Nordstrom is one of the most iconic department stores in the US. Nordstrom has over 9 million shoppers each year. For most people, the first thing that comes to mind when they think of Nordstrom are its brick and mortar stores. The company serves American customers through its over 350 locations. Most ecommerce sellers might therefore ignore the retailer in pursuit of players with a larger digital presence, such as Amazon or Walmart. However, online is becoming an increasingly important part of Nordstrom’s operations – according to Statista, each year since 2020 over 35%+ of Nordstrom’s annual sales were driven through digital channels.

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

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

Why is the Direct Drop Ship Program Great?

Nordstrom’s Direct Drop Ship Program has several powerful benefits for participating sellers:

Invite-only Marketplace Where You Can Grow Sales

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

Nordstrom Provides Full Assistance With EDI Integration

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

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

Nordstrom Covers All Shipping Costs

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

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

Understanding Nordstrom’s Requirements

Nordstrom has specific requirements for its trading partners, including EDI compliance, timely order fulfillment, and accurate inventory management. To ensure a smooth partnership, it’s essential to understand these requirements and implement them effectively.

Trading Partner Requirements

As a trading partner with Nordstrom, you’ll need to meet certain requirements, such as:

• Timely Order Fulfillment: Nordstrom expects its trading partners to fulfill orders promptly and accurately, ensuring that customers receive their products on time. Meeting these expectations is crucial for maintaining customer satisfaction and upholding Nordstrom’s reputation for reliability.
• Accurate Inventory Management: Trading partners must maintain accurate inventory levels to prevent stockouts and overstocking. Proper inventory management helps ensure that products are always available for purchase, which is vital for keeping customers happy and maintaining a smooth supply chain.
• EDI Compliance: Nordstrom requires its trading partners to be EDI-capable, which involves exchanging electronic documents, such as purchase orders and invoices, in a standardized format. This ensures seamless communication and data exchange between Nordstrom and its partners, reducing errors and improving efficiency.

Integration Options

To integrate with Nordstrom’s systems, you’ll need to consider the following options:

Integrate with Ecommerce Platforms

Nordstrom requires its trading partners to integrate with its ecommerce platform, which involves connecting your online store to Nordstrom’s system. This integration enables you to:

• Receive Purchase Orders Electronically: By integrating with Nordstrom’s ecommerce platform, you can receive purchase orders directly into your system, streamlining the order processing workflow and reducing manual data entry.
• Send Shipment Notifications and Tracking Information: Integration allows you to send shipment notifications and tracking information to Nordstrom automatically. This ensures that customers are kept informed about the status of their orders, enhancing their shopping experience.
• Update Inventory Levels in Real-Time: Real-time inventory updates help you maintain accurate stock levels, preventing overselling and stockouts. This integration ensures that Nordstrom always has up-to-date information about your inventory, which is crucial for maintaining a smooth supply chain.

By integrating with Nordstrom’s ecommerce platform, you can improve the efficiency of your order fulfillment process and ensure that you meet Nordstrom’s requirements. This seamless connection helps you provide a better customer experience and maintain a strong partnership with Nordstrom.

What Should You Look for in a Nordstrom 3PL?

Due to Nordstrom’s stringent requirements, many sellers find it simpler and more profitable to rely on an established 3PL that is already familiar with and comfortable meeting Nordstrom’s requirements. This way sellers can reap the benefits of participating in Nordstrom’s Direct Drop Ship program without having to completely retool their inventory storage and order workflows.

Maintain a Fulfillment Rate of 98%

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

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

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

Ability to Ship 97% of Orders On-Time

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

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

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

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

~ Fenix Light Store

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Have an Existing UPS Account, and Experience Working With the Carrier

Nordstrom requires that sellers ship all Nordstrom orders on their own UPS account, which is connected to your, or your 3PL’s UPS account. In order to meet Nordstrom’s fulfillment metrics, your 3PL must have experience working with UPS to ensure that daily pickups and carrier scans are conducted in a timely fashion, thereby streamlining your Nordstrom order fulfillment.

Help You Meet Nordstrom’s Eco-Friendly Packaging Standards

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

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

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

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

Fully Compliant With Nordstrom Packing Slip Requirements

Nordstrom requires every shipment sent to customers to have a branded packing slip, as well as a return label (Nordstrom bears all shipping costs).

This is an example of what a Nordstrom packing slip looks like:

This is what a Nordstrom return label looks like:

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

Fully Compliant with Nordstrom EDI Technology

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

Benefits of Working with a 3PL

Working with a third-party logistics (3PL) provider can help you meet Nordstrom’s requirements and improve your overall business operations. Some benefits of working with a 3PL include:

• Improved Order Fulfillment: 3PLs specialize in order fulfillment and can help you meet Nordstrom’s timely fulfillment requirements. Their expertise in logistics ensures that orders are processed and shipped efficiently, reducing the risk of delays and errors.
• Enhanced Inventory Management: 3PLs can help you manage your inventory levels more effectively, reducing the risk of stockouts and overstocking. With advanced inventory management systems, 3PLs provide real-time visibility into your stock levels, helping you make informed decisions about replenishment and stock allocation.
• Increased Efficiency: 3PLs can streamline your logistics operations, freeing up time and resources for you to focus on growing your business. By outsourcing logistics to a 3PL, you can concentrate on core business activities such as marketing, product development, and customer service.

Responsive, Reliable Customer Support

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

Experience Working with Nordstrom Sellers

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

Here’s what one of our customers had to say about Cahoot’s Support team:

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

~ VERSACART

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

Top Nordstrom 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels, such as Nordstrom, whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels.

Ecommerce sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels. MCF deploys the same infrastructure and resources that power Amazon’s in-house Fulfilled By Amazon (FBA) logistics network.

ShipBob

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

Cahoot: The Best Nordstrom 3PL

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

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

We are compliant with all aspects of the Nordstrom Direct Drop Ship program – and provide you the flexibility to use the Nordstrom UPS account provided to you without any hidden fees. Our US-based customer service team is always available if something needs to be addressed, ensuring that sales are uninterrupted and that you enjoy a successful partnership with Nordstrom.

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

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

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

Frequently Asked Questions

What is Nordstrom’s Direct Drop Ship Program?

Nordstrom’s Direct Drop Ship Program allows vendors to ship products directly to Nordstrom customers, bypassing Nordstrom’s warehouses. This program enables Nordstrom to expand its product offerings without holding inventory, while vendors like you manage fulfillment and shipping while meeting Nordstrom’s strict compliance standards.

What carrier does Nordstrom use for shipping?

Nordstrom requires sellers to use their own UPS account for all Nordstrom orders.

What is a 3PL?

3PL stands for third-party logistics, also known as order fulfillment. A 3PL warehouse provides a full range of ecommerce fulfillment services, including storage, order processing, shipping, and receiving. Many 3PL warehouses provide value-added services such as returns processing, cross docking, or kitting.

How many distribution centers does Nordstrom have?

Nordstrom currently operates over 350 stores across the U.S. These stores also fulfill online orders and act as shipping locations. In addition, each seller participating in Nordstrom’s Drop Ship Program also can act as a distributor for orders placed on Nordstrom.

What is Nordstrom’s biggest competitor?

The main competitors of Nordstrom (JWN) include Dillard’s (DDS), Macy’s (M), Neiman Marcus (private), and Saks Fifth Avenue (SKS).

Wayfair is commonly referred to as the “Amazon of the Furniture and Home Goods” industry. Wayfair has over 22 million active customers; while this may seem a small number compared to the number of people shopping at the likes of Amazon and Walmart, Wayfair is focused on a specific niche. Wayfair has managed to retain its dominance in the Furniture and Home Goods category despite these massive competitors. Wayfair brings in $2.9+ billion in revenues each quarter.

Wayfair’s business model is similarly unique. While Amazon has invested heavily in building its inhouse logistics network and Walmart and Target are slowly growing ecommerce in addition to the brick and mortar channel that fueled their growth, Wayfair is different. Wayfair relies heavily on a dropshipping model. In this model, when Wayfair customers place orders, the orders are sent directly to sellers to be picked, packed, and shipped. According to estimates, Wayfair dropships as much as 95% of the products that it sells to customers. This reliance on dropshipping makes efficient fulfillment services essential for Sellers working with Wayfair to ensure timely delivery and customer satisfaction.

Why Selling on Wayfair is Great for Ecommerce Merchants

Wayfair offers unique selling opportunities for sellers that other marketplaces don’t.

Lesser Competition Than on Other Marketplaces

As of 2023, Wayfair has only 11,000 3rd party sellers, which is miniscule compared to the 2.5 million 3rd party sellers on Amazon’s marketplace and still very low compared to the 150,000 on Walmart. This allows brands to be much more prominently featured and visible to customers, enabling increased sales and profitability.

No Marketplace Referral Fees

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

Wayfair Covers Shipping Fees

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

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

~ VENTAPAK

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Issues and Problems with Selling on Wayfair

Selling on Wayfair can be lucrative but there are challenges and downsides sellers must navigate. Here are some of the most common issues and problems sellers face:

1. Wayfair Controls Final Pricing

Unlike other marketplaces where sellers set their own prices, Wayfair includes the shipping cost in the customer facing price meaning they control the final retail price.

2. Automated Pricing Algorithm

Wayfair uses an automated algorithm to adjust listing prices dynamically. This can lead to unpredictable price changes and lower margins without seller consent.

3. Price Competition

Large brands and established manufacturers dominate product categories, along with many sellers adopting a low price, high volume strategy, making it difficult for new sellers to gain visibility.

4. Listing Visibility

Wayfair’s search algorithm prioritizes best-selling products and established sellers. Wayfair does not allow SEO or paid ads to boost visibility. As a result, newer sellers often struggle to get noticed.

5. No Branded Storefronts

Unlike on Amazon and Walmart, Wayfair does not allow sellers to create branded storefronts. This limits a seller’s ability to build brand recognition and customer loyalty, as all products are displayed under Wayfair’s branding rather than the seller’s business identity.

6. Strict Policy Compliance

Sellers must adhere to Wayfair’s stringent policies regarding product quality, shipping times, and return policies. Failing to comply with these regulations can result in penalties, product delistings, or even account suspension.

7. Customer Service

Wayfair requires sellers to provide rapid responses to customer inquiries. Delays in communication or failure to resolve customer issues promptly can negatively impact a seller’s standing on the platform.

8. Strict Listing Requirements

Wayfair has rigid listing guidelines that sellers must follow. These include detailed product descriptions, high-quality images, and accurate specifications. Listings that do not meet Wayfair’s standards may be rejected or removed from the platform.

9. High Return Rates

Wayfair has a customer-friendly return policy, which often translates into higher return rates for sellers. Since sellers are responsible for handling returns and associated costs, frequent returns can erode profit margins and create logistical challenges.

10. Large Item Shipping Challenges

Wayfair specializes in home goods, furniture, and large items, which can present shipping challenges. Sellers must ensure proper packaging, coordinate with freight carriers, and manage potential damages during transit. Shipping delays or damage claims can lead to customer dissatisfaction and financial losses.

11. Market Fluctuations

The home goods and furniture industry is highly susceptible to market fluctuations, seasonal demand shifts, and economic downturns. The US housing market also impacts customer demand for furniture and home goods. These factors can affect sales volume, pricing stability, and overall profitability for sellers on Wayfair.

What to Look for in a Wayfair 3PL?

Sellers participating in Wayfair can be profitable, but requires careful planning. Sellers must manage logistics, pricing, and meet Wayfair’s standards and regulations. This can be overwhelming and partnering with an experienced 3PL can ensure participation with Wayfair is profitable and stress-free. Here are some of the features a 3PL provides:

Automated Inventory Level Monitoring

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

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

If a business takes on more orders than it can fulfill, fails to ship all assigned orders, and is forced to cancel, it can damage relationships with both Wayfair and customers. Such cancellations may lead to penalties, loss of trust, and a negative impact on future sales opportunities.

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

Ability to Offer Late Same Day Cut Offs

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

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

Minimum Lead Time – Every SKU Ships Fast

If an order containing different SKUs needs to ship in separate shipments, Wayfair expects merchants to proactively communicate that to customers. However, today’s demanding customer expects ultrafast order fulfillment across every SKU. To meet these expectations, shippers must ensure their 3PL deploys excellent pick-pack practices, have high-quality fulfillment services, and order fulfillment operations in their warehouses.

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

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

~ GN Products LLC

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Responsive, Reliable Customer Support

Needless to say, order fulfillment is a complex operation, and things don’t always go to plan. When issues arise, customers and Wayfair won’t blame the 3PL; the merchant is held accountable and the merchant’s relationship and brand equity is at stake with these key stakeholders. While setbacks can occur, it is crucial to ensure that the 3PL offers responsive and reliable customer support to address problems swiftly and restore normal operations with alacrity.

Most traditional 3PLs lack personnel with either the experience or expertise required to quickly troubleshoot issues. It is essential to identify 3PLs with a dedicated and qualified support team ready on hand to resolve problems, ensuring business operations remain uninterrupted and increasing in sales volume and profitability.

Cahoot – The Best 3PL for Wayfair

Cahoot’s peer-to-peer order fulfillment network is built for the future of ecommerce. Our network of warehouses is located at strategic locations across the US, enabling Wayfair merchants to offer their customers ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs – including heavier, seasonal, larger-sized and slow moving ones. Cahoot’s services come with transparent pricing and no hidden fees.

Cahoot is compliant with all expectations Wayfair has from its dropshippers. Our US based customer support team is always ready and responsive to ensure that order fulfillment operations are running smoothly at all times. Cahoot is committed to helping Wayfair sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

To find out how Cahoot can help ecommerce businesses grow, please get in touch with us. We can’t wait to show how Wayfair order fulfillment was meant to be. Businesses selling on multiple sales channels can also see how Cahoot can help with fulfillment in our other articles:

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

Frequently Asked Questions

Is Selling on Wayfair Worth it?

Selling on Wayfair can be worth it for businesses that specialize in home goods, furniture, and décor. The platform provides access to a large customer base, but it operates differently from traditional marketplaces like Amazon or eBay. Wayfair uses a drop-ship model, meaning sellers don’t directly sell to customers but instead supply products that Wayfair markets and sells.

How do I Sell on Wayfair?

Wayfair does not allow just anyone to list products. First, sellers need to submit an application to the Wayfair Partner Program and be approved.

What is a Wayfair 3PL?

A Wayfair 3PL (Third-Party Logistics) provider is an external company that handles warehousing, fulfillment, and shipping on behalf of Wayfair suppliers. Since Wayfair operates on a drop-ship model, many sellers use 3PL services to manage storage and deliveries efficiently. This helps meet Wayfair’s strict shipping requirements, improve delivery speed, and reduce logistics costs.

How Much Does It Cost to Ship for Wayfair?

Wayfair typically covers shipping costs but requires sellers to price their products accordingly to absorb these costs. There are no direct shipping fees to Wayfair, but suppliers are responsible for ensuring competitive pricing that includes fulfillment expenses.

Nearly every American has shopped at a Target – the retailer holds a level of popularity comparable to that of Amazon and Walmart. The Minnesota retailer’s brick and mortar footprint is massive. As of 2024, Target had 1,956 stores in the U.S and hauled in $107 billion in revenue. More importantly, the company holds a huge audience for sellers and brands to target – according to Business Insider, 8 out of 10 US shoppers are Target customers and the average Target customer makes 23 trips a year to one of their stores. But while Target has had a sizable customer base for years, eCommerce sellers and brands have largely focused on their competitor, Amazon. However, in recent years, Target has begun expanding its online offerings. In 2019, it launched its third party marketplace on its website – Target Plus. This has opened up a massive new audience for eCommerce merchants to expand into.

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

Why Target Plus Is A Great Option For Sellers

Invite-Only Marketplace With a Large Audience

Target Plus was introduced in 2019 as an invite-only platform. The company said it was doing this to carefully curate the assortment of brands and products available to customers on its website. According to Marketplace Pulse, the program launched with 30 sellers on Target Plus in 2019. Five years later, that number has grown to more than 1,200.

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

Autonomy Over Logistics and Fulfillment

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

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

A More Equitable Marketplace – No Inhouse Competitor like Amazon FBA

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

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

While Target Plus is a great growth opportunity, the marketplace is still invite-only – Target themselves reach out to the brands that they think would be a good fit for them, explaining the exclusivity. Their website has a form for merchants to fill out if they’re interested in being part of the marketplace, but Target carefully curates participants in the program, and applicants must strive to meet rigorous standards for acceptance.

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

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

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

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

Ability to Fulfill Orders in 1 Business Day

Target Plus requires participating brands to fulfill their orders (get it out of the warehouse) in 1 business day. This requires warehouses that have excellent picking and packing practices, as well as order fulfillment standards.

Ensure Order Delivery in 5 Business Days

The marketplace requires that brands/products deliver orders to the end-customer in under 5 business days. However, customers today expect fast, free shipping in under 2 days across every channel. Amazon and their Prime loyalty program have created this customer expectation.

Flexibility To Use All Shipping Carriers and Services

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

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

On every order that is sent out from the warehouse, Target requires a branded packing slip to be part of the shipment. This is something that needs a 3PL who will sweat the details and ensure that the little – but very important – things are taken care of.

Full Compliance with Target’s EDI Requirements

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

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

Responsive, Reliable Customer Support

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

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

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

Top Target Plus 3PLs

Amazon Multi-Channel Fulfillment

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

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

ShipBob

Cahoot: The Best Target Plus 3PL

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

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

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

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

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

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

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

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

Frequently Asked Questions

How can I become a Target Plus seller?

Target Plus is an invite-only marketplace offering launched by Target in 2019. Target reaches out to brands that they think would be a good fit for the marketplace. Interested merchants can also fill out a form on Target’s website to express their interest in joining the program.

What are the benefits of selling on Target Plus?

Selling on Target Plus offers several benefits, including access to Target’s large customer base, autonomy over logistics and fulfillment, and a more equitable marketplace without preferential treatment for certain logistics providers.

What should I look for in a 3PL for Target Plus?

When choosing a 3PL for Target Plus, consider factors such as the ability to fulfill orders in 1 business day, ensure order delivery in 5 business days, flexibility to use all shipping carriers and services, ability to produce a Target.com branded packing slip on every shipment, full compliance with Target’s EDI requirements, and responsive, reliable customer support.

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

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

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

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

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

Let’s get into the details.

Amazon FBA Peak Surcharges 2022

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

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

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

USPS Peak Surcharges 2022

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

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

Priority Mail and Priority Mail Express Rate Adjustments:

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

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

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

FedEx Peak Surcharges 2022

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

Source: FedEx.com

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

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

UPS Peak Surcharges 2022

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

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

Source: UPS

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

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

Reduce Shipping Costs with Cahoot Distributed Order Fulfillment

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

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

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

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

Related Blog Posts

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

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

Apple vs. Amazon on governing its customers

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

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

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

3rd party seller avoiding responsibility for defective goods

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

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

How will Amazon deal with the backlash?

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

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

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

Related Blog Posts

Shopify and Amazon have teamed up to offer Prime delivery to Shopify DTC ecommerce shoppers called Buy with Prime. Third-party ecommerce merchants that sign up for the service will install the Prime badge in their checkout process, connect Amazon Pay as a Wallet within Shopify Payments for customers to checkout with Amazon Pay, and leverage Amazon’s huge distribution network to fulfill orders on their own sites through the Multi-Channel Fulfillment (MCF) outsourced logistics service. This allows merchants to tap into the preferences of Amazon Prime members, such as fast shipping and a seamless shopping experience. Additionally, Shopify merchants can benefit from integrating Buy with Prime into their stores, enabling them to offer fast shipping and easy checkout, while streamlining operations through Amazon’s logistics network. It’s effectively Amazon payment and fulfillment for ecommerce brands.

The potential benefits for a DTC Seller are obvious: they’ll be able to offer their customers one-and-two-day delivery, and Prime users will have their checkout information pre-loaded on the site via their Amazon Wallet. This is no small win. According to McKinsey & Company, more than 90% of US online shoppers expect free two-day shipping, while the vast majority of Sellers lack a network of warehouses to store and ship distributed inventory to make fast and free shipping affordable.

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

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

What is Buy with Prime?

Amazon Buy with Prime gives DTC Sellers the ability to offer their customers the Amazon Prime checkout and delivery experiences on their Shopify site. When a Seller integrates with the service, they’ll get:

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

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

If you don’t currently offer fast and free shipping, Buy with Prime will immediately fix that issue for you. The theory behind Buy with Prime is that the easier transaction coupled with buyer expectations for fast delivery will increase conversion rate, (Amazon reports ~16% lift), thus increasing your web store’s growth. Additionally, integrating two powerful ecommerce tools like Amazon Multi-Channel Fulfillment and Buy with Prime simplifies the management of product catalogs, orders, and returns for online retailers while leveraging Amazon’s Fulfillment Network.

How Buy with Prime Shifts the Ecommerce Landscape

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

Online brands have long maintained that their curated shopping experiences, community building, and custom unboxing experiences counterbalance the raw power of fast and free delivery from marketplaces. A look at ecommerce transaction value in the United States suggests otherwise, though, as combined US marketplace GMV growth exceeds US DTC GMV growth.

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

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

Imagine if YOUR top competitor installs Buy with Prime on their site and blows your delivery speed out of the water. Online consumers love comparison shopping, and you’ll be at a severe disadvantage on your Product Display Page (PDP) and in checkout. You can expect your cart abandonment rate to skyrocket. In short, your slow delivery experience will become an even bigger liability than it already is. Integrating Buy with Prime into Shopify stores can provide a competitive edge by enhancing delivery speed and efficiency, making it important for Shopify merchants to consider this feature. Additionally, by offering Prime benefits, you can boost shopper confidence. Prime members love the reliability and speed of Amazon’s delivery service, and by extending these benefits to your own site, you can encourage more sales and reduce cart abandonment rates.

Likewise, DTC brands can benefit from streamlined fulfillment, offloading the logistics to FBA and potentially enjoying reduced fulfillment costs (more on this later; it may not be as simple as it sounds).

How Buy with Prime Interrupts Your Customer Experience

So, the answer must be simple, right? Just sign up for Buy with Prime and drive more sales.

If only it were that easy.

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

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

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

How BWP Affects Discovery

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

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

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

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

How BWP Affects Conversion

With prominent placement on the Product Details and checkout pages, Amazon Buy with Prime most obviously affects conversion.

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

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

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

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

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

How BWP Affects Post-Purchase and Brand Loyalty

Buy with Prime is supported by the FBA network, but Sellers expecting FBA’s low rates will likely be disappointed. Amazon already lets Sellers use FBA for their DTC orders through its non-Amazon solution, Amazon Multi-Channel Fulfillment, but the fulfillment pricing is shockingly bad.

Cahoot’s analysis of 2025 FBA rates versus MCF rates reveals that MCF is at least 50% more expensive than FBA, and reaches nearly 3X the cost for the small standard size category (which are the items FBA loves to ship!). Sellers that have done the math to consider Amazon FBA vs FBM already know that FBA is a bad deal for items larger than a few pounds, and this comparison rate table suggests that Buy with Prime will be an even worse deal.

On top of that, you will lose the ability to control the unboxing experience. No more free marketing from unboxing videos, no more custom inserts to boost repeat rate, and no more amazing first impressions: Amazon now owns your post-purchase experience. Yes, the experience is improving in terms of delivery speed, but it’s degrading in every other way (we all know how FBA loves to put small items in oversized boxes with a ton of air pillows that customers hate to pop and send to the landfill). And to add insult to injury, you’re now marketing for Amazon by using their Buy with Prime logo on your checkout pages.

How BWP Affects Repeat Purchases

Last but certainly not least, Amazon Buy with Prime will also interrupt your ability to build brand loyalty, win repeat purchases from your customers, and increase lifetime value by carefully cultivating a long-term relationship – the linchpin of sustainable profitability.

You’re up against some daunting statistics – according to a 2024 Marketing Scoop survey, Prime members spend an average of $1400 per year on Amazon, (nearly twice as much as non-Prime customers). And half of Prime members buy something on Amazon at least once a week, and 75% shop on Amazon 3-4 times per month.

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

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

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

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

Setting up Buy with Prime on your Shopify store is a straightforward process that can be completed in a few simple steps that start with installing the app. Search for the Buy with Prime app in the Shopify App Store. Once you find it, click on the install button to add it to your Shopify store. There are a few minor configurations, but again, very straightforward.

Alternatives to Amazon Buy with Prime

DTC Sellers must feel like they’re stuck between a rock and a hard place. On one hand, they’re squeezed by demanding customer expectations for fast and free shipping, while on the other, they’re faced with the incredible expense of providing fast and free shipping. Now, Amazon promises to help with the latter challenge, but it’s a poison pill that invades their customer experience.

Thankfully, there’s a better way.

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

Cahoot is at the forefront of boosting profitable growth for online Sellers by enabling fast and free shipping across all channels. Unlike Amazon Buy with Prime, Cahoot fulfillment operates in the background, leaving you to own your customer experience – but with new and improved fast delivery. And again, unlike Amazon Buy with Prime, it works for all sales channels: Buy with Prime certainly won’t be available for Walmart and other major marketplaces. You’re limited to Shopify, a plug-in to be used on another ecommerce platform, or custom integration.

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

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

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

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

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

Introduction

What is Third-Party Logistics (3PL)?

Third-party logistics (3PL) refers to the outsourcing of logistics and supply chain management to external service providers. These providers specialize in managing various aspects of the supply chain, including inventory management, order fulfillment, warehousing, and shipping. By partnering with a 3PL company, Shopify store owners can focus on core business activities while ensuring efficient and timely order delivery.

Benefits of Using a 3PL for Shopify

Using a 3PL company can bring numerous benefits to Shopify store owners, including:

• Improved customer satisfaction: By outsourcing logistics operations, businesses can ensure timely and accurate order delivery, leading to increased customer satisfaction.
• Reduced shipping costs: 3PL companies can negotiate better shipping rates with carriers, resulting in cost savings for businesses.
• Increased efficiency: 3PL companies can streamline logistics operations, reducing the time and resources required to manage inventory, fulfill orders, and handle shipping.
• Scalability: 3PL companies can help businesses scale quickly and efficiently without the need for significant investments in infrastructure and personnel.

Types of 3PL Companies

There are several types of 3PL companies, including:

• Full-service providers: These companies offer end-to-end solutions, managing all aspects of the supply chain, from freight forwarding to bulk inventory storage and management to shipping and reverse logistics.
• 3PL warehouses: These companies specialize in storing, shipping, and handling returns for businesses.
• Transportation-based 3PLs: These companies focus on transporting goods between locations, often using their own fleet of vehicles.
• Financial- and information-based 3PLs: These companies provide financial and information services, such as sales analyses and supply chain analytics.

What Makes a Good 3PL for Shopify Sellers?

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

1. Nationwide USA Warehouses

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

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

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

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

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

Source: Shopify App Store Free Shipping Bar

2. User-Friendly Shipping Software

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

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

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

~ Home and Garden Supply

Speak to a fulfillment expert

3. Achieve a 99% On-Time Order Fulfillment Rate

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

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

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

4. Multi-Carrier Shipping Discounts and Carrier Flexibility

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

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

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

5. Pre-built Ecommerce Integrations and Open APIs

It shouldn’t be hard to connect your Shopify store to your 3PL. The best 3PLs have pre-built integrations that will do it in a few clicks (this goes for other ecommerce platforms, too). Many merchants are scaling into multiple sales channels to maximize growth, and your 3PL should be able to integrate easily with all of them.

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

6. Responsive Customer Service

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

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

~ Cut.com

Speak to a fulfillment expert

Top Shopify 3PL Companies

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

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels. Ecommerce Sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels.

Shopify Fulfillment Network (Flexport)

Shopify Fulfillment Network (sold to and rebranded as Flexport in mid-2023 but still operating the Shopify Fulfillment Network app) is geared towards Shopify sellers. The pricing and shipping speed aren’t expected to be comparable to FBA as Shopify does not own any logistics infrastructure. This fulfillment option will work for you if you only need to fulfill orders in the United States, have fewer than 2,000 SKUs, ship more than 10 orders but less than 10,000 orders per day, and don’t sell any prohibited or regulated products.

ShipBob

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

Red Stag Fulfillment

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

Cahoot: Shopify’s Premier Fulfillment Network

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

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

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

When is the best time to work with a 3PL?

The best time to work with a 3PL depends on your business’s specific needs and growth stage. It might be time to consider outsourcing fulfillment when you’re starting to run out of capacity. For example, if order volume consistently exceeds what you can handle efficiently in-house, or if your available storage space reaches or exceeds 75-90% of your capacity. Businesses that experience seasonal spikes in demand can benefit from a 3PL’s ability to seamlessly scale operations up or down as needed.

When logistics management becomes too time-consuming, or rising shipping costs are creating excessive margin pressure, outsourcing fulfillment allows you to focus on growing your business and improving your products while leveraging a 3PL’s carrier network and negotiated rates.

If you’re struggling to meet your on-time delivery promises or you’re dealing with frequent fulfillment errors and the customer service burden has gotten to be too much, it would be worth looking into a 3PL’s expertise and infrastructure; in particular, look into 3PLs that can support nationwide inventory distribution to reduce shipping times and costs.

Merchants looking to get smarter and more efficient with inventory forecasting so they can procure the right amount of inventory at the right time should partner with 3PLs that offer AI-driven intelligent demand planning software. Agentic AI is able to analyze fluctuations in market demand, freight forwarding trends, trade and policy current events, etc., and automatically create purchase orders with your suppliers (in their language), optimizing the amount of capital tied up in inventory.

If you’d like to find out how Cahoot can enhance your efficiency, reduce your costs, and support the growth of your ecommerce business, please get in touch with us. We can’t wait to show you how Shopify order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in a 3PL that can help you with fulfillment, check out some of our other articles:

• How to Choose the Best 3PL for Wayfair
• How to Choose the Best 3PL for Your Macy’s Orders
• How to Choose the Best 3PL for Target Plus
• How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Frequently Asked Questions

Can Amazon fulfill Shopify orders?

Yes, Amazon can fulfill Shopify orders using the Multi-Channel Fulfillment (MCF) service. MCF integrates a Shopify website with Amazon’s fulfillment network to pick, pack, and ship orders using the Fulfilled by Amazon (FBA) infrastructure and resources.

Does Shopify offer fulfillment?

Yes, Shopify owned and operated the Shopify Fulfillment Network (SFN, formerly known as Deliverr), before it was sold to Flexport in mid-2023. Shopify promotes Flexport as its trusted fulfillment partner.

How much does Shopify fulfillment cost?

Enter your product information into the Flexport Cost Calculator to see what you would pay with Flexport Fulfillment.

What does order fulfilled mean on Shopify?

When you fulfill an order in Shopify, you begin the process of sending the order on its way to the customer. The customer receives an email telling them that their item has shipped, and the order’s Fulfillment Status displays as Fulfilled on the Orders page.

What is fulfillment on Shopify?

Shopify Fulfillment Network connects your online store with Flexport, a leading logistics partner that will pack, pick, and ship online orders to your customers without any intervention.

In the era of online marketplaces, most eCommerce merchants and brands find themselves at the mercy of order fulfillment solutions operated by the powerful corporations who act as gatekeepers for these platforms – for example, Fulfillment By Amazon and Walmart Fulfillment Services. Each platform requires merchants to send inventory to their warehouses and follow their unique policies and requirements. All of them also come with their respective fees and surcharges.

Sellers seeking a better deal have often turned to Third Party Logistics Providers (3PLs). They do so with the ambition of not just regaining control and autonomy over their logistics, but also boosting their profits. Fulfillment companies often adjust their pricing models based on order volume, storage, and shipping factors, which can include volume discounts, providing additional savings to the seller.

The problem, however, is that the vast majority of 3PLs operate from an extremely limited number of locations – hampering the seller from being able to offer customers the free, fast shipping experience that they now expect and demand. To solve this problem, a disruptive, radically different strategy is needed – a peer-to-peer order fulfillment network.

While merchants have worked with traditional 3PLs, a peer-to-peer network is an entirely new idea. Those merchants who have used traditional 3PLs are often unaware of their pros and cons. Far fewer are aware of how they compare to a peer-to-peer network. In this article, we take a deep dive, looking at every factor that influences a seller’s choice of fulfillment partner, and compare traditional 3PLs to peer-to-peer networks on each of them. We highlight how a Peer-to-Peer network can offer significant advantages compared to working with legacy 3PLs.

Cost

Traditional 3PL Fulfillment Services – What Do They Have in Common With Traditional Hotels?

Think of a time when you stayed at a boutique, traditional hotel – are you struggling to find or remember when you last did that? In the era of Airbnb, these single-location hotels have lost significant market share.

Why is that?

The reason is not competition – that there is a segment of travelers looking for a more economical, boutique experience compared to staying at a large hotel chain like Marriott or Hilton. The reason is that these traditional hotels are asset-heavy businesses that have no economies of scale. Because they primarily operate from a single location that they rent or own, they are significantly prone to cost pressures driven by land availability, rental rates, and staffing.

All this has meant that a marketplace model with a vast network, such as Airbnb (almost anyone can rent out a space), offers significant advantages to travelers that traditional hotels cannot hope to match.

What if we told you a traditional 3PL is exactly like these hotels?

A traditional 3PL usually operates from an extremely limited number of locations (2-3 at the most). This provides them with little to no economies of scale. They are also asset-heavy businesses that rent or own their properties. This is compounded by the fact that staff in the warehouse now expect to be paid $19 / hr. With multiple players, such as Walmart and Target, setting up fulfillment centers to deliver their eCommerce orders, traditional 3PLs must pay people more if they are to staff their warehouses. This is also a cost pressure that has to be ultimately absorbed by the merchants who work with them.

Additionally, the surge in e-commerce has significantly increased warehousing costs. The demand for warehouse space and labor has skyrocketed, leading to higher prices and intensified competition within the third-party logistics industry. Traditional 3PLs are particularly affected by these rising warehousing costs, which further strain their ability to offer competitive pricing.

Peer-to-Peer – What do Cahoot and Airbnb Have in Common?

Airbnb’s business model is asset-light – their idea is simple but powerful – anyone that has a spare room at their house that they don’t use can monetize it.

This two-sided marketplace model generates network effects, with millions of customers (property owners and travelers) interacting to ensure the platform offers competitive prices constantly. We have a similar idea for the future of eCommerce – rather than everyone building more warehouses as part of their own private, isolated networks, what if we optimized what’s already available?

Cahoot’s peer-to-peer network aims to unlock the potential of over 2 million retailers with their own warehouses. Any merchant with excess capacity in their warehouses can monetize it by becoming a fulfillment partner for Cahoot.

Our two-sided marketplace model generates network effects, with numerous businesses (sellers and fulfillment partners) interacting to drive prices downward. Just like Airbnb has a massive spread of listings, our model provides us with a vast network of strategically located warehouses across the country. And just like them, we’re more economical than the previous solutions customers used.

Quality

Traditional 3PL – “Fast Shipping or Low Shipping Costs? Pick One”

With the limited number of locations these traditional 3PLs operate from, it becomes near impossible for them to cover the country through economical ground shipping in under two days.

Based on our research, inventory needs to be spread across at least 4 strategic locations if a merchant is aiming for 2-day delivery to the entire contiguous United States (the lower 48 states). If the brand aims for 1-day delivery, it requires nine strategic locations.

When we talk about ‘strategic’ location, we mean it – a location is only strategic if it is located near a major population center. Suppose you’re a brand in the Midwest. In that case, it makes no sense to get excited about saving costs on inbounds by working with a traditional 3PL in Chicago, IL, when most of your orders might be coming from Southern California! Great candidates for strategic locations include New York, Chicago, and Southern California, as examples.

Most traditional 3PLs do not have warehouses at strategic locations – forcing their customers to decide whether to use economic ground services (but not meet the customer expectation for fast delivery) or incur extremely high costs by providing fast delivery through air shipping.

Peer-to-Peer – “Fast Shipping and Low Shipping Costs – Get Them Both.”

A Peer-to-Peer Fulfillment Network has a vast network of strategically located warehouses nationwide. With such a network, it is possible to cover the entire country through ground shipping in under two days. This makes it possible to meet the customer’s expectation for fast shipping while using economical services.

Many sellers might face hefty fees with platform-specific fulfillment services, such as Fulfillment By Amazon (FBA) for Amazon and Walmart Fulfillment Services (WFS) for Walmart. Merchants have no viable alternative because the only way traditional 3PLs can hope to offer the delivery speeds customers are used to is by using expensive air shipping. As no seller is willing to take a margin hit that deep, they are stuck with fulfillment services run by the marketplaces themselves.

With a Peer-to-Peer network, you do not have to make an either-or decision – you get the best of both worlds – providing both your business and your customers with benefits. Our network offers cost savings that boost your bottom line while also improving the experience your customers have.

Service Levels

Traditional 3PLs – Struggle to Offer The Bare Minimum

Traditional 3PLs just about get the basics done (with a lot of huffing and puffing and seller pain) – receiving your inbounds, picking, packing, and shipping your orders out the door on time. If you’re trying to handle additional requirements – such as operating the warehouse, arranging for carrier pickups, or fulfilling orders on the weekends, you’re likely out of luck.

The problem is that these ‘additional’ requirements are now becoming table stakes as this is what programs like Amazon Seller Fulfilled Prime expect. Additionally, customers expect their orders faster and faster, meaning that doing the basics alone may no longer be enough even to stay afloat.

Those aiming to compete with Amazon, including large retailers like Walmart, are realizing they must offer customers Prime-like experiences. Walmart’s shipping standards are also challenging – products with 2 and 3 day delivery speeds are ranked higher in search results, win the buy box more often, and see higher conversion rates. Sellers are also expected to ensure that they deliver 95% or more of orders within the promised time to customers.

Many of these 3PLs may also be unable to offer late cut-off times. Late cut-off times allow for carrier pickups and scans to occur the same day, meaning more of your customers will receive their orders in 1 or 2 days.

Perhaps most worryingly of all, customer support can often be erratic, unreliable, or slow to respond. Shipping and order fulfillment is a crucial part of your business operations. Lengthy resolution items can mean significant outages and downtime for your company.

Peer-to-Peer – Meet and Exceed the Gold Standard for Order Fulfillment

With Cahoot’s peer-to-peer network, you don’t just have to settle for the basics. We help sellers on Amazon meet and surpass the demanding criteria of the Seller Fulfilled Prime (SFP) program. The SFP program’s requirements are arguably the most challenging in the industry. Any merchant who can meet and surpass them has an excellent order fulfillment strategy in place.

We support warehouse operations, carrier pickups, and delivery on the weekends. We also offer late cut-off times, ensuring that you can increase the proportion of customers whom you service with 1- and 2-day delivery.

Our US-based customer support team is also ready and responsive to any of your questions. We know that eCommerce order fulfillment is complex, and things don’t always go as planned. What’s crucial is ensuring that those issues are addressed quickly, getting your business back on track. With our team, you can count on minimum downtime.

Technology

Traditional 3PL Fulfillment Providers Try to Handle Fulfillment Without Tailormade Tools

Many traditional 3PLs solve just one piece of the problem – the task of order fulfillment itself. Most of them fail to provide customers or their employees with the shipping software technology needed to speed up order fulfillment at scale.

The technology that most traditional 3PLs deploy is not much more advanced than what a micro-shipper fulfilling their orders on their own might be using.

Even if traditional 3PLs deploy technology, it tends to be legacy software, like ShipStation. Such tools require constant human intervention and oversight. For example, for every single customer order that is received, a tool like ShipStation requires staff to compare rates across different fulfillment locations and carrier services, manually identifying the cheapest option to pick.

Such systems mean that an enormous amount of time is wasted every single day by employees simply rate-shopping for shipping labels when they could be engaged in higher-order work.

For other workflows like keeping track of inventory, traditional 3PLs deploy similarly clunky, inflexible software incapable of meeting today’s needs. This runs the risk of accepting customer orders on SKUs that are out of stock, leading to canceled orders and unhappy customers. Unfortunately, your customers aren’t going to blame your 3PL’s poor technology when there are issues with their deliveries – they’re going to point the finger at you.

Peer-To-Peer – Scale Order Fulfillment with Purpose-Built Software

While our peer-to-peer network provides nationwide coverage, our next-generation shipping software supercharges productivity and accelerates order fulfillment.

For every order received, Cahoot’s software can intelligently compare multiple warehouse locations and shipping services, instantly determining the most economical shipping label that meets customer delivery promises.

Our software is designed and purpose-built from the ground up to excel at scale. When your order volumes surge, manually printing shipping labels can be a massive source of inefficiency. With Cahoot, all your shipping labels are ready to print in one click – dramatically speeding up fulfillment and freeing up staff to concentrate on higher-order work.

Our technology comes with other intelligent features – such as optimizing packaging choices for Multi-Line, Multi-Quantity (MLMQ) orders, as well as intelligently keeping track of inventory decrements. Color-coded alerts on our dashboard provide merchants with real-time visibility into dipping inventory levels. This allows for proactive decision making to accelerate sales, rather than scrambling to react too late.

Redundancy and Backup

Traditional 3PL – Highly Vulnerable to Single Point Failures

eCommerce order fulfillment is not an easy thing, and there are potentially many things that can go wrong – such as 3PL delays with receiving your inventory, damages to inventory in transit, misplaced inventory, or carrier errors.

There are also things for which it is difficult to account for – such as unexpected, extreme weather events that disrupt carrier operations.

While you can strategize to minimize or avoid some issues, others are simply out of your control. Unfortunately, this is where a traditional 3PL is highly vulnerable. When you operate from a single location, an outage in that location can be catastrophic. Your entire order fulfillment operations come to a grinding halt, putting your sales on pause. Worse, customer complaints will surge, resulting in lots of negative reviews and refund requests.

Customers today may not be forgiving even of circumstances outside your control, such as weather events – they ask a pertinent question, “Why weren’t you prepared with an alternative strategy?”

One minor issue at your 3PL can quickly snowball into a disaster for your brand reputation and customer loyalty. The only option sellers have is to find fulfillment partners whose solutions come with excellent risk mitigation, ensuring that orders reach customers no matter what.

Peer-To-Peer – Always Lights On For Your Business

A network of warehouses in different locations ensures that you’re inherently much more likely to keep your business operations constantly running smoothly.

You’re de-risked on multiple dimensions – if there’s terrible weather in 1 location, you can still fulfill orders from another warehouse. If there are issues with a carrier over there, you can ship from another location. If there’s an outage there….you get the idea.

This ensures that you’re constantly selling and customers are constantly getting their orders. They may also really appreciate how your business is always ready to serve them, no matter the circumstances. Unexpected, adverse circumstances don’t result in angry customers and negative reviews when working with Peer-to-peer fulfillment networks, they’re just another opportunity to continue selling and keep providing your customers a great experience.

Scalability

Traditional 3PL – Works Initially, But Stumbles at Scale

Going back to our earlier example, let’s say you’re a brand starting out in the Midwest, and you found a great traditional 3PL in Chicago, IL. You’re thrilled because your geographical proximity to them means that you’ll be saving a lot on inbound freight costs (sending your inventory to their warehouse on a truck).

In your first few days, most of your customers are your friends, who spread the word about your brand to their circles. Most of your orders tend to come from the Chicago area and Michigan – things are working well with the traditional 3PL. You can service your customers with fast delivery while using economical ground shipping.

At some point, your brand surges in popularity, and you start receiving orders nationwide – you’re thrilled and can already imagine the cash registers ringing! However, after an initial surge, you soon see very few orders coming in. After doing some investigation, you discover that your 3PL’s inefficiencies are costing you – customers in Southern California are receiving their orders far too slowly. Worst of all, knock-off listings on the Amazon marketplace have seized on your idea, and are now winning against you because they’re offering customers faster shipping. You also see a surge of refund requests, from customers who are unhappy with the time it’s taking for their orders to arrive.

Traditional 3PLs are ill-equipped to deal with spikes in order volume that happen naturally as you scale. These companies don’t become an enabler of your growth; they can be just the opposite – a bottleneck that slows you down.

The problems with traditional 3PLs mount at the worst possible time – once you start seeing orders come in from Southern California, let’s say you identify another fulfillment partner in Los Angeles. Now you have two contracts, each with its own pricing structure. There are 2 different SLAs for order fulfillment and you have to pick which location each of your orders is routed to, all on your own. Managing these two 3PLs can completely consume your bandwidth, overtaking your focus on the activities that actually matter – selling and taking care of your customers.

Other problems emerge as you scale – let’s say you’ve somehow figured things out, and have made DTC fulfillment work with these two traditional 3PLs. As you grow further, you start sending pallets to retailers all over the US, such as Target, Nordstrom, or Macy’s. Suddenly, your 3PL has no space for your containers and struggles to handle B2B fulfillment. Additionally, many of these traditional 3PLs may lack the EDI technology which is a prerequisite to work with many retailers and brands.

Peer-to-Peer – Accelerates Growth By Scaling Alongside You

Let’s imagine you’re the Midwest brand again. This time, you’re working with Cahoot’s peer-to-peer network. When you start out, you ship orders from one of our Midwest fulfillment centers, providing customers with free, fast shipping.

When your brand surges in popularity, things don’t fall apart – you simply add more nodes on the Cahoot network to fulfill orders from. You use our fulfillment centers in Southern California to ensure you deliver a high-quality experience to your customers on the West Coast.

You also work only with 1 vendor, offering you 1 contract. This ensures you can scale nationwide fulfillment, with none of the process management overhead that working with traditional 3PLs brings.

We also have experience and expertise in handling B2B fulfillment, in addition to DTC fulfillment. Whatever the spike in order volume you see, we’ll make sure that you actually celebrate your success. You won’t be spending your time thinking, “Can our fulfillment keep up with all this growth?”

Traditional 3PL – Great for Regional Shipping

Traditional 3PLs do a reasonably good job of servicing the specific parts of the country that they are located in. For example, a traditional 3PL on the West Coast might be great for orders in all states in that part of the country.

Because of the restrictions on the number of locations they have, these 3PLs find offering nationwide coverage at affordable rates extremely difficult.

While these models may work for brands with a strongly regional customer base, the problem is that nearly every seller dreams of scaling nationally and globally at some point – these 3PLs can often become a hindrance when the sellers do decide to start expanding.

Peer-to-Peer – Great For National Programs Like Amazon SFP

Previously, Amazon’s Seller Fulfilled Prime (SFP) program had a regional component – brands could fulfill orders just in their region of the country on their own while still featuring the Prime badge on their product listings on the Amazon marketplace. However, Amazon now expects fast shipping across the entire contiguous U.S. on the program – products across every size category must be delivered in 3-5 days, while approximately 70% of orders on standard-sized products must be delivered in 2 days or less.

Traditional 3PLs will find it nearly impossible to meet this requirement using ground shipping because of their location constraints. Using air shipping is not an option for sellers in most cases because that erodes any cost savings they were hoping to see over FBA.

Analytics and Reporting

Traditional 3PLs – Decisions Made on Instinct

Traditional 3PLs tend to make most decisions using a combination of intuition and guessing. Some of the most crucial pieces of the eCommerce order fulfillment workflow are – Which warehouse to dispatch an order from, and which box to pack the items in?

Most traditional 3PLs do not have the purpose-built technology needed to determine the warehouse each order should be sent from. At best, a rudimentary heuristic based on the customer’s ZIP code might be deployed. The problem is that you could be losing money on every shipment. Until you invest in the right technology, you’ll never actually know the full extent of your losses.

The second crucial factor is the choice of box to use. Traditional 3PLs have a limited number of boxes of the most popular sizes. They randomly throw products into any box that fits. In the best case, an ad-hoc heuristic might be defined to map each SKU to a box, by eyeballing the box and product sizes. This creates problems on multiple dimensions. The first is that the overall cost of packaging materials continued to increase at a pace faster than inflation, while the cost of paper and cardboard increased by as much as 9% in 2024. This means that if you’re selecting larger sized boxes on each order, your costs surge. More crucially, the shipping carriers set their prices in tiers, based on the dimensional weight of items. This means that the wrong choice of box for a lightweight item can tip it over into a higher pricing tier than is actually needed. Sellers can bleed money on both avenues – cost of supplies, and the fees they pay to the shipping carriers. Today, there is also a growing consumer demand for environmentally responsible, sustainable packaging. When items reach environmentally conscious consumers in oversized boxes, it can negatively impact the experience they have with your brand.

Lastly, most traditional 3PLs do not offer enough variety of warehouse locations to actually place your inventory close to where most of your customers live – even in cases where they have multiple warehouse locations, they could still place your products in the wrong fulfillment center!

The only way to eliminate ambiguity and make the optimal selection each time is to ensure decisions are guided by past data and real-time technology automation – unfortunately, most 3PLs do not offer that.

Peer-to-Peer – Decisions Informed by Data

With Cahoot’s Peer-to-peer network, we let data and technology make the most critical decisions.

For order routing, our next-generation software intelligently compares multiple warehouse locations, carriers and shipping services before picking the most optimal location and service that can meet the delivery promise committed to the customer.

We use advanced 3D bin technology to evaluate the fit of items in boxes, ensuring that each SKU goes into the best-sized box. Our software also comes with intelligent automation for Multi-Line, Multi-Quantity (MLMQ) orders, where our system learns from box and SKU dimensions, as well as past packaging choices to optimize box selection.

Lastly, while warehouses on our network are located near major population centers, it still means nothing if we don’t place your inventory in the location closest to where most of your customers live. We go deep and sweat the details to identify geographic trends in your historical orders, ensuring that we set you up to see maximum savings.

Flexibility and Agility

Traditional 3PL – High Switching Costs, Hidden Fees, Painful Migration

Traditional 3PLs often do not operate with flexible, merchant-centric models where you can build from what you have. Like we mentioned earlier, each of them comes with limited geographic coverage of the country, and offers their own pricing contract and SLA.

Let’s say you’re working with a traditional 3PL that gives you coverage on the East Coast. While their services are good, you’re trying to find out if there’s a way for you to expand to the West Coast. Traditional 3PLs do well when they have as much of your inventory tied to their warehouses as possible. You may be hit by high fees on both fronts – the removal fees from the East Coast 3PL, and the inbound fees with the West Coast provider.

Worst of all, once you do manage to migrate your inventory over, you’ll still have to deal with the process management overhead that comes from working with two fulfillment partners.

While this does not sound like an easy process, we’ve put together a step-by-step guide on how to migrate from one fulfillment partner to another.

Peer-to-Peer – Seamless, Painless Migration

A Peer-to-Peer Network is the most merchant-centric, merchant-inclusive platform for Order Fulfillment. Cahoot’s Peer-to-Peer network is not a ‘winner takes all’ arrangement. We’re not only an option for merchants looking for ultrafast eCommerce order fulfillment, but also an option for 3PLs looking to serve their customers better.

When our customers are happy with using their existing 3PL to serve a particular part of the country, say the West Coast, we can flexibly scale nationwide coverage on top of their current setup. They can bring their 3PL to our network, where we provide them with an economical way to cover the East Coast.

In fact, one of the biggest features of the peer-to-peer model is that it can be a way through which traditional 3PLs can overcome their geographical constraints while helping merchants achieve free, fast nationwide shipping.

Integration and Consistency

Traditional 3PL – Extremely Fragmented, Increased Overhead

Many traditional 3PLs were designed for the older, pre-Amazon Prime era of eCommerce when merchants fulfilled orders from just one or two channels. In today’s world of online marketplaces, traditional 3PLs may not support all of the different marketplaces. You may have to work with one 3PL for your Walmart orders, while handling Shopify fulfillment through another. The depth of integration also matters – for example, does the technology these 3PLs use transmit inventory count information back to the sales channel so that you avoid receiving orders on out-of-stock items? Can they transmit tracking information back to the channel? And does your order fulfillment help you meet the unique expectations customers have on each marketplace?

As you work with multiple 3PLs, your ability to offer consistent order fulfillment may be severely compromised. With these providers, handling the basics of order fulfillment becomes challenging. When it comes to exception management on specific orders, the problem worsens.

Let’s imagine you’re working with warehouses from two 3PLs, each with their own SLA – the first has a cutoff time of 1PM, the second 12PM. Suppose an order comes in at 12 30 PM – but there’s been an unexpected issue with the first warehouse. You’re unable to reroute the order to the second warehouse because it’s already past the cutoff time there. The problem stems from the fact that each warehouse has its own SLA and none of them are integrated to each other.

If you’re seeking to expand sales channels or achieve nationwide coverage, the number of such fragmented, siloed warehouse nodes increases exponentially – drowning you and your team in process management. You may need to hire dedicated people to babysit and oversee this operation, which negatively hits your costs.

Peer-to-Peer – Unified, Simple and Consistent Across Every Channel

With a Peer-to-peer fulfillment network, you get custom-built, out-of-the-box integrations for all major marketplaces. We pull all the critical information about orders and their delivery due dates into our system, while pushing back updated inventory and carrier tracking information to the respective channel. This extends to our fulfillment operations – we ensure that you stay compliant with the unique requirements that each marketplace has, such as usage of a particular shipping carrier / service, or branded packing slips.

With Cahoot, you spread your inventory across multiple warehouses, but work with just one partner. This ensures that you can offer a consistent experience on every order. This solid foundation makes exception management much easier to handle. When orders may not make it in time because of issues at one node, we can intelligently reroute it from another location with minimal overhead. We also offer consistent SLAs and every node on the network is tightly connected.

With a Peer-to-peer fulfillment network, the number of warehouses and sales channels increases, but there’s always only minimal process management needed. You and your team will get back more time to focus on growing the business.

Environmental Sustainability

Traditional 3PLs – Excess Packaging Waste and Greenhouse Gas Emissions

Customers today expect brands to be sustainable and environmentally responsible in their operations. A traditional 3PL exacerbates problems for brands across 2 different dimensions, packaging, and emissions.

Traditional 3PLs tend to have a random, haphazard approach to packaging – they have a few boxes of the most popular sizes, and the warehouse staff simply place the item into whichever one might be available on hand.

When the customer receives the order, they might be annoyed that their item was delivered in an overly large box, generating more waste for the environment. For environmentally-conscious shoppers, such experiences can ruin their relationship with the brand, completely turning them off from future purchases.

A bigger problem can arise because of the limited number of warehouse locations. Due to this, they’re forced to use air shipments or keep packages in transit for longer on the road. All this increases emissions released, worsening your brand’s carbon footprint and weakening your sustainability credentials.

Peer-to-Peer – Eliminate Packaging Waste and Slash Emissions

While our network of strategically located warehouses, you’ll nearly never use air shipping (unless customers specifically ask for it). You’ll be able to offer fast and economical ground shipping – which is great for your customers and the environment. But we go a step further and help you cut down packaging waste also.

As we mentioned before, our software’s 3D Bin Technology and its Multi-Line, Multi-Quantity Automation features help ensure you always use only the necessary amount of packaging material.

Lastly, environmental sustainability is the core cause that a peer-to-peer network is fighting for – in a world where everyone is using up more resources to build logistics infrastructure for their own private network, we’re aiming to use the Power of Many to build a more sustainable fulfillment network, without compromising on today’s sky-high customer expectations.

Reliability

Traditional 3PL – Fail to Live up to Their Promises

Most people tend to choose a traditional 3PL because they think a company dedicated to logistics and shipping can do a better job than a fellow merchant fulfilling your orders for you.

However, as we’ve discussed in the sections above, we think traditional 3PLs are still operating to serve the old paradigm of eCommerce. While you may feel that you are ‘in safe hands’ initially, the reality may be very different and disappointing.

Most traditional 3PLs may promise a lot, but struggle to deliver even the basics. Where does this disconnect come from? Most sellers are extremely busy and cannot afford to spend endless hours vetting their 3PL’s performance and services. Decisions may be taken with limited information and time – unfortunately, this leads to a lot of unpleasant surprises after the inventory has been received and orders start flowing in.

It’s worth asking – how can merchants rigorously vet their 3PLs to make sure their claims are actually true? With Cahoot, you won’t have to worry about that – because we’ve already taken care of that.

Peer-to-Peer – Only The Best Warehouses Pass Cahoot’s 44 Point Checklist

Some people think that working with a traditional 3PL (with their own warehouse space) is better than operating in a peer-to-peer network. Most people who feel this way share one concern, “How Can I Trust Another Merchant to Deliver My Orders?” A similar concern was shared by many people when Uber first rose to popularity, defeating the cabbies in London and New York’s famous Yellow Taxi. In London, people must spend 3 years training to be accepted as a cab driver. With Uber, nearly anyone could start driving taxis instantly. A similar sort of nervousness was prevalent among people, who asked, “How can we trust getting in a car with a stranger?” Interestingly, the data challenges the popular perception – according to research conducted at NYU, humans trust authentic sharing economy workers more than their neighbors and colleagues (and nearly as much as their families). The keyword in that sentence is authentic. Authenticity is built by high levels of trust and transparency – such as Uber drivers providing their details and a profile picture on the platform.

Similarly, we recognize that building authenticity is crucial. Order fulfillment is a crucial aspect of business operations, and you don’t want to be handing that task over to someone you can’t trust. We foster trust with our sellers by rigorously vetting fulfillment partners. Cahoot has a 44-point checklist that warehouses must pass if they are to become part of our eCommerce order fulfillment network. This ensures that only the best warehouses, with excellent packing practices and order fulfillment standards, make the cut. Cahoot also has zero tolerance for defects and regularly reviews the performance of its fulfillment partners. We think that a warehouse in the Cahoot network has been through more rigorous vetting than the review that the average seller does on a traditional 3PL. This means that there’s a good chance that a Cahoot warehouse is better than the one at your traditional 3PL. With our vetting and audits, you can rest assured that it’s a safe and trustworthy one, too.

Privacy and Security

Traditional 3PLs – Lax Data Security Measures

With traditional 3PLs, your customer information moves across multiple systems without proper safeguards. They might request for all your order and customer information to be transmitted to whatever technology they are using. If that is different from their shipping software, then your proprietary data enters another system outside your purview.

While you may have signed contracts with the 3PL, your data still rests on multiple systems that they operate, with minimum visibility. Worse, you are entirely reliant on their information security practices, which may be minimal or even non-existent.

In the era of Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), no company can afford a data breach. Under a regulatory framework like GDPR, customers have the right to request for deletion of their data. If sensitive details like their name, phone number and address are already on systems that your 3PL controls, it increases exposure and risk to your business.

Peer-to-peer – Robust Data Privacy and Governance Measures

While having confidence in the order fulfillment standards of our warehouses is important, another concern sellers might have is, “How can we trust that other merchants will not see or use our customer data?” While Uber built high levels of trust in people, it still could not change the fact that people were indeed getting into a car with a stranger. To safeguard its customers and set their fears at ease, Uber has put in place various safety measures on its app. Some of these include GPS tracking, the ability to transmit location information to emergency services, logs of historical trips as well as the very famous rating system – where both riders and drivers review each other after each ride (a social incentive to behave respectfully).

With Cahoot’s peer-to-peer fulfillment network, you can sit back and relax knowing that every order will be fulfilled on time. However, we do know that another merchant is responsible for fulfilling your order, and take data privacy extremely seriously. We provide a single platform where you get total control and visibility into your data. When our fulfillment partner prints a label to ship your order, they see the customer’s first name, but only the initial of their surname. Only the absolute essential information needed for order fulfillment is shared with the fulfillment partner, while all other product / brand / customer information remains with the seller.

Community

Traditional 3PL – You Work With a Vendor

Working with a traditional 3PL is often nothing more than a transaction – you pay them a lot of money, and they perform the task of order fulfillment for you. While getting your orders out to customers is vital, there’s often little differentiated value addition that you get from the engagement.

Peer-to-Peer – Work With a Partner Reduce Costs and Generate Revenue

With Cahoot’s peer-to-peer network, you can have ultrafast eCommerce order fulfillment by partnering with us. But it doesn’t have to end there. If you have excess capacity in your own warehouse, you can actually double up as a Fulfillment Partner on the network to monetize that and bring in additional revenue. Order Fulfillment is a growth driver, not a cost center – with us, those words definitely ring true. This is similar to Uber drivers in their home city becoming riders when they’re traveling!

Summary

While traditional 3PL companies are useful for the things they do well, they have limitations that can put pressure on sellers trying to succeed in the rapidly changing environment of modern ecommerce. For sellers trying to achieve Prime delivery standards without using FBA, or those that simply require nationwide reach for their fast delivery options, a traditional 3PL on its own is not sufficient.

Cahoot’s innovative fulfillment network combines the benefits of a traditional 3PL, but adapted to the needs of a modern online merchant. Ambitious sellers can no longer afford to limit their fast delivery options to certain regions, and they must submit numerous fees and conditions to get the reach.

Whatever your needs, Cahoot can deliver differentiated value to your business. Reach out to us today to get started!

Hola, Amazon Sellers! We’ve got some news for you. It is predicted that the 2021 holiday season is going to witness eCommerce sales of $206.88 billion with a rise of 11.3% in the US.

With the holiday season knocking at our doors, Amazon sellers are putting their best foot forward in optimizing their listings for grand traffic, massive sales, and greater profits.

If you want to reap the benefits of this holiday shopping season, then there is no better time than this! But how can you stand out in such a fiercely competitive environment? 

For Amazon sellers, a winning holiday keyword strategy is one of the best ways to improve their listings’ discoverability. By investing early in seasonal keyword optimization, you can acquire high positions in SERPs ahead of the competition and increase traffic and sales exponentially. 

So, are you ready for the revolutionary 2021 Amazon holiday shopping sales? Let’s make the seasonal keyword optimization magic happen with some powerful seller moves. But before we unveil some of the best Amazon keyword practices, let’s understand the fundamentals of Amazon SEO and how it works.

What is Amazon SEO?

The first page of Amazon’s SERP is one of the most coveted pieces for every seller. It has the power to convert one-time page visitors to buyers and bring about a stunning increase in overall profits.  

Like Google, Amazon analyzes the search results through its algorithm, which again includes several factors like –

• Product Title with high-converting keywords
• Product Description with relevant keywords
• Product Features with clear bullet points
• Appealing Product Images
• Good Ratings and Reviews
• Competitive Product Price

The underlying search engine is known as A9. The algorithm deploys several parameters to engineer the relevancy of millions of listings stored in its database with the search terms used by the shoppers.

Behind closed doors, Amazon’s search engine algorithm – A9 is constantly being renewed and refined. Although no one really knows its formula or how exactly it works, there are some widely known factors that influence it.

What is A9?

A9 is Amazon’s product ranking algorithm which provides the results depending on the terms or keywords or queries added by users in Amazon’s search box. The results displayed are catalyzed by the shopper’s preferences, past orders, and keyword matches.

How does A9 work?

The A9 algorithm selects the product listings to be displayed to potential buyers and their rankings based on some criteria like:

• Relevant keywords added in listings that match with customer search queries
• Previous customer preferences and behavior
• Customers’ past purchases

While customer preferences and their past purchases aren’t in your hands, what you can influence is your product’s organic ranking by optimizing your listings and making them SEO-friendly.

Why Should You Optimize Amazon Keywords for This Holiday Season?

The goal of Amazon’s search engine is to provide customers with the most relevant product results in relation to the search queries they insert. When it comes to product listings, Amazon looks at keywords present in various fields of the listing like title, description, and bullet points. To display products for every time they are searched, Amazon “indexes” these keywords in its database, i.e., collecting, parsing, and storing the search terms. 

Therefore, a crucial portion of your Amazon marketing strategy is to ensure that your listings have an optimized Amazon product title, descriptions, and bullet points with high-converting and relevant keywords. This is even more significant to the holiday season as it brings about an exponential increase in traffic as compared to other times.

Your listing should be optimized in a way that A9 can locate it, and it should also be compelling for customers to pay enough attention to your products and brand.

It is recommended that during the holiday season, holiday-based search terms like “gift pop-up cards”, “Christmas gifts”, etc. should be added to your listing content.  

Note: When you craft your listing content, make sure it flows naturally. Avoid keyword stuffing, as this diminishes the credibility of your product listing, and drives away potential buyers from your product page to your competitors’ pages.

Tips on Optimizing your Amazon Product Listing with Seasonal Keywords

Here are a few tips and tricks that will help you tackle Amazon’s A9 ranking factors and make your listings holiday season ready in no time:

Step 1: Perform Relevant Keyword Research

Before you begin with keyword research, you should pause and set your goals for your products and brand and why would you want to leverage keywords for your listings.

Do you wish to improve your listing’s search rankings? Are you launching a new product this holiday season? Are you trying to compete with existing sellers selling seasonal products?  

Once you define your goals, your keyword research task gets way easier than it actually is.

Generally, you want to add those keywords to your listings that are more specific and searched for the most by shoppers. For instance, listing Christmas bells as “bells” in your product title will likely have a negative impact on where your product appears in the SERPs as it will attract a lot of irrelevant traffic who aren’t even searching for Christmas bells.

Since long-tail search terms are considered more effective, you must incorporate long-tail keywords into your product listings to optimize for Amazon’s SERPs.

Another efficient strategy is to implement the next-to-highest ranking Amazon keywords for your listings. Small-scale third-party Amazon sellers launching new holiday/seasonal products can face overwhelming competition for the top keywords.

In such cases, optimizing a listing for the keyword “Christmas bell” and expecting to land at the top of Amazon’s SERP is not favorable. Therefore, it’s a good idea to opt for a more specific long-tail keyword like “Christmas Tree Decoration Bells”.

Top Seasonal Keywords

Here is a list of the best seasonal keywords collected by us that you may use for your product listing content:

• Gifts for Men
• Gifts for Women
• Christmas Decorations
• Christmas Socks
• Kids Halloween gifts
• Jazz Christmas
• Halloween Gifts Adults
• Thanksgiving Candies
• Cyber Monday Deals
• Toys Black Friday Deals
• Christmas Gifts
• Classical Christmas

How to Perform Keyword Research?

There are several third-party Amazon seller tools for performing keyword research that uses AI and ML technology to provide the most accurate data.

One such tool is SellerApp’s keyword research tool that analyzes thousands of data points to offer high-converting keywords for every seller type. The following are the SellerApp features that analyze keywords in a more innovative way –

• Product Keyword: Get the best keywords, their relevance score, monthly search volumes and cost-per-click, to increase your listing desirability and discoverability.
• Reverse ASIN lookup: Compare your product to the competition and learn from their keyword strategies. Search any ASIN and see which keywords are ranking for that listing.
• Index checker: Check if your backend search terms entered in Seller Central are indexed or not. Optimize your product discoverability as per Amazon’s best practices.
• Keyword Tracker: View real-time keyword ranking position, change in their position, indexed products, and data-driven recommendations to improve Amazon listing SEO.
• Keyword Booster: This tool will show you all the optimal keywords for your product. Here, you can find and sort keywords based on their frequency. Copy and paste your keyword list into the Keyword Booster. Filter your keyword results by the variety of duplication filters, remove unwanted words and characters. Copy the cleaned keyword list from the Keyword Booster with the copy button and paste the optimized keyword list on your Amazon product info page.

Step 2: Make Your Product Title SEO-Friendly

Product Title is one of the most crucial factors that have the power to exponentially boost your product’s visibility and rankings. Make sure that you add all the relevant information in your title and craft a catchy product title.

According to Amazon, a product title should include the following:

• Brand
• Product
• Material
• Quantity
• Color

Note: A product title in the Amazon search is limited to 100 characters only. Therefore, use the space in a rightful manner – do not overstuff it with keywords, keep it appealing and simple.

Amazon has provided guidelines on how to craft good product titles. Your product title should include product information such as brand, product line, color, size, material or key feature, and packaging or quantity. Here, you must also include 1-2 relevant keywords that can influence product conversion and click-through rates.

If you are selling seasonal products, make sure to include holiday special keywords in your product title to get more visibility.

Ensure that the initial 5-6 words of the title are clear, crisp, and intelligible. These simple techniques make the title eye-catching as well as optimize it for the Amazon search.

Step 3: Optimize the Bullet Points

Amazon provides slots for adding bullet points that explain your products in a clear and concise manner to shoppers. Bullet points are found under any parent/child ASINs on the listing page.

They are usually paid more attention than the actual product description. Therefore, you should leverage this space to explain all the compelling features and benefits your product has.

In this section, add secondary keywords that are important but may not fit in the title, for example, keywords that are seasonal and resonate with the upcoming holiday/festivities. There is no need to repeat keywords from the title or other sections.

Simply use high-converting keywords throughout your product listings that you have gathered from your keyword research.

It is estimated that Amazon will index the first 1,000 bytes for your bullet points. Therefore, you must make sure that your bullet points should be 200 bytes max for them to be indexed.

Step 4: Craft a Product Description that Converts

Amazon’s A9 algorithm will prioritize those listings that have the power to convert and have made a considerable amount of sales in the past. Therefore, your product description should be crafted in a way that adds value to your listing and unveils its lucrative benefits, rather than just being informational.  

Add in only the most relevant keywords that pertain to your product’s unique features, its type and texture, and overall utility.

The product description is also an ideal way to portray your brand and its vision, attract the target audience, and focus on the problem-solution framework. The character length of your description should be 2,000 characters, including spaces. Remember to make it short and crisp and not a huge chunk of complex texts.

Step 5: Do Not Forget the Backend Keywords

Amazon also offers sellers the opportunity to add hidden search terms, which are called “backend keywords.”

Although not visible, these keywords constitute the backbone of your listing’s rankings on Amazon SERP.

You can get up to 249 bytes for adding other very relevant keywords for your product that weren’t fit to be added into your listing content visible to customers like title, description, and bullet points. The best part about this section is that here, you can include –

• other high-ranking long-tail keywords,
• holiday-related keywords like “gift ideas”, “gift pop up cards”,
• misspellings that are searched the most by customers,
• synonyms that shoppers might look for,
• translation words of your products in Spanish or French or any other language.

Here, you don’t need to add product identifiers, like your brand or product name, or content that is irrelevant or repetitive.

Final Thoughts

If you stay proactive and prepare well for the 2021 holiday season, nobody can cease your progress. For even the most advanced Amazon sellers, optimizing keywords takes immense effort, time, and analyzing capabilities. Even though it all seems too overwhelming in the beginning, it can be streamlined with the right AI-powered Amazon keyword tool.

The truth is the more you can streamline the seasonal touch points across your Amazon business, the easier it will be to attract relevant traffic and scale-up.

We hope that this step-by-step guide benefits your Amazon business and fuels your seller journey to success. If you have any more questions, get in touch with us!

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The One-Stop-Shop is a new VAT scheme that was introduced in July 2021 across the European Union. It offers an alternative for online entrepreneurs and Amazon sellers who, until then, had to register for VAT in a variety of countries if they wanted to expand their business across the EU.

The One-Stop-Shop was accompanied by changes concerning the delivery thresholds in the EU, the taxation of goods sold to end customers across borders, and the VAT registration and filing duties.

In this article, we will dive into the specifics of the One-Stop-Shop program and discuss what opportunities the OSS offers to Amazon sellers and FBA users.

Threshold Changes that Came With the Introduction of the One-Stop-Shop

Until July 2021 online sellers had to register for VAT in their home country and in all EU countries to which sales exceeded the delivery thresholds. The thresholds were set by each European country individually and were usually set at 35,000€ or 100,000€. 

In all countries in which sellers were registered for VAT, they also had to submit VAT returns. Following the filing of returns, VAT needed to be paid separately to each tax authority, following differing deadlines and formats. Furthermore, all sales prior to the crossing of the threshold limit were taxed with a domestic VAT rate and the VAT had to be paid to the domestic tax office. This meant that sellers had to continuously monitor several threshold limits and payment deadlines at once.  

The country-specific thresholds were replaced by an EU-wide threshold of only 10,000€ when the One-Stop-Shop was introduced. This new, lower threshold is reached by all cross-border sales to European countries combined and, therefore, crossed much earlier. This also means that sellers often have to register in several countries at once. A solution to this is the voluntary registration for the One-Stop-Shop scheme.

The One-Stop-Shop for Amazon Sellers

For business-to-consumer cross-border sales, a One-Stop-Shop registration replaces foreign VAT registrations. Additionally, the EU-wide delivery threshold is no longer applicable. This means that all sales – even the first – are subject to country-specific foreign VAT rates. Thresholds do no longer need to be monitored and no further VAT registrations are necessary – as long as goods are only stored in the home country.

Since no further VAT registrations are necessary, neither are regular foreign VAT returns. Instead, a regular OSS report needs to be prepared and submitted to the tax authorities in the country of OSS registration, the sellers’ home country in the European Union or their country of choice if they are not based in the EU.

Of course, a VAT registration in the home country and the submission of domestic VAT returns are still necessary, as the One-Stop-Shop only applies to cross-border transactions. For the same reason, the usability for the One-Stop-Shop is greater for basic Amazon sellers than for sellers making use of Fulfillment-Programs such as Amazon FBA. Amazon sellers generally only store their products in their home country and the goods are then delivered from there to customers EU-wide. FBA programs, on the other hand, enable sellers to store their products in a variety of foreign European countries.

The One-Stop-Shop and Amazon FBA Sellers

Within the PAN-EU FBA program for example, sellers’ products might be stored in England, France, Germany, Italy, Spain, Poland and the Czech Republic. As soon as products are stored in a country, VAT registrations are mandatory. Therefore, sellers participating in the PAN-EU program need to register for VAT in all countries mentioned above. However, participation in the One-Stop-Shop is still possible.

Deliveries from the home country to foreign countries are taxed with foreign VAT rates and appear in the OSS report, as detailed above. Deliveries from foreign warehouses to customers in the same country are settled in a foreign VAT return, while cross-border deliveries to third countries are again appearing in the OSS report filed in the home country. Lastly, deliveries from foreign warehouses to customers in the seller’s home country appear in the domestic VAT return.

As evidenced, the usability of the One-Stop-Shop for Amazon sellers using FBA is smaller than the advantages of the OSS for basic Amazon sellers storing only in their home country. However, the new scheme can still be advantageous. This depends on the delivery volume, the chosen FBA program, and the customer base and is best decided on a case-by-case basis.

Technical Solutions for the One-Stop-Shop

If you want to or have to use the OSS to fulfill your VAT duties in Europe as an Amazon seller another challenge facing you are the different VAT rates. This is especially true if you sell products from several niches or Amazon product categories to which country-specific reduced VAT rates apply. A solution comes in the form of the hellotax OSS full-service package.

This VAT service provider specialized on the Amazon and FBA E-Commerce business offers their proprietary OSS software in combination with an OSS registration. The software automatically calculates VAT rates and compiles reports which aid in the creation of OSS reports. The hellotax team of local tax accountants then regularly files your OSS returns.

The OSS service can also be used in conjunction with the regular VAT services, which include VAT registrations EU-wide and the submission of regular VAT returns. All your VAT duties are therefore taken care of by one service provider and you can concentrate on scaling your Amazon business while staying worry-free and VAT compliant across the European Union.