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Videos | When is outsourcing order fulfillment the best choice for your business?

Shipwire's E-Commerce Business Development Leader, Stephen Maeder, speaks about outsourcing order fulfillment and when it's the right choice for your business. He gives an overview of Shipwire's capabilities, and shares how using Shipwire can help you expand into new markets, scale effortlessly, and keep costs down.


Video Transcript

I'd like to welcome you to this webinar on Shipwire. Shipwire provides ecommerce order fulfillment services for companies of all sizes. They have warehouses in the U.S., Canada, UK, Hong Kong and Australia. They help their clients grow sales and expand into new markets by eliminating the hassles of shipping and storage. Shipwire is integrated into the Miva Merchant platform as well as all of the major marketplaces. They can help optimally pick, pack and ship orders to your customers faster and for less. On the webinar with us we have Stephen Maeder which is Shipwire's Ecommerce Business Development Leader. He has a variety of experience in the ecommerce and logistics industries and he's here to share with us his knowledge about outsourcing order fulfillment and how Shipwire might fit into your business logistics. 

Good morning everyone and good afternoon to those in Central or East Coast  Time Zones. We've called this webinar "When is Outsourcing Order Fulfillment the Best Choice for Your Business?"That was really just to entice you all to join us and have a conversation on when is the right time for you to outsource order fulfillment or if it's the right choice for your business. 

A little bit about Shipwire, I think that's the best place to start off. We'll talk about what is Shipwire and then we'll get into times and circumstances where you might want to outsource your items a little bit later on in the presentation here. So what is Shipwire? What is outsource order fulfillment? First off, outsource order fulfillment is really taking your products and putting them in a third party warehouse to have them store your inventory and actually ship out orders when they come in through your online ordering channels. Whether that's your Miva Merchant store, Amazon or ebay Marketplace, however you get your orders, they can be sent out. You can even load orders via a csv file or manually putting them in if you get wholesale orders and things like that. Shipwire has warehouses globally,.U.S., Canada, UK, Hong Kong and just recently we opened one in Sydney, Australia. So you connect up your channels with our built-in connectors. Miva's is a module that you download and then upload to your store to get installed there and get everything hooked up so orders just flow over to our system to be shipped out. 

Something to know about Shipwire, we've been around for a good number of years now. Just last year we were acquired by Ingram Micro who is one of the largest shippers in the entire world. So we have tremendously good raters with all of the carriers throughout the world through every warehouse that we ship. That also gives us really good financial backing to continue to grow. Were growing at a pretty fast pace here and we work with businesses of all sizes, from your small mom and pop startups, to starter campaigns that haven't even gotten a single order yet or even their first shipment of inventory, all the way up to businesses doing hundreds of millions of revenue online a year. So we really take that whole small medium of business space and are helping them out and really leveling the playing field for ecommerce and multi-marketplace merchants is what we're all about. 

Locate inventory locally and closer to your customers

North America
  • US 
    • Chicago
    • Los Angeles
    • Philidelphia
  • Canda
    • Toronto
    • Vancouver
International
  • United Kingdom
    • London
  • Australia
    • Sydney
  • China
    • Hong Kong
Coming Soon
  • Germany
    • Frankfurt
  • Brazil
    • Rio de Janeiro
Here's our warehouse network so you can get an idea of the individual cities that we're in around the world. Obviously we have both East and West Coast in the US and Canada. This is very important for lowering your shipping costs to your clients, depending on where most of them are. A note about the Sydney warehouse, if you have interest into Australia or maybe your business already happens to be in Australia, this is a great warehouse, it's over 40,000 square meters, it's the most technologically advanced warehouse in Australia. It's Ingram Micro's warehouse and we get access to that. 

What does outsourcing your fulfillment allow you to do? 

It allows you to expand into new markets
Fulfillment that can grow with you and help you expand into new markets for less. Flexible and scalable order fulfillment is key. Let's take for example that you are a US based business. You might want to test things out in Canada and/or the UK. You might have some customers there now and you're shipping out Internationally and you're dealing with customs, duty fees, longer shipping times and shipping expenses for that and then have the thought "if I got my inventory into that country it would get rid of the end users requiring custom duty's or fees, reduce the shipping times, reduce the shipping costs, maybe we could grow our UK or Canada business to be a greater percentage of our overall business." Using Shipwire would be a way to allow you to  test that out. It would be very cost effective to use Shipwire to get inventory into those countries and we help people with getting things set up. We help you get your business registration and things like that to be able to do business in the countries we have warehouses in. That's one thing to think about, is International expansion. 

Grow Sales Across Multiple Channels
Merchants need to sell B2B, B2C and across multiple marketplaces online. If you're not already using Amazon and ebay, maybe you want to try it out in a location different than your current country to test things out there before you start doing more targeted marketing campaign in those countries. Those are things you can test out very cost effectively using Shipwire for that warehouse and fulfillment capacity.    

Keep Costs Down
Expanding has high costs. Carriers increase prices regularly. Running your own warehouse does not scale. Being able to use multiple warehouses can really help you keep the costs down because you're getting closer to your clients. 

One of the things we do really well here is optimize for the most cost-effective combination of warehouse, packaging and carrier to get the lowest shipping price for your customers. So you get an order in on your Miva Merchant store and it flows over into Shipwire. Shipwire is using a really cool algorithm that we developed to figure out "ok, which warehouse actually has the items in stock that are on this order, which warehouse is closest to the customer, if multiple warehouses have the same inventory and they are equally close to it, what's going to happen is our algorithm is going to go take a look at shipping rates for ground shipping, one-day shipping, two-day shipping, from all the carriers that are available from these warehouses and find out which ones going to be the most cost effective of each carrier rate and actually chose the one that's most cost effective. Also, for clarification, if the customer picked Fedex Ground shipping in Miva, that will come over into Shipwire and that selection of shipping will be honored. This algorithm I'm talking about implies to orders coming into our system as well as our shipping rate quoting system.  

In Miva Merchant we do have things built in the cart so when your customer is checking out of your store, they'll actually see shipping rates return from your Shipwire accounts. So the ones from Fedex, UPS, give realtime quotes which is from a system that is mainly coming from one zip code out to the customer's zip code with a particular weight, that's how those usually work. The way ours work is a little bit different. It will actually take the full address and figure out whether it's a commercial address or a residential address because obviously that changes things. We don't want to be sending a Fedex Ground to a P.O. Box for example. We'll have to figure out what that address is, commercial or residential. We'll figure out what box size needs to be used for the particular size of the items that are in it. You'll provide length, width, height and weight on all the products. So we'll figure out what box size will be used. Then we'll also take a look at best options for one-day, two-day ground and return that to the real time shipping module inside Miva. So what will be returned to the customer in their cart is real options of what it will cost to get the item to them and they'll be able to chose that and it will get reflected over to Shipwire. 

What this kind of algorithm allows you to do is save a lot on shipping because you're actually charging the right amount to your customer for what it actually costs you. This is a big area within ecommerce that's usually pretty wrong. You usually end up losing a good bit of money on shipping because you're just not charging the right amount to your customer. This could really help reduce that quit a lot, so much so that you may be able to offer free shipping to your clients. For a lot of businesses this is a great way to increase your conversion rate as well as competition with other competitors. 

Interesting things that you can do from a marketing perspective for being able to have multiple warehouses and reduce shipping costs by having aggregated shipping rates that Ingram Micro is able to negotiate with their huge shipping volumes. For example, they ship all of Apple's products. They have very great rates. 

Shipping Faster, For Less
Here is an example of what your shipping can look like. You'll get quicker shipping times when your warehouse is closer to your customer. So for this example, say you're in Miami and you're shipping a 10x10x10 box that's 10 pounds to both Los Angeles and Toronto. Here's what it would cost for you to ship that box. For 100 orders a month you're looking at $1400 to Los Angeles and $2500 to Toronto, Canada. If you were to locate your inventory within our Los Angeles and Toronto warehouses, Then you would save quite a bit on these total orders. Just in a month you would save about $2000 just because of the reduced shipping prices. So this is a big deal for domestic shipping. You're talking about 35% in domestic shipping on average across your clients and even more Internationally. You all know how much of a pain International Shipping can be and how much longer it takes to get there. The other part domestically is you can get to both cities within 1-2 days with ground shipping. That's something that can really increase customer happiness, getting their order quicker and not having to pay a lot for shipping. 

What does the modern merchant need to grow?
Expand Into New Markets
  • Global ecommerce is growing
  • Flexible and scaleable is key
  • International shipping is:
  • Too slow
  • Too expensive
  • Too risky
  • Too confusing
  • Bad customer service 
Expanding into new markets is something you can do with Shipwire. International shipping is typically really slow, expensive, risky, a lot of packages are lost it can be confusing for the customer. One of the biggest things is having a package arrive and being told they owe money in custom fees and duties that they didn't expect. Sometimes that causes the client to just reject the package, which can lead to a really poor customer experience overall. When you bring inventory into another country that Shipwire has a warehouse in, you're paying the custom duties upon importation. You're doing it then and you can ship that inventory over in bulk like on a ship. It might be slow to get the inventory over in the first place but it can be very cost effective. One it arrives it can ship out nice and quick that last mile so to speak. 

Keeping Costs Down
  • Expanding has high costs
  • Carriers increase prices regularly
  • Running your own warehouse does not scale 
When running your own warehouse you have to think about when to hire new staff for the holiday rush period, do I need to get more warehouse space, etc. Imagine you get a product and you're on the Today Show and all of a sudden you have 400% volume of orders as you did the previous week. Will you be able to scale and handle that kind of growth and demand? What would that look like if you're fulfilling on your own? Also, another thing you'll need to think of is what are your expenses for the warehouse? Do you have a clear idea of how much it costs overall to run a warehouse? To hire staff? How much are we spending hourly? Are you just working out of your office and is staff really taking care of customer service, sales or marketing? How much time are they spending on shipping orders? Really taking a look at all that and seeing what it costs could be very time consuming. When you use Shipwire, as you see our pricing later, you'll see it's very clear and broken down as to what the costs are so that you don't have surprises. You can very clearly run scenarios to find out what your costs would be as your volume grows. 

How it Works
Shipwire's pricing is purposely aligned with the needs of the fast-growing business. While most outsourced order fulfillment providers require that you sign long-0erm contracts and agree to minimum fees in order to get competitive pricing, Shipwire offers on-demand, clear pricing that scales with you as your business grows. It is designed to be simple, transparent and to require minimal oversight or management on your part.  

Storage & Support

Storage
Price associated with how much space is used in warehouses and unique products stored. We base our fee off what you send us. If you send us pallets and don't want us to break them down, you can pay for the number of pallet spaces that you're using. If you want us to break them down and put them on shelves then we can charge by cubic feet used, and these are very simple calculations. They're are based on pallets or cubic feet of space used across all warehouses. So it's not like, "Oh, now that I want to go into the UK I have to pay this extra fee to get into the UK warehouse." No, you're just paying that one standard price for all cubic feet used across all warehouses with Shipwire globally. This starts off at $24.95 a month to have a bout a pallets worth of products with us, so that really hits that small end of things there. You can really try us out. The other thing about trying us out - we do offer our first 50 shipments for free on our trial. So that means no picking and packing fees. It's really there so you can try us out. You can send us let than that. You can send us five items and have it shipped to yourself or a business just to see what the experience is like from the receiving end of what it's like to see our packing and shipping methods. 

Support - Order Handling
Price associated with the order volume of picking and handling items. We have a labor cost involved with having to pick the item that goes into your order. You'll pay a certain amount for your first item going into the box and then a much smaller amount for each additional item going into your box. So that's how order handling works. We have our order handling fees automatically go down, the per pick and pack fees, as you scale up your business with us. So against that long-term contracts, this really allows you to have your costs of order handling automatically go down as your scaling your business so you don't have to think about it. 

Shipping
You will pay for shipping items out to the carriers using Ingram Micro's great rates. The way all this works is you have an account with a balance in it and these fees are being deducted from that account. One thing to note on this is that there's no receiving fees. So when you send us your inventory, whether it's boxes or you're shipping a pallet to us, or you're shipping a container to us that's loaded with pallets, there's no fees associated with receiving that inventory, as long as you have it labeled properly. We've got a great pdf that shows you how to appropriately label items for our warehouses so it's easy for our staff to be time effective. So we don't charge for this. What this allows you to do really is handle your cash flow better, so as you can see you're paying for storage and support which is a set amount. You know how much it is, how much inventory you want to store with us, how fast you're turning your inventory and all that. This should all be a pretty established cost. With order handling and shipping, that comes after you've already been paid by your customer. So our pricing really works well for cash flow and your business being able to scale without having to throw a whole bunch of money at order fulfillment. If you were to buy your own warehouse you would have to put money down for buying a property or leasing it ahead of time and have that cash outlay. Of course there's a lot more to consider like how much staff to hire and everything else that goes along with owning your own warehouse. But you have to lay down the cash a long time before you're able to make that back in from your clients.

Full-Featured Integration
  • The Shipwire/Miva integration does everything you would want it to do. 
We've got a really good integration with Miva. We were originally integrated with Miva in 2008 and updated that integration in 2012. It does everything with integration with Shipwire can do and everything you'd want it to do.
  • Inventory Status - You can query your inventory status globally by region, or by warehouse. Find out when inventory will be available for products that are out of stock. 
If we look at the perspective of regular order flow on your web site first thing I would think about would be that we make sure to get the inventory status correct on your web site. So you want to make sure that if something is out of stock, if you don't want to sell items that are out of stock, you can have your Miva Merchant store set up so it won't sell items at 0 in your Shipwire warehouses. A little bit about this. There's some nuance in your Shipwire warehouses. By default, Shipwire is going to send over to Miva Merchant the inventory level globally. So add up all the inventory across the globe for each sku and send back that number to the to the Miva Merchant store. If you have multiple Miva Merchant stores for different geographic regions, one for the US store and one for a UK store for example, you can actually call into Customer Care on our side and set it up that such a way that your Miva Merchant US Store only gets the inventory counts for US warehouses to return back to it. Your UK store just gets UK location inventory amounts sent back to that store. So we have some good flexibility there for multiple Miva Merchant store situations. That's inventory status that synchs over on a regular basis so that you're not overselling. This is also for Amazon and ebay where it's even a bigger deal to not be selling things that you don't have, to not hurt your customer, or your merchant rating. 
  • Shipping Rates 
Obtain real-time shipping rates at any time during checkout. Shipwire will return the most cost-effective rates, choosing from the best warehouse, packaging and carrier available based on your Optimizer preferences.  We talked about this earlier. You're getting real-time shipping rates into the Miva Merchant checkout process. So you're getting the actual Shipwire account rates here.
  • Order Entry 
Orders are submitted to Shipwire from Miva automatically via our Order Entry API. Once Miva receives an order, Shipwire takes care of the rest. Once a customer actually completes checkout in your Miva Merchant store those orders automatically come over to Shipwire to be fulfilled by our team. 
  • Order Tracking
All tracking information related to completed shipments is pulled automatically, including expected delivery dates. This tracking information is posted back to Miva. This includes expected delivery dates as well.
  • Multi-Account Support 
You can connect your Shipwire account to more than one Miva account for fulfillment features. If you have several different niches or brands, websites all in Miva Merchant, you can of course connect them all to Shipwire to your single Shipwire account and we can handle fulfilling all of that.

I want to give you a good picture of some of the products that do really well with Shipwire. This isn't exhaustive. Obviously there are other kinds of products too that we handle. Gaming. That's an Angry Birds plush toy. We actually fulfill all the Angry Birds plush toys which is a really big business. Nutraceuticals, health and cosmetics is really big. We do the People's Chemist if you've heard of them along with several others like them.  We're actually really good with Kickstarter campaigns. I'm not sure if anyone is doing a Kickstarter campaign to bring some new products out, but this may apply to you if you do a lot of backorders or preorders from products. We actually have done some case studies on Kickstarters that we've been involved with, our clients have been involved with where they've received 7,000 - 10,000 preorders beforehand and when the inventory of the manufacturing run actually came in we would get out 7,000-8,000 orders on the very first day that the item was received at our warehouse. So we do really well with Kickstarters there.  Electronics, Food and Beverage, Travel Goods, Automotive, These are just some of the things we do really well with. I would say things that have a low number of overall skus, maybe under 1000 skus and good turn over of those items is typically what does really well with Shipwire. A Sales Representative can go through with you what products you sell and if they would be a good fit for your business economically. We really want to clarify, we don't just want anybody and everybody to become a Shipwire client, we really want to make sure it's a good fit and our Sales Representatives do a really good job kind of asking those questions to make sure that your business and your products are a good fit for Shipwire economically so it's going to be a win win for everyone. So reach out to our Sales Reps if you have any questions. 

Some of our clients
  • Dodocase
  • Behance
  • Stem
  • Rovio
  • Guru
  • People's Chemist
  • mobee
  • Berg
  • Rosenfeld
  • Luxy
  • Pacha Ibiza
  • glif
  • Kara
  • JYSK
  • Viking Bags
  • Evernote
When is Outsourcing Order Fulfillment the Best Choice for Your Business?

The easy answer to that question, if you're registered and showed up for a webinar called "When is Outsourcing Order Fulfillment the Best Choice for Your Business?" it's probably pretty soon. You should probably seriously consider it. I would guess you're probably already feeling some of the pain of fulfilling on your own, or you can see it coming in more growth in your business. What are the kind of spots you might want to consider this? 

Your level of experience with shipping and fulfilling. Do you really know how to get a product from point A to point B the fastest method for the lowest price with the least margin of error? Do you really want to go through UPS, USPS, Fedex, etc. to find the best price or particular size box to ship and check the right location to optimize it all for yourself. Maybe you can find some software to do that, a lot of them don't. Shipwire does it automatically. Do you want to spend time in a warehouse or garage or your office? Packaging and shipping products, is that your main business? Is it fulfillment or would you rather spend more time focusing on sales and marketing, product curation, product creation? What do you really want to be spending your time on? Another thing I would mention would be business growth plans. If you believe your business will grow you really need to ask yourself some key questions. With increasing business you might have to add additional warehouse space. Will your current staff be able to handle the growth? Will you have to hire more? Will you still be able to focus on growing sales if you win a few big accounts. Outsourcing your fulfillment can really help lay the foundation that you need to grow and scale your business as you're moving forward. 

Shipping Errors
This is a big one. One of the laws of do it yourself order fulfillment is that as shipping volume goes up, error rates go up. Employees and family get stressed out, their working late, order management systems designed for lower volumes are breaking down and generally mistakes happen more often. This costs a lot for your business in the sense that you have upset customers in terms of return shipping, reshipping costs and in general just hassles. stocking, etc. With Shipwire obviously these are professional warehouses and staff and we're made to handle scale. We're very smart at being able to take a look at algorithmically the amount of orders that have come into our system so that we make sure to bring in the right number of warehouse staff on any particular day to handle the order volume that needs to be shipped out that day. Same thing with receiving. When you send us a receiving we're going to ask you for a tracking number for that order so we know what day it's coming how big it is, how many skus are on it so again, make sure we have the right amount of warehouse staff in to be able to process that receiving. Those are just some of the things we do to handle scale very intelligently. 

When is Outsourcing Best for Your Business or When it Might Not Be?
What kind of products do you sell? Obviously not all products are right for outsource fulfillment. If you're shipping handmade items that you make on demand or items that need customization like monograming for wedding invitations, any singular items like closeouts or antiques, certain perishable items that have to be refrigerated or be in a really temperature controlled environment - these types of products are probably not going to work out. Order Fulfillment is really best for non perishable items that you buy by the lot or container and sell by the hundreds. Toys, electronics, apparel, are all very big with us here. 

Another thing to think about is who your end buyer is. We do straight to consumer shipment. We do some B2B so you can have wholesale items to distributor, even big box retailer. So if you want to get into Walmart and Target and places like that you can use us if it's right and you can certainly check with sales on your particular use case scenario to see if it's going to make sense. We want to make sure that you're only coming on board with us if it really makes sense for you to do so. It doesn't do us any good to have an unhappy customer because things just don't work out economically for them the particular way they want to use us. 

If you're doing a lot of B2B, you really want to make sure that you get stuff Mastercard packed. Because we charge on a per item picked basis, we want to make sure that for those large big lots or wholesale orders, that they are able to order in quantities that match your case quantity. So if you have a Mastercard box  and it has fifty smaller  boxes of the individual products in it, then let your wholesalers buy in fifty. That pick up of mastercase quantity is one pick say for $2, rather than 50 picks for all the individual items. It really matters how you put things together. 

Last thing I want to cover here is when is outsourcing best is inventory complexity. How many skus do you have? Say if you sell a black shirt in small, medium and large, that's three skus. If you sell the same shirt in one, two and three packs with all the sizes that's now nine skus. That's going to make a big change for how you break things up into skus and how you want to have things at our warehouse. A big reason for this is that we'll put individual items in bins for each sku. So it will make it easier for us to pull the order you really want to make sure that the volume of skus that you have works out with things there. 

Q&A
http://mivamerchant.com/partners/shipwire

Q: Are they able to use their own UPS number?

A: You can use your own UPS number if you contact Customer Care. I will say, really check our rates and you're able to do that by signing up for a Shipwire account and loading in some of your products. You can then do a test quote from your Shipwire User Interface and then compare it to your own UPS account rates. Most likely we're going to have way better rates because we only add on a small margin to Ingram Micro's Shipwire fantastic negotiated rates. Ingram Micro is one of the top five shippers in the world. So it is possible, but it may not be ideal.

Q: Can we use Shipwire for just International orders?

A: Yes, absolutely you can. We have a lot of customers that are doing exactly that. They use their own warehouse domestically and just use us for expanding. I don't know of the specific details on how you set that up from a technical perspective, but our Sales team can help you with that when you contact them. They can send an email to sales@shipwire.com.

Q: If Miva orders go direct to Shipwire, how do you separate products that are drop shipped? 

A: That is another good technical question going into how the integration works. My knowledge on the integration now is that all orders come over to Shipwire. Now there are some settings inside Shipwire to what we will do with items we don't recognize. So for example, when you set up your Shipwire account, you'll actually put in your products, the Sku, description, length, width, height, weight into the Shipwire system so we know what it is and when we're calculating cubic feet space, inventory and all that stuff we're able to keep track of that. Now if you get an order in and there's a sku on it that's not in your Shipwire account, essentially you have the option in the settings to either ignore that entire order, just ignore that particular item and go ahead and fulfill the rest of the items on the order, or put that order in a hold status for manual review. So if you pick one of those options with it then you can of course fulfill the items separately. Just know that all of the skus that you've entered into Shipwire will be fulfilled through Shipwire's warehouses. 

Q: Do you have discounted rates for inbound pallets?

A: The carriers we use are  UPS, USPS, Fedex, Canada Post, Canada Royal Mail and a whole host of others and they are all about not shipping pallets. They are about shipping boxes up to a certain weight and size. So they don't handle pallets. So we don't have any carriers that do pallet shipping. So that is something if you have inventory with us and you need to ship that, you'll need to find a truckload or other freight kind of options to use. That's just not the way we ship from our warehouse. So we don't have the ability to create those types of rates.






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