopify 3PL of choice should have an open API and support resources that make the order fulfillment integration process as seamless as possible.

6. Responsive customer service

Finally, the best Shopify 3PLs offer amazing customer suppport. You should be able to get in touch with your 3PL easily to troubleshoot challenges. Look for a Shopify 3PL that assigns a real person to work with your ecommerce account. Make sure there are multiple ways to get in touch with them. If it’s a small issue, live chat works. Complex challenges,, should be handled by an advanced ticket system. And finally, , you need a direct phone number for critical order fulfillment issues.

“We switched to Cahoot from a different 3PL and the team has bent over backwards to make the transition easy and seamless. Great personal assistance every day from the team and very quick, reliable shipping from the Cahoot partner warehouse. Highly recommend their service.”  

–Cut.com
Speak to a Fulfilment Export

Top Shopify 3PL Companies

Now that you know what to look for, how do a few of the top players in the 3PL industry stack up? We’ve provided a primer to help jump-start your order fulfillment research.

Amazon Multi-Channel Fulfillment

You can use Amazon’s fulfillment network, FBA, to fulfill Shopify orders. When you do so, it’s called Amazon Multi-Channel Fulfillment – but it does in fact use the exact same FBA resources.

Shopify Fulfillment Network

Like Amazon FBA, Shopify is building its own logistics service for ecommerce sellers called Shopify Fulfillment Network.

ShipBob

ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping software platform and a large set of pre-built integrations.

Red Stag Fulfillment

Red Stag Fulfillment is a more traditional 3PL, with only two locations in the United States. They offer B2B fulfillment in addition to B2C since they have a wider focus than just ecommerce.

Cahoot: The Best Shopify 3PL

Cahoot’s order fulfillment services network is built for ecommerce. We’ll help you level the playing field with marketplaces and delight your customers with a stellar, Amazon-like delivery experience – right from your Shopify store. And we don’t stop there. We have pre-built ecommerce integrations with major marketplaces to fuel your multi-channel growth.

Our innovative peer-to-peer model offers low-cost, fast nationwide order fulfillment by design. As a result, our pricing is typically 30% lower than the 3PL providers listed above, and we can beat them on order fulfillment speed and delivery reliability.

Cahoot is committed to helping Shopify sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Shopify order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles:

1. How to Choose the Best 3PL for Wayfair
2. How to Choose the best 3PL for Your Macy’s Orders
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Offer 1-day and 2-day shipping at ground rates or less.

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