Deciding between Shopify vs Amazon for your ecommerce business? Shopify lets you create a custom online store, while Amazon provides instant access to millions of customers. This article will compare their differences, costs, and benefits of each to help you choose the right platform in the Shopify vs Amazon debate.

Key Takeaways

• Shopify offers greater customization and branding options, allowing you to create a unique online store, while Amazon is a marketplace with a uniform design that limits individual branding.
• Setting up a store on Shopify involves a guided process, making it beginner-friendly, whereas Amazon allows quicker product listing but requires strict adherence to selling standards.
• Shopify has a more flexible pricing model without transaction fees on its payment system, while Amazon imposes referral fees that can eat into Seller profits; understanding these costs is key to choosing the right platform.

Key Differences Between Shopify and Amazon

When it comes to selling products online, both Amazon and Shopify are giants in their own right, but they serve different purposes. Shopify is an ecommerce platform that allows you to sell online and create your own online stores, providing a blank canvas for your brand. In contrast, Amazon is a vast online marketplace where multiple Sellers list their products, akin to owning a stand at a busy market. In the debate of Shopify vs Amazon, each platform has its unique strengths.

Listing products on Amazon can be a bit more cumbersome as it requires Sellers to provide documentation for account approval, which can delay the setup process. On the other hand, Shopify offers more freedom in entering product information, making it easier to get your shop up and running quickly.

Customization is another area where Shopify shines. Amazon’s layout significantly influences a merchant’s store page design, limiting how much you can personalize your shop. Shopify, however, allows for extensive branding and customization options, letting you create a cohesive brand experience that stands out. Whether you’re a small business or a larger enterprise, Shopify provides the tools to build a unique online presence.

New Amazon merchants often face challenges such as strict requirements for product descriptions and listings, which can be daunting. In contrast, Shopify offers a more flexible and supportive environment, making it a preferred choice for many online Sellers.

Ease of Setting Up Your Online Store

Setting up an online store should be as straightforward as possible, and both Shopify and Amazon offer different experiences in this regard. Shopify’s setup process includes a comprehensive 8-step guide, ensuring users receive support while customizing their online store. This guide, combined with Shopify’s user-friendly tools like the AI assistant for writing product descriptions and the drag-and-drop website builder, makes it an excellent choice for individuals without technical skills.

Amazon allows users to start listing products almost immediately after creating an account, streamlining the process significantly compared to Shopify. This immediate access to a huge customer base can be a major advantage for Sellers looking to start selling online quickly. However, selling on Amazon resembles operating a booth in a crowded market, whereas Shopify allows you to create your own branded online storefront.

Shopify’s pricing structure allows selling an unlimited number of products without incurring additional listing fees, making it a cost-effective option for growing businesses. Whether you want to build your own online store with customizable templates or leverage Amazon’s vast marketplace, understanding these differences can help you choose the best platform for your business.

Branding and Customization Options

Branding is crucial for any business, and this is where Shopify truly excels. Shopify offers extensive brand customization, allowing you to create a unique and cohesive brand experience. From customizable themes to HTML/CSS modifications, Shopify provides the tools to personalize every aspect of your online store. This means you can build your very own brand and customer experience that stands out in the crowded ecommerce space.

In contrast, Amazon’s marketplace design emphasizes uniformity, limiting individual Seller branding opportunities. While this can ensure a consistent shopping experience for customers, it restricts Sellers from fully expressing their brand identity. Selling on Shopify allows for complete ownership of your own store, providing more control over branding and pricing.

With Shopify, Sellers can build direct relationships with customers, gaining valuable information like names and emails that can be used for personalized marketing efforts. For businesses aiming to establish a strong brand presence, Shopify’s customizable templates and extensive branding tools are a major benefit. This flexibility allows you to tailor the customer experience to align with your brand values and goals.

Marketing Tools and Capabilities

Effective marketing is the key to driving traffic and sales, and Shopify and Amazon offer different ecommerce tools to help Sellers reach prospective customers. Shopify users can utilize a variety of marketing and SEO tools to enhance the visibility of their own website. From targeted advertising campaigns on platforms like Meta and Google to email marketing and marketing automation tools, Shopify provides a comprehensive suite of tools to help you grow your business online.

Shopify’s SEO tools guide users on improving their search engine rankings, aiding in better visibility for their online stores. Additionally, Shopify allows users to run targeted advertising campaigns across various platforms, only charging when conversions occur. This means you can reach your prospective customers more effectively and maximize your marketing budget.

Amazon Sellers must optimize for the Amazon search engine specifically, which requires a different approach to SEO. While Amazon provides immediate access to a wide range of customers, it also means Sellers need to invest in promotions to ensure visibility.

Shopify, on the other hand, requires more active marketing efforts since it does not benefit from the same built-in traffic that Amazon has. This means businesses on Shopify need to be more proactive in their marketing strategies to drive traffic and sales.

Pricing and Fees Comparison

Understanding the pricing and fees associated with each platform is essential for making an informed decision. Different types of fees to consider when comparing Amazon and Shopify include subscription fees, transaction fees, referral fees, and fulfillment fees.

Let’s break down these fees to see how each platform stacks up.

Subscription Fees

Shopify offers four main plans: Basic Shopify at $29 per month, Shopify at $79 per month, Advanced Shopify at $299 per month, and an enterprise plan for more complex businesses called Shopify Plus, starting at $2,300 per month for 36 months. These plans cater to businesses of varying sizes, providing flexibility and scalability as your business grows. The Basic Shopify plan is perfect for new and small businesses, while the Advanced Shopify plan offers more advanced features for larger enterprises.

Amazon, on the other hand, offers a simpler pricing structure with two plans. The Individual plan is suitable for casual Sellers who don’t need advanced features, ($0.99 per item sold, separate from other fees), while the Professional plan is recommended for business owners or professional retailers ($39.99 per month). This straightforward approach can be easier for Sellers to navigate but may not provide the same level of flexibility as Shopify’s tiered pricing plans.

Transaction and Referral Fees

One of Shopify’s significant advantages is that it does not impose transaction fees when users utilize Shopify Payments; you only pay the credit card rate, which covers the cost of processing the payment. This means Sellers can keep nearly all their profits without worrying about additional costs per transaction.

Amazon’s referral fees vary by product category and can range from 6% to as high as 45% depending on the item sold, but the most common by far is 15%. Shopify does not impose referral fees, which can lead to higher profits for sellers.

Additionally, Amazon charges a per-item fee for Sellers on the Individual plan, while Shopify allows unlimited products without additional listing fees. This can lead to substantial savings for Sellers using Shopify, making it a more cost-effective option in the long run.

Fulfillment Fees

Using Amazon FBA incurs various fulfillment fees based on the size and weight of the products, which can significantly impact overall expenses. These fees include storage and handling fees, which can add up quickly, especially for larger or heavier items.

Shopify, on the other hand, allows Sellers to manage shipping with customizable rates, weights, rules, and options to connect with third-party fulfillment services. This flexibility can help Sellers optimize their shipping process and reduce costs.

Shipping and Fulfillment Options

Shipping and fulfillment are central to any ecommerce business. Amazon FBA offers Sellers the advantage of leveraging Amazon’s extensive logistics network for handling inventory and shipping. This means businesses can benefit from Amazon’s fast and reliable shipping options, enhancing the customer experience.

Shopify provides users the flexibility to integrate with various order management systems and third-party logistics (3PL) providers for efficient fulfillment operations. Sellers on Shopify can set up shipping rates based on weight, destination, and specific conditions to customize their shipping process.

Additionally, integrating Shopify with Amazon Multi-Channel Fulfillment (MCF) can enhance the speed of order fulfillment, allowing customers to receive their orders more quickly. Shopify Buy with Prime is also an MCF solution, but adds a special buy button to Shopify checkout pages to allow customers to choose FBA fulfillment rather than Sellers deciding for them. These integrations can reduce manual labor by outsourcing the processing of customer orders and while optimizing logistics.

Payment Options

Payment options are a fundamental part of the ecommerce experience. Shopify Payments allows users to accept payments directly through their store without additional fees for credit card processing. This integrated payment gateway simplifies the checkout process and can improve conversion rates. Moreover, Shopify users can also integrate third-party payment processors, offering more flexibility in payment acceptance, and the Shop Pay app enables a quick 1-click checkout experience for shoppers.

Amazon supports various payment methods, including gift cards, bank account transfers, and mobile payments. The primary payment gateway for Amazon is Amazon Pay, which provides a seamless and secure payment experience for customers.

While both platforms offer robust payment options, Shopify’s flexibility and lack of additional fees make it a more attractive choice for many Sellers.

SEO and Organic Sales

SEO is crucial for enhancing online visibility and reaching potential customers in ecommerce. Optimizing product pages effectively can significantly improve a Shopify store’s visibility in search results, attracting more customers. Content marketing through blogging can further increase organic traffic, helping to establish authority and relevance in your category.

Sales on Amazon often require continuous promotion, as organic visibility is not guaranteed. This means Sellers need to invest in Amazon SEO and other promotional strategies to maintain a competitive edge.

While Shopify requires more active marketing efforts, the potential for building long-term organic sales through effective SEO and content marketing can be highly rewarding.

Integrating Amazon with Shopify

Integrating Amazon with Shopify can expand your reach and enhance your sales opportunities. This integration allows you to synchronize inventory and product information between Shopify and Amazon, streamlining the management of your online store. The process can involve using a built-in Amazon app, third-party applications, or custom APIs depending on your business needs.

Once integrated, users can create Amazon offers and listings directly from their Shopify store. Onboarding for integration can vary in time, with simpler setups taking as little as 15-30 minutes. This synergy between the two platforms can significantly enhance your ecommerce results, offering the best of both worlds.

Pros and Cons of Selling on Both Platforms

Selling on both Shopify and Amazon can allow businesses to maximize their reach and conversions. Amazon provides immediate access to a wide range of customers, which is crucial for driving sales. However, competition on Amazon is intense, requiring Sellers to invest in promotions to ensure visibility to sell products.

With over 1.75 million merchants using Shopify, businesses can avoid referral fees by using this platform, offering better marketing flexibility and control. Amazon’s strict policies can lead to account bans if compliance is not maintained, adding an element of risk for Sellers. ReSellers doing wholesale or retail arbitrage may find Amazon more suitable due to its vast marketplace.

A successful online business ecommerce platform presence should ideally include both an official website and a presence on platforms like Amazon for maximum impact. Balancing the strengths of both platforms can help businesses achieve their sales and branding goals more effectively by creating their own ecommerce website.

Beyond the Basics

Beyond the basics, both Shopify and Amazon offer unique features that can enhance your ecommerce experience. Shopify Capital provides merchant cash advances and loans to eligible store owners, a financial service many people don’t associate with the platform.

Amazon’s A9 Algorithm, which differs significantly from Google’s algorithm, plays a crucial role in how products are ranked on the site. Understanding these unique features can help you leverage each platform’s full potential.

Summary

Both Shopify and Amazon offer powerful tools for selling products online, but they cater to different needs and business models. Shopify provides extensive branding and customization options, making it ideal for businesses looking to build a unique online presence. Its flexible pricing plans and lack of transaction fees further enhance its appeal. Amazon, with its vast marketplace and immediate access to millions of customers, is perfect for Sellers looking to reach a large audience quickly.

Ultimately, the choice between Shopify and Amazon depends on your business goals and needs. For many Sellers, using both platforms can be the best strategy, combining the strengths of each to maximize reach and sales. By understanding the key differences and benefits of each platform, you can make an informed decision that sets your business up for success.

Frequently Asked Questions

Can I use both Shopify and Amazon to sell my products?

Absolutely, you can use both Shopify and Amazon to sell your products! By integrating them, you can sync your inventory and easily manage listings, giving your business the best of both worlds.

What are the main differences between Shopify and Amazon?

The main difference is that Shopify lets you build a customized online store where you control branding and customer relationships, while Amazon is a vast marketplace where many Sellers can reach a large audience, but have very little control. So, choose Shopify for brand control or Amazon for quick access to customers.

How do the fees compare between Shopify and Amazon?

Shopify generally offers more predictable and lower fees, especially if you use Shopify Payments and avoid additional transaction fees. In contrast, Amazon has varying referral fees by product category and additional fulfillment costs with FBA.

Which platform is easier to set up for a new business?

Shopify is generally easier to set up for a new business because it offers a comprehensive setup guide and user-friendly tools, perfect for those without technical skills. However, Amazon allows for immediate product listing, giving Sellers a quick start if speed is a priority.

What are the advantages of integrating Shopify with Amazon?

Integrating Shopify with Amazon expands your reach and boosts sales by synchronizing inventory and product information. This means you can easily manage your listings and improve your visibility across both platforms.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

Selling on Amazon through the Fulfillment by Amazon (FBA) program offers tremendous opportunities for ecommerce entrepreneurs. The ability to leverage Amazon’s vast fulfillment network allows sellers to focus on growing their businesses rather than handling logistics. However, before products can enter Amazon’s fulfillment centers, they must meet specific preparation requirements. This is where FBA prep services come into play, offering a crucial intermediary step that can streamline operations and prevent costly mistakes, ultimately supporting the success of your Amazon business.

Understanding Amazon FBA Prep Service Requirements

Amazon maintains strict standards for products entering their fulfillment centers. These requirements ensure efficient processing, storage, and shipping of items to customers. Typical preparation needs include proper packaging, labeling, bundling, and protection measures tailored to different product categories.

For instance, fragile items require additional cushioning, while clothing might need polybags with suffocation warnings. Electronics often require special static-free packaging, and items with expiration dates must have visible labeling. Amazon can reject improperly prepared inventory, leading to returns at the seller’s expense, storage fees, or even inventory disposal.

These requirements can become overwhelming, especially for new sellers or those expanding their product lines. Meeting Amazon’s specifications demands time, knowledge, specialized materials, and dedicated workspace. This complexity has given rise to specialized FBA prep services that bridge the gap between manufacturers and Amazon’s fulfillment centers.

What Are FBA Prep Services?

FBA prep services are third-party operations that handle the preparation of inventory according to Amazon’s guidelines before sending products to fulfillment centers. These specialized services act as intermediaries between suppliers or manufacturers and Amazon, ensuring products meet all requirements before entering the FBA ecosystem.

These services typically offer comprehensive solutions for the Amazon FBA seller, including receiving inventory from suppliers, inspecting for quality issues, preparing according to Amazon’s category-specific guidelines, labeling with Amazon barcodes, and finally shipping to designated fulfillment centers. Many also provide additional services such as photography, bundling, kitting, and removal of supplier packaging.

The primary goal of prep services is to ensure products comply with Amazon’s requirements, preventing costly rejections or penalties while saving sellers valuable time and resources.

The Benefits of Using FBA Prep Services

Outsourcing preparation tasks to specialized services offers numerous advantages for FBA sellers of all sizes.

Time savings represent one of the most significant benefits. Properly preparing inventory for Amazon can be labor-intensive and time-consuming. By delegating these tasks to professionals, sellers can redirect their energy toward strategic activities like product sourcing, marketing, and business growth.

Cost efficiency also plays a crucial role. While prep services charge fees, they often prove more economical than handling preparation in-house, especially when considering the expenses of warehouse space, packaging materials, equipment, and labor. For many sellers, the economies of scale achieved by prep services translate to lower per-unit costs.

Professional expertise is another key advantage. Established prep services stay current with Amazon’s frequently updated requirements and possess the knowledge to handle various product types correctly. Their experience minimizes the risk of costly mistakes that could lead to inventory rejections, returns, or customer dissatisfaction.

Scalability benefits become apparent as businesses grow. Using prep services eliminates the need to expand physical workspace or hire additional staff during growth phases or seasonal peaks. These services can typically accommodate fluctuating inventory volumes without requiring sellers to adjust their infrastructure.

Geographic advantages also merit consideration. Strategically located prep services can reduce shipping costs and transit times to Amazon’s fulfillment centers. Some services maintain facilities near major Amazon hubs, optimizing the final delivery leg of the supply chain.

Common Services Offered by FBA Prep Companies

The scope of fulfillment services offered varies between providers, but most cover fundamental preparation needs while offering specialized options for specific requirements.

Inspection serves as the foundation of quality control. Prep services examine incoming inventory for manufacturing defects, shipping damage, or inconsistencies before proceeding with preparation, potentially saving sellers from customer returns and negative reviews.

Packaging and protection ensure products arrive at customers in perfect condition. Services apply appropriate packaging materials according to Amazon’s guidelines and product vulnerability, which may include bubble wrap, air pillows, polybags, or custom solutions.

Labeling represents a critical compliance element. Prep services print and apply Amazon-compliant FNSKU labels, ensuring proper inventory tracking within Amazon’s system. Some also handle hazmat labels, expiration dates, or country of origin markings as required.

Bundling and kitting capabilities allow sellers to create multi-product offerings without handling the assembly themselves. Prep services can combine separate items into cohesive packages according to sellers’ specifications, creating value-added product bundles.

Inventory management features often include real-time tracking systems that allow sellers to monitor their products throughout the preparation process. Many services offer online portals where sellers can view inventory status, preparation progress, and shipping confirmations.

How to Choose the Right FBA Prep Service

Selecting an Amazon prep center requires careful consideration of several factors to ensure alignment with business needs.

Location considerations should account for proximity to suppliers and Amazon fulfillment centers. Strategic positioning can minimize shipping costs and transit times, accelerating inventory availability and reducing logistics expenses.

Pricing structures vary significantly between providers. Some charge per unit, others by weight, and some use hybrid models that include storage fees or minimum monthly charges. Understanding the fee structure and comparing total costs based on your specific product profile is essential.

Service capabilities should match your product requirements. Some prep services specialize in certain categories like apparel or electronics, while others provide broader support. Confirming they can handle your specific preparation needs prevents potential complications.

Technological integration capabilities merit evaluation, particularly for high-volume sellers. Services offering integration with inventory management systems, Amazon Seller Central, or other e-commerce platforms can streamline operations and reduce manual data entry.

Reputation and reliability should be thoroughly vetted. Reading reviews, requesting references, and testing services with small shipments before committing to larger volumes can prevent costly partnerships with underperforming providers.

Understanding Amazon FBA Prep Services Pricing

Amazon FBA prep services pricing can vary widely depending on the provider and the specific services offered. Typically, these services charge either by the item or by the volume of products being prepped. Some providers may also impose storage fees if products are held at their facility before being shipped to Amazon’s fulfillment centers.

When selecting an FBA prep service, it’s crucial to consider the pricing options and ensure they align with your business needs. Some providers offer discounts for bulk orders or long-term contracts, which can be beneficial for high-volume sellers. Others may charge extra for specialty services like kitting or bundling, so it’s important to understand all potential costs upfront.

To get the best value for your money, research and compare the pricing of different FBA prep services. Look for providers that offer transparent pricing, flexible payment options, and a clear breakdown of their services and costs. This due diligence can help you avoid unexpected expenses and ensure that the prep service you choose supports your business’s financial health.

Top Amazon FBA Prep Centers for Ecommerce Fulfillment

Choosing the right Amazon FBA prep center is crucial for the success of your ecommerce business. Here are some top Amazon FBA prep centers known for their reliability and comprehensive services:

1. AMZ Prep: A full-service FBA partner with a global reach, AMZ Prep offers a wide range of services including FBA prep, shipping, and storage. Their extensive network and expertise make them a strong choice for sellers looking to streamline their operations.
2. ShipMonk: Known for its strong focus on customer service, ShipMonk provides services such as opening and repackaging goods, labeling, and shipping. Their attention to detail and customer-centric approach make them a popular choice among Amazon sellers.
3. Fulfillment by Amazon (FBA): Amazon’s own fulfillment service offers numerous benefits, including fast and reliable shipping, customer service, and returns handling. Leveraging Amazon’s infrastructure can provide significant advantages in terms of efficiency and customer satisfaction.
4. Cahoot: While FBA Prep isn’t Cahoot’s primary business model, we do have an entire business unit and fully automated workflow within the Cahoot software that guides users on exactly how to request prep and forwarding to FBA fulfillment centers.

When choosing an FBA prep center, consider factors such as their experience with Amazon, understanding of FBA prep requirements, pricing, and customer service. Look for providers that offer flexible services, transparent pricing, and a strong focus on customer satisfaction to ensure a smooth and efficient fulfillment process.

Amazon FBA Fulfillment Costs and Strategies

Amazon FBA fulfillment costs can be a significant expense for ecommerce businesses, but with the right strategies, you can minimize these costs and maximize your profits. Here are some tips to help you reduce your Amazon FBA fulfillment costs:

1. Optimize Your Product Packaging: Proper packaging can help reduce shipping costs and prevent damage to your products. Using the right materials and packaging techniques can also ensure compliance with Amazon’s guidelines.
2. Use Amazon’s Fulfillment Centers: Amazon’s fulfillment centers are strategically located to minimize shipping costs and ensure fast delivery. By utilizing these centers, you can take advantage of Amazon’s logistics network to improve efficiency and reduce expenses.
3. Take Advantage of Amazon’s Free Services: Amazon offers a range of free services, including free storage for a limited time and customer returns handling. Leveraging these services can help you save money and streamline your operations.
4. Monitor Your Inventory Levels: Keeping track of your inventory levels can help you avoid additional costs for aged inventory and ensure you’re not overstocking. Regularly reviewing your inventory can also help you make informed decisions about restocking and managing your supply chain.
5. Use Amazon’s Revenue Calculator: Amazon’s revenue calculator can help you estimate your FBA costs and compare them to your own fulfillment method. This tool can provide valuable insights into your cost structure and help you identify areas for improvement.

By implementing these strategies, you can reduce your Amazon FBA fulfillment costs and increase your profits, ensuring a more efficient and profitable ecommerce business.

Setting Up Your FBA Prep Service Relationship

Establishing a smooth working relationship with your chosen prep service involves several key steps.

Initial onboarding typically requires creating an account with the prep service and providing essential business information. This process often includes completing seller profiles, specifying preparation instructions, and setting up billing arrangements.

Amazon permissions must be properly configured to allow the prep service to work on your behalf. This usually involves adding them as users to your Seller Central account with appropriate permission levels or sharing specific access credentials required for inventory management. Properly configuring Amazon permissions ensures that the prep service can manage your FBA shipments efficiently and in compliance with Amazon’s standards.

Communication protocols should be clearly established, defining primary contact methods, response timeframes, and escalation procedures for urgent issues. Regular check-ins and feedback sessions can help optimize the partnership over time.

Standard operating procedures documentation proves invaluable for consistent operations. Developing clear instructions for how products should be handled, special preparation requirements, and quality standards ensures the prep service understands your expectations.

Performance monitoring should be ongoing, tracking key metrics like processing times, error rates, and overall cost-effectiveness. Regular performance reviews help identify improvement opportunities and ensure the service continues meeting business needs.

Potential Challenges and Solutions

While Amazon prep centers offer significant benefits, certain challenges may arise that require proactive management.

Quality control inconsistencies can occur, especially with high-volume operations or staff turnover. Establishing clear quality standards, conducting random inspections, and providing feedback on issues can help maintain consistent preparation quality.

Communication breakdowns represent another common challenge. Maintaining open channels, documenting instructions clearly, and establishing regular update mechanisms can prevent misunderstandings and ensure timely problem resolution.

Seasonal capacity constraints may affect service levels during peak periods like Q4. Planning ahead, providing volume forecasts to your prep service, and potentially distributing inventory across multiple services for critical periods can mitigate these challenges.

Conclusion

For Amazon sellers seeking to optimize their operations, FBA prep services offer a valuable solution that balances efficiency, compliance, and scalability. By understanding the range of services available, carefully selecting the right partner, and establishing clear working relationships, sellers can leverage these specialized intermediaries to streamline their supply chains and focus on strategic business growth.

Some prep services also offer multi-channel fulfillment, enabling sellers to expand their reach beyond Amazon to other platforms like Walmart and eBay. Whether you’re a new seller looking to avoid the learning curve of Amazon’s requirements or an established business seeking to scale without expanding infrastructure, the right prep service can transform your FBA operations. As with any business partnership, success depends on careful selection, clear communication, and ongoing management – but with these elements in place, prep services can become a cornerstone of an efficient, profitable Amazon selling strategy.

Frequently Asked Questions

What is Amazon FBA prep?

Amazon FBA prep refers to the process of preparing products for sale on Amazon, including packaging, labeling, and shipping. This ensures that products meet Amazon’s requirements and are ready for fulfillment.

What are the benefits of using an FBA prep service?

Using an FBA prep service can help you save time, reduce costs, and ensure compliance with Amazon’s guidelines. These services handle the intricate details of preparation, allowing you to focus on growing your business.

How do I choose the right FBA prep service?

When choosing an FBA prep service, consider factors like their experience with Amazon, understanding of FBA prep requirements, pricing, and customer service. Look for providers that offer transparent pricing and flexible services tailored to your needs.

What are the costs associated with FBA prep services?

FBA prep services typically charge by the item or by the volume of products being prepped. Some providers may also charge storage fees if products are held at their facility before being shipped to Amazon. It’s important to understand all potential costs upfront.

Can I use an FBA prep service for specialty products?

Yes, many FBA prep services offer specialty services like kitting, bundling, and custom packaging for products that require special handling. These services can help ensure that your products are prepared correctly and meet Amazon’s specific requirements.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

Shipping costs are one of the biggest challenges for ecommerce businesses today, and understanding them is essential to reducing expenses and increasing profit margins.  With rising carrier fees, labor expenses, and warehouse leases, every dollar saved makes a difference. Shipping costs can vary greatly depending on several factors, including package weight, dimensions, destination, and shipping method. Traditional shipping software, built for a simpler time, often fails to optimize costs effectively, leaving businesses to absorb unnecessary expenses. By gaining a clear understanding of these costs, businesses can make informed decisions that help reduce shipping expenses and improve overall efficiency.

That’s where next-generation ecommerce shipping software comes in. Designed to reduce shipping costs at every stage, these advanced solutions automate key processes: choosing the most affordable shipping labels, optimizing package sizes to avoid dimensional weight fees, and streamlining fulfillment with minimal manual intervention. By leveraging automation and AI-driven decision-making, merchants can significantly cut costs while improving delivery efficiency.

In this article, we’ll explore how next-gen shipping software helps save money, eliminate cost leakages, and improve warehouse efficiency, giving businesses the competitive edge they need to succeed in ecommerce today.

Shipping Costs are One of the Biggest Challenges for Ecommerce Businesses Today

Shipping costs can be a significant challenge for ecommerce businesses, as they can eat into profit margins and affect customer satisfaction (and revenue) if they skimp on delivery speed. To reduce shipping costs, ecommerce businesses can implement various strategies, such as negotiating with shipping carriers, using discounted shipping supplies, and optimizing packaging. By taking proactive steps to manage shipping expenses, businesses can protect their profit margins and offer competitive shipping rates to their customers.

Calculating Shipping Costs

Calculating shipping costs involves considering all the factors mentioned above. To calculate shipping costs, ecommerce businesses can use shipping calculators, consult with shipping carriers, or connect to carrier APIs for real-time rate shopping, to determine the most cost-effective option. It’s essential to factor in all shipping fees, including fuel surcharges, handling fees, delivery area surcharges, and insurance costs, among others. By accurately calculating shipping costs, businesses can set appropriate pricing strategies and avoid unexpected expenses.

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. At a time when major carriers implement annual rate increases (GRIs) and additional surcharges, along with rising worker wages and warehouse leases are all going up, Sellers need to be scrappy 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 automation rules to be written to support workflows. But why do merchants go to all this trouble and take the time to do so? The answer is simple – to 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 doing what they’re intended to: ensuring that the cheapest option is 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. And when a new rule is needed, no time needs to be spent checking backward compatibility. 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 for 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 that is larger than is actually needed, the item can have higher DIM weight, costing you more money than the discounted shipping rates you should be paying 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 possibility of errors.  

Next-Gen Software – Pay the Optimal Rate Every Time

With Cahoot’s Intelligent Cartonization technology, you can rest assured knowing that you’re using the right box (or boxes) for even your most complex orders. 

This means that items go in the optimal boxes and you only pay the minimum rate required to ship the order. By taking the thinking out of the workflow and leaving the decision-making to the technology, the possibility of errors is dramatically 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 the 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 even 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 carriers 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 a competitive advantage by allowing you to do more with less. Your team members are also freed up to focus on more value-added tasks, rather than spending all day ensuring that your shipping software doesn’t fall apart.

Summary: Why Next-Gen Shipping Software is Essential for Cost Savings

As ecommerce businesses grow, so do their shipping expenses. Legacy shipping software relies on outdated shipping processes that often lead to cost leakages, inefficient package selection, and unnecessary manual labor. These inefficiencies add up, directly impacting profit margins.

With next-gen ecommerce shipping software, businesses can reduce shipping costs by:
✅ Automatically selecting the cheapest shipping label for every order
✅ Optimizing packaging to prevent overpaying for dimensional weight
✅ Eliminating manual labor costs with intelligent automation
✅ Enabling untrained or seasonal staff to handle fulfillment easily

By embracing smarter shipping solutions, merchants can stop overpaying, streamline operations, and reinvest their savings into growth.

This was Part 4 of our 4-part Next-Generation Shipping Software Guide highlighting how next-gen shipping software saves ecommerce businesses money. If you’d like to learn more, check out the other 3 parts including what has changed between the old and new world of ecommerce order fulfillment, how next-gen shipping software simplifies fulfillment operations, and how it makes order fulfillment more efficient.

Frequently Asked Questions

What is the best shipping software?

It depends on what you’re looking for in shipping or fulfillment software. To manage shipments and print shipping labels, you can try a legacy solution like ShipStation, which has many limitations. Alternatively, to automate shipping and enhance your team’s productivity, you can choose a next-generation fulfillment technology that facilitates faster, optimized shipping with built-in best-in-class discounted shipping rates.

How is Cahoot able to offer discounted shipping rates for small businesses?

Cahoot aggregates bulk shipping volume across all our users of all sizes and partners with several major carriers and consolidators to negotiate best-in-class carrier discounts, which we make available to users of the Cahoot Label Software and Fulfillment Services.

What shipping carriers does Cahoot work with?

Cahoot works with UPS, FedEx, USPS, DHL, Amazon Shipping, OSM Worldwide, OnTrac, Pitney Bowes, and several regional carriers. Our large network ensures you have access to the best shipping options for your business, whether you need flat-rate shipping options or local delivery services.

How do I integrate Cahoot with my ecommerce platform?

Cahoot integrates easily with dozens of ecommerce platforms, including Shopify, WooCommerce, and BigCommerce, as well as listing management tools and marketplaces such as Amazon, TikTok Shop, Rithum (formerly ChannelAdvisor), and many more. Our simple, native integrations allow you to start shipping with discounted rates quickly and streamline your shipping workflows.

How quickly can I save on my shipping costs?

As soon as you sign up for Cahoot, you can start saving on shipping costs. Our platform gives you instant access to pre-negotiated shipping rates, helping you cut expenses from day one.

Do you provide customer support in case I need help?

Yes, Cahoot offers full customer support and an extensive (but easy-to-navigate) self-service help center to help with any questions or issues. Our support team is here to assist you with everything from integrating your ecommerce platforms to choosing the best shipping options and navigating packaging costs.

Can ecommerce shipping software handle returns?

Yes, Cahoot ecommerce shipping software can efficiently handle reverse logistics from returns, automated return label generation, return order tracking, and inventory management, to peer-to-peer returns support where unused items that are being returned can be shipped from the returning customer directly to the next customer purchasing the same item. Peer-to-peer ecommerce returns are the future of reverse logistics as they can cut the cost of returns by 64%, increase inventory turnaround by 4X or more, and cut CO2 emissions by 54% on average. Peer-to-peer ecommerce returns are the most eco-friendly solutions on the market.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

Ecommerce order fulfillment is more than just packing and shipping — it’s about precision, speed, and cost efficiency. Businesses that rely on outdated legacy systems often face delays, high labor costs, and manual errors, making it difficult to meet growing customer expectations.

Enter next-generation warehouse automation software for ecommerce: designed to optimize every step of the fulfillment process. From intelligent order routing to real-time tracking and automated cartonization, modern shipping software maximizes warehouse efficiency, reduces costs, and ensures seamless operations. By integrating smart automation, businesses can scale effortlessly while delivering faster and more reliable shipping experiences.

In this article, we’ll explore how shipping software enhances warehouse efficiency, minimizes fulfillment challenges, and empowers merchants to stay ahead in a competitive market.

Understanding Fulfillment Challenges

Fulfillment challenges can significantly impact a business’s ability to deliver products efficiently and effectively. Understanding these challenges is crucial to implementing effective solutions.

Manual Processes and Labor Costs

Manual processes can be a significant drain on resources, leading to increased labor costs, reduced productivity, and a higher risk of errors. Tasks such as manual data entry are not only time-consuming but also prone to mistakes, which can cause delays and escalate costs. This is where automation solutions, like warehouse management systems (WMS), come into play. By automating repetitive tasks, a WMS can streamline operations, reduce the need for manual labor, and minimize errors. This not only cuts down on labor costs but also frees up your team to focus on more strategic activities that drive business growth.

Disconnected Software Programs and Missing Tracking Info

Disconnected software programs can create a fragmented fulfillment process, leading to missing tracking information and making it difficult to monitor and manage inventory levels, shipping, and delivery. This lack of integration can result in inefficiencies and errors that disrupt the entire supply chain. Implementing a seamless integration between software programs, such as a WMS and shipping software, can significantly improve visibility and control over the fulfillment process. With integrated systems, you can ensure that all parts of your operation are synchronized, providing real-time updates and comprehensive tracking information. This not only enhances operational efficiency but also improves customer satisfaction by ensuring timely and accurate deliveries.

Warehouse 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 the outside continuously bears down on them – whether it’s rivals on online marketplaces, multiple channels to market and sell on, or demanding customers. 

Efficient shipping processes play a necessary role in enhancing productivity by automating tasks such as creating labels, tracking packages, and handling returns, ultimately leading to improved customer satisfaction.

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 higher-order work that adds big value.

In the previous section, you might’ve seen that legacy software has features that can simplify operational 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, autonomous 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 or mailer) 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. We’ll also highlight how next-generation shipping software is built to ensure your team gets back the time they’ve been losing, boosts their productivity, and drives greater efficiency across your business. 

Automated Shipping Workflows with Warehouse Management Systems

Legacy Software – Labor Intensive and Painful

The most important things that teams do inside shipping software are route orders to fulfillment locations and identify the cheapest shipping label 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 ship 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 the customer’s address
5. Select packaging
6. Rate shop across all carriers and services one at a time
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 the simple steps 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 (still in Beta in 2025), 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 the comparison of real-time shipping rates for each carrier and service to make a full and final, (accurate), decision.

In our estimation, it would take the average human over 5 hours to print labels for 1,000 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 shipping supplies to instantly and automatically generate shipping labels for every single order, and integrating seamlessly with inventory management enhances efficiency and accuracy.

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

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

The system automates many steps that legacy software doesn’t – it spots potential issues with addresses and makes suggestions to fix them, it only considers warehouses that have inventory available, it selects the smallest packaging that an order can fit into and ship safely, and it rate-shops that package weight and dimension across all carriers, services, and warehouses for the cheapest service. 

It’ll take the average human just 15 minutes to print labels for 1,000 orders in Cahoot, and most of that time is waiting for the printer to finish its job. We’ve made a video where you can get a glimpse of how this works, and how we stack up against the popular legacy shipping software ShipStation (if you’d like to see a little more about how Cahoot compares to ShipStation, read our comparison here!) You can sit back and relax, knowing that the optimal selection was made for every single order using technology. You can also free up your time to work on 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 shipment packaging selection. Optimizing layout and staff allocation in a distribution center can significantly enhance shipping efficiency and reduce costs.

This is a common problem that customers of legacy software like ShipStation face. For complex orders that 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 community forum below are requesting a pull-down list of the common boxes they use so 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 that can be applied to 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 automation rules that need to be written to map SKU combinations to boxes is dizzyingly long and involves having to figure out all the possible SKU permutations; impossible if your product catalog is any more than a couple dozen SKUs.

As the classic saying goes, customers are great at highlighting problems, but not identifying solutions. We think this is a big pain point that next-generation software already solves. 

Next-Gen Software – Powered by Machine Learning for Warehouse Operations

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 and time. 

Our software remembers the box selection you make the first time and applies it by default the next time regardless of how many SKUs and units of each are in the order. This ensures you’re freed up from repetitive manual entries and clicks.

We don’t believe the solution to picking the optimal box for every MLMQ order is an arbitrary default or crude automation rule. The Cahoot system uses breakthrough cartonization innovation to intelligently evaluate the space utilization for a group of items across all available boxes in stock and calculates the percent fit (% fit), making sure the most optimal box is automatically selected every time.

This frees up your team’s time in the warehouse or distribution center, eliminating the data entry and the minutes spent figuring out which box to use for every order. The newfound time can be spent focusing on more valuable tasks that grow your sales and business.

Optimizing Your Fulfillment Network and Carrier Management

Optimizing your fulfillment network and carrier management is crucial to ensuring efficient and cost-effective shipping operations.

Fulfillment Network and Carrier Performance Metrics

Monitoring fulfillment network and carrier performance metrics is essential for optimizing shipping operations. Key metrics such as on-time delivery rates, shipping costs, and customer satisfaction provide valuable insights into the efficiency of your fulfillment process. Implementing a warehouse management system (WMS) can offer real-time visibility into these metrics, enabling businesses to make data-driven decisions. By analyzing performance data, you can identify areas for improvement, optimize carrier selection, and enhance overall warehouse efficiency. This proactive approach not only reduces operational costs but also boosts customer satisfaction by ensuring reliable and timely deliveries.

By understanding fulfillment challenges and optimizing the fulfillment network and carrier management, businesses can significantly improve their warehouse efficiency, reduce operational costs, and enhance customer satisfaction. Implementing automation solutions, such as a WMS and shipping software, can streamline operations and provide better visibility and control over the entire fulfillment process.

Summary: Why Next-Gen Shipping Software is a Game Changer

Traditional fulfillment systems struggle to keep up with the demands of modern ecommerce. High labor costs, fragmented software, and inefficient processes slow down operations and increase expenses. However, next-generation warehouse automation software for ecommerce transforms fulfillment by automating workflows, optimizing inventory management, and integrating with multiple sales channels.

With features like real-time order tracking, AI-powered cartonization, and automated carrier selection, next-gen shipping software ensures businesses can scale without bottlenecks. Investing in the right shipping software for warehouse efficiency leads to lower costs, improved accuracy, and a seamless fulfillment experience for both businesses and customers.

If you’d like to learn more, check out our Next Generation Shipping Software Guide, Part 4: “Save Money With Ecommerce Shipping Software: Next-Gen Solutions”.

Frequently Asked Questions

How does warehouse automation software improve ecommerce fulfillment?

Warehouse automation software streamlines fulfillment by automating tasks such as order routing, shipping label generation, and inventory tracking. This reduces manual errors, increases processing speed, and optimizes carrier selection, ensuring faster and more cost-effective deliveries.

What are the key benefits of using shipping software for warehouse efficiency?

Shipping software enhances warehouse efficiency by automating label printing, integrating with multiple carriers, optimizing order packing, and providing real-time tracking. These features help businesses reduce labor costs, minimize delays, and improve overall fulfillment accuracy.

Can warehouse automation software integrate with existing ecommerce platforms?

Yes, most next-generation warehouse automation solutions integrate seamlessly with ecommerce platforms like Shopify, Amazon, Walmart, and eBay. This allows for synchronized inventory management, automated order processing, and real-time shipping updates.

How does automated cartonization help reduce shipping costs?

Automated cartonization uses AI to determine the best packaging size for each order, reducing dimensional weight costs and preventing wasted space. This optimization leads to lower shipping fees and improved warehouse space utilization.

How do I choose the right warehouse automation software for my business?

When selecting warehouse automation software, consider factors like integration capabilities, ease of use, automation features, and scalability. Look for a solution that supports multiple carriers, offers intelligent order routing, and provides analytics for continuous optimization.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

Ecommerce has transformed the way people shop, but behind every seamless online purchase is a complex fulfillment operation. As consumer expectations for fast and affordable shipping continue to rise, merchants face increasing pressure to optimize their logistics. Managing inventory across multiple warehouses, coordinating with various carriers, and ensuring accurate, on-time deliveries, all while keeping costs low has become a daunting challenge.

Legacy shipping software was built for a simpler time when most businesses operated from a single warehouse and fulfilled orders through a few standardized shipping methods. But today’s ecommerce landscape is far more dynamic. Merchants must navigate multi-channel sales, distributed fulfillment networks, and ever-changing carrier rates, all while maintaining a smooth customer experience. Unfortunately, traditional shipping software often falls short, forcing businesses to rely on manual workarounds that are inefficient, error-prone, and costly.

Next-generation shipping software changes everything. By leveraging intelligent automation, real-time decision-making, and deep integration with fulfillment networks, modern shipping solutions eliminate the complexity of ecommerce logistics. These systems optimize order routing, reduce shipping costs, and ensure seamless fulfillment—without the need for endless configuration or constant oversight.

In this article, we’ll explore the major ways next-generation shipping software simplifies ecommerce fulfillment, highlighting how it outperforms legacy systems in efficiency, accuracy, and scalability. Whether you’re a growing merchant or an established seller looking to streamline your operations, the future of shipping is here—and it’s built for success.

What is Ecommerce Shipping Software?

Ecommerce shipping software is a specialized technology solution designed to streamline and optimize the shipping process for online businesses. Its primary purpose is to help ecommerce businesses manage their shipping operations efficiently, reduce shipping costs, and improve customer satisfaction. By integrating with ecommerce platforms, inventory management systems, and shipping carriers, ecommerce shipping software provides a seamless and automated shipping experience. This integration ensures that orders are processed quickly and accurately, inventory levels are synchronized, and customers receive their purchases on time, enhancing overall customer satisfaction.

Benefits and Key Features

The benefits of using ecommerce shipping software are manyfold. Firstly, it significantly reduces shipping costs by enabling businesses to compare real-time rates from multiple carriers and choose the most cost-effective option. This not only saves money but also ensures that customers receive their orders promptly. Improved customer satisfaction is another major benefit, as the software automates many aspects of the shipping process, reducing errors and delays.

Key features of ecommerce shipping software include real-time rate comparison, which allows businesses to find the best shipping rates instantly. Automated label printing streamlines the shipping process, saving time and reducing the risk of errors. Inventory management features help keep track of stock levels across multiple warehouses, ensuring that products are always available when needed. Order tracking provides customers with real-time updates on their shipments, enhancing their shopping experience.

Additionally, ecommerce shipping software supports international shipping, making it easier for businesses to expand their reach globally. The software often provides exclusive shipping discounts, further reducing shipping expenses. Multi-carrier support and integration with multiple sales channels ensure that businesses can manage all their shipping needs from a single platform, improving efficiency and supply chain visibility.

Simplifying Operations: Making Today’s Complex Ecommerce Effortless

Based on original research we’ve conducted, a merchant seeking to cover the continental US (the lower 48 states) with affordable 2-day ground 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. However, effective inventory management and synchronization can be achieved through the use of advanced fulfillment software, which streamlines operations, enhances accuracy, and addresses common challenges in the fulfillment lifecycle.

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 (you can’t draw a line down the middle of a map and expect to get the best shipping rate)? 
• 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, online shoppers are sharing more sensitive data than ever. With an increased consumer demand for privacy protection, how does your shipping software keep personal information 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, especially when handling diverse shipping options. 

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 when carriers change or update their services. For example, when USPS introduced Ground Advantage, your rules didn’t automatically update to factor in the new service. This means you had 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. In this way, the Cahoot shipping management software takes the thinking and error out of the rate shopping process, always providing the optimal shipping label, and improves shipping speed because it takes actual estimated real-time delivery date into account based on ship date and day of the week.

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. You don’t have to update rules and make sure they’re all compatible when business needs change. 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 for 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 with our software, not months. 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 Handling with Multi-Carrier Shipping Software

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. Robust shipping software solutions can help manage these exceptions more effectively, ensuring smoother operations and better customer service.

Next Gen Software – Agile, Flexible Order Rerouting

With Cahoot’s 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. The system will automate shipping from the remaining 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 and off. This ensures that your business can continue operating smoothly 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, Shipwise (formerly DesktopShipper), and ShippingEasy 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 Adobe Commerce (formerly Magento 2). We’re also integrated with all leading shipping carriers and ecommerce tools that Sellers use today. Our ecommerce shipping solution provides robust integrations that streamline rate shopping, label creation, and order tracking, making shipping more efficient and cost effective for businesses of all sizes.

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 tracking information back 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 legacy software’s lack of native integration with fulfillment networks. Selecting the right shipping solution that seamlessly connects all fulfillment nodes is crucial for efficient order fulfillment and handoff to multiple carriers.

With tools like Flexport, 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? Flexport 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 file 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 collate and send over the information. 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 have 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 in-house 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 files and handing them over to your fulfillment partner. With Cahoot, your fulfillment partners see all orders instantly and can print labels in one click. This agility and simplified workflow are just two of the reasons that help Sellers using our fulfillment network meet and surpass the challenging cut-off times and demanding performance metrics that Amazon expects them to meet on Seller Fulfilled Prime. 

It’s not just SFP where requirements are challenging. On the Walmart marketplace, 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, address, 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 Cahoot warehouses. We hold back or redact other information – for example, even on a shipping label, your fulfillment partner sees only the first initial of the customer’s last name – making it difficult for them to reconstruct personal customer data. And no data is copy/pasteable or exportable!

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. 

The Future of Fulfillment is Here

Ecommerce logistics have evolved beyond the limitations of legacy shipping software. Today’s merchants need solutions that don’t just patch problems with complex rules and manual oversight but instead offer true automation, intelligence, and flexibility. The challenges of distributed fulfillment, multi-channel sales, and increasing customer expectations demand technology that works for you—not against you.

Cahoot’s next-generation shipping software isn’t just an upgrade; it’s a transformation. With intelligent automation, seamless integrations, and built-in security, our system ensures that fulfillment is fast, cost-effective, and effortlessly scalable. From real-time order routing to automated packaging selection, every feature is designed to help you save time, reduce costs, and focus on growing your business rather than troubleshooting logistics.

The days of clunky, error-prone software are over. The future belongs to merchants who embrace smarter, more efficient fulfillment—where technology does the heavy lifting, and businesses thrive. It’s time to leave behind outdated systems and step into a world where shipping works smarter, not harder.

Are you ready to experience the future of ecommerce fulfillment? The next generation of shipping starts now. If you’d like to learn more, check out our Next Generation Shipping Software Guide, Part 3: “Next-Gen Warehouse Automation Software for Ecommerce: Fulfillment Efficiency”.

Frequently Asked Questions

Who uses shipping software?

Shipping software has features that can benefit various clients, including individual Sellers, ecommerce brands, retailers, and courier service providers. Feature-rich software like Cahoot is autonomous and makes highly intelligent and scalable fulfillment and shipping accessible to retailers and brands of all sizes.

What is fulfillment optimization?

Fulfillment optimization is the process of determining the best options for sourcing and order fulfillment, which results in more efficient use of inventory and reduced costs.

What is a shipping platform?

A shipping platform helps you ship faster and cost-effectively by organizing orders, offering pre-negotiated shipping rates, enabling shipping rate comparison, and managing shipping workflow. 

Who uses shipping software?

Shipping software has features that can benefit various clients, including individual Sellers, ecommerce brands, retailers, and courier service providers. Feature-rich software like Cahoot is autonomous and makes highly intelligent and scalable fulfillment and shipping accessible to retailers and brands of all sizes.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

At Cahoot, we believe today’s ecommerce industry needs next-generation shipping software. Selecting the best shipping software is crucial for enhancing efficiency and customer satisfaction. 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, so 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 1990s and journey through the early 2020s to see what the ‘old world’ of ecommerce looked like, for Sellers and customers. By understanding these changes, we can see how modern shipping solutions can turn challenges into a competitive advantage.

The ‘Old World’ of Ecommerce: Lower Complexity

In the olden days of ecommerce, life was simpler. Fewer channels to manage, fewer customer expectations, and less technological complexity meant uncomplicated logistics and order fulfillment processes that seem almost quaint by today’s standards.

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. Ecommerce companies now face a more complex landscape with multiple channels and higher customer expectations.

Minimal Competitive Pressure

In the 1990s, online marketplaces did not exist. Amazon launched its 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. 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? Major shipping carriers were not as crucial in this old model as they are today.

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.

The ‘Old World’ of Ecommerce: 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 Costs Were 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 1990s, and well into the 2010s, which helped manage delivery costs. This provided Sellers with better predictability and control over operational costs.

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.

Warehouse 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 less 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 much easier to hire workers and lease warehouses, there was no pressure to maximize resource utilization or be scrappy to cut costs. Margins were protected without having to do any of those things.

The ‘New World’ of Ecommerce: High Operational Complexity

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.

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 expanded into ecommerce, while shopping cart platforms like Shopify and BigCommerce help merchants sell directly to customers. Even retailers 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 across multiple channels. This has also meant they need to hire larger teams to manage this complex operation. An effective ecommerce shipping solution is crucial in managing these multiple channels, as it integrates with various carriers and platforms to streamline the shipping process. Customers choose to shop online for the convenience of home delivery and the importance of fast and reliable shipping.

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, counterfeit knock-off products are widely available and erode the sales of the original brand by shipping faster or being lower priced. Additionally, high shipping costs pose a significant challenge, impacting both profitability and consumer choice.

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 the Amazon Prime program 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. Multi-carrier shipping software plays a crucial role in optimizing shipping options by comparing rates across different carriers and automating the selection process based on various criteria.

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 developments. 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 spend $50 or more). 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 peaked. 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 Costs Are Expensive

It is becoming increasingly difficult for Sellers to absorb the costs associated with small parcel shipping. Carrier GRIs which held steady for nearly three decades are now increasing year over year. UPS and FedEx imposed a 5.9% GRI in 2022, after many years of only increasing 3.9% or 4.9%, followed by the largest increase in history in 2023: 6.9%, and in 2024 and 2025 increases were 5.9% each. The trend is clear. These increases are significantly higher than historical trends and exceed the prevailing inflation rate, making it difficult for Sellers to handle the impact, especially when combined with delivery delays. 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. Standard warehouse staff are now expected to be paid as much as $20/hr in California where a law was mandated to pay fast food employees a $20 minimum wage. The entire local labor market has to compete at that rate. And that’s not considering specialized warehouse staff that can drive forklifts or the managers. At this rate, this is no longer a “minimum” wage occupation. With the pool of workers being diverted to Amazon, Walmart, and Target as they command $19+ average hourly rates, it has become very difficult for smaller brands and retailers to sufficiently staff their warehouses.

Warehouse Space is Expensive

Lastly, warehouse rents reached an all-time high during the early COVID-19 years (2020-2022), and remain unusually high in 2025 after decades of low and steady price increases. Warehouse demand is expected to rise in 2025 compared to 2024 as availability constricts. 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 continues to increase 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 2024 Heptagon Capital study found that as many as 82% of America’s warehouses were built before 2000. This has meant that a huge number of Sellers have been competing for the same limited space – driving up leasing rates.

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 ecommerce industry. The supply chain inefficiencies, including disruptions and environmental impacts, further exacerbate these challenges, highlighting the need for sustainable practices and advanced technologies to enhance operational efficiency.

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. Additionally, businesses must navigate supply chain disruptions that can lead to delayed shipments and increased operational costs.

Why Sellers Need to Switch to Next-Gen Ecommerce Shipping Software

Now that we’ve taken a look at the old and new worlds of ecommerce, you might be wondering what role shipping software plays 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.

Choosing shipping software is crucial in developing an effective shipping and fulfillment strategy for ecommerce businesses.

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 of ecommerce shipping software must solve 3 key problems that 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 Cahoot’s next-generation software is purpose-built to address these key requirements.

Summary

Ecommerce has come a long way since its early days, and let’s be honest—there’s no turning back. The simplicity of the past has given way to a fiercely competitive, complex, and high-stakes environment where every decision matters. Sellers today are not just managing one storefront; they’re juggling multiple sales channels, working around rising costs, and trying to meet sky-high customer expectations. And in this landscape, traditional shipping software is more of a relic than a reliable tool.

That’s why it’s time for a new approach. The old world of ecommerce didn’t demand automation, cost savings, or multi-channel flexibility. But the new world? It absolutely does. To stay competitive, businesses need shipping software that doesn’t just keep up but actually propels them forward—software that simplifies complexity, enhances efficiency, and drives down costs in ways that were never needed before.

At Cahoot, we’re not just witnessing these changes; we’re actively shaping the future of ecommerce fulfillment. Because in today’s market, the right technology isn’t just helpful—it’s essential. And those who embrace the next generation of ecommerce shipping software will be the ones who thrive.

If you’d like to learn more, check out our Next Generation Shipping Software Guide, Part 2: “Shipping Software for Ecommerce Fulfillment: The Next Generation of Shipping Simplified”.

Frequently Asked Questions

How can I reduce shipping costs for my ecommerce business?

Reducing shipping costs requires a multi-faceted approach:

• Negotiate rates with multiple carriers rather than relying on a single provider
• Consider using regional carriers for deliveries within specific areas
• Optimize packaging to reduce dimensional weight charges
• Implement zone skipping by shipping bulk orders to carrier hubs closer to final destinations
• Use shipping software that compares rates across carriers in real-time
• Offer local pickup options for customers in your area
• Consider flat-rate shipping for certain product categories

What are the most common causes of parcel delivery delays?

Several factors commonly contribute to delivery delays:

• Weather events and natural disasters
• Carrier capacity constraints during peak seasons
• Customs clearance issues for international shipments
• Address errors or incomplete delivery information
• Staffing shortages at carrier facilities
• Vehicle breakdowns or logistical issues
• High volume surges (like during Black Friday/Cyber Monday)Last-mile delivery complications in rural or hard-to-access areas

How can I reduce the environmental impact of my ecommerce shipping?

To make your shipping more sustainable:

• Use right-sized packaging to minimize waste and reduce dimensional weight
• Choose recycled or biodegradable packaging materials
• Offer carbon offset options at checkout
• Consolidate orders when possible to reduce the number of shipments
• Partner with carriers that have environmental initiatives or electric vehicle fleets
• Implement a packaging reuse program for returns
• Consider local fulfillment options to reduce transportation distances

What should I do about rising return rates in ecommerce?

To address the challenge of increasing returns:

• Provide detailed product descriptions, measurements, and high-quality images to set accurate expectations
• Implement a clear, easy-to-understand return policy
• Consider offering free returns as a competitive advantage
• Use analytics to identify products with high return rates and address underlying issues
• Implement a return merchandise authorization (RMA) system to streamline the process
• Consider restocking fees for certain categories to discourage unnecessary returns
• Offer virtual try-on or AR features for appropriate products

How can I improve last-mile delivery efficiency?

Improving last-mile delivery, often the most expensive part of shipping, requires:

• Partnering with multiple carriers to diversify delivery options
• Implementing delivery management software to optimize routes
• Offering alternative delivery options like BOPIS (Buy Online, Pick Up In Store)
• Using lockers or pickup points in convenient locations
• Providing narrow delivery windows to improve customer experience
• Leveraging data analytics to predict delivery challenges in specific areas
• Considering micro-fulfillment centers in urban areas for faster delivery

What are the best practices for international shipping in ecommerce?

For effective international shipping:

• Partner with carriers experienced in global logistics
• Understand customs documentation requirements for each country
• Use harmonized system (HS) codes correctly for all products
• Be transparent about duties and taxes that customers may need to pay
• Consider using a third-party logistics provider specializing in international shipping
• Implement reliable package tracking for international orders
• Offer DDP (Delivered Duty Paid) options for a smoother customer experience
• Research import restrictions for products in your target markets

How can I manage shipping expectations during peak seasons?

To handle peak season shipping challenges:

• Plan ahead by increasing inventory and staffing well before peak periods
• Communicate realistic delivery timeframes to customers
• Consider implementing order cutoff dates for holiday deliveries
• Diversify carrier partnerships to spread volume across multiple providers
• Use shipping software that can automatically route orders to carriers with capacity
• Offer incentives for early shopping to spread out order volume
• Maintain transparent communication about potential delays
• Consider temporary local pickup options during extremely high-volume periods

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

Give Your Website Customers an Amazon-Like Delivery Experience

Today, online shoppers expect transparency at every stage of their shopping experience—including shipping. One crucial factor that influences purchasing decisions is the estimated delivery date (EDD). If customers know exactly when their order will arrive, they are more likely to complete the purchase and trust your brand for future transactions.

If you’re running a Shopify store, displaying estimated delivery dates on product pages is a simple but effective way to enhance customer satisfaction and reduce support inquiries. In this guide, we’ll dive into:

• What an estimated delivery date is
• Why displaying EDDs matters in ecommerce
• The benefits of adding estimated delivery dates to Shopify stores
• Tips for accurately calculating delivery estimates
• A step-by-step guide to adding estimated delivery dates on Shopify using code

Let’s get started!

What Is an Estimated Delivery Date?

An estimated delivery date (EDD) is the projected timeframe in which a customer can expect to receive their order after placing it. Unlike general shipping estimates (e.g., “ships in 3-5 business days”), an EDD provides a specific arrival window, such as “Arrives between March 15-18”, or it can be a specific date based on the carrier’s stated transit time from origin to destination address, such as “FREE delivery Tomorrow, March 13”.

EDD calculations take several factors into account, including:

• Processing time: The time required to prepare and package the order
• Shipping method: The carrier and shipping speed chosen by the customer or offered by the Seller
• Destination: The buyer’s location in relation to your fulfillment center
• Holidays & weekends: Non-working or non-shipping days that could delay shipping and delivery

By displaying accurate EDDs, Shopify store owners set clear expectations and build trust with customers.

Why Are Estimated Delivery Dates Important for Ecommerce?

Shoppers today value convenience, speed, and transparency. If an ecommerce store does not provide an estimated delivery date, customers might abandon their carts or seek alternatives from competitors like Amazon, where shipping timelines are clear.

Here’s why showing EDDs on Shopify product pages is critical:

✅ Reduces Cart Abandonment

Uncertainty about when an order will arrive is a major reason customers hesitate at checkout. By offering clear delivery estimates upfront, you eliminate doubts and increase conversions.

✅ Improves Customer Experience & Trust

A store that provides reliable delivery estimates appears more professional and organized. Customers appreciate clear expectations and are more likely to return for future purchases.

✅ Decreases Customer Support Inquiries

One of the most common customer service questions is “When will my order arrive?” By proactively displaying estimated delivery dates, you reduce the need for these inquiries, saving time and resources.

✅ Boosts Sales & Competitive Advantage

If a customer is deciding between your store and another with vague shipping timelines, a visible EDD can be the deciding factor in your favor. Shoppers love predictability, and showing estimated delivery dates can give you a competitive edge.

Benefits of Adding Estimated Delivery Dates to Shopify Stores

Now that we understand the importance of estimated delivery dates, let’s explore how to add them to your Shopify store using code.

How to Add Estimated Delivery Dates on Shopify Using Code

While Shopify does not have a built-in estimated delivery date feature, you can manually add it to your product pages using Liquid code. Below are the step-by-step instructions to implement this feature without relying on third-party apps.

Step 1: Identify Your Shipping Timeframes

Before adding EDDs to your store, define your shipping and processing times. Consider:

• Order processing time (e.g., 1-2 business days)
• Shipping carrier timelines (e.g., 3-5 business days for standard shipping)
• Different EDDs for various locations (if applicable)

Step 2: Open Shopify’s Theme Code Editor

1. In your Shopify Admin, go to Online Store → Themes.
2. Click on Actions (3 dots) → Edit Code.

Step 3: Add Custom Code to the Product Page

Locate the `product.liquid` file (or `product-template.liquid` in Shopify 2.0 themes) and insert the following code snippet where you want the estimated delivery date to appear:

    {% assign processing_time = 2 %} <!-- Adjust processing time in days -->
    {% assign shipping_time_min = 3 %} <!-- Minimum shipping time in days -->
    {% assign shipping_time_max = 5 %} <!-- Maximum shipping time in days -->
    {% assign min_days = processing_time | plus: shipping_time_min %}
    {% assign max_days = processing_time | plus: shipping_time_max %}
    {% assign today_date = 'now' | date: '%Y-%m-%d' %}
    {% assign min_delivery_date = today_date | date: '%s' | plus: min_days | date: '%b %d' %}
    {% assign max_delivery_date = today_date | date: '%s' | plus: max_days | date: '%b %d' %}
<p><strong>Estimated Delivery:</strong> {{ min_delivery_date }} - {{ max_delivery_date }}</p>

Step 4: Customize the Message

Modify the text within the `<p>` tags to match your store’s branding (e.g., “Your order is expected to arrive between…”).

Step 5: Save & Preview the Changes

1. Click Save in the code editor.
2. Go to a product page and refresh to see the estimated delivery date displayed.

Step 6: Test Different Scenarios

• Change the processing and shipping time variables to verify accuracy.
• Place test orders to ensure the calculations align with actual delivery times.

Pro Tips for Accurate Estimated Delivery Dates

✅ Factor in Business Days & Holidays – Ensure your estimates exclude non-working days when applicable.

✅ Offer Multiple Shipping Options – Display different EDDs based on shipping speed (e.g., Standard vs. Express).

✅ Use Location-Based Estimates – If you ship internationally, adjust the timeframe for different regions.

✅ Keep Your Shipping Speeds Updated – If carrier delays occur, update your estimates accordingly to avoid customer disappointment.

✅ Communicate Clearly – If there are unexpected delays, notify customers proactively via email or SMS.

Final Thoughts

Adding an estimated delivery date to your Shopify store is a simple yet powerful way to increase conversions, reduce customer inquiries, and improve overall satisfaction. While third-party apps exist, using custom code gives you full control and flexibility over how EDDs appear on your site.

By implementing the steps outlined in this guide, your customers will have a clear expectation of when their orders will arrive, making them more confident in their purchase decisions.

Now it’s your turn—try adding EDDs to your Shopify store today and watch your sales and customer trust grow!

Frequently Asked Questions

What is estimated delivery date?

An estimated delivery date (EDD) is the date when a package is expected to arrive at its destination. It’s a key part of the online shopping experience and can impact customer satisfaction.

Where can I find an EDD?

It can be displayed at various times and locations such as on the product page, at checkout, in the order confirmation email, on the branded tracking page, in shipment notifications, or on the “Thank You” page.

Why are accurate EDDs important?

They can help build trust and encourage repeat business, they can help reduce customer anxiety and uncertainty, and they can help retailers manage their inventory and optimize their supply chain.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

The ecommerce industry has experienced a dramatic shift in recent years, with global Sellers gaining direct access to U.S. consumers. Platforms like Amazon, Temu, and Shein have made it easier than ever for international merchants, particularly those based in China, to reach American shoppers with competitively priced products. At the same time, social media trends such as the “Amazon Haul” phenomenon have fueled consumer demand for affordable and trendy products, often sourced from overseas suppliers.

This global competition presents both challenges and opportunities for U.S.-based Sellers. While international merchants benefit from cost-efficient manufacturing and logistics, American businesses can still thrive by leveraging their strengths such as superior customer service, branding, and localized marketing strategies. By understanding the changing dynamics of ecommerce and implementing smart business tactics, domestic Sellers can remain competitive and grow their market share.

Understanding the Competitive Landscape

Historically, American retailers sourced products through distributors and wholesalers, often relying on Chinese manufacturers for affordable goods. However, the rise of ecommerce platforms has eliminated many middlemen, (a phenomenon known as disintermediation), allowing manufacturers and Sellers from China to sell directly to U.S. consumers at lower prices.

A study by Marketplace Pulse found that in five major European Amazon marketplaces (Spain, France, Italy, the UK, and Germany), 41% of Sellers were based in China. In a different study by the same source, China-based sellers were found to represent nearly 50% of the top 10,000 Sellers on Amazon in the U.S. Additionally, upwards of 95% of Chinese Sellers use Fulfillment by Amazon (FBA) depending on the product category, ensuring fast and reliable shipping that levels the playing field with domestic merchants.

Despite these challenges, U.S. Sellers have unique advantages that can help them stand out in an increasingly competitive marketplace. Here’s how:

1. Competing with More Than Just Price

While low prices can attract customers, American consumers also value quality, trust, and customer service. Sellers who prioritize superior product quality, hassle-free returns, and excellent customer support can differentiate themselves from international competitors.

2. Leveraging Branding and Storytelling

Companies like Shein and Temu rely on aggressive digital marketing to promote their ultra-low-cost products. However, many consumers also seek brands that offer authenticity, transparency, and ethical sourcing. U.S. Sellers can build brand loyalty by emphasizing their company’s values, quality control, and customer engagement strategies.

3. Smart Marketing and Customer Engagement

Establishing an independent website allows Sellers to cultivate their own customer base rather than relying solely on third-party marketplaces. Targeted digital marketing, social media engagement, and partnerships with influencers can help businesses create a loyal audience and drive repeat sales.

4. Supply Chain Optimization

Efficiency in sourcing and logistics is crucial to competing with global Sellers. By improving demand forecasting, negotiating better supplier agreements, and optimizing shipping and fulfillment strategies, domestic Sellers can lower costs and improve profit margins.

5. Expanding Product Categories and Sales Channels

Instead of competing head-to-head in oversaturated categories, Sellers can explore niche markets with consistent demand. Additionally, diversifying sales across platforms like Walmart, eBay, and Shopify reduces dependence on Amazon and creates new revenue streams.

Thriving in a Global Ecommerce Market

The increasing presence of global Sellers on platforms like Amazon, Shein, and Temu has reshaped ecommerce, but it does not mean U.S. businesses cannot compete. By focusing on quality, branding, smart marketing, and operational efficiency, American Sellers can carve out a strong position in the marketplace. Success in ecommerce is not just about offering the lowest price—it’s about providing value, building customer trust, and adapting to an ever-changing digital retail environment.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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Amazon SFP – How To Sell and Win

In June 2023, Amazon announced they would reopen enrollment for their Seller Fulfilled Prime (SFP) program. Like most things in the Amazon world, the news was received with mixed reactions by Sellers. For those familiar with the Amazon ecosystem, they know that this program is challenging. Many feel the list of requirements is daunting and that Amazon holds them to higher standards than the ones it sets for its in-house Fulfilled By Amazon (FBA) logistics network.

Most people are familiar with the requirements that Amazon expects Sellers to meet, but far fewer are aware of the roadblocks that make success hard to achieve. An even smaller number are aware of the strategies they can deploy to meet Amazon’s criteria and surpass them. We’ve outlined all of that and more in our Ultimate Guide:

• We start by helping you understand what the program actually is and its benefits.
• Despite the daunting SFP requirements, the reward can be immense – we highlight the value that success in the program can deliver to your business.
• However, SFP success is not easy, and many Sellers find the program extremely challenging – we do a deep dive into the most common stumbling blocks that trip up even experienced Amazon merchants.
• Finally, we give you an essential cheat sheet needed to start selling and winning on Amazon Seller Fulfilled Prime!

One critical aspect to consider is the Seller Fulfilled Prime cost. Understanding the financial implications, including the program fee per item sold, percentage fees, and minimum fees, is essential for assessing potential profitability and managing profit margins effectively.

What is Seller Fulfilled Prime?

Before we do a deep dive, it’s essential to understand – what is the Seller Fulfilled Prime program?

Definition and Benefits of Seller Fulfilled Prime

Seller Fulfilled Prime (SFP) is a program offered by Amazon that allows third-party Sellers to display the Prime badge on their listings while maintaining control over their fulfillment process. This means sellers can ship Prime orders directly to customers within two days, ensuring fast and reliable delivery. By participating in SFP, sellers can significantly boost their visibility, credibility, and sales potential, all while providing an enhanced customer experience.

The benefits of SFP include:

• Increased Visibility and Credibility: Listings with the Prime badge are more likely to be seen and trusted by customers.
• Greater Control: Sellers have more options and control over their fulfillment process and inventory management compared to using Fulfilled by Amazon (FBA).
• Brand Building: Sellers can build their brand, including flexibility to provide unique experiences for customers, such as custom packaging, while maintaining Prime status.
• Increased Sales and Profits: The Prime badge can lead to higher sales and better profit margins.
• Amazon’s Customer Service: Access to Amazon’s customer service and support for handling customer service inquiries, but the ability to own customer service if desired.
• Lower Fees: Freedom from the high fees associated with Amazon FBA.
• Improved Support for Challenging SKUs: The ability to meet the consumer expectation for free and fast shipping even on slow-moving, seasonal, larger-sized, and heavier SKUs.

While all these are great, the biggest one for any Seller is that the program allows your product listings on the Amazon Marketplace to feature the coveted Prime badge. With over 180 million subscribers in the United States in 2025, Amazon’s loyalty program has a great promise for the end customer – pay $139 (plus taxes) annually, and Amazon will deliver you stuff for free in under two days.

The program has far more profound implications for Sellers – their ranking on Amazon search results and ability to win the “Buy Box” is heavily and positively influenced by ensuring their products are Prime eligible. It’s also no secret that most shoppers on Amazon toggle the filter when browsing the store just to see products that qualify for Prime. All this means that an Amazon merchant’s survival, let alone success, largely depends on ensuring each SKU is Prime-eligible.

Seller Fulfilled Prime offers Sellers the best of both worlds – the Prime badge and autonomy over order fulfillment. However, it isn’t all smooth sailing, and Sellers have tended to shy away from the program because of its exacting standards. However, there are indications that the present time is a good one to begin seriously considering enrolling in the program.

How Seller Fulfilled Prime Works

To participate in SFP, sellers must meet Amazon’s stringent performance requirements. These include:

• Own Warehouse: Sellers must have their own warehouse, (or partner with a robust and capable modern 3PL), and an Amazon Professional Seller account.
• Premium Shipping Options: Offering premium shipping options to customers.
• Exceptional Performance Metrics: Consistently exceeds for the On-Time Delivery, Valid Tracking, and Delivery Speed metrics while maintaining a very low Order Cancellation Rate.
• Supported Carriers: Delivering orders with Amazon’s approved Seller Fulfilled Prime carriers.
• Amazon Returns Policy: Agreeing to the Amazon Returns Policy.

Sellers must also complete a trial period, during which they must fulfill at least 100 Prime packages while adhering to all of Amazon’s strict shipping requirements. Once the trial period is successfully completed, the Prime badge will be displayed on their listings, granting access to Prime customers. More on this later.

SFP – Now More Relevant For Sellers Than Ever Before

Several reasons have combined to make Seller Fulfilled Prime more relevant than ever before for Sellers, some of Amazon’s own making along with others that are not as palatable to the company:

The “Prime Effect”: Everybody Wants Fast Shipping

When Amazon first introduced Prime in 2005, it announced that it would ship customer orders over $35 for free in 2 days. At the time, people in the industry thought that the company had lost its mind and that this strategy would surely fail. It took competitors over a decade to offer free 2-day shipping – retailers like eBay and Walmart introduced their competing services only in 2017.

However, when Prime moved from its 2-day timeline to free 1-day shipping in 2019, Walmart and BestBuy responded almost immediately, offering customers the same experience. That captures just how much Amazon has raised the bar and redefined customer expectations – the Prime effect means that all of us expect everything delivered in under two days for free.

The stakes are high for ecommerce merchants across every channel – it does not matter whether you serve customers through a Shopify storefront, eBay, Amazon, or Walmart – you have to meet the consumer expectation for fast order fulfillment.

Shipping is no longer a back-office operation; it has become the defining element of the customer experience.

The company that created the Prime Effect is arguably the most customer-obsessed organization in the world. For years, Amazon has focused relentlessly on creating value for its customers – often at the expense of Sellers on its platforms. At every turn, the company has weaponized the size of its customer base and the network effects of its marketplace model to squeeze Sellers while delighting customers.

People, regulators, and governments aiming to call out the company on some of these practices have been met with a frequent refrain, “As long as the end customer is happy, how does it matter?” But why are customers so happy with Amazon, and how does the company have so many of them (most of whom are Prime members)? The most important reason is Amazon’s ability to ship products in under two days, nearly always on time.

Diversify Beyond FBA

For Sellers operating on Amazon, the approach has often been relatively straightforward: let Amazon FBA take care of it all and only use Fulfilled By Merchant (FBM) or SFP as a backup in the rare event of an emergency. However, given how FBA has repeatedly proven to quickly and substantially change program requirements and fees, a backup may no longer suffice – Sellers may need to devise an entirely new order fulfillment strategy.

Sellers Have Traditionally Relied on FBA

According to Jungle Scout, 64% of Amazon Sellers use FBA exclusively to deliver their orders, with only 14% choosing to completely cut ties with FBA and handle everything independently.

There are good reasons for this – the algorithm determining whether a product listing will win the Buy Box uses fast order fulfillment as a leading criterion. The fact that FBA listings are automatically Prime eligible is attractive for many Sellers (SFP listings also have a great chance to win the Buy Box, while merchant-fulfilled non-Prime orders trail well behind).

The well-known A10 algorithm, which ranks products in search results on Amazon, also prefers listings with fast order fulfillment, which has led Sellers to lean in heavily on FBA (again, a Seller Fulfilled Prime order can show up favorably, subject to the merchant doing other things right, such as optimizing for the right keywords in their product detail page copy).

The question Sellers might ask is: why would I do all the extra work required by SFP listings when it’s easier to win the buy box and rank well with FBA alone? To answer the question with a question: why not both? Not only do you get more shots on the Buy Box goal, but SFP listings typically sell for 15 – 20% more, plus increased discoverability and conversion compared to non-SFP FBM listings (82% of Sellers are offering both FBA and FBM versions of their listings).

So, why not all three? If you like FBA, continue to sell on FBA, but add SFP to your FBM listings and some will sell at the higher price and you’ve done nothing other than duplicate your listings. When the 180 Million Prime members apply the Prime-only filter when browsing for products on Amazon, they do it for no other reason than fast and free delivery. Will you be there to sell to them?

Seller Fulfilled Prime – An Essential Tool for Ecommerce Growth

Well, technically, you do have more to do than just duplicate your listings. You have to fulfill the orders with fast and free shipping, and you must meet the uncompromising performance metrics.

Seller Fulfilled Prime Requirements

• Maintain an On-Time Delivery Rate greater than 93.5% (A delivery is on time if it is delivered on or before the delivery date promised to the customer when they checkout).
• Maintain a Valid Tracking Rate (VTR) higher than 99% – a package has Valid Tracking if it has at least one carrier scan. This scan must occur before the package is delivered to ensure it provides a tracking number that can be used by the customer to track their order.
• Any product linked with a Prime shipping template must offer a minimum shipping speed of 3-5 days to the contiguous United States (the lower 48 states), across all 3 size tiers: Standard, Oversize, and Extra Large.
• Product detail page views must promise 1-day nationwide delivery to at least 30% of customers looking at Standard-size products, and 2-day nationwide delivery to at least 70% of page viewers of the same size tier. For Oversized products, these metrics are 10% and 45%, respectively. For Extra Large products, 15% of product detail page views must promise 2-day delivery (there is no 1-day expectation for these SKUs at this time). Note that Oversize and Extra Large SKUs may use regional shipping templates, so they are not required to deliver nationwide in 2 days or less.
• Merchants must now first go through a pre-qualification process before starting their SFP trial. In the 90 days leading up to starting an SFP trial, they must self-fulfill at least 100 packages, with a Cancelation Rate <2.5%, Valid Tracking Rate >95% and Late Shipment Rate <4%. Once they are approved for the trial, they must ship at least 100 packages in 30 days while meeting all the SFP program requirements above.
• To fulfill Prime trial orders, Sellers should identify these orders within Seller Central by looking for the Prime badge and ‘IsPrime’ tag, which help in managing these specific orders efficiently.
• Sellers must provide free returns for all eligible items weighing less than 50 lb, for any reason.
• Amazon will not excuse late deliveries due to a carrier’s failure to deliver on time during the trial period (after passing the trial, they will). You must make sure that your order volume can incur a few late deliveries per trailing 7 days and still exceed the On-Time Delivery performance metric.
• During this entire period, the Prime badge will not be visible to customers on listings. After successful completion of the pre-qualification and trial period, Amazon will enable the Prime badge for your listings.

The critical thing to remember (which is the kick in the teeth for Sellers) is that Amazon FBA does not face any penalties for missing any of these performance metrics – whereas the onus is on the SFP merchant to diligently track these metrics and ensure you never fall below the minimums. To enable Prime shipping, Sellers must adjust their shipping templates and make specific selections in Seller Central to choose delivery regions for Prime service.

If this list appears daunting, you’re not alone – many Sellers feel these criteria are tough to meet. So before even looking at where the challenges and roadblocks lie, it’s worth asking – why is it worth being part of the program, and what value can it deliver to your business?

The Competitive Advantages of Seller Fulfilled Prime

While these are all great benefits for Sellers and provide their businesses with significant competitive advantages, making a success of the SFP program is highly challenging. Most merchants know that the requirements list is rigorous and demanding, but few are aware of the exact stumbling blocks that trip up people. Fewer are aware of solutions available to overcome these roadblocks and win at SFP.

Succeeding at SFP is Hard – Here’s Why

While the list of criteria is long and rigorous, we’ve identified the most challenging aspects of the program that trips up most Sellers:

Nationwide Fast Delivery Forces Most Sellers to Use Expensive Air Shipping

• In the past, Amazon had “regional Seller Fulfilled Prime” – which allowed Sellers to manage order fulfillment in certain geographical parts of the country while still having the Prime badge on their product listings.
• The Regional SFP program allowed merchants who owned a single warehouse or worked with a traditional 3PL with a single warehouse location to meet the program’s requirements through economical ground shipping.
• However, Amazon now expects Sellers to make products across every size tier available within 3-5 days (at the most) across the entire continental U.S. – additionally, approximately 70% of standard sized item orders must be delivered in under 2 days across the nation.
• The new requirements eliminate the possibility of regional models working any longer – having your inventory stationed in just one location means that shipments to certain parts of the country cross multiple shipping zones. The only way to deliver orders on time in such “single-node” operations is by using expensive air shipments. Making expensive shipments by air completely nullifies any cost savings merchants hoped to achieve when leaving FBA – in fact, it could worsen things.
• It becomes vital in such a scenario to use an SFP fulfillment partner with a strategically located network of fulfillment centers, such as Cahoot, whereby it is possible to cover the entire country in 2 days while still using economical ground shipping rather than express air shipments. Such a network is one of the very few ways it is still possible to both have nationwide coverage and significant cost savings over FBA.
• Lastly, Sellers must ensure that their product listings are classified correctly by Amazon. The metric for % of product detail pageviews that must promise a certain delivery speed is based on the size tier the item falls into (if an oversized or extra large item is classified as standard sized by mistake, you will be under pressure to get a large number of orders of those items delivered in under 2 days).

Amazon Expects Delivery in 2 Calendar Days, While Carriers Operate on Business Days

Amazon now expects Sellers to make Prime deliveries in 2 calendar days (necessitating the need to work with carriers that support weekend pickup and delivery). This requirement has caused Sellers a lot of pain and grief, and here’s why:

The Misleading Page Views Metric

In its latest round of revisions to the program criteria, Amazon has increased the percentage of product detail page views that must promise 1 calendar day and 2 calendar day delivery. Thirty-percent (30%) of product detail page views for standard sized products must promise 1-day delivery, while 70% must promise 2-day delivery. But when does your listing promise 1-day delivery, and when does it promise 2-day delivery? Let’s understand this with a few examples:

Let’s imagine every order is delivered the very next day after it ships. If a customer views your order on a Monday and places their order before the cutoff time, you will ship it that same day, and it reaches the customer the next day. In this case, Amazon displays a 1-day delivery promise and this page view counts towards your 1-day metrics.

In this second case, when a customer looks at the product detail page after the cutoff time, you ship the order the next day after it is placed, and it reaches the customer the following day. This therefore fails to meet the 1-day promise, but meets the 2-day delivery promise (which means that if a 2-day promise was made after Monday’s order cutoff time, one-day shipping still needs to be used to deliver it in 2 calendar days).

In this last case, it gets really bad. If a customer views your listing on a Saturday evening, the item is expected to ship on Monday (assuming you don’t ship Sundays) and it will be delivered to them on Tuesday – a full 3 days later.

In this case, such a page view counts toward neither the 1-day nor 2-day metrics. The implication is clear – your listings will display 2-day and even 3-day delivery promises for significant periods of time. The mapping between the number of warehouses you have, the percentage of the US population you can service with 1-day delivery, and the % page views that actually promise 1-day delivery is not linear. This graphic illustrates that:

If you have warehouse locations, you can cover 42% of the US population with 1-day delivery. But different customers look at your product detail pages at different times of the day, and see different delivery speed promises. As per our research, in reality, only 21% of page views may actually promise 1 calendar day delivery. To meet the new Seller Fulfilled Prime delivery requirements, it could take as many as six to nine strategically located warehouses. These demanding metrics mean that traditional 3PLs will find it nearly impossible to help Seller Fulfilled Prime merchants (learn more about why traditional 3PLs are failing, and how peer-to-peer order fulfillment networks are designed to help you find success on SFP here). It becomes crucial for merchants to partner with order fulfillment networks that have warehouses at different strategic locations across the country, ensuring customers from anywhere see fast delivery promises. While merchants may want to upgrade to a fulfillment partner who is better positioned to meet these requirements, it’s easier said than done to leave your current 3PL for better alternatives. Many merchants don’t know how to evaluate and find the perfect fulfillment partner for them. If you’re looking for a step-by-step guide on migrating fulfillment partners, check out our guide here!

The Juggling Act Between Cut-off Times, Economical Shipping, and Meeting SLAs

With Seller Fulfilled Prime, a late cut-off time can potentially increase the number of orders your carrier picks up the same day, boosting your 1 and 2-day delivery metrics. If FBA faces any issues or does not meet the delivery promise shown to the customer on the product listing, there are no penalties for Amazon – but a Seller must meet the 93.5% on-time delivery criteria. Here’s a graphic demonstrating how delivery timelines look like when operating with a 2 PM cutoff time (based on our discussion of the page views metric):

Sellers must carefully make the tradeoff between increasing their cutoff times (if they can schedule a late pickup with their carriers) versus also ensuring that those orders reach the customer the next day. Increasing the cutoff times increases the percentage of page views that promise 1 and 2-day delivery, but you must ensure that you can actually get the product to the customer’s doorstep within the time you’re promising. Here also, Sellers need to strategically place their inventory in a network of warehouses to avoid shipping orders placed close to cut-off times through expensive overnight air shipments. Placing inventory in different strategically located warehouses will enable nationwide coverage through economical ground shipping, all while meeting the customer’s expectations. Pay attention to time zones. A 2PM cutoff time is specific to the local time zone, so an order received before 5PM Eastern Time may need to ship from a western time zone to deliver on time, depending on the delivery promise. This makes it essential that your promotional activities (advertising, marketing) also closely follows the local time zones of the eyeballs you’re trying to reach. But it’s all very doable and Cahoot offers SFP consulting services to help. Reach out if you’d like to talk.

The shift to calendar days has had the most significant impact on the operational side of things – Sellers now have to plan a whole different way of running their business and schedules, which have also become challenges:

Operational Excellence Needed

Challenging to Staff And Operate Warehouses on Weekends

As we’ve mentioned before, staffing is often the biggest bottleneck towards finding success with order fulfillment. With weekend pick up and delivery expected to meet the calendar day-based SLAs, most merchants with a single warehouse or those working with 3PLs face difficulties succeeding in the program. If you own and operate your warehouses, paying your staff to work on the weekends or hiring additional people may eat into your margins to unfeasible extents. Traditional 3PLs, which are asset-heavy, also face cost pressures around labor – which they may be forced to pass onto Sellers. While these options erode any cost savings that Sellers see over FBA, you are not without alternatives – consider platforms like Cahoot, where each of our fulfillment centers is vetted for operational excellence and meets all the challenging requirements.

Arranging for Carrier Pickups on Weekends

In addition to warehousing, your carriers are another critical element in making your logistics work. Not all carriers offer weekend pick up and delivery – some may require you to be a large shipper and maintain minimum order volumes. All this means you may have to contact your account manager at the various carriers and enquire about possible options that may incur additional fees. However, while all this can be done, the biggest reason Sellers shy away from SFP is the heavy amount of process management, collaboration, and busy work needed to keep this operation running.

Managing Weekend Operations Can Overwhelm Sellers

It becomes easier to understand why so many Sellers shy away from Seller Fulfilled Prime – between working with multiple 3PLs to ensure your inventory covers the country, to operating and staffing your warehouses on the weekend as well as coordinating with your shipping carriers to arrange for weekend pickups, it can seem incredibly overwhelming and drain your bandwidth, time, and resources. You might often wonder whether managing so many stakeholders and sifting through so much busy work is worth it when FBA offers you only one party to work with – even if that party is Amazon, whose interests often tend to be misaligned with yours. It does not have to be this way – Sellers must spend time identifying partners who provide a unified experience where they get to work with just one vendor. Platforms like Cahoot help Sellers meet and exceed the SFP program requirement while ensuring you deal with only one company rather than coordinating between multiple 3PLs and carriers, preserving precious time and resources for you and your business.

Unnecessary Surcharges From Amazon Buy Shipping

In its latest round of revisions, Amazon no longer mandates the use of its Buy Shipping platform to print shipping labels. This is a major relief for Sellers, because Amazon Buy Shipping comes with one major issue that they have reported anecdotally – the platform is not great at estimating the delivery timelines for USPS services (the comment below from Amazon’s Seller Central forums highlights the issue):

In many situations, Buy Shipping does not accurately estimate the delivery timeline within which a USPS service can make orders. In such cases, Sellers are faced with a choice to pick from two bad alternatives: fail to show the customer a fast delivery promise (not an option for SFP Sellers) or buy a more expensive label from the choices that Buy Shipping does believe are capable of meeting the SLA:

This can be tough for Sellers to swallow – as order volumes increase, the extra costs paid on each shipping label begin to mount, eroding margins and profitability. Thankfully, Amazon no longer requires the mandatory use of the service. However, this does not automatically mean that you will see increased savings. You still need to make sure that you’re picking the most economical label on every order! This requires technology like Cahoot’s next generation shipping software, which intelligently rate shops across all carriers and shipping services from all available warehouse locations to always print the cheapest label that will meet the delivery date promised to the customer.

So while a lot can potentially go wrong, Sellers can also make the program work for them and find success by following specific, vital strategies. Start finding success in the SFP program by using the tricks and recommendations in our SFP Cheat Sheet!

The Cheat Sheet for Winning at Seller Fulfilled Prime

To enable Prime shipping, sellers must adjust their shipping templates and make specific selections in Seller Central and add all the warehouse addresses orders will ship from to support delivery regions for Prime service.

• Achieve Nationwide Coverage With a Warehouse Network: Making orders nationwide in under two days is no easy task. You need to distribute inventory strategically in at least 6 different locations to cover 97%+ of the country in this window. Operating from a single warehouse or one or two 3PL fulfillment centers will simply not cut it – you need to distribute your products across a network to meet the program requirements economically.
• Use Data to Guide Inventory Placement And Avoid Air Shipping: Even with a network model, it is crucial to analyze where most of your orders are coming from – placing your inventory close to those “order hubs” becomes a vital part of ensuring you will meet and exceed the one and two-day delivery requirements. This also ensures that you can reach all of your customers through economical ground shipping rather than being forced to make too many expensive air shipments.
• Consolidate Relationships And Eliminate Busywork: SFP can lead you down the rabbit hole of investing in multiple 3PLs and coordinating with numerous carriers to make the program work for you. Sellers need to conduct research and identify a platform that provides a single relationship for you to manage – otherwise, logistics can overtake your focus on the activities that matter – selling and taking care of your customers.
• Save Every Dollar Across Every Shipment: The whole point of moving away from FBA towards a program like SFP is to extract cost savings. It is essential to align your technology towards automation, whereby you’re automatically generating the lowest price shipping labels on every single order.
• Monitor Metrics Like a Hawk: Amazon provides you with dashboards on Seller Central that provide all the SFP metrics needed. It is crucial to constantly stay on top of these and keep adjusting your strategy to ensure you’re meeting expectations.

Succeeding in this program is challenging, but we think these tips are a great place to start. As Q4 and the holiday season approach, now is the time for Sellers looking to diversify their order fulfillment beyond FBA and offer fast, profitable free shipping across every SKU to identify a partner who can help you win at Amazon Seller Fulfilled Prime. If you’d like to understand how Cahoot can be with you every step of the way, just fill out this form, and we’ll be in touch!

Frequently Asked Questions

What is Seller Fulfilled Prime on Amazon?

Seller Fulfilled Prime allows you to list your products as Prime-eligible and handle the fulfillment yourself.

What is the difference between seller-fulfilled and Amazon fulfilled?

Logistics. Within the framework of Fulfillment by Amazon (FBA), the platform handles the entire logistics process – from product storage in warehouses to dispatching. Seller Fulfilled Prime (SFP) leaves you 100% in charge of everything in this regard, yet forces you to cover dispatch fees at your own cost.

How do you pre qualify for the Seller Fulfilled Prime trial?

To pre-qualify for the Seller Fulfilled Prime trial you must meet the following criteria over the past 90 days: Self-fulfilled at least 100 packages, Cancellation rate less than 2.5%, Valid tracking rate greater than 95%.

What is the difference between SFP and FBA?

FBA offers scalability and customer trust but comes with higher costs and limited control. FBM provides cost savings and customization options but requires more time and effort. SFP combines Prime eligibility with control over costs but has stricter requirements and operational challenges.

Is Seller Fulfilled Prime worth it?

In reality, it’s more of a trade-off. Seller fulfilled Prime offers the advantage of the Prime Badge and lower fees than FBA, but Amazon also levies stricter, potentially more costly requirements than FBM. But SFP orders can command higher prices (15 – 20%) and allow for more control. With a well-managed program, it can be quite beneficial.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

If you’re an Amazon seller looking to improve your logistics, whether by fully outsourcing fulfillment or keeping some of it in-house, finding the right 3PL provider is essential. This article reviews the top 8 Amazon 3PL shipping companies. You’ll learn about providers that offer faster shipping, reduced costs, and specialized services to meet your fulfillment needs.

Key Takeaways

• Cahoot’s peer-to-peer order fulfillment model allows for faster and more cost-effective logistics, making it ideal for small businesses competing with larger retailers.
• Advanced technology plays a crucial role in optimizing 3PL services, enhancing order accuracy and efficiency while allowing for real-time tracking and management.
• Partnering with a 3PL provider offers significant cost management benefits, as businesses can convert fixed costs to scalable expenses and access transparent pricing models.

Cahoot: Leading Amazon Fulfillment Partner

Cahoot stands out with its innovative peer-to-peer order fulfillment model that leverages merchant-operated warehouses. This approach not only offers faster and more cost-effective fulfillment compared to traditional 3PLs but also allows businesses to tap into unused space at merchant warehouses across the country. This unique model enables Cahoot to provide ultrafast order fulfillment services, making it a game-changer for ecommerce companies. And Cahoot has demonstrated that fulfillment accuracy is unmatched when Sellers fulfill for other Sellers because they care, they “get it”, they understand the complexities and importance of performance metrics and how they impact the livelihoods of online businesses.

Small businesses benefit from Cahoot’s scalable logistics support, allowing them to compete with larger retailers. The platform integrates seamlessly with major ecommerce marketplaces and shopping carts such as Amazon, eBay, Shopify, and BigCommerce, making order fulfillment more efficient. Cahoot also provides nationwide 1-day and 2-day shipping through its network of over 100 fulfillment centers, enabling merchants to meet high consumer expectations.

Furthermore, Cahoot’s participation in Amazon’s Seller Fulfilled Prime (SFP) Program sets it apart. Partnering with Cahoot allows merchants to meet Amazon’s stringent SFP requirements, such as same-day fulfillment and weekend shipping. The advanced fulfillment technology and software provided by Cahoot enhance order accuracy, provide real-time visibility, and reduce operational costs, ensuring a smoother and more efficient fulfillment process. And with Cahoot, merchants can participate as a fulfillment warehouse from their own location, adding and removing Cahoot locations as needs change; not the case with any other 3PL.

Cahoot also supports all the expected additional services such as FBA prep, inventory barcoding and bundling, B2B fulfillment, returns management, and distribution services, among others. With exceptional customer support ratings and awards and hundreds of 5-star reviews across all the major customer confidence sites like G2, Google, Trustpilot, even Shopify and Amazon app stores, Cahoot is one of the leaders in warehousing and streamlined fulfillment services.

ShipBob: Well-Rounded

ShipBob is a solid choice for Amazon fulfillment, providing a range of services tailored for Amazon Sellers. They offer FBA prep services, which help businesses navigate Amazon’s specific requirements. Their pricing model is flexible enough to accommodate the diverse needs of Amazon businesses.

ShipBob employs advanced technology to support efficient order fulfillment and inventory management, making logistics operations straightforward. Their customer service is accessible through phone, email, and chat, providing support for logistical needs.

Overall, ShipBob is a dependable fulfillment partner for Amazon Sellers, focusing on customer satisfaction and operational efficiency without overpromising. They offer reliable services that can help streamline your logistics processes.

Red Stag Fulfillment: Precision and Reliability

Red Stag Fulfillment is a reputable choice known for its dedication to delivering precise and reliable order fulfillment, warehousing, and shipping solutions. Their pricing structure is designed to be straightforward, ensuring clients only pay for the services they actually use, which makes it a sensible option for businesses conscious of costs. While their promise of 100% order accuracy and zero loss or damage is commendable, it’s important to remember that no system is entirely foolproof.

A notable aspect of Red Stag Fulfillment is their capability to handle bulky or oversized items, which can be a significant advantage for businesses with unique logistical challenges. They offer a supportive onboarding process, helping new clients transition smoothly and establishing a fulfillment process that aligns with their specific needs.

Red Stag Fulfillment’s emphasis on precision and reliability contributes to a positive customer experience and helps streamline the fulfillment process at their centers. While they set high standards in logistics, businesses should evaluate whether their specific offerings align with their unique requirements and expectations.

ShipMonk: Full-Service Fulfillment Solutions

ShipMonk brings a variety of fulfillment services to the table, including order fulfillment, FBA prep services, and support for the Seller Fulfilled Prime program. Their pricing model is designed with Amazon Sellers in mind, aiming to provide cost-effective solutions that align with business operations.

A notable feature of ShipMonk is its swift order processing. This efficiency helps in getting orders to customers promptly, which can enhance the shopping experience. This efficiency, combined with its comprehensive fulfillment solutions, makes ShipMonk a formidable partner for ecommerce businesses looking to streamline their logistics operations.

ShipNetwork: Flexible Logistics Options

ShipNetwork offers logistics options that are adaptable to the specific needs of Amazon Sellers. Their services, which include inventory management and order shipment, are a good choice for maintaining smooth logistics and fulfillment operations. They provide customer support through various channels like phone, email, and online case submission, which can be handy when you need assistance.

One of ShipNetwork’s interesting offerings is their customized packaging solutions. These can help maintain brand identity during fulfillment, adding a personalized touch to orders. With such flexible and customer-focused services, ShipNetwork stands out as a versatile logistics partner.

Shipfusion: Tech-Driven Fulfillment Services

Shipfusion is a tech-oriented 3PL provider offering end-to-end fulfillment services, mainly for high-volume ecommerce and wholesale businesses. With locations in Chicago, Los Angeles, Las Vegas, and Toronto, they provide specialized storage solutions, including temperature-controlled and cold-chain shipping, to accommodate diverse product needs. Shipfusion’s software allows for real-time tracking and management, adding a layer of control over fulfillment operations. This technology-driven approach ensures efficient and reliable operations in order fulfillment.

MyFBAPrep: Enterprise-Level Fulfillment

MyFBAPrep caters to large brands with its enterprise-level logistics services. Their extensive network of warehouses facilitates efficient distribution, aiming to position inventory for quick delivery. This setup can help reduce shipping times and costs, a crucial factor in maintaining strong margins.

Their integration with Amazon’s FBA program is a plus, as it allows Sellers to leverage Amazon’s extensive fulfillment network while maintaining control over their inventory and logistics processes through an FBA prep service and consolidated inventory visibility.

AMZ Prep: Comprehensive Fulfillment Solutions

AMZ Prep is a tech-enabled 3PL provider offering services like inventory management, warehousing, order processing, and shipping. Their solutions are crafted to be efficient and affordable while providing comprehensive solutions that cater to the diverse needs of ecommerce businesses. Their reliability makes them a valuable partner for brands aiming to optimize logistics strategies.

Choosing the Right 3PL Provider for Your Amazon Business

Selecting the right 3PL provider is a critical decision for any Amazon business. Choosing a provider with a long-term vision is crucial for overcoming current logistics challenges and preparing for future growth. Ecommerce companies should begin by analyzing their reasons for needing a 3PL, such as operational challenges or business structure changes.

Cost-efficiency plays a significant role in this decision. Businesses should seek providers offering efficient operations without hidden fees that could inflate costs. Evaluating the global reach of a 3PL is also important for powering international expansion, making advanced technology a central consideration. Providers using state-of-the-art technology can optimize logistics operations through automation, offering scalable solutions that grow with your business. This blend of cost-efficiency, global reach, and advanced technology will ensure that your chosen 3PL provider can meet your evolving needs.

The Role of Technology in Modern 3PL Services

In the modern 3PL, technology plays a pivotal role in 3PL services. Quality 3PL providers invest in advanced technology systems, and the best are proprietary warehouse management systems (WMS) and transportation management systems (TMS), that improve their competitive edge. These systems enhance order accuracy, optimize resource use, and reduce operational costs through automation and data capabilities. The savings get passed onto their clients.

Cloud-based WMS integrates with existing technologies, offering comprehensive visibility across the supply chain. This integration enables real-time data tracking, minimizes errors, and accelerates processes, allowing teams to focus on core tasks. Employing technology for warehousing and inventory management helps businesses reduce overstocking and related costs, boosting overall efficiency.

AI and ML are transforming 3PL operations by enabling smarter inventory management and route optimization. These technologies allow for predictive analytics, helping businesses anticipate demand and streamline their logistics operations. Technology’s role in 3PL services drives efficiency and innovation in the industry.

Benefits of Using Third-Party Logistics for Amazon Sellers

Collaborating with a third-party logistics provider offers numerous benefits for Amazon Sellers. Optimizing logistics operations leads to significant cost savings and improved customer service. Cahoot and ShipBob, for instance, use a nationwide network of fulfillment centers to minimize shipping times and costs, creating an exceptional customer experience.

Quick preparation times are another advantage, with some providers ensuring items are ready for fulfillment within 24 to 72 hours, and more modern solutions providing same-day fulfillment late into the day. This speed is crucial in supporting high customer satisfaction and loyalty. Likewise, automation in the picking, packing, and shipping workflow improves delivery speed and accuracy.

3PL providers also offer specialized services like kitting, subscription box fulfillment, and comprehensive returns management. These value-added services enable businesses to focus on core competencies while the 3PL manages logistics complexities, making them indispensable to ecommerce Sellers.

How 3PL Providers Enhance Customer Experience

Enhancing customer experience is a primary goal for any ecommerce business, and 3PL providers play a crucial role in achieving this. Reliable logistics providers can achieve on-time delivery rates above 97%, significantly improving customer trust and satisfaction. High order accuracy rates of 99.9%+ ensure customers receive exactly what they ordered, reducing returns and complaints.

Personalized and dedicated support from account specialists enhances customer service, making it easier to resolve issues efficiently. Effective returns management simplifies the process for customers, encouraging repeat business and loyalty. Real-time tracking and automated notifications keep customers informed about their order status, enhancing their overall shopping experience.

3PL providers also offer customized fulfillment service options, including a variety of shipping methods, ensuring that customer expectations are not just met but exceeded. By focusing on these elements, 3PL providers don’t just improve customer satisfaction – they build lasting relationships that turn shoppers into loyal fans.

Cost Management with 3PL Services

Running a successful Amazon business means keeping a keen eye on costs, and partnering with a 3PL provider can be a game-changer in this area. These providers offer a flexible cost model, allowing you to pay only for the services and space you actually use. This means you can turn fixed costs into scalable expenses, giving you the agility to adapt to changing demands effortlessly.

When it comes to shipping, negotiating costs with your 3PL can lead to significant savings, as shipping often takes a big bite out of your logistics budget. Ask for discounts on inbound container shipping, and make sure there are no hidden fees lurking in the shadows, allowing you to plan your budget with confidence.

Regular performance reviews with your 3PL ensure they are hitting those efficiency and cost-saving targets. Plus, consolidating orders into fewer shipments can further lower your shipping costs. By leveraging these cost management strategies, you can optimize your logistics operations and boost your financial performance.

Ensuring Data Security and Privacy with 3PLs

Data security and privacy are paramount when working with third-party logistics providers. Defining clear data access limits and implementing robust security measures is vital when negotiating 3PL contracts to protect sensitive information. Contract clauses should specify data ownership, access rights, and security measures such as encryption and incident response protocols.

Regular audits and compliance checks ensure 3PL providers adhere to agreed-upon data security practices. Cahoot, for instance, protects consumer data by ensuring that fulfillment partners only see the minimum information required to fulfill orders, unlike traditional logistics companies.

By prioritizing data security and privacy, businesses can maintain customer trust and protect their valuable information.

Summary

Navigating the world of third-party logistics can be challenging, but selecting the right 3PL provider is essential for the success of your business. From Cahoot’s innovative and high-quality peer-to-peer model to ShipBob’s comprehensive fulfillment services and Red Stag Fulfillment’s precision and reliability, each provider offers unique benefits tailored to different business needs. By understanding the specific strengths and offerings of these top 3PL companies, you can make informed decisions that enhance your logistics operations and drive growth.

Remember, the right 3PL provider not only streamlines your fulfillment process but also significantly impacts customer satisfaction and cost management. Partnering with a reliable and technologically advanced 3PL will be essential to staying competitive and meeting the ever-growing expectations of your customers.

Frequently Asked Questions

What are the benefits of using Cahoot for Amazon fulfillment?

Using Cahoot for Amazon fulfillment provides a cost-effective and reliable solution through its peer-to-peer model, enabling low-cost 1-day and 2-day shipping nationwide, as well as easy integration with major ecommerce platforms and access to Amazon’s Seller Fulfilled Prime program. This positions your business for optimal efficiency and exceptional customer satisfaction.

How does ShipBob support Amazon Sellers?

ShipBob supports Amazon Sellers by offering fulfillment services such as FBA prep, advanced technology for efficient order processing, and dedicated customer support, all aimed at enhancing the logistics experience.

What makes Red Stag Fulfillment unique?

Red Stag Fulfillment stands out due to its expertise in managing bulky or oversized items, its commitment to 100% order accuracy with no shrinkage, and the dedicated onboarding support it provides, catering effectively to businesses with specific logistical demands.

How does technology enhance 3PL services?

Technology significantly enhances 3PL services by improving order accuracy, optimizing resource utilization, and reducing operational costs. Utilizing advanced systems such as WMS and TMS, alongside AI and machine learning, facilitates real-time data tracking and smarter inventory management.

What should businesses consider when choosing a 3PL provider?

When choosing a 3PL provider, businesses must prioritize the provider’s long-term vision, cost-efficiency, global reach, advanced technology, and scalable solutions. These factors are essential for meeting evolving logistics needs effectively.

Written By:

Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.