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Front and Center

Ode DeJoy

Postmaster General Louis DeJoy announced on Tuesday the 10-year plan for making necessary improvements to the USPS, including making delivery times… longer? Well, at least the post office hours will stay open… shorter?

Wut.
‍You heard that right. Beyond their adorable new vehicles which have already hit the streets, the 10-year plan, called Delivering for America, includes a much-needed $40 billion investments in modern package processing equipment and carrier devices, vital upgrades to post offices and uniforms, and implementation of new employee training which will help these overworked carriers from going postal. It will also dial down delivery time expectations for first-class mail from a 3-day standard... to a 5-day standard.

HOW COULD THEY?
‍I KNOW! Lawmakers are outraged and have already called to oust the PostMaster General for this plan. DeJoy notes in the plan that they have not been able to meet this 3-day standard for the past 8 years, but they expect to meet this 3-day approximately 70% of the time. They will be moving First-Class Mail from air transportation, which is costly, unreliable and carbon emission-heavy, to sustainable ground transportation.

Well, that’s good.
‍Maybe I <3 my mail carrier too much, but these changes sound necessary to improve the overall health and operations of the USPS in the long run. Not to mention, it shows a further shift towards sustainability in logistics operations, a common theme we’ve seen week after week.

Back of the Packet

Titanic 2
‍One of the largest container ships in the world has run aground in a sandstorm and blocked all traffic through the vital Suez Canal water passageway in Egypt, which CNN reports, accounts for approximately 30% of container ship traffic globally each day. Shipping delays and higher gas prices are predicted to affect consumers around the globe, as tug boats have been tugging their little hearts out around the clock to dislodge the titanic, 220,000-ton ship.

Running Train
‍Announced on Tuesday, the first rail network has connected the US, Mexico and Canada in a $29B deal between Canadian Pacific Railway and Kansas City Southern, in a move that seems to kick President Biden’s promise of the Second Great Railway Revolution. The Canadian Pacific Railway links east and west coasts between the US and Canada, while Kansas CIty Southern connects US, Mexico and Panama, with the major networks connecting on a single point at a joint facility in Kansas City, Missouri.

ShipHero News

Building a Customer Loyalty Program… with Science!
‍“Be loyal to those who are loyal to you. And respect everyone, even your enemies and competition.” Who knew that customer loyalty programs could be summarized so perfectly by a man who can’t be seen… yes, it’s a John Cena quote. Check out our latest blog to learn how your business can build its own customer loyalty program… with science!

The Fulfillment Innovation Wheel: Resilient Shipping
‍Is your business sufficiently protected from supply chain risks like extreme weather events, supplier disruptions, and well... pandemics? If not, find out how with ShipHero’s Fulfillment Innovation Wheel series - Resilient Fulfillment.

How To Build Your Customer Loyalty Programs... with Science!

An eCommerce Science Lesson

Welcome to your eCommerce Science lesson on Customer Loyalty. Simply put, customer loyalty is that conditioned behavior of “human want thing, company has thing”.

• I want shoes, Nike has shoes.
• I want coffee, Starbucks has coffee.
• I want the meats, Arby’s has the meats.

You get the picture. In fact, a 2021 Customer Experience Trends Report just proved that we’re creatures of habit, with 3 in 4 shoppers making purchasing decisions based on their past experience. So how do you get your company into that equation? With a generous and truly engaging customer loyalty program, of course!‍

What is a Customer Loyalty Program? It’s a customer-facing program that aims to increase customer retention and motivate repeat purchases… which is a high-falootin’, fancy business school way of saying:Going the extra mile to really engage with your customers will keep them coming back for more than just your products (like when the waitress calls you “sweetie”.)

‍In this article, we’ll describe the benefits and best practices for each type of customer loyalty program so that you can start building a customer loyalty program of your very own.

Benefits of Customer Loyalty Program

Customer loyalty programs have been proven to inspire customer retention, drive customer referrals, and save your sales team some budget.

‍Inspire customer retention. While it’s always nice to see a familiar face, members of customer loyalty programs typically spend nearly 20% more than typical customers. Not to mention, existing customers are 50% more likely to buy a new product of yours.

‍Drive customer referrals. With loyalty programs that create community or competition, beyond traditional word-of-mouth, people will organically share your loyalty program efforts, contribute positive reviews, and even generate content of their own by way of UGC or ambassadorships.

‍Save costs: Companies must spend 500% more to convert a new customer compared to an existing one. For example, if you spend $100 flagging down an Average Jane from the street, giving her the business, and closing the sale; you’ll only need to spend $20 to close the sale with them next time.

Building a Customer Loyalty Program

There are six distinct types of customer loyalty programs used by major brands today.

1. Points
2. Paid Membership
3. Tier Rewards
4. Progress and Competition
5. Community
6. Subscription

Let’s dive into a description and best practices for each type. Keep in mind, every type can be used in combination with the other to create hybrid loyalty programs.

Points Program

The points program allows customers to accrue points through various actions, and spend those points on rewards. It is a brilliant way to gamify the shopping experience, and is used by retailers with high volumes and inexpensive items, such as grocery stores, fashion outlets, or fast food chains (hi McDonald’s Monopoly).

You can start by creating a simple points systems, which has two components:

1. What actions will customers complete to accrue points? Many retailers equate a $1 spent to 1 point, and increase points if it is a product you need to push.
2. How will customers use their points? You can offer discounts, free gifts, samples, and just about anything.

Offer relevant and personal rewards. Beyond product discounts, rewards should be something that truly resonates with your target audience, such as free tickets to a relevant event or cool swag.Consider using points program software like Smile.io, which allows you to build customized point systems for your online and physical stores.

Paid Membership

The paid membership program invites customers to pay a “joining fee” for members-only club access and VIP benefits, where the perceived benefits of joining the program far outweigh the cost.

You can start by offering exclusive benefits, discounts and product releases to your paid members, and unless you’re already a recognizable brand with strong social proof, this program is best-suited when targeting existing customers.

Be sure to incorporate your business values into the program to build stronger relationships. If your business revolves around certain cause, like Toms for example, you could engage your membership base to feel closer to the contribution

Once your paid membership program is operational, ask your members for feedback and reviews, and widely advertise those perks to convert your non-members into paid members.

Tier Rewards

The tier rewards program offers another way to gamify engagement, and incentivizes customers to ascend tiers that reward with increasingly desirable perks e.g., Silver, Gold, Platinum, Uranium Status on airlines. This provides a satisfying experience, and even a little bragging rights, for your regular customers.

To get started, decide how many tiers you’ll offer based on your available perks. Keep the levels to a minimum or else customers will tire out climbing the seemingly never-ending tiers. Not to mention, customers at your top tier will have the greatest levels of customer retention, so don’t make it too challenging to get there. Aim for a solid distribution of customers at each tier.

Next, you’ll want to decide all the different conditions that a customer can climb tiers, whether it’s dollar amount spent, frequency/volume of orders, or some other form of engagement.

From there, map out available perks based on their value and assign them to each tier. You want to keep it simple and easily understood. Be sure to offer truly valuable and exclusive benefits for the higher tiers.

Progress and Competition

The Progress and Competition loyalty programs publicly issue engagement-related goals or competition, with rewards granted to the top performers. Common examples include Pelaton’s leaderboard, Trivia HQ, Nike Run Club’s public progress tracker, and more

When you publicly set a goal or issue a competition, there will be people that strive to win… it’s just human nature. What’s more, customers who believe they are close to achieving a goal or performing well in a competition become more committed to their efforts -- this is known as the endowed progress effect.

To get started, create fun and attainable goals or a challenging game that peaks people’s interest and beckons to their competitive instincts. The goals or game need not focus entirely on buying a product or even engaging in your company at all; rather, the best way to capitalize on this loyalty program is to position your product as the competitive edge you need to reach these goals and win the game.

Be sure to visually encourage progress and comparison with progress bars, leaderboard, and various nudge tactics.

Community

The Community program strives to create a platform where your members can interact with other like-minded individuals to connect and share content, get access to exclusive benefits and events, and stay-in-the-know about your company (causing excruciating FOMO for those not-in-the-know).

To get started, find your target audience by leveraging existing social media platforms to develop a sense of community. Play around with concepts that create bonds not only between  your company and customers, but among customers themselves.

Many companies have branded their base by calling them a cute pet-name (hi Barbs), or rallying behind a common cause. In fact, about 66% of customers are more willing to trust brands that take stances on social and political issues that resonate with them.

As long as you encourage discussion that is relevant to your brand, there is no wrong way to create a community-focused loyalty program.

Subscription

The Subscription loyalty program, commonly known as “Subscribe & Save”, allows customers to subscribe to weekly, monthly or seasonal purchases and receive discounts upwards of 15% off. Notable examples are GNC, Trunk Club, Butcher Box, and any brand that ships offers recurring purchases or subscription boxes. (We cover the subscription model extensively in our blog.)

To get started, develop a pricing and bundle strategy that incentivizes customers to sign-up for repeat purchases. Examples include freemium options, early bird offers, free trials, bundles and more. From there, provide an easy way for customers to manage and even customize their subscriptions.

Subscription models have shown to yield better customer relationships, improved aggregate data, and more diversity in product offerings. Not to mention, it gives brands the creative freedom to understand how their customers would prefer to engage with their products and services.

Wrap It Up

By using one or all of the customer loyalty programs above, your company will offer exciting and fun ways to engage with your company, and incentivize repeat customers in the meantime.

While just about any eCommerce company can promise a lucrative subscription model or rewards program, the reality is that these are extremely complicated strategies to pull off without the right inventory management and order fulfillment processes to back them up.

In fact, most 3PLs and fulfillment providers simply don’t offer the customization options that eCommerce companies need to pull off loyalty programs.

That’s why you need to make sure you are giving your loyalty to the right fulfillment provider.That’s why more and more eCommerce companies rely on ShipHero’s advanced bundling and customization capabilities to power their loyalty programs with reliable 2-day shipping across the contiguous U.S.

Third-party logistics (3PL) is one of the ways that a company can outsource order fulfillment. An eCommerce order fulfillment process starts when a customer submits the order and finishes when the product reaches their door.

What seems like a simple process can become quite complex depending on the storage location of your company's inventory, the customer's location, the size of the order and the timetable for delivery. It becomes even more complicated when you factor in the potential for returns.

Suppose you can't handle your eCommerce fulfillment in-house. In that case, it's probably time to outsource and let a third-party logistics company take over.

Keep reading to learn everything you need to know about 3PLs.

What Is a Third-Party Logistics Company?

3PL companies are companies that offer various eCommerce logistics processes to online businesses. Some services they offer include warehousing, inventory management and order fulfillment.

3PL involves the business, the logistics provider and the shipping carrier. In simple terms, a 3PL provider offers logistics services to manage certain aspects of a company's shipping operations. 3PLs are renowned for their logistics industry expertise and can help companies better fulfill orders to keep their customers happy.

Some people think 3PLs and freight brokers are essentially the same. However, 3PL companies are more active than freight brokers because they take over your fulfillment operations. Meanwhile, freight brokers only connect you to shipping carriers without touching your products.

A 3PL becomes integrated into the company's inventory storage and transportation procedures. Rather than storing, packaging and shipping orders, companies hire a 3PL to manage the entire process. The 3PL owns or leases its storage and transportation assets to fulfill the client's orders remotely, ensuring you can focus on growing your business.

Third-party supply chain models first appeared in the 1970s when intermodal marketers took packages from businesses and brought them to rail stations for delivery. People developed 3PL software to help companies manage inventory and deliveries as the field grows. Nowadays, all kinds of businesses, from Fortune 500 to small businesses, use third-party logistics.

Benefits of Third-Party Logistics in Supply Chain Management

Here are the benefits of working with a 3PL company:

Reduce Logistics Costs

Third-party logistics companies often have connections in the sector, meaning they have better access to vendors and can negotiate higher discounts for you. By partnering with them, you can use their contacts and influence to reduce shipping supply and warehousing expenses, ultimately saving you money.

Receive Logistics Experience

Many third-party logistics service experts have decades of combined experience in the industry. When you hire a 3PL company, you get access to this expertise to get insights on transport documentation, shipping regulations and other logistics issues. They can also answer your questions about how to increase operational efficiencies.

Focus on Critical Functions

Running an in-house logistics division takes a lot of time and money. By hiring a 3PL company, you can instead focus on core business processes like developing marketing materials and improving sales channels. Better yet, you can do this without dedicating any internal staff or resources to run an in-house logistics division.

Scale With Your Business Capabilities

3PLs provide custom-made services based on your company's needs and performance. If your business grows and product orders increase, you can sign them for a more significant contract with more benefits. Conversely, considering downscaling your business, you can opt out of some of their services.

Increased Speed

Working with a 3PL company helps you save time. You save time not only by streamlining various supply chain operations but also by being proactively aware of any potential issues in the supply chain. Addressing these issues early on means you don’t need to spend a lot of time fixing them after the damage is done.

Shipping and Logistics System Connectivity

Many 3PL companies offer all-in supply chain and logistics management, which means they handle your entire supply chain. This means your entire supply chain and logistics operation is handled by one party, reducing the chance of miscommunication and mistakes. It’s also more efficient since all the information flows within one organization instead of many.

Improved Customer Service

Customers want to get their purchased items on time. Working with a 3PL company helps you get products to customers on time, increasing their satisfaction. Many 3PL companies also offer returns management, restoring customer satisfaction when they receive defective items.

Third-Party Logistics Business Model

As the name implies, 3PL involves three parties that help bring products to the market. Here are the three parties involved in the 3PL model:

The Business

The business is your company – you're responsible for producing goods and running the eCommerce business. Once people buy your products, you send the orders to your logistics company.

The Logistics Company

The logistics company is the intermediary between your company and the shipping providers. Third-party logistics companies offer many services, including warehousing, packaging and inventory management.

The Shipper

The shipper carries your products to physical stores or the buyers' doors. Major shippers include USPS, UPS and DHL.

What Services Does a 3PL Provide?

A 3PL can scale and customize its services according to the client's specific needs. The client still retains some oversight when managing shipping operations. Before signing a contract, you can outline what services you want the 3PL to provide and what services you will maintain in-house. As your business grows, your 3PL provider can take over a significant role in expanding your supply chain and procurement operations.

Here's an overview of the services a 3PL typically provides:

Product Storage Solutions

3PL companies provide warehouse spaces to handle order fulfillment for multiple companies in one place. This improves efficiency and reduces costs because they don't have to switch between numerous warehouse locations to finish orders. Moreover, you don't have to lease warehouse space, buy forklifts, or rent trucks to handle your merchandise.

Inventory Management and Organization

Managing inventory involves more than simply storing your company's products. Integrative technology also syncs your inventory with your online store in real-time, so you can track inventory and predict demand to avoid sell-outs. Your 3PL also helps organize items with multiple parts into proper categories, ensuring nothing is misplaced.

Inventory Distribution

Most 3PL providers have fulfillment centers across the country to store your products. 3PL companies distribute your inventory across the country to ensure fast shipment times.

A 3PL automatically routes orders to fulfillment centers based on the customer's location. 3PLs use extensive automation to save hundreds and thousands of dollars on inventory distribution, raising their clients' profits.

Picking and Packing

Alongside storage, 3PL companies assign staff to pick products for each order and package them for delivery.

Freight Forwarding

Once the products are picked and packaged, the 3PL forwards them to a shipping carrier for delivery. Different 3PLs work with other carriers, and a good 3PL will choose the one that offers the best price and delivery speed. Some 3PLs even work with local carriers for less than truckload (LTL) shipping for local orders.

Expedited Shipping

By partnering with a 3PL, your company can offer expedited shipping options to your customers since fulfillment centers send out orders daily. 3PLs often negotiate discounts with carriers like FedEx, DHL, USPS and others to offer faster delivery speeds at a manageable cost.

Shipment Tracing/Tracking

In addition to handling the shipping process, a 3PL will also manage the tracing and tracking process. Customers will receive shipping information to track their orders throughout the fulfillment process.

Reverse Logistics (Returns)

Not only do 3PLs offer shipment services, but they can also provide reverse logistics to handle returns. A 3PL can provide customers with return labels to drop the item off with a carrier for return to the fulfillment center.

Again, when you sign a contract with a 3PL company, you can customize its services according to your business's needs. An experienced 3PL provider will be able to handle the logistics of the entire supply chain from when your customer submits their order to when it arrives on their doorstep.

How 3PLs Handle Order Fulfillment

So you can visualize what this looks like, here is an outline of the order fulfillment process from a 3PL provider's perspective:

Step 1: Receiving

A 3PL needs inventory to complete customer orders, so your first act should be moving inventory to their warehouse. Depending on your business size, your inventory may be divided into several fulfillment centers. Each 3PL has its process for receiving and storing inventory. Most providers can customize this service according to the client's needs.

Step 2: Picking

Depending on the 3PL's software, your partner may get the orders automatically, or you may have to send them manually. After placing the order, the 3PL starts the order fulfillment process by packing the items at the warehouse and then passes it to the next stage of the supply chain for packaging.

Step 3: Packing

Once the 3PL has picked up all ordered items, they are prepared for delivery.S

tandard shipping materials for your products include cardboard boxes, poly mailers, bubble wrap, packing tape and bubble mailers. The best 3PL company can balance package protection and small dimensional weight so your products arrive safely and within budget.

Some 3PL companies charge extra for packing material, but others fold the costs into the service fee. Depending on your working relationship, 3PL companies may also let brands customize their packaging.

Step 4: Shipping

After the products are prepared, they're handed off to a courier for final delivery.

Some 3PLs partner with specific shipping carriers, while other companies have a rotation of transportation services to get the best deals. Either way, 3PL partners are responsible for brokering deals with freight forwarders to bring you the best rates. The courier fleet usually picks items up from your 3PL partner's warehouses.

Step 5: Returns

The order process doesn't always finish once the package is delivered to the customer's door. Specifically, product returns can get complicated if you manage inventory stock levels yourself. When you're working with a 3PL partner, they receive all returned products to be restocked, scrapped, or processed.

To make the return process more manageable, you can ask the 3PL company to provide shipping labels for every package. Customers can fill them out and return their packages if something goes wrong.

It should be clear by now that 3PL partnerships benefit companies, but how do you determine whether yours will? Keep reading to learn the signs that it's time to hire a 3PL.

When Do You Need a 3PL?

3PLs are needed when you can't handle order fulfillment by yourself. Unless you're running a small retail business out of your garage with no more than a dozen orders a week, the chances are good that your company could benefit from hiring a 3PL provider. To help you decide, here is an overview of the advantages associated with working with a third-party logistics provider:

• Time savings: Outsourcing your company's logistics means you have more time to focus on critical business processes.
• Cost savings: 3PL companies offer lower warehousing, shipping and inventory management prices, which is cheaper than building in-house logistics departments.
• Improved compliance: 3PL companies help you stay updated with the latest logistics technologies and regulations. Service customization: When it comes to warehousing, shipping and distribution, a 3PL provider can customize its services according to your needs and adjust as you grow. Access to resources: Hiring a 3PL gives you access to the best inventory management software and other integrative technology you might not get on your own.
• Expanded reach: 3PL companies have more experience negotiating with shipping carriers and other vendors so that you can get the best logistics services at low rates.
• Risk reduction: Outsourcing operational logistics to a 3PL company means fewer labor and financial risks than building an in-house logistics department.

Still unsure whether hiring a 3PL provider is the next logical step for your business? Here are some of the top reasons to hire a third-party logistics provider:

You're Shipping More Than 100 Orders Per Month

There is nothing magical about the number “100” – the point is that your company is receiving more orders than you can efficiently manage in-house. Shipping a large volume of items per month means your team spends more time and effort fulfilling orders than doing core business tasks. Once you've reached over 100 shipments per month, it's a good idea to hire a 3PL company to support your operations.

You've Run Out of Storage Space for Your Inventory

Any retail company's goal is to have enough orders that it becomes necessary to increase inventory levels. Of course, when this happens, you'll need space to store all of that extra inventory. Rather than dealing with this predicament each time you add a new product to your store, turn over storage logistics to a 3PL.

You Want to Offer Your Customers Expedited Shipping

Suppose you're currently managing your order fulfillment in-house. In that case, you may struggle to make it to the post office even once a day, let alone often enough to give your customers expedited shipping options. With a 3PL handling your order fulfillment logistics, you can suddenly offer one-day, two-day and maybe even same-day delivery.

You Want to Save Money on Storage and Shipping

Working with 3PL providers isn't cheap, but it could save you loads of time and money. Instead of spending a lot to lease storage space and build an in-house logistics division, consider hiring a 3PL so you can spend the savings on building your business. Additionally, 3PL services speed up product deliveries and give you a competitive advantage.

You Want Your Company to Have Room to Grow

Every good business person is forward-thinking. From the moment you start your business, you should know where you want to go and how you want to get there. Suppose you expand your offerings throughout the country or around the globe. In that case, a 3PL can help you get there with inventory distribution services. For example, some 3PLs can leverage 2-day or overnight shipping to help eCommerce businesses keep up with Amazon and other giants.

Hiring a 3PL provider to manage your supply chain's logistics is smart if any or all of the signs above are coming into play. Before you start shopping around for a 3PL, however, you should take a moment to consider whether doing so is enough. You may want to consider taking things one step further and hiring fourth-party logistics service providers – keep reading to learn more.

What's the Difference Between a 3PL and a 4PL?

First and foremost, you should know that 3PLs and 4PLs are professional, hired services that help businesses like yours plan and execute inventory management and order fulfillment logistics. You get much more flexibility than you would if you managed fulfillment in-house.

As you well know by now, a third-party logistics provider is a company that handles the logistics of your company's supply chain and order fulfillment processes. Depending on how much control you want to hand over to your 3PL, they can do everything from storing and managing your inventory to picking, packing and shipping your orders. They can even handle the returns management process for you.

So, what is a fourth-party logistics provider, and how does it differ from a 3PL?

A fourth-party logistics provider adds another element to the equation, combining various resources and technologies to optimize your supply chain's design and execution. You can still keep your 3PL to manage the day-to-day details of order fulfillment. Still, a 4PL will become the “control tower” that oversees supply chain management. They will supervise your 3PLs and any other resources or providers you use to ensure your supply chain operates smoothly, efficiently and cost-effectively. For businesses that want total supply chain visibility, a 4PL provider can be a great option.

The critical difference between a 4PL and a 3PL is that many 3PLs are asset-based – they own or lease equipment and warehouses that they use to provide services. As such, a 3PL is concerned with its costs and may not always seek the best deal for you if it means a better deal for them. In contrast, a 4PL's only concern is integrating and optimizing your supply chain operations.

The Different Types of 3PL Providers

A third-party logistics provider can offer many services, though many focus on specific supply chain solutions. As a business, this might mean hiring multiple 3PLs to fulfill your supply chain's different aspects – this is when hiring a 4PL may come in handy.

Here is a quick overview of the different types of 3PL providers you may come across:

Transportation

As part of your transportation 3PL search, you need to consider several factors, including the company's location, where your customers are located, delivery timelines, shipping methods, service options and pricing and discounts. This type of 3PL deals with shipping inventory between locations.

Warehousing/Distribution

The most common type of 3PL is warehouse and distribution-based. These providers handle the storage, shipment and returns of your orders. When considering a warehousing 3PL, you'll need to consider the number of locations and their geographical locations, the pricing model for storage, negotiated shipping rates, delivery insurance, daily cutoffs for order fulfillment and management tools.

Financial/Information

Once your company expands beyond the eight or nine-figure mark in annual revenue, you may want to bring a financial 3PL on board to help you optimize your operations for the industry and to evaluate current trends. These 3PLs offer freight auditing, cost accounting, bookkeeping, tracking, tracing and inventory management.

How 3PL Pricing Models Work

Now that you better understand the different types of 3PL providers, you may wonder how much it costs to hire a 3PL. Third-party logistics pricing depends on the services you require and the scope. Several factors that determine 3PL pricing include:

• Onboarding: Getting a 3PL partnership up and running can take 3 to 6 months, so some companies charge onboarding fees to set your company up with integrated technology to manage order fulfillment services.
• Inventory Receiving: Before a 3PL can start managing its supply chain, it must receive its inventory from suppliers or manufacturers. Some companies charge per unit or pallet, while others charge by the hour or a flat rate for receiving and storing inventory.
• Inventory Storage: Different 3PLs offer different storage fees depending on the warehouse. You may be charged a lower rate for shared storage but will share the fulfillment center with other companies. You may be charged per item, bin, shelf, or pallet for storage.
• Order Picking and Packing: Many 3PLs charge a fee for picking each item, while others include this cost in the total order fulfillment price. Some companies offer discounted rates for orders under a certain number of items.
• Packaging: Some 3PLs include packaging materials in their shipping costs, while others charge a fee. You may have the option to customize your packaging materials, or you may not.
• Kitting: Refers to any unique accommodations you request for assembling, arranging, or packing orders before shipping. Assembly fees vary according to your individual needs.
• Shipping: Most 3PLs have relationships with shipping carriers to reduce costs, which means more significant savings. These costs consider various factors, such as shipping speed, shipping zones and packages' dimensional weight.

In addition to considering these individual costs, you should also know that most 3PLs offer three pricing models. Here is a quick overview of their differences:

• Total Fulfillment Cost: This pricing model reflects the total fulfillment cost for direct-to-consumer orders, charging only for receiving, storing and shipping inventory instead of fees for individual services.
• Fulfillment by Amazon: Abbreviated to FBA, Fulfillment by Amazon is a model in which products are sold on the Amazon marketplace, and Amazon fulfills orders on behalf of your company. Because Amazon receives a cut of every sale, they can offer discounted fulfillment fees. This offer is convenient for some companies, but for others, it means sacrificing a portion of their bottom line and losing the ability to highlight their brand. Amazon also charges long-term storage fees for unsold items.
• Pick and Pack: As you can guess from the name, this pricing model is based on separate charges for each item picked and packaged. Most 3PL providers charge between $0.15 and $5.00 for each pick, so costs can add up quickly with this pricing model.

When choosing a 3PL provider, consider all aspects, including costs. Keep reading to receive some additional tips for selecting a 3PL provider.

Tips for Choosing a 3PL Provider

If you've decided that hiring a third-party logistics provider is the next logical step in expanding your business, congratulations! Now comes the hard work – choosing the perfect provider to meet your business's current needs while offering room for growth.

Here are some simple tips to keep in mind when choosing a 3PL provider:

• Ask the provider if they have an enforceable non-disclosure agreement (NDA).
• Look at the company's financial stability and client satisfaction track record.
• Book a consultation to visit a nearby 3PL warehouse or distribution center to see if their operations are up to code.
• Consider the company's hours of operation, including weekends and holiday hours.
• Ask what services the company provides and which, if any, they consider their specialty.
• Determine what third-party logistics software they use and examine its features.
• Ask how the company differs from other 3PLs and what differentiates them from the competition.
• Consider the options for customization and scalability of services.
• Inquire about their relationships with shipping carriers and their negotiated rates.
• Ask about their options for expedited shipping as well as guaranteed deliveries.
• Determine how many warehouses they operate and their locations.
• Ask about their customer service policies and how they help you when an issue occurs.
• Ask what the costs and process is. If you're not happy, choose to switch to another 3PL.
• Find out what their typical customer profile is. If their profile is disjointed or you're not similar to their other customers, they might not be the right 3PL.
• Try to find reviews and talk to existing or past customers.

Mistakes to Avoid When Choosing a 3PL Provider

Naturally, you want to find the best 3PL provider for your company. That’s probably easier said than done, though. There are many pitfalls to avoid when choosing a 3PL company to work with.

Here, we’ll cover six mistakes you should be wary of when picking a 3PL company.

Choosing Companies With the Lowest Upfront Costs

One of the goals of outsourcing fulfillment is saving money, but that doesn’t mean you should cheap out on a 3PL company. You shouldn’t choose a 3PL company just by choosing the one with the lowest upfront costs because it may cost you more in the long run.

Many 3PL companies can offer low upfront costs because they don’t use the latest technologies or provide less client support. If your chosen 3PL company isn’t doing its best to satisfy your logistics needs, your customer satisfaction may also suffer. Consider spending more upfront to gain long-term benefits instead of short-term savings.

Not Asking Questions

Just like any partnership, you need to be clear about what you expect out of your 3PL partner. Here's what you should do before signing a deal:

1. Ensure you know how the 3PL company runs its business.
2. Ask the representative questions about how the company handles big order volumes, scales for seasonal demand, receive customer returns and more.
3. Don’t move forward with the deal before you know everything you need to know about the 3PL provider.

Choosing 3PL Companies Closest to Your Location

Choosing a 3PL company with fulfillment centers close to you means you’ll have an easier time surveying your inventory and checking out its operations. But it’s even more important that your 3PL’s fulfillment centers be close to your customer base to reduce shipping time and costs.

Not Communicating Product Demand Changes

3PL companies don’t understand your business unless you tell them, so you need to inform them of any changes in seasonal demand. They may have difficulty managing inventory if you don’t communicate when your products are most or least in demand. Remember to give your 3PL partner advanced notice of demand spikes to ensure they have enough inventory on hand to meet customer demands.

Not Providing Relevant Information

Communication is key when working with a 3PL partner, and sharing information relevant to your logistics operation is part of it. You need to trust your 3PL partner with essential information about your logistics operations, so they won’t be in the dark and can provide the best services.

Picking 3PLs With Bad Client Service

Your interview with a prospective 3PL partner generally informs how they run their business. If the representative exhibits a customer-first attitude and goes out of the way to accommodate your needs, that can be a good sign of how they’ll treat your customers. Conversely, if the representative treats you badly, the company may do the same to your customers.

Examples of 3PL Companies for eCommerce and Small Businesses

There are dozens of 3PL companies vying for your business, so choosing one is challenging. To help you decide, here are four premiere 3PL company options for your eCommerce and small business:

ShipHero

ShipHero is one of the best third-party logistics services for online retailers providing order fulfillment for more than 4,000 eCommerce businesses. Here are some of the benefits you'll get when partnering up with ShipHero:

• Warehouse management services
• Robust 3PL software system
• Nationwide fulfillment center network
• Professional returns management
• eCommerce platform integration
• A variety of delivery options
• Simple pricing model and flat fees
• No-contract services

ShipHero also integrates with major eCommerce platforms like Shopify Plus, BigCommerce, Shopify, Amazon and WooCommerce.

ShipBob

ShipBob is a third-party logistics company that helps you ship products worldwide. It promises shipping to all areas of the world through fulfillment centers in North America, Australia and Europe.

ShipBob offers these 3PL services:

• Warehouse storage
• Pick and pack
• Product receiving
• Standard product packaging
• Product shipping

ShipBob offers integrations with major eCommerce platforms like Shopify, BigCommerce and Squarespace.

Whitebox

Whitebox offers end-to-end 3PL services to help your products go from the factory floor to the buyers' doorstep. Whitebox even has an in-house advertising agency to help you market your business.

The services offered by Whitebox include:

• Product packaging
• Shipping
• Quality assurance
• Warehouse management
• Order fulfillment
• Product description creation
• Professional product photography

FedEx Fulfillment

FedEx Fulfillment is the 3PL subsidiary of FedEx, which offers third-party logistics to small businesses. It boasts excellent customer service and a resource hub to help new business owners learn entrepreneurship.

Here are the services you'll get from FedEx Fulfillment:

• Order fulfillment
• Product packaging
• Reverse logistics
• Warehouse and storage management

How to Choose the Best Third-Party Logistics Company

Choosing the right 3PL company can help you cut costs and improve efficiency. Follow these tips to pick the right 3PL provider:

• Research the company's reputation and track record.
• Find a company that offers all the services you need.
• Look into the 3PL company's technology.
• Ask about their inventory and packaging customization offerings.
• Pick a company that provides multiple fulfillment centers across your target regions.

Closing Thoughts

Once you've narrowed your list to a few different 3PL options, it's time to start digging deeper to find the best match for your company. Before talking to any 3PL in-depth, ensure they have and sign a non-disclosure agreement to protect your company.

In addition to talking to the 3PL's representatives, you should also ask for references in the industry to determine whether the company has a solid track record and a positive reputation. Over time, it will become clear whether any of the 3PLs on your list are the right fit for your company or not.

Of course, the most important matter when choosing a 3PL partner is the value it offers. Find a 3PL company that caters to your order fulfillment needs at a reasonable price.

Finding the perfect third-party logistics partner that will keep your company's best interests in mind may not be a quick and easy process. Still, it is important that you do it right.

For help finding a 3PL provider, check out our online directory or contact ShipHero directly to learn how we can help you with fulfillment.

Third-Party Logistics FAQs

How Is a 3PL Different From a Fulfillment Company?

A 3PL is different from a fulfillment company in the services it offers. Most fulfillment companies only pack and ship your packages. Meanwhile, a 3PL company takes over your entire logistics operations, from warehousing to shipping. Many 3PLs even offer extra services like returns processing and inventory management.

3PL Companies for Small Businesses vs Large Businesses

3PL companies can help small businesses and large businesses alike. The scale of service is the major difference between 3PL for small and large businesses.

For small businesses, a 3PL company may only need to handle a relatively small amount of items with limited variety. Conversely, 3PLs working with large businesses may handle a wide range of products at larger volumes.

That said, the end result is still the same. Partnering with a 3PL increases your logistics efficiency to save money and get products to customers quicker.

What are third-party logistics (3PLs)?

Third-party logistics involves handing your logistics operations over to another company. A third-party logistics company usually offers warehousing, shipping and inventory management services.

What's the difference between 3PL vs. 4PL?

The main difference between 3PL and 4PL is the number of parties involved. A 3PL company still works under your management to handle your inventory and shipments. In contrast, a 4PL company contracts different 3PL providers to take your products.

What are the benefits of working with a 3PL?

The main benefits of working with 3PLs are cost and time savings. You also gain access to their expertise. You don't have to train in-house logistics employees to handle warehousing and shipping.

Third-party logistics (3PL) is one of the ways that a company can outsource order fulfillment. An eCommerce order fulfillment process starts when a customer submits the order and finishes when the product reaches their door.What seems like a simple process can become quite complex depending on the storage location of your company’s inventory, the customer’s location, the size of the order, and the timetable for delivery. It becomes even more complicated when you factor in the potential for returns.Suppose you can’t handle your eCommerce fulfillment in-house. In that case, it’s probably time to outsource and let a third-party logistics company take over.Keep reading to learn everything you need to know about 3PLs.

What Is a Third-Party Logistics Company?

3PL companies are companies that offer various eCommerce logistics processes to online businesses. Some services they offer include warehousing, inventory management, and order fulfillment.3PL involves the business, the logistics provider, and the shipping carrier. In simple terms, a 3PL provider offers logistics services to manage certain aspects of a company’s shipping operations. 3PLs are renowned for their logistics industry expertise and can help companies better fulfill orders to keep their customers happy.Some people think 3PLs and freight brokers are essentially the same. However, 3PL companies are more active than freight brokers because they take over your fulfillment operations. Meanwhile, freight brokers only connect you to shipping carriers without touching your products.A 3PL becomes integrated into the company’s inventory storage and transportation procedures. Rather than storing, packaging, and shipping orders, companies hire a 3PL to manage the entire process. The 3PL owns or leases its storage and transportation assets to fulfill the client’s orders remotely, ensuring you can focus on growing your business.Third-party supply chain models first appeared in the 1970s when intermodal marketers took packages from businesses and brought them to rail stations for delivery. People developed 3PL software to help companies manage inventory and deliveries as the field grows. Nowadays, all kinds of businesses, from Fortune 500 to small businesses, use third-party logistics.

Benefits of Third-Party Logistics in Supply Chain Management

Here are the benefits of working with a 3PL company:

Reduce Logistics Costs

Third-party logistics companies often have connections in the sector, meaning they have better access to vendors and can negotiate higher discounts for you. By partnering with them, you can use their contacts and influence to reduce shipping supply and warehousing expenses, ultimately saving you money.

Receive Logistics Experience

Many third-party logistics service experts have decades of combined experience in the industry. When you hire a 3PL company, you get access to this expertise to get insights on transport documentation, shipping regulations, and other logistics issues. They can also answer your questions about how to increase operational efficiencies.

Focus on Critical Functions

Running an in-house logistics division takes a lot of time and money. By hiring a 3PL company, you can instead focus on core business processes like developing marketing materials and improving sales channels. Better yet, you can do this without dedicating any internal staff or resources to run an in-house logistics division.

Scale With Your Business Capabilities

3PLs provide custom-made services based on your company’s needs and performance. If your business grows and product orders increase, you can sign them for a more significant contract with more benefits. Conversely, considering downscaling your business, you can opt out of some of their services.

Third-Party Logistics Business Model

As the name implies, 3PL involves three parties that help bring products to the market. Here are the three parties involved in the 3PL model:

The Business

The business is your company – you’re responsible for producing goods and running the eCommerce business. Once people buy your products, you send the orders to your logistics company.

The Logistics Company

The logistics company is the intermediary between your company and the shipping providers. Third-party logistics companies offer many services, including warehousing, packaging, and inventory management.

The Shipper

The shipper carries your products to physical stores or the buyers’ doors. Major shippers include USPS, UPS, and DHL.

What Services Does a 3PL Provide?

A 3PL can scale and customize its services according to the client’s specific needs. The client still retains some oversight when managing shipping operations. Before signing a contract, you can outline what services you want the 3PL to provide and what services you will maintain in-house. As your business grows, your 3PL provider can take over a significant role in expanding your supply chain and procurement operations.Here’s an overview of the services a 3PL typically provides:

Product Storage Solutions

3PL companies provide warehouse spaces to handle order fulfillment for multiple companies in one place. This improves efficiency and reduces costs because they don’t have to switch between numerous warehouse locations to finish orders. Moreover, you don’t have to lease warehouse space, buy forklifts, or rent trucks to handle your merchandise.

Inventory Management and Organization

Managing inventory involves more than simply storing your company’s products. Integrative technology also syncs your inventory with your online store in real-time, so you can track inventory and predict demand to avoid sell-outs. Your 3PL also helps organize items with multiple parts into proper categories, ensuring nothing is misplaced.

Inventory Distribution

Most 3PL providers have fulfillment centers across the country to store your products. 3PL companies distribute your inventory across the country to ensure fast shipment times.A 3PL automatically routes orders to fulfillment centers based on where the customer resides. 3PLs use extensive automation to save hundreds and thousands of dollars on inventory distribution, raising their clients’ profits.

Picking and Packing

Alongside storage, 3PL companies assign staff to pick products for each order and package them for delivery.

Freight Forwarding

Once the products are picked and packaged, the 3PL forwards them to a shipping carrier for delivery. Different 3PLs work with other carriers, and a good 3PL will choose the one that offers the best price and delivery speed. Some 3PLs even work with local carriers for less than truckload (LTL) shipping for local orders.

Expedited Shipping

By partnering with a 3PL, your company can offer expedited shipping options to your customers since fulfillment centers send out orders daily. 3PLs often negotiate discounts with carriers like FedEx, DHL, USPS, and others to offer faster delivery speeds at a manageable cost.

Shipment Tracing/Tracking

In addition to handling the shipping process, a 3PL will also manage the tracing and tracking process. Customers will receive shipping information to track their orders throughout the fulfillment process.

Reverse Logistics (Returns)

Not only do 3PLs offer shipment services, but they can also provide reverse logistics to handle returns. A 3PL can provide customers with return labels to drop the item off with a carrier for return to the fulfillment center.Again, when you sign a contract with a 3PL company, you can customize its services according to your business’s needs. An experienced 3PL provider will be able to handle the logistics of the entire supply chain from when your customer submits their order to when it arrives on their doorstep.

How 3PLs Handle Order Fulfillment

So you can visualize what this looks like, here is an outline of the order fulfillment process from a 3PL provider’s perspective:

Step 1: Receiving

A 3PL needs inventory to complete customer orders, so your first act should be moving inventory to their warehouse. Depending on your business size, your inventory may be divided into several fulfillment centers. Each 3PL has its process for receiving and storing inventory. Most providers can customize this service according to the client’s needs.

Step 2: Picking

Depending on the 3PL’s software, your partner may get the orders automatically, or you may have to send them manually. After placing the order, the 3PL starts the order fulfillment process by packing the items at the warehouse and then passes it to the next stage of the supply chain for packaging.

Step 3: Packing

Once the 3PL has picked up all ordered items, they are prepared for delivery.Standard shipping materials for your products include cardboard boxes, poly mailers, bubble wrap, packing tape, and bubble mailers. The best 3PL company can balance package protection and small dimensional weight, so your products arrive safely and within budget.Some 3PL companies charge extra for packing material, but others fold the costs into the service fee. Depending on your working relationship, 3PL companies may also let brands customize their packaging.

Step 4: Shipping

After the products are prepared, they’re handed off to a courier for final delivery.Some 3PLs partner with specific shipping carriers, while other companies have a rotation of transportation services to get the best deals. Either way, 3PL partners are responsible for brokering deals with freight forwarders to bring you the best rates. The courier fleet usually picks items up from your 3PL partner’s warehouses.

Step 5: Returns

The order process doesn’t always finish once the package is delivered to the customer’s door. Specifically, product returns can get complicated if you manage inventory stock levels yourself. When you’re working with a 3PL partner, they receive all returned products to be restocked, scrapped, or processed.To make the return process more manageable, you can ask the 3PL company to provide shipping labels for every package. Customers can fill them out and return their packages if something goes wrong.It should be clear by now that 3PL partnerships benefit companies, but how do you determine whether yours will? Keep reading to learn the signs that it’s time to hire a 3PL.

When Do You Need a 3PL?

3PLs are needed when you can’t handle order fulfillment by yourself. Unless you’re running a small retail business out of your garage with no more than a dozen orders a week, the chances are good that your company could benefit from hiring a 3PL provider. To help you decide, here is an overview of the advantages associated with working with a third-party logistics provider:

• Time savings: Outsourcing your company’s logistics means you have more time to focus on critical business processes.
• Cost savings: 3PL companies offer lower warehousing, shipping, and inventory management prices, which is cheaper than building in-house logistics departments.
• Improved compliance: 3PL companies help you stay updated with the latest logistics technologies and regulations.
  • Service customization: When it comes to warehousing, shipping, and distribution, a 3PL provider can customize its services according to your needs and adjust as you grow.
  • Access to resources: Hiring a 3PL gives you access to the best inventory management software and other integrative technology you might not get on your own.
• Expanded reach: 3PL companies have more experience negotiating with shipping carriers and other vendors so that you can get the best logistics services at low rates.
• Risk reduction: Outsourcing operational logistics to a 3PL company means fewer labor and financial risks than building an in-house logistics department.

Still unsure whether hiring a 3PL provider is the next logical step for your business? Here are some of the top reasons to hire a third-party logistics provider:

You’re Shipping More Than 100 Orders Per Month

There is nothing magical about the number “100” – the point is that your company is receiving more orders than you can efficiently manage in-house. Shipping a large volume of items per month means your team spends more time and effort fulfilling orders than doing core business tasks. Once you’ve reached over 100 shipments per month, it’s a good idea to hire a 3PL company to support your operations.

You’ve Run Out of Storage Space for Your Inventory

Any retail company’s goal is to have enough orders that it becomes necessary to increase inventory levels. Of course, when this happens, you’ll need space to store all of that extra inventory. Rather than dealing with this predicament each time you add a new product to your store, turn over storage logistics to a 3PL.

You Want to Offer Your Customers Expedited Shipping

Suppose you’re currently managing your order fulfillment in-house. In that case, you may struggle to make it to the post office even once a day, let alone often enough to give your customers expedited shipping options. With a 3PL handling your order fulfillment logistics, you can suddenly offer one-day, two-day, and maybe even same-day delivery.

You Want to Save Money on Storage and Shipping

Working with 3PL providers isn’t cheap, but it could save you loads of time and money. Instead of spending a lot to lease storage space and build an in-house logistics division, consider hiring a 3PL so you can spend the savings on building your business. Additionally, 3PL services speed up product deliveries and give you a competitive advantage.

You Want Your Company to Have Room to Grow

Every good business person is forward-thinking. From the moment you start your business, you should know where you want to go and how you want to get there. Suppose you expand your offerings throughout the country or around the globe. In that case, a 3PL can help you get there with inventory distribution services. For example, some 3PLs can leverage 2-day or overnight shipping to help eCommerce businesses keep up with Amazon and other giants.Hiring a 3PL provider to manage your supply chain’s logistics is smart if any or all of the signs above are coming into play. Before you start shopping around for a 3PL, however, you should take a moment to consider whether doing so is enough. You may want to consider taking things one step further and hiring fourth-party logistics service providers – keep reading to learn more.

What’s the Difference Between a 3PL and 4PL?

First and foremost, you should know that 3PLs and 4PLs are professional, hired services that help businesses like yours plan and execute inventory management and order fulfillment logistics. You get much more flexibility than you would if you managed fulfillment in-house.As you well know by now, a third-party logistics provider is a company that handles the logistics of your company’s supply chain and order fulfillment processes. Depending on how much control you want to hand over to your 3PL, they can do everything from storing and managing your inventory to picking, packing, and shipping your orders. They can even handle the returns management process for you.So, what is a fourth-party logistics provider, and how does it differ from a 3PL?A fourth-party logistics provider adds another element to the equation, combining various resources and technologies to optimize your supply chain’s design and execution. You can still keep your 3PL to manage the day-to-day details of order fulfillment. Still, a 4PL will become the “control tower” that oversees supply chain management. They will supervise your 3PLs and any other resources or providers you use to ensure your supply chain operates smoothly, efficiently, and cost-effectively. For businesses that want total supply chain visibility, a 4PL provider can be a great option.The critical difference between a 4PL and a 3PL is that many 3PLs are asset-based – they own or lease equipment and warehouses that they use to provide services. As such, a 3PL is concerned with its costs and may not always seek the best deal for you if it means a better deal for them. In contrast, a 4PL’s only concern is integrating and optimizing your supply chain operations.

The Different Types of 3PL Providers

A third-party logistics provider can offer many services, though many focus on specific supply chain solutions. As a business, this might mean hiring multiple 3PLs to fulfill your supply chain’s different aspects – this is when hiring a 4PL may come in handy.Here is a quick overview of the different types of 3PL providers you may come across:

Transportation

As part of your transportation 3PL search, you need to consider several factors, including: the company’s location, where your customers are located, delivery timelines, shipping methods, service options, and pricing and discounts. This type of 3PL deals with shipping inventory between locations.

Warehousing/Distribution

The most common type of 3PL is warehouse and distribution-based. These providers handle the storage, shipment, and returns of your orders. When considering a warehousing 3PL, you’ll need to consider the number of locations and their geographical locations, the pricing model for storage, negotiated shipping rates, delivery insurance, daily cutoffs for order fulfillment, and management tools.

Financial/Information

Once your company expands beyond the eight or nine-figure mark in annual revenue, you may want to bring a financial 3PL on board to help you optimize your operations for the industry and to evaluate current trends. These 3PLs offer freight auditing, cost accounting, bookkeeping, tracking, tracing, and inventory management.

How 3PL Pricing Models Work

Now that you better understand the different types of 3PL providers, you may wonder how much it costs to hire a 3PL. Third-party logistics pricing depends on the services you require and the scope. Several factors that determine 3PL pricing include:

• Onboarding: Getting a 3PL partnership up and running can take 3 to 6 months, so some companies charge onboarding fees to set your company up with integrated technology to manage order fulfillment services.
• Inventory Receiving: Before a 3PL can start managing its supply chain, it must receive its inventory from suppliers or manufacturers. Some companies charge per unit or pallet, while others charge by the hour or a flat rate for receiving and storing inventory.
• Inventory Storage: Different 3PLs offer different storage fees depending on the warehouse. You may be charged a lower rate for shared storage but will share the fulfillment center with other companies. You may be charged per item, bin, shelf, or pallet for storage.
• Order Picking and Packing: Many 3PLs charge a fee for picking each item, while others include this cost in the total order fulfillment price. Some companies offer discounted rates for orders under a certain number of items.
• Packaging: Some 3PLs include packaging materials in their shipping costs, while others charge a fee. You may have the option to customize your packaging materials, or you may not.
• Kitting: Refers to any unique accommodations you request for assembling, arranging, or packing orders before shipping. Assembly fees vary according to your individual needs.
• Shipping: Most 3PLs have relationships with shipping carriers to reduce costs, which means more significant savings. These costs consider various factors, such as shipping speed, shipping zones, and packages’ dimensional weight.

In addition to considering these individual costs, you should also know that most 3PLs offer three pricing models. Here is a quick overview of their differences:

1. Total Fulfillment Cost: This pricing model reflects the total fulfillment cost for direct-to-consumer orders, charging only for receiving, storing, and shipping inventory instead of fees for individual services.
2. Fulfillment by Amazon: Abbreviated to FBA, Fulfillment by Amazon is a model in which products are sold on the Amazon marketplace, and Amazon fulfills orders on behalf of your company. Because Amazon receives a cut of every sale, they can offer discounted fulfillment fees. This offer is convenient for some companies, but for others, it means sacrificing a portion of their bottom line and losing the ability to highlight their brand. Amazon also charges long-term storage fees for unsold items.
3. Pick and Pack: As you can guess from the name, this pricing model is based on separate charges for each item picked and packaged. Most 3PL providers charge between $0.15 and $5.00 for each pick, so that costs can add up quickly with this pricing model.

When choosing a 3PL provider, consider all aspects, including costs. Keep reading to receive some additional tips for selecting a 3PL provider.

Tips for Choosing a 3PL Provider

If you’ve decided that hiring a third-party logistics provider is the next logical step in expanding your business, congratulations! Now comes the hard work – choosing the perfect provider to meet your business’s current needs while offering room for growth.Here are some simple tips to keep in mind when choosing a 3PL provider:

• Ask the provider if they have an enforceable non-disclosure agreement (NDA).
• Look at the company’s financial stability and client satisfaction track record.
• Book a consultation to visit a nearby 3PL warehouse or distribution center to see if their operations are up to code.
• Consider the company’s hours of operation, including weekends and holiday hours.
• Ask what services the company provides and which, if any, they consider their specialty.
• Determine what third-party logistics software they use and examine its features.
• Ask how the company differs from other 3PLs and what differentiates them from the competition.
• Consider the options for customization and scalability of services.
• Inquire about their relationships with shipping carriers and their negotiated rates.
• Ask about their options for expedited shipping as well as guaranteed deliveries.
• Determine how many warehouses they operate and their locations.
• Ask about their customer service policies and how they help you when an issue occurs.
• Ask what the costs and process is. If you’re not happy, choose to switch to another 3PL.
• Find out what their typical customer profile is. If their profile is disjointed or you’re not similar to their other customers, they might not be the right 3PL.
• Try to find reviews and talk to existing or past customers.

Examples of 3PL Companies for eCommerce and Small BusinessesThere are dozens of 3PL companies vying for your business, so choosing one is challenging. To help you decide, here are four premiere 3PL company options for your eCommerce and small business:

ShipHero

ShipHero is one of the best third-party logistics services for online retailers providing order fulfillment for more than 4,000 eCommerce businesses. Here are some of the benefits you’ll get when partnering up with ShipHero:

• Warehouse management services
• Robust 3PL software system
• Nationwide fulfillment center network
• Professional returns management
• eCommerce platform integration
• A variety of delivery options
• Simple pricing model and flat fees
• No-contract services

ShipHero also integrates with major eCommerce platforms like Shopify Plus, BigCommerce, Shopify, Amazon, and WooCommerce.

ShipBob

ShipBob is a third-party logistics company that helps you ship products worldwide. It promises shipping to all areas of the world through fulfillment centers in North America, Australia, and Europe.ShipBob offers these 3PL services:

• Warehouse storage
• Pick and pack
• Product receiving
• Standard product packaging
• Product shipping

ShipBob offers integrations with major eCommerce platforms like Shopify, BigCommerce, and Squarespace.

Whitebox

Whitebox offers end-to-end 3PL services to help your products go from the factory floor to the buyers’ doorstep. Whitebox even has an in-house advertising agency to help you market your business.The services offered by Whitebox include:

• Product packaging
• Shipping
• Quality assurance
• Warehouse management
• Order fulfillment
• Product description creation
• Professional product photography

FedEx Fulfillment

FedEx Fulfillment is the 3PL subsidiary of FedEx, which offers third-party logistics to small businesses. It boasts excellent customer service and a resource hub to help new business owners learn entrepreneurship.Here are the services you’ll get from FedEx Fulfillment:

• Order fulfillment
• Product packaging
• Reverse logistics
• Warehouse and storage management

How to Choose the Best Third-Party Logistics Company

Choosing the right 3PL company can help you cut costs and improve efficiency. Follow these tips to pick the right 3PL provider:

• Research the company’s reputation and track record.
• Find a company that offers all the services you need.
• Look into the 3PL company’s technology.
• Ask about their inventory and packaging customization offerings.
• Pick a company that provides multiple fulfillment centers across your target regions.

Closing Thoughts

Once you’ve narrowed your list to a few different 3PL options, it’s time to start digging deeper to find the best match for your company. Before talking to any 3PL in-depth, ensure they have and sign a non-disclosure agreement to protect your company.In addition to talking to the 3PL’s representatives, you should also ask for references in the industry to determine whether the company has a solid track record and a positive reputation. Over time, it will become clear whether any of the 3PLs on your list are the right fit for your company or not.Of course, the most important matter when choosing a 3PL partner is the value it offers. Find a 3PL company that caters to your order fulfillment needs at a reasonable price.Finding the perfect third-party logistics partner that will keep your company’s best interests in mind may not be a quick and easy process. Still, it is important that you do it right.For help finding a 3PL provider, check out our online directory or contact ShipHero directly to learn how we can help you with fulfillment.

Third-Party Logistics FAQs

What are third-party logistics (3PLs)?

Third-party logistics involves handing your logistics operations over to another company. A third-party logistics company usually offers warehousing, shipping, and inventory management services.

What’s the difference between 3PL vs. 4PL?

The main difference between 3PL and 4PL is the number of parties involved. A 3PL company still works under your management to handle your inventory and shipments. In contrast, a 4PL company contracts different 3PL providers to take your products.

What are the benefits of working with a 3PL?

The main benefits of working with 3PLs are cost and time savings. You also gain access to their expertise. You don’t have to train in-house logistics employees to handle warehousing and shipping.

ShipHero recently launched The Fulfillment Innovation Wheel to help 3PLs understand what capabilities and service offerings they need to implement in order to be successful and to help online retailers and brands choose which 3PL is right for them by allowing them to ‘check the boxes’.The Fulfillment Innovation Wheel listed a set of twelve (12) capabilities that fulfillment providers and logistics companies should implement to continually delight their customers and push themselves towards greater success and innovation.The twelve capabilities are:

1. 2-Day Delivery
2. Same Day Shipping
3. At the Box Personalization
4. Designed for Returns
5. Sustainable Fulfillment
6. Resilient Shipping
7. Distributed Fulfillment
8. Data Now
9. Automation
10. Scale Up and Out
11. Integration Stack
12. Professional Services

In this article, we will be diving into Capability #6: Resilient Shipping. And be sure to stay tuned for future articles as we deep-dive into each capability.

Capability #6: Resilient Shipping

Is your business sufficiently protected from supply chain risks like extreme weather events, supplier disruptions, and well... pandemics? COVID-19 has certainly had an immense impact on global trade and domestic supply chains, but this hasn’t been an isolated incident, with SARS, measles, swine flu, ebola and avian flu all resulting in similar yet less severe business interruptions at a global level. Moreover, domestic supply chains are frequently plagued by extreme weather events, supply shortages, and carrier delays.Supply chain resilience refers to a company’s ability to conduct normal business operations despite sudden disruptions or unexpected events that negatively affect supply chains and order fulfillment. Resilient supply chains are also able to quickly recover from outages and achieve pre-disruption levels of functionality. As an example, many FBA merchants use ShipHero for FBM to avoid stock outs, maintain emergency inventory stockpiles, and provide diversified fulfillment options. In this article, let’s uncover how businesses can build a resilient supply chain and delivery network.

What Is a Resilient Supply Chain?

To start building your roadmap towards supply chain resiliency, you need to know what a resilient supply chain looks like. According to a recent study, these are the five core principles of a resilient supply chain:

1. Rapid detection, response, and recovery. Your business must be able to quickly detect events, identify optimal response options, and achieve full-scale recovery.
2. Complete oversight and control. Your business should have end-to-end visibility into your supply chain, along each step of the fulfillment journey, as well as the ability to take action quickly.
3. Preparation for any scenario. Your business must prepare for a disruption before it happens with documented incident response plans, complete with specific steps and responsible parties for each scenario.
4. Built-in redundancies and continuity. Your business must be able to account for process failures and bottlenecks, and provide additional surge capacity when disruptions arise.
5. Intelligent demand planning. Your business can proactively avoid disaster scenarios with distributed fulfillment and effective inventory management.

Are these five principles present when looking at your own supply chain? If you outsource your fulfillment, ensure that your fulfillment provider can guarantee a resilient supply chain with the above principles.If your business fulfills in-house or you are a 3PL provider, consider building in the following practices for a resilient supply chain.

Building Supply Chain Resiliency

Hope for the best, plan for the worst. Your business can minimize damage from supply chain risks with the following best practices:

Map Out Your Fulfillment Processes

By documenting your end-to-end fulfillment process, you have a powerful visual tool to understand your supply chain and identify any possible pain points. Consider creating a process diagram and list relevant people at each step.As for data, how does information flow through your supply chain? Is it automated? Or does it heavily rely on the copy/pasting of a single employee? By creating a full picture of how data flows through your supply chain, you can identify possible bottlenecks or dependencies that could inflict serious damage to your supply chain in times of crisis. Consider creating a process diagram of how data moves around your business (i.e., data flow diagram) and list relevant people at each step.

Get Inventory Insight and Control

Is your inventory where it should be at any given moment? Proper inventory management helps you avoid surplus inventory gathering dust on warehouse shelves and accumulating storage fees, while guarding against stock-outs and shortages in certain regions. Not to mention, intelligently distributed inventory allows you to reduce shipping costs and decrease delivery times. Consider investing in modern inventory management software to get oversight and control of your inventory, or switch to a fulfillment provider, like ShipHero, that uses advanced warehouse management software across their network of fulfillment centers.

Build Automation Rules

In times of crisis, stressful or crunch-time decision making is very susceptible to human error. Automation can eliminate human interference in your core business processes, while leaving room for intervention when needed. Consider implementing automation rules in your inventory management software; for example, automation rules can help place orders with the most cost-efficient suppliers when inventory hits certain levels, or automation can be used to choose the optimal delivery carrier when many face delays.

Provide Real-Time Collaboration

Do you have the ability to access and share supply chain information in real-time? Being able to access up-to-date information and reporting enables better decision-making and emergency planning. Consider implementing procedures and systems to get the right data to the right decision makers.

Manage Product Returns

Product returns introduce a lot of complications in your supply chain, including unpredictable inventory levels, increased costs, and reduced conversions -- and this is amplified during situations of surging demand or delayed shipments. With a more effective return strategy (i.e., reverse logistics), your business will be more prepared for when the ship hits the fan. Consider designing your supply chain and inventory management process with returns built in, or switching to a fulfillment provider that offers return credit and advanced reverse logistics capabilities.

Wrap up

With the above best practices in place, your data-driven supply chain will be optimized for resiliency, and be able to quickly detect, respond to, and recover from any sudden supply chain disruptions.Our customers love that ShipHero provides a resilient and data-driven supply chain that can offer 2-day shipping anywhere in the contiguous United States at simple and transparent pricing. We also prioritize ground shipping, making for an eco-friendly supply chain. We attribute this success on the Fulfillment Innovation Wheel to Capability #6: Resilient Shipping.Stay tuned next as we cover Capability #1: 2-day Delivery! Get 2-day, today. ShipHero.

Learn more about ShipHero's industry-leading warehouse management software.

Front and Center

Hey theEre Packeteers, Happy FRiday from your hmble Packet writer! Did yuu take it easy this Saint Pattyricks’s day like I did?! Yuu celebrating Saint Josepph's tooday? NO I didn’t spend all my stimmy on whisky.. Hey I’m fine to write this, seriously I’mFINE. Gimme the laptop. I can tYpe.…

Seeing Green

Even if you didn’t wear green, Americans were certainly seeing green this St. Patrick’s day when the second round of pandemic stimulus checks bagen to hit their bank accounts. The most recent $1,400 direct payment will help a lot of individuals pay for very basic necessities like rent, food and utilities. (Track your stimmy here.)‍

Economists believe that the stimulus checks could provide a much needed boost to the hard-hit retailer sector. Did that peak your interest? Well, it certainly didn’t for…

The FED

On Wednesday, the U.S. Federal Reserve announced that there will be no interest hikes until 2023, keeping prime interest rates near 0%. What does this mean? Borrowing money from banks will continue to be extremely cheap, which makes it easier for people to get the capital they need to start a business or make a major purchase. In the same announcement, the Fed increased their U.S. GDP estimate and lowered the unemployment estimate… so things are looking up for the economy?

Yup.

Not to mention, vaccine production is ramping up, about 8% of the population has been vaccinated thus far, and the first American baby has been born with antibodies against COVID-19 after the mother received the Moderna vaccine whilst pregnant. Adorable and ground-breaking.

Thank you.

After 14 beautiful weeks at the helm of the Packet, I wanted to take a moment to thank all of the Packeteer subscribers that have joined us every Friday. I hope you enjoy reading it as I enjoy writing it, and if you ever have interesting topics to cover or want to connect, email us here‍

.…

SEe I TOLD you I could do it...

Back of the Packet

Lab-made Human Embryos

Bold title to lead in with, explain. This week, research papers have revealed for the first time that scientists have created living organisms that resemble human embryos. Using stem cells or reprogrammed skin cells, scientists were able to create clumps of cells that look just like pre-embryos.

Daylight Savings Time

It happened, in case you didn’t know why you've been late to everything this week. Thanks farmers.

ShipHero News

Futuristic Logistics & Emerging Tech

We can rebuild it, we have the technology. We can make it better than it was. Better, stronger, faster… The next generation of supply chain is almost here, and it’s digital.Supply Chain 4.0 incorporates emerging technology — blockchain, AI, autonomous trucks, drones, 3D printing, augmented reality, and more — into every aspect of the supply chain, rendering it nearly unrecognizable from today’s capabilities.

What does the future of logistics hold? Check out our newest blog Futuristic Logistics & Emerging Tech to find out.

We can rebuild it, we have the technology. We can make it better than it was. Better, stronger, faster… The next generation of supply chain is almost here, and it’s digital. 

Supply Chain 4.0 incorporates emerging technology -- blockchain, AI, autonomous trucks, drones, 3D printing, augmented reality, and more -- into every aspect of the supply chain, rendering it nearly unrecognizable from today’s capabilities. 

More and more logistics start-ups are gaining ground in the warehousing and fulfillment industry through agile pricing and advancements in one or more emerging technology, like predictive inventory management and automated workflows powered by machine-learning algorithms. 

Take ShipHero for example. Advancements in machine-learning powered supply chain forecasting and platform-based integration capabilities have allowed us to intelligently distribute inventory to lower shipping costs and delivery times. That’s why ShipHero has rapidly scaled to ship over $5 billion orders to date.

So, what else does the future of logistics hold? Let’s dive in to find out.

Safe & Efficient Warehousing

Warehousing operations like picking and packing orders will be extremely precise and lightning fast, not to mention much safer, thanks to augmented reality (AR). 

AR headsets (think, Google Glass) could illuminate the most efficient route around a warehouse like a GPS right in front of your eyes, and clearly point to the exact items that you need to pick. 

High-tech wearables are already incorporated into warehouse safety protocols to allow employees to signal for help and receive emergency assistance, and AR headsets with live-streaming capabilities would further improve the safety of employees while allowing employers to monitor and optimize productivity.

Reduced Transportation Cost and Duration

Long-distance trucking and last-mile delivery will become quicker and cheaper with the advent of autonomous trucks and drones.

Today, truck drivers are restricted to a limited amount of time on the road, rightly so to avoid tired driving, reduce accidents and mitigate dangerous driving. With the help of automated driving systems, it could help the trucker shortage and bring renewed interest to the profession, while allowing truck drivers to spend more time on the road.

Amazon Prime Air has shown that drones can deliver packages under 5 lbs in 30 minutes to select locations. Though not yet in operation, the drones will autonomously zoom through the skies to deliver the package to an outdoor delivery target. New transport concepts like drones or robots help companies improve that last-mile delivery for high-value packages.

Supply Chain-as-a-Service

There’s Print on Demand, and then there’s 3D Print on Demand. 

By sharing design specs with a 3PL or fulfillment provider, retailers could repurpose their fulfillment centers as small-batch manufacturers that use 3D printers to create products in-house, thereby reducing shipping times for expedited orders. 

This would allow 3PL and fulfillment providers to offer full-service supply chains to the growing number of online brands and ecommerce startups.

Advanced Inventory Control

Blockchain may sound a bit vague or abstract in the supply chain space, but essentially this can be used to scan QR codes and track the journey of an individual product (rather than groups of SKUs) throughout the supply chain. Once scanned, relevant product data is automatically synced for all business systems simultaneously.

Real-time data flowing between your systems allows for precise inventory forecasting and restocking capabilities. More in-depth tracking of your inventory also helps utilize the ‘shared economy’ where Uber and local delivery providers can seamlessly deliver products on your behalf.

This advanced form of collaboration also allows companies to easily detect fraudulent products, locate lost or stolen goods, and identify sources of product damage at each step of the supply chain.

Scale Instantly

Platforms like Shopify and Amazon have allowed ecommerce merchants to access a wide-range of capabilities that they otherwise would have to invest in and build themselves. In terms of supply chain, by linking via API to a large number of carriers and providing customers with negotiated rates, smart fulfillment companies like ShipHero allow their customers to directly compare their options and select the best shipping method. 

Supply chain today is nearly unrecognizable to the paper-based and manual processes of the past. With exponential growth, the supply chain of the future will be far more integrated and efficient to what we have today. Startups like ShipHero are beating traditional carriers by leveraging tomorrow’s technology for today’s business needs.

ShipHero recently launched The Fulfillment Innovation Wheel to help 3PLs understand what capabilities and service offerings they need to implement in order to be successful and to help online retailers and brands choose which 3PL is right for them by allowing them to ‘check the boxes’.

The Fulfillment Innovation Wheel listed a set of twelve (12) capabilities that fulfillment providers and logistics companies should implement to continually delight their customers and push themselves towards greater success and innovation.

The twelve capabilities are:

1. 2-Day Delivery
2. Same Day Shipping
3. At the Box Personalization
4. Designed for Returns
5. Sustainable Fulfillment
6. Resilient Shipping
7. Distributed Fulfillment
8. Data Now
9. Automation
10. Scale Up and Out
11. Integration Stack
12. Professional Services

In this article, we will be diving into Capability #5: Sustainable fulfillment.

‍And be sure to stay tuned for future articles as we deep-dive into each capability.

Capability #5: Sustainable Fulfillment

Cut down your company’s waste, improve your brand image. Sounds like a win-win, doesn’t it? That’s the power of Sustainable Fulfillment -- eCommerce order fulfillment that minimizes the environmental impacts of your supply chain.

eCommerce waste is a much more serious problem than you think. In 2018, the EPA estimated that packaging accounts for about 30% of all household waste. Moreover, with packaging made from plastics, only 9% of all plastics has ever been recycled, with the rest ending up in our oceans, forests, and landfills.

Beyond the harm to the environment, inconsiderate packaging hurts your brand reputation as well. Think back to opening a large box to find a much smaller product inside, or individually-wrapped parts, and thinking “what a waste!”.

Poor packaging leads to brands being labeled as inconsiderate or wasteful, and in a world where GenZ-types and Greta Thunberg’s run wild, your company should avoid this image at all costs.

So, how can your company achieve Sustainable Fulfillment? The answer lies in using proper packaging, planning intelligent shipping, and bringing awareness to your customer base.

How to Create Sustainable Fulfillment

If you fulfill orders in-house, you can reference the list below to achieve Sustainable Fulfilment. If you use a 3PL or third-party fulfillment provider, be sure that they have taken the necessary steps to create Sustainable Fulfillment for your business.

Sustainable eCommerce Packaging

Right-size packaging and eco-friendly packaging for your products is a necessary step towards Sustainable Fulfillment. More and more eCommerce businesses are using on-demand packaging for their products, and eliminating over-boxing by shipping the product in its original carton.

‍Right-size packaging means avoiding product packaging that is exorbitantly larger than the product itself, or eliminating excess materials or fillers.

‍Eco-friendly packaging means using recycled or renewable materials that are biodegradable or easily disposed of.

Your company may use large packaging with fillers to avoid damaging the product, but with breakthroughs in reusable and recyclable eCommerce packaging, you can avoid the damage while offering a great unboxing experience.

Companies like NoIssue exist to create sustainable, customized packaging.

Intelligent Order Fulfillment & Routing

Carbon emissions from transportation are another major source of waste in your supply chain. Last mile delivery and air freight make up a majority of carbon emissions in logistics, so transportation optimization and intelligent inventory management are significant ways of reducing your carbon footprint.

‍Transportation Optimization starts at the distribution center. By using Warehouse or Order Management Software (WMS/OMS) to route your orders correctly, your company can identify the most viable distribution center to ship orders in terms of delivery speed and cost. Additionally, last-mile delivery routes should be calculated to reduce mileage and ensure the most energy-efficient routes are selected. I

ntelligent Inventory Management means that your inventory is placed in the warehouse closest to your customers, also known as distributed fulfillment, to reduce shipping distance and costs. Also, using WMS/OMS to ensure that orders are picked, packed and loaded correctly helps to reduce returns, reroutes and expedited shipping.

Our clients have used the above two strategies to lower the carbon footprint of our clients fulfillment while still guaranteeing affordable two-day shipping, powered by ShipHero SaaS Warehouse Management Software.

Our clients use our proprietary inventory forecasting capability to intelligently distribute their inventory across our nationwide network of warehouses. From there, we help them prioritize ground-shipping and avoid wasteful air-freight and expedited shipping. Not to mention, our clients use our SaaS WMS to accurately pick, pick and ship orders all from their tablet or mobile device.  

Spread Awareness

Once your business has adopted Sustainable Fulfillment, the final step is to educate your customers! If you use recyclable materials, let your customers know so they can ensure responsible disposal and feel part of the solution. By getting customers on board with your eco-friendly efforts, you can have a much wider positive impact on the environment as a business.

You should advertise the steps you’ve taken towards Sustainable Fulfillment, and consider using packaging inserts in your orders that explain why your business took these steps and what customers can do to help. Adding this packaging insert has little to no added disruption to your fulfillment process, and it is a phenomenal way to reduce waste and improve your brand.

Our customers love that ShipHero allows them to completely customize their boxing experience, including packaging, inserts, and materials. If your 3PL or fulfillment provider doesn’t offer this, then maybe it’s time for a switch. ShipHero has $5 billion in orders shipped to date, and we attribute this success on the Fulfillment Innovation Wheel to Capability #5: Sustainable Fulfillment.

Do you want to monetize your brand? Do you want to engage your audience through real, non-digital means? Are you ready to become the InfluentrepreneurTM (Influencer + Entrepreneur) you were always meant to be?

Today, more and more influencers use private labelling - selling pre-made products under your own branding - to earn revenue and provide followers with a high-quality product that they can trust, because it’s yours!

As an influencer, you already have an online audience. And if you currently promote products on your page, then you also have a solid base of people who rely on your product recommendations. With this, becoming a CEO is as easy as:

1. Pick a good product
2. Apply your logo and brand
3. Choose a shipping provider
4. Sell your products online

There are many success stories from influencers turned CEOs, like our adorable canine friend Humphrey and his owner’s brand, Spotted by Humphrey. And companies like inKLOUT exist to help influencers design and market their own products.

But if you’re among the brave souls that want to tackle this journey yourself, this how-to guide will break down each of the three steps (especially the complicated logistics-side of things) to get you on your way to becoming CEO of your own e-commerce brand.

4 Steps to Become an Influencer + Entrepreneur

The private labelling business is very straightforward. You pick a product from a manufacturer, you brand the product, you sell the product, and you get the product to the customer’s doorstep.

You may have heard the term Dropshipping before, but this simply means that the manufacturer handles the final step for you and ships the product to your customers. We’ll get into this later on in Step 3...

So let’s get into the four steps to start your very own e-commerce private label business.

Step 1: Pick a Good Product

The most important thing to do when starting a private label business is to ask yourself the important questions, like:

• Why do people follow you?
• What is your passion or niche?
• What are your peers selling?

Answers to these questions will help you pick a product that is relevant to your personal image and content.

‍The search begins. Depending on your theme or category, whether it’s fashion, beauty, wellness, etc., you want to search for trending products in your personal domain, or products that you personally use and believe in.

‍Avoid over-saturated items. You want to stay ahead of trends, not lag behind them. Whatever product you choose, make sure that there isn’t too much competition. Typically, products that have a smaller amount of reviews (<1,000) on Amazon or on the private label manufacturer website are good candidates, as long as they are high quality.

‍Pick Your Manufacturer. Search on sites like Thomasnet, Alibaba, AliExpress or Google. Simply type “*your product* private label” and see the list of results. Be sure to ask about cost of goods, shipping cost, and turnaround time for any order.

Here is a list of Private Label manufacturers based on category. And as mentioned earlier, companies like inKLOUT can help you design or select a product for your brand.

‍Note: Most manufacturers do only use cashier’s check or a money wire for payment.

Step 2: Apply Your Logo and Brand

Your company now needs a name, a logo, a product label, and a slogan. This is your opportunity to tell your story, so have some fun with it.

‍Company Name

‍It’s important to select a name that resonates with your brand and with your audience. It’s equally important to make sure the name you choose isn’t already taken, because you will want to be able to  trademark your name for a site domain and social media.

Shopify has a Business Name Generator that you can use to search for and create your perfect business name.

‍Company Logo

‍When you think of logos, what comes to mind? The Nike Swoosh? The McDonald’s Golden Arches? Right from the start, these companies knew that a thoughtful logo has a huge impact on your audience.

If you already have a great idea for your logo, sketch it out! Then, if you aren’t already a master at Photoshop, consider using a Graphic Designer to create a digital copy of your logo. We also recommend using a professional because you will need multiple image sizes for product labels, social media, website, and more.

Graphic Designers can also help you brainstorm ideas for a logo if you don’t already have one. Sites like 99designs, Fiverr, and Upwork have loads of freelance Graphic Designers that can help you create your logo.

‍Product Label

‍Typically, the private labelling manufacturer creates the product label for you, once they have your company logo and name. Given the manufacturer, you can customize the labelling as much or as little as you’d like, so be sure to ask about the manufacturer’s capabilities during your search.

‍Company Slogan

‍“Just Do It.”-- Nike

“I’m Lovin’ It.” -- McDonald’s

“We Throw in Extra Parts to Mess With You” -- Ikea (not really)

Your slogan is your one sentence summary of your company and your brand. It should be something to grab your audience’s attention and showcase your company.

Step 3: Choose a Shipping Provider

In the most simple terms, you have three options when it comes to shipping.

‍In-House

‍The manufacturer sends you the product directly, and you store it in your home ... or a warehouse, storage locker or shed. From there, you pack the product in a box/package and use USPS, FedEx or another delivery service to send it to the customer.

This is called in-house fulfillment, because you do it entirely by yourself, most likely in your house. This is the cheapest option, with just an upfront investment for a $200 label printer, but also the most time-consuming and the most difficult to guarantee quality service. Not to mention, you are responsible for handling product returns.

Keep in mind you are competing with brands that offer 2-day shipping and free returns. And when you start to sell a lot of products, you may find it hard to grow your business while spending all your time putting your products in boxes and taking trips to the post office.

‍Outsource

‍A company will store the product in their large network of warehouses and will ship the products on your behalf. For a set per-item fee, an eCommerce fulfillment company like ShipHero can help you deliver within two days, help you handle returns, and help you manage inventory.

‍Fulfillment-by-Amazon (FBA) is a popular example of outsourced fulfillment because you send your product to their warehouse, and for a per-item fee, Amazon will deliver your products.

‍Dropshipping

‍The factory/wholesaler will also pack and ship it directly to your customer, bypassing you entirely. This allows business owners to take a hands-off approach to the operation of their business, and customer satisfaction lies entirely in the hands of the manufacturer.

As a cheap and convenient option, dropshipping also results in lower profit margins, longer shipping times, and less control over your business. But CEOs that want to have a more hands-off approach will choose dropshipping for the minimum involvement required.

Step 4: Sell Your Product Online

With a fully-branded product and a shipping method in place, all that’s left to do is sell.

Whether you want to spread your products to everyone or keep it exclusive is up to you and your brand. You can sign up for Instagram Shopping to post a New Catalog of your products, or you can connect to your website. Instagram allows integrations with Shopify, BigCommerce, Magento and WooCommerce.

Besides your social media channels, you can sell on platforms like Shopify and Amazon to reach a large audience, but Shopify lets you design your own website and gives you more control to build your brand.

There you have it!

The four steps to becoming brand owner and CEO of your very own eCommerce private label company. ShipHero created this influencer how-to guide to help you on your entrepreneurial journey, because ShipHero’s mission is to help businesses deliver their eCommerce.

We’ve shipped over $5 billion orders to date. Each day, more and more businesses are signing up with ShipHero to receive 2-day shipping, return handling and the eco-friendly shipping option with priority ground shipping.

About the Podcast

Objects! with ShipHero talks with the entrepreneurs, innovators and idealists that put items on the shelf and bring packages to your doorstep. From hot sauce to board games, toothbrushes to frying pans, startup side-gigs to enterprise players, join ShipHero founder, Nicholas Daniel-Richards, as he demystifies the manufacturing and logistics behind some of our most beloved household objects, with transformational ideas that are guaranteed to make you say, why didn’t I think of that?. This fast-paced and intriguing podcast covers thousands of travelled miles in less than an hour, so next time you’re standing in your local store and see a label that says ‘Made in <A Land Far, Far Away>’, you’ll know just how it got into your hands.

If you are a successful entrepreneur looking to grow or an aspiring innovator with an idea, Objects! with ShipHero provides a detailed, 360° exploration with the masterminds behind modern ecommerce and shipping solutions.  So settle in, buckle up, and prepare to get objectified! ... no wait, not that. Get ready to say “I objects!”... we’ll work on it. Available on Spotify, iTunes and at this link.

Episode Introduction

Episode FORE of Objects! with ShipHero gets into the rough business of golf gloves, as we’re joined by Adam Karger and his company Scotch & Skins -- a brand dedicated to upping your golf game with premium leather golf gloves and other high-end golf accessories.

“True differentiation didn’t have to be about being so different from everyone else, but rather celebrating really good materials-- really amazing, natural materials. And this glove did that… and so we found a little bit of our voice.” -- Adam Karger, co-founder of Scotch & Skins

As a tech consultant by day, an entrepreneur by night, and a new father around the clock, Adam shares his journey of designing and manufacturing a high-quality golf glove from scratch, with absolutely zero prior knowledge of making or selling gloves.

So how do you start a business selling a product you don’t know how to make? Join us as we learn how Adam, armed with only a laptop and an idea, forged the right partnerships to create his brand Scotch & Skins, set to tee off in the spring of 2021. (Already nauseous of these golf puns? Don’t worry there isn’t any more).

All Businesses Start With a Little Drive

Although he started as a novice in the manufacturing and design of golf gloves, Adam Karger is no amatuer in the golf world. Adam played Division 1 Golf at Colgate University and in his Senior year competed in five tournaments, posting a scoring average of 83.2.

Adam and his co-founder and friend, Bryce, had toyed around with the idea of vintage-style golf gloves for some time. With no prior experience, the road seemed long and challenging, and a lot of questions stood in his way like, how do you find a manufacturer? How do you design and get tech specs? How do you ensure quality? How do you source the leather?... to name a few.

But like all journeys, Adam began with a single, brave step towards his new future, after a couple beers with his friend of course.

“For me, it was a really interesting problem to solve. Because, I think when you’re building a company or a brand or a product, really it’s just solving a bunch of little questions, and the amalgamation of those answers turn into the go/no go of building a product or a brand” -- Adam Carger

Where did Adam turn for the answers to these problems? Why, Google of course. The start of Adam’s journey was typing phrases “glove designer” and “glove manufacturer” into a publicly available search engine… Here he proved that there is no secret to success other than persistence, perseverance, and a little drive. (last one ;-p)

Play To Your Handicap

Adam’s philosophy of “partner with people who have the superpowers that you don’t” led him to Greg, a glove consultant with years of experience making all types of gloves, except golf gloves. Excited to work on a new project, Greg agreed to consult and Adam began to grow his team.

The first superpower Greg brought to the table was his large network of manufacturers, which they were able to whittle down to a few choices and eventually settle on a Connecticut-based leather manufacturer.

Currently, Adam’s home will be the fulfillment hub due to the minimum required investment and full control of the packing and boxing customization. In the spirit of partnering with people who have superpowers they don’t, Adam set the goal for his company to eventually work with a 3PL like ShipHero, because reaching that point means the company has gotten big enough to where order fulfillment takes up too much time and a 3PL partner is needed to help your business scale.

Avoid the Sandtraps

Golf gloves are typically made of natural leather or a synthetic substitute, so the question was which material was better for their business? With this first decision, Adam and Bryce decided that whenever they came to a similar fork in the road, they were going to take the path towards high-quality materials.

But, where would their journey’s excitement be without hitting the hazards early on? They wanted to use real leather, and golf gloves are typically made using Cabretta leather (not actually leather) because it is thin, form-fitting and “soft as butter”.

In hopes to stand out from this tradition, Adam and Bryce found an Australian distributor for kangaroo leather... and when the prototype was complete, they immediately realized their massive mistake. The kangaroo leather was extremely poorly suited for a golf glove, because the leather was not thin enough or flexible enough to be useful on the golf course. Luckily, they had a mulligan.

Their glove consultant Greg recommended UK-based Pittards, a top manufacturer of Cabretta leather with over two centuries of experience. A month after the kangaroo catastrophe, their next set of Cabretta leather golf gloves were a hole-in-one: thin, form-fitting, and supple. With this, Adam and Bryce realized that differentiating your brand doesn’t need to lead you down a difficult path; rather, choosing to celebrate really good materials is a way to differentiate in and of itself.

The Back 9

“We’ve evolved over time, but it makes you appreciate where you are when you think of where you started.” -- Adam Carger

Adam found that being laser-focused on their first product allowed them to bring one high-quality and thoughtful product to the market and helped them to determine their company’s manufacturing principles. They then applied what they learned to making their Cabretta leather ball markers and North American hickory alignment sticks with covers made from North American leather from North American tanneries. How boujee.  

Officially teeing off in the spring of 2021, Scotch & Skins is currently going through the final process of creating sizes, finalizing logo design, and will go into full-scale manufacturing soon with their premium golf gloves and assortment of high-end golf accessories.

So remember...  if the glove don’t fit, you must not have shopped Scotch & Skins.

And be sure to check out https://www.scotchandskins.com/ and join their email list to be notified of product release.

How About You?

Have you been sketching the next big thing on the back of a cocktail napkin? Are you frantically Googling everything about it right now? Now, right now, is the time to make it happen. There’s loads of tools and resources available everywhere to convert the idea in your head into an OBJECT! on the shelf. All it takes is a little follow through. ⛳️