Working with a third-party logistics (3PL) provider can be a game-changer for merchants looking to streamline their supply chain and focus on growing their business. However, for those who have never worked with a 3PL before, it can be daunting to know where to start. In this article, we’ll answer some of the most common questions merchants have when considering working with a 3PL.

How much does it cost to work with a 3PL?

The cost of working with a 3PL can vary widely depending on factors such as the size of your business, the complexity of your supply chain, and the specific services you require. Some 3PLs charge a flat fee for their services, while others charge based on the volume of orders they process or the storage space they require.

It’s important to carefully review a 3PL’s pricing structure to ensure it aligns with your business needs and budget. Some 3PLs offer a range of services that can be customized to meet your specific needs, while others may require you to sign a long-term contract.

Do 3PLs have monthly minimums?

Many 3PLs do have monthly minimums, which means that you’ll need to meet a specific volume of orders or storage space requirements each month to maintain your relationship with the provider. This can be a good thing, as it ensures you’re getting value from the service and encourages you to focus on growing your business.

However, it’s essential to carefully review the minimums required by any potential 3PL to ensure they are realistic and achievable for your business. If you’re starting out or are in a period of slow growth, you may want to look for a 3PL that has lower minimums or offers more flexibility in its pricing structure.

How much hand-holding will a 3PL give me?

The level of support you receive from a 3PL can vary widely depending on the provider and the specific services you require. Some 3PLs offer a high level of support, with dedicated account managers and frequent communication, while others take a more hands-off approach.

When evaluating a 3PL, it’s essential to understand how much support they offer and how responsive they are to your needs. Look for a provider that has a reputation for excellent customer service, and that is willing to work closely with you to understand your business and help you achieve your goals.

Is it better to have a 3PL closer to me or closer to my customers?

The answer to this question depends mainly on your business and supply chain requirements. If you need to receive products from suppliers quickly, it may be advantageous to work with a 3PL that is located close to your business. On the other hand, if you ship a large volume of products to customers in a specific region, it may make more sense to work with a 3PL that has a facility in that area.

Ultimately, the goal should be to find a 3PL that can provide the services you need at a competitive price, regardless of their location.

How automated are 3PLs? Will I have to do a lot of manual input on my end?

The level of automation offered by a 3PL can vary widely depending on the provider and the specific services you require. Some 3PLs use advanced technology to automate much of the order fulfillment process, while others rely on manual processes.

When evaluating a 3PL, it’s essential to understand how automated their processes are and how much manual input will be required on your end. Look for a provider that has invested in advanced technology and can offer a high level of automation to help streamline your supply chain.

Can a 3PL help me get a product through customs or act as the importer on file?

Yes, many 3PLs offer customs brokerage services and can act as the importer on record for your shipments. This can be a valuable service for merchants importing products from overseas and want to ensure that their shipments clear customs quickly and smoothly.

When evaluating a 3PL, it’s essential to understand their experience with customs brokerage and their ability to handle any issues that may arise during the import process. Look for a provider that has a proven track record of success in this area and that can provide references from other clients who have used their customs brokerage services.

How does insurance work with a 3PL? Do I need to have my own insurance on my products, or does their insurance cover everything?

Most 3PLs carry insurance to cover damage or loss of your products while they are in their care. However, the specific details of their insurance coverage can vary, so it’s essential to understand what is covered and what is not.

In many cases, it may be necessary for you to carry your own insurance to cover any potential gaps in the 3PL’s coverage. This can include things like product liability insurance, which can protect you if one of your products causes harm to a customer.

When evaluating a 3PL, be sure to ask about their insurance coverage and what types of insurance you may need to carry to ensure that your products are fully protected.

How long does it take to onboard with a 3PL?

The onboarding process with a 3PL can vary depending on the provider and the specific services you require. In general, however, you can expect the onboarding process to take several weeks to a few months.

During the onboarding process, you will typically work closely with your 3PL to provide them with the information they need to manage your supply chain effectively. This may include things like product information, order history, and shipping requirements.

When evaluating a 3PL, be sure to ask about their onboarding process and what you can expect regarding timelines and requirements.

If there are lost packages, who is responsible for finding them and working with the customer?

If a package is lost or damaged while in the care of a 3PL, the responsibility for finding and resolving the issue will typically fall on the 3PL. However, it’s essential to review the specific terms of your contract to understand what is covered and what is not.

When evaluating a 3PL, be sure to ask about their policies for lost or damaged packages and how they handle customer inquiries and complaints. Look for a provider with a proven track record of resolving issues quickly and efficiently.

What levels of shrinkage and accuracy are normal?

Shrinkage and accuracy levels can vary widely depending on various factors, including the specific industry you are in, the complexity of your supply chain, and the quality of your products.

In general, a well-run 3PL should be able to achieve accuracy levels of 99% or higher with low levels of shrinkage. However, it’s essential to review the specific performance metrics of any potential 3PL to ensure they meet your expectations.

When evaluating a 3PL, be sure to ask about their performance metrics and how they track and report on their performance. Look for a provider that is transparent about their performance, and willing to work closely with you to improve their processes continually.

Conclusion

Working with a 3PL can be a great way to streamline your supply chain and focus on growing your business. However, it’s essential to carefully evaluate potential providers to ensure that they can meet your specific needs and budget.

When evaluating a 3PL, be sure to ask about their pricing structure, minimum
monthly requirements, and the level of support they can provide. Consider the location of the 3PL in relation to both your business and your customers, as well as the level of automation they offer and their experience with customs brokerage.

It’s also essential to understand the insurance coverage provided by the 3PL and any gaps that may need to be covered by your own insurance. Finally, be sure to review the onboarding process, policies for lost or damaged packages, and performance metrics to ensure that the 3PL is meeting your expectations.

By carefully evaluating potential 3PL providers and choosing the right partner for your business, you can enjoy the benefits of a streamlined supply chain and focus on growing your business with confidence.

At no cost, we will do the leg work that requires merchants to invest hundreds of hours in finding a 3PL or Fulfillment Center that genuinely meets their needs and requirements. We verify every partner by checking references, touring warehouses, verifying pick pack accuracy and customer visibility, and ensuring customer service is a top priority. With all of the hours we have spent carefully selecting top-tier fulfillment centers to bring in as partners, we can line up your business needs with a highly recommended partner.

I. Introduction

In today’s global economy, supply chain management is a critical factor for the success of any business. A well-managed supply chain can help businesses to reduce costs, increase efficiency, and improve customer satisfaction. To achieve these goals, many businesses are turning to third-party logistics providers (3PLs). In this section, we will provide an overview of 3PLs, their importance in supply chain management, and finally, what to look for in a 3PL.

We recognize that searching for the appropriate 3PL can be an intimidating and time-intensive process. With a variety of choices, each with its own unique expertise and focus, it’s critical to select the appropriate provider as it significantly influences the future success of your business.

An ideal 3PL partner should alleviate the burden of logistics operations and allow you to focus on enhancing your products and brand.

II. What is a 3PL?

A third-party logistics provider, or 3PL, is a company that provides logistics services to businesses. These services include transportation, warehousing, inventory management, and other supply chain activities. 3PLs typically operate as intermediaries between businesses and transportation companies, helping to coordinate the movement of goods from one place to another. There’s no shame in brushing up on 3PLs before making a decision.

III. What to Look For in a 3PL: Supply Chain Management

When determining what to look for in a 3PL that will best suit your operations, there are several important factors to consider, including:

Expertise and Industry Knowledge: 3PLs have extensive knowledge and experience in the logistics industry, including regulatory compliance, transportation management, and supply chain optimization. This expertise can help businesses to streamline their operations and reduce costs.

Scalability: 3PLs can help businesses to scale their operations quickly and efficiently by providing additional capacity and resources as needed.

Access to Technology: 3PLs invest heavily in technology, including transportation management systems, warehouse management systems, and other software tools to help businesses improve their supply chain operations.

Cost Savings: By outsourcing logistics activities to a 3PL, businesses can reduce overhead costs, such as labor, equipment, and facilities. 3PLs can also help businesses negotiate better rates with transportation providers, reducing costs.

IV. Technology

Technology has become a vital component of modern logistics and supply chain management. With the ever-growing complexity of supply chains, it is imperative that businesses work with 3PLs that are equipped with the latest technology. In this section, we will discuss the role of technology in logistics and supply chain management and how to evaluate a 3PL’s technology capabilities.

The Role of Technology in Logistics and Supply Chain Management

Technology has transformed the logistics and supply chain industry in recent years, allowing for greater efficiency, accuracy, and visibility. Some of the essential technology tools used in logistics and supply chain management include transportation management systems, warehouse management systems, and inventory management systems. These tools can help businesses optimize their supply chain operations, reduce costs, and improve customer service.

Assessing the 3PL’s Technology Capabilities

When evaluating a 3PL’s technology capabilities, consider the following:

  1. What technology tools does the 3PL use? Are they up-to-date and effective?
  2. Does the 3PL have experience working with businesses similar to yours?
  3. Does the 3PL have a dedicated IT team to manage and maintain its technology tools?
  4. Can the 3PL provide real-time visibility into your supply chain operations?
  5. Evaluating the Compatibility of the 3PL’s Technology with Your Existing Systems

It’s crucial to ensure that the 3PL’s technology is compatible with your existing systems to avoid integration issues. When evaluating compatibility, consider the following:

  1. Does the 3PL’s technology integrate seamlessly with your existing systems?
  2. What are the costs and timelines associated with integrating the 3PL’s technology with your existing systems?
  3. Will there be any disruptions to your operations during the integration process?

It is no surprise that in today’s world, technology plays a critical role in modern logistics and supply chain management. When selecting a 3PL partner, it’s essential to assess their technology capabilities, ensuring they use the latest technology and tools and are experienced in working with businesses like yours.

Furthermore, evaluating the compatibility of the 3PL’s technology with your existing systems is critical to avoid any integration issues. Ultimately, partnering with a 3PL that has advanced technology capabilities can help businesses improve their supply chain operations, reduce costs, and enhance customer service.

V. Cost

When pondering what to look for in a 3PL, it’s important to remember that the lowest price is not always the best option. While it may be tempting to opt for the lowest price, it’s crucial to consider the long-term impact on your business. In this section, we’ll discuss why the cheapest option may cost you more in the long run and how to navigate 3PL pricing.

You Get What You Pay For

Regarding 3PLs, it’s essential to remember the old adage, “You get what you pay for.” The cheapest provider may not have the experience, technology, or resources to meet your needs effectively. Sometimes, they may even cut corners, resulting in issues like late deliveries or damaged goods. Ultimately, these issues can harm your business’s reputation and customer satisfaction. This is a crucial aspect in the journey of what to look for in a 3PL.

Understanding 3PL Pricing

3PL pricing can be complicated, with various factors influencing the final cost. When evaluating pricing, ask your potential 3PL partner to walk you through the costs and how they will make sense for your business. Some factors that may influence pricing include:

  1. Volume and frequency of shipments
  2. Transportation mode (e.g., ground, air, ocean)
  3. Warehousing and storage fees
  4. Value-added services (e.g., kitting, labeling, assembly)
  5. Technology and software fees

While cost is undoubtedly an essential factor when selecting a 3PL, it’s crucial to find the right balance between cost and quality. Consider the 3PL’s experience, technology capabilities, and reputation when evaluating pricing. A slightly higher cost may be worth it if it means better service, increased efficiency, and, ultimately, a better customer experience.

In conclusion, while determining what to look for in a 3PL for your business, it can be tempting to opt for the cheapest 3PL option; it’s essential to consider long-term impacts. A low price may result in lower quality service, which can ultimately harm your business’s reputation and bottom line. When evaluating pricing, consider the 3PL’s experience, technology capabilities, and reputation, and remember to find the right balance between cost and quality.

VI. Credibility

When selecting a 3PL, evaluating its reputation and credibility in the industry is critical. In this section, we’ll discuss the importance of assessing a 3PL’s reputation, how to check for customer references and reviews, and how to evaluate their responsiveness and communication skills.

Reputation and Credibility

While determining what to look for in a 3PL for your business, it’s essential to evaluate its reputation and credibility in the industry. Consider factors such as:

  1. How long have they been in business?
  2. Do they have experience working with companies similar to yours?
  3. What do industry peers say about them?
  4. Customer References and Reviews

Checking for customer references and reviews can provide valuable insight into a 3PL’s strengths and weaknesses. Ask potential providers for references from companies similar to yours and take the time to reach out and ask about their experience. Additionally, search for online reviews and ratings to get a broader understanding of the provider’s reputation.

Responsiveness and Communication

Effective communication is crucial when partnering with a 3PL. Evaluate their responsiveness and communication skills during the selection process to ensure they’re a good fit. Consider factors such as:

• How quickly do they respond to inquiries?

• Do they provide clear and concise answers to your questions?

• Are they willing to work with you to solve potential issues?

When evaluating a 3PL, take the time to assess their reputation, customer references and reviews, and responsiveness and communication skills. A strong reputation and a proven track record of success can provide peace of mind and increase the likelihood of a successful partnership. Effective communication and responsiveness are critical to ensuring a smooth and efficient supply chain.

You’re passionate and knowledgeable about your product and market, and no one expects you to be an expert in shipping and logistics. Make sure that the 3PL you choose is professional and experienced and will value your customers in the same way that you do when it comes to responsive communication.

VII. What to Look For in a 3PL: Conclusion

Selecting the right 3PL is crucial to the success of your business. A strong partnership with a reliable provider can improve your supply chain efficiency, reduce costs, and ultimately enhance your customer experience. On the other hand, a poor partnership can result in delays, errors, and damaged goods, ultimately harming your business’s reputation and bottom line.

In conclusion, selecting the right 3PL is a critical decision that should not be taken lightly. Consider the key factors outlined in this article and take the time to evaluate potential partners thoroughly. With the right 3PL, you can streamline your supply chain, increase efficiency, and ultimately set your business up for success.

Order fulfillment is a crucial part of any business that deals with physical products. Given the almost unimaginable range of products available to the consumer today, many items come with their own specific challenges due to a host of factors such as fragility, volume, loose parts, and weight. There are ways around these challenges, however, and today we’ll take a look at five reasons to outsource fulfillment.

Creating and maintaining a complex logistics system to overcome these challenges is an intimidating prospect due to the massive amount of time and resources that may be required. However, the good news is that you don’t have to perform this heavy lift alone.

Now, let’s dive in and discuss the top 5 reasons to outsource fulfillment.

Focus on core business functions

One of the primary reasons to outsource shipping fulfillment is to allow businesses to focus on their core competencies. Shipping and logistics can be time-consuming and complex, requiring a significant investment in resources and infrastructure. Due to this, outsourcing shipping fulfillment has become a popular trend among businesses in recent years, with more and more companies opting to outsource their logistics operations. These businesses have found that when outsourcing fulfillment, they can free up valuable time and direct their team to focus on other essential functions, such as sales, marketing, product development, and customer service, which can now be intentionally aimed at increasing their bottom line.

Reduce costs

Fulfillment can be an expensive process, especially if you’re handling it in-house. Outsourcing shipping fulfillment can help businesses reduce costs in several ways. First, outsourcing eliminates the need for businesses to invest in their own shipping infrastructure, including warehouses, distribution centers, and transportation fleets. This can result in significant cost savings, particularly for smaller businesses that may not have the resources to invest in these areas. A good fulfillment partner will have the technology and expertise to help you manage your inventory levels and ensure you always have the right amount of stock on hand. Additionally, outsourcing can provide economies of scale, allowing businesses to take advantage of the expertise and resources of larger logistics providers and achieve lower shipping rates.

Increase efficiency and scalability

Outsourcing shipping fulfillment can also increase efficiency and scalability. Logistics providers have the expertise and resources to optimize shipping and warehousing operations, reducing transit times, minimizing errors, and improving overall efficiency. Fulfillment providers have the technology and expertise to optimize the process, from receiving and storing inventory to picking, packing, and shipping orders. As your orders ramp up, outsourced fulfillment can scale with you quickly and easily. Seasoned fulfillment providers can easily accommodate changes in order volume, seasonal fluctuations, and new product launches.

Improve customer experience

Outsourcing shipping fulfillment can also improve the customer experience. Partnering with a reliable logistics provider who understands the critical nature of the shipping experience can help businesses offer faster and more reliable shipping, tracking, and delivery options to their customers. This can help improve customer satisfaction and loyalty, as well as increase sales and revenue.

Access to expertise and technology

Finally, outsourcing shipping fulfillment provides businesses with access to the expertise and technology of logistics providers. Shipping and logistics can be complex and constantly evolving, requiring specialized knowledge and technology to optimize operations. By partnering with a logistics provider, businesses can tap into the expertise and resources of professionals who have experience in managing logistics operations and access to the latest technology and tools, such as artificial intelligence, automation, and robotics, in order to improve efficiency and accuracy.

To learn more about what to look for in a 3PL partner, see our detailed guide HERE.

In conclusion, outsourcing shipping fulfillment can provide significant benefits to businesses, including allowing them to focus on core business functions, reducing costs, increasing efficiency and scalability, improving the customer experience, and accessing expertise and technology. Those looking to optimize their shipping and logistics operations should consider the benefits of outsourcing and explore their options with reliable logistics providers.

In a recent QuickTake Panel with eHub partner LOGIWA, co-hosted by eHub, four experienced and sustainability-driven guest panelists discuss the topic of “How 3PLs Win Through Sustainable Fulfillment Operations” through 3 specific topics:

  1. What it means to become a sustainable fulfillment operator
  2. How sustainability can drive growth for 3PLs
  3. Steps to take to create sustainable operations

Sustainability – What Does it Mean for Companies?

Sustainability in business aims to reduce the environmental impact companies cause through their operations. For 3PLs, companies, brands, and consumers and customers alike, sustainability is an inevitable and driving factor in the future decisions for what businesses will be supported, and how businesses will conduct their operations, including through 3PLs and fulfillment. Logiwa’s quicktake panel goes over how sustainability has been achieved by their companies, how it can be achieved by others, and the ultimate impact and advantage sustainability can provide to 3PLs and businesses wanting to take that journey.
Here are some of the highlights from the panel’s answers to the topics:

TOPIC 1: WHAT IT MEANS TO BECOME A SUSTAINABLE FULFILLMENT OPERATOR

Jamie: For a 3PL business owner, some of Logiwa’s customer’s sustainability is operating in a manner that’s going to minimize the negative impact on environment, society, economy, but will also maximize the positive impacts.

Reid: [Sustainability] applies to a lot of different facets for the customer itself.
How do you go above and beyond for the customer and show them that you’re considering things that they might not have even thought of themselves that apply into the sustainability bucket.

George: Sustainability is a journey. It’s a journey for your business,…where you as a business owner or a member of a team decide to pick up the banner and go on that journey…and include as a stakeholder and a decision-making process; are [you] factoring in the environmental impact of these decisions? Obviously we all want to build successful businesses…but in addition to that are we taking into account what effect this has on the planet, on the environment, on the communities that we operate and live in.

Sustainability takes into account not only doing good business, but how we are rooting for the planet, for the community, for the people that we care about and who we’re gonna leave the world to.

TOPIC 2: HOW SUSTAINABILITY CAN DRIVE GROWTH FOR 3PLs

Wayne: From a pure business perspective, why would a 3pl or a brand managing their own fulfillment for that matter consider making this investment in sustainability?

Reid: I’d say the biggest thing is this no longer a niche play, or it should no longer be a niche play
If you make money, great, but if you’re not putting it to good use or to good focus then I’d say nobody effectively wins.

George: The bottom line is customers are demanding it. Customers are demanding. Consumers are demanding it. So, as much as it is the right thing to do it is also a very pragmatic business decision. The shift towards sustainability is inevitable. Are you going to be forced to do it down the road, or are you going to do it now and really put your stamp in that space as one of the early thought leaders, early companies that adapted these principles in sustainability as a north star. From a branding perspective, it makes so much sense as well…[because] it’s very rare that I come across a 3PL that is able to confidently assert that sustainability is one of their top values. So from the fact that it’s a small saturation of 3pls that are practicing sustainability as a high priority right now, is an immediate competitive advantage

Jamie: sustainability has…transitioned…[in that] it’s going to become a competitive neutralizer, if you’re not doing it you’re behind the curve.
There’s a lot of ways that we can impact that. Particularly things like smart routing of orders, or if we’re recommending the proper package types, or trying to run an order to a particular location where there’s gonna be the least amount of transport.

George: The branding of sustainability catches a niche audience.
I’ve had customers over the last year and a half that…[say] “just because you do what you do and you do it in a way that is sustainable you have my business”
Just by the virtue of your value, you’re attracting [an] audience.
[Another] thing that’s important is for you to share your data with your customers. Having a partner that knows how and represents the data back to them is super important in terms of customer loyalty…[it creates] a really virtuous chain reaction of data and action

Adam: There’s this thought that sustainable fulfillment is more expensive, and I think there’s a lot of misconceptions…because reducing waste can absolutely be a very economical and cost effective thing to be doing.
One example we had was a 3PL [that was] working through the prospecting stages of bringing on a merchant…[Their] primary focus…was cost savings. One of the things that we discovered [was] we could help right-size package some of their high-volume products, eliminating waste, and the projected savings on that was 40,000 dollars

Reid: [With less packaging] You’re can also save your operations team from creating the box, closing the box and going from there which eventually plays into an efficiency aspect because [when you’re] looking at the bottom line, it not only makes sense for the customer, but it’s also saving the operations team allowing them to process more orders. So really it’s a win win.

George: Utilizing sustainable materials and sustainable supplies [is] super important. The only thing more sustainable than that is using less of it…[at Manifest] we work with each client to find the optimal packaging.
Bottom line is…customer loyalty.
We all know the upfront customer acquisitions costs in this business aren’t easy to swallow.
So being able to retain those clients and have their loyalty and have them super happy with the service you provide and very proud to be working with you and them seeing you as your true supply chain partner just creates a longer, more prosperous relationship in the long run.

TOPIC 3: STEPS TO TAKE TO CREATE SUSTAINABLE OPERATIONS

Wayne: Is [creating sustainability] incremental, or is it a more wholesale way to…move your operations into a…sustainable mode of operating?

George: Part of the problem [is] everybody wants to be sustainable and build sustainable businesses.
There are very small things that you can start off with and start to make a difference and compound into realistic and formidable progress, and don’t be afraid to lean on what others are doing. Copy us, copy other ideas, and then that’s the easiest path. You don’t need to put pressure on yourself and your team to reinvent the wheel or invent the wheel for sustainability for your fulfillment operations, there are small things that are happening every day all around you that you can start to implement
For example, one of the first things that we decided to do was offset the carbon footprint on all of our shipments.
Something as simple as walking around your warehouse and deciding [if you’re using] the right LED lights that save power,…[implementing] movement track lighting. And then recycling…the amount of trash that gets picked up, the amount of cardboard…that nobody wants to pick up…so figuring out ways what to do with all that excess waste and trash.
All those are steps that compound into really meaningful differences.

Jamie: One of the key factors in the momentum behind sustainability is that there’s so many different avenues to go start.
The more of these opportunities to build your brand and business that you can take advantage of, the more these levers that you can pull, the more advantageous you’re going to be.
LED bulbs, motion sensors, or usage of natural light. Sometimes it’s just as simple as painting your roof white, and minimizing your cooling costs.

WRAP-UP

Adam: There’s a lot of partners, there’s a lot of people out there that can help you, and so I would just say work with those around you, join whatever community partnership you want to in order to take the first steps.
Leverage the community we have in order to make progress on those initiatives.

Reid: Let’s continue to…share [these things]. Let’s continue to make them even better because if we go out there and just hold onto them, that’s not going to be good for anyone. That’s not even a sustainable concept.
The sustainability…is truly in the networking side and also in the delivery side.

George: The market is driving us.
The shift towards sustainability is inevitable, so as a business owner you need to have it on your map.
This is a journey, and small steps are ok. They will compound into more and more progress and…implementation. Adapting that into your roadmap…thinking and…decision making for you and your team is the best way to get started and you’ll be surprised how much progress you can make really quickly just by making decisions and thinking about your business in environmentally friendly and sustainable ways.

SALT LAKE CITY, Jan. 13, 2023 – eHub, a platform that provides streamlined shipping functions for 3PLs and high-growth DTC merchants, announced the launch of a new strategic partnership with Logiwa, the leading cloud fulfillment platform for high-volume direct-to-consumer (DTC) businesses.

In the competitive e-commerce space, 3PLs and online merchants rely on modern technologies to optimize all aspects of the supply chain, including shipping and delivery. Logiwa’s cloud-based warehouse management platform seamlessly integrates with eHub’s API to simplify the complexities of the shipping process.

The joint functionality allows users to find carriers within eHub’s network of more than 150 carriers, shopping carts, and marketplaces. This gives access to shipping capabilities such as rate shopping, package tracking, delivery information, and other core features within Logiwa’s cloud fulfillment platform. Users can also access advanced reporting to track the shipping process and keep the buyer updated on the delivery process.

“eHub is dedicated to providing essential solutions that increase efficiency and drive growth for our 3PLs and merchants,” said Wade Sleater, CEO of eHub. “Pairing Logiwa’s cloud-based fulfillment platform with eHub’s dynamic API provides our customers with flexibility and a competitive advantage unparalleled in logistics.”

“Today’s customer wants quick and cost-effective shipping, making it critical to the success of any e-commerce business,” said Erhan Musaoglu, founder and CEO of Logiwa, Inc. “Partnering with eHub provides customers with a range of tools that will get orders on time and as promised, which translates to a positive customer experience.”

About eHub

eHub connects shippers with carriers, shopping carts, and marketplaces to provide flexibility and competitive advantage through a dynamic API. The eHub solutions provide businesses with cost savings and new revenue through competitive rates, responsive customer services, pre-negotiated shipping contracts, and the eHub Network. The eHub Network offers a variety of complementary advantages to merchants looking for the best 3PL value and advantages to 3PLs looking for new business opportunities. The benefits to 3PLs of partnering with eHub include access to a robust lead sourcing pool, revenue sharing on any leads passed into and placed within the Network, and rate monetization to capture the most significant margin on every package shipped. To learn more about eHub, please visit www.ehub.com.

About Logiwa

Logiwa is the leading cloud fulfillment software for high-volume direct-to-consumer brands, wholesalers, and 3PLs. The Logiwa Cloud Fulfillment Platform is an integrated WMS and order fulfillment system that makes it easy to run a digital warehouse and scale your high-volume DTC fulfillment operations. Logiwa’s solution works where traditional WMS systems fail: it connects quickly with new online stores and marketplaces, makes it easy to run a digital warehouse, and is easily updated to support dynamic warehouse environments. To learn more about Logiwa, please visit www.logiwa.com.

If online retailers have sold products to anyone in the European Union (EU) as of July 1, 2021, they’re most likely aware that taxation changes have been made. Non-EU retailers have been given new options for VAT payment in the EU. Online retailers, as well as consumers, will need to know what these changes and new rules are, why these changes have been implemented, and the options for businesses to incorporate them.

What has changed with EU import VAT?

The EU eliminated its €22 tax de minimis, implemented new value-added tax (VAT) regulations, and encouraged online retailers to adjust their methods of importing goods into the EU.

Before July 1, anyone importing goods into the EU valued under €22 was not charged VAT. Now (post-July 1, 2021), all low-value imports (where the total value of goods is less than or equal to €150) are charged a VAT fee applied to the COGS value (cost of goods sold).

Why the change?

There are several reasons why the EU decided to remove the €22 de minimis and distance selling threshold that previously voided the VAT fees for orders under the threshold, including the following:

1. VAT fraud
A massive amount of VAT fraud has been occurring in the EU, averaging around €7B in VAT fraud each year. The new rules aim to make shipments more secure and eliminate processes that allow fraud to occur quickly.

2. Level the playing field
The EU incorporated the VAT scheme in an attempt to level the playing field between domestic and foreign retailers. Online EU retailers previously paid VAT on all orders, regardless of the value of the delivered goods, while retailers from countries outside of the EU could slide under the de minimis, allowing them to offer more competitive pricing. As of July 1, 2021, non-EU retailers must also pay VAT fees on all of their shipments into the EU, helping EU retailers stay competitive.

it’s extremely important to consider what kind of experience retailers want their customers to have

Non-EU online retailers also have the cost of international shipping and the task of finding and paying for an intermediary/fiscal representation. EU retailers do not need an intermediary, and their domestic shipping costs are significantly less expensive than international shipping costs. While the EU initially intended to level the playing field for domestic EU sellers, the changes have given them quite the advantage over non-EU retailers.

An intermediary is a European tax representative, usually an international accounting firm, who acts as an in-country agent for online retailers selling into the EU. After retailers acquire an IOSS number, the monthly remittance of VAT for all EU sales will need to be paid to their intermediary, who will then go on to pay it on the seller’s behalf to the country that they’ve selected for representation.

3. Tax revenue
A more obvious benefit, but a benefit nonetheless, is that the EU’s removal of the de minimis causes an increased tax revenue.

4. Simplify
The new VAT scheme is intended to simplify the VAT collection process. IOSS offers a new optional method of VAT collection by pre-collecting the EU import VAT.

Were online retailers and consumers ready?

Despite months of news coverage, many retailers were not prepared for the VAT scheme when it launched and have had difficulty incorporating the new scheme. Some local governments were unprepared to enforce the new rules, and communication has been less than ideal. The EU, retailers, and customers are still experiencing somewhat of a transitional period; however, implementation is getting better. Despite the difficulties of these changes, businesses should never try to cheat the system, engage in illegal shipping conduct, or fail to comply with the new VAT scheme because it will result in penalties.

What does the new EU VAT scheme mean for online retailers and consumers?

With the new VAT scheme, online retailers must decide how they want their EU consumers to receive their packages. While there are several different options to handle VAT collection, this article focuses on IOSS.

IOSS service

The Import-One-Stop-Shop (IOSS) service allows retailers to register in one European country (their choice) and report all European sales in a single VAT return to that country. For example, if a seller registers for an IOSS number in Ireland, they will report and remit taxes for all EU sales there. Ireland would distribute the VAT collected to the countries where the sales occurred.

This simplifies the registration and remittance process because retailers don’t have to register in multiple countries as they did previously with the distance selling thresholds. However, it does require non-EU businesses to appoint and pay for an in-country representative who will go on to disperse their collected VAT and take on liability if the non-EU businesses don’t pay.

When using an IOSS registration number on import documents, retailers must select DTU/DAP to ensure they will not be charged carrier disbursement or advancement fees on their shipments into the EU. Bypassing these fees can save sellers up to $16 (USD) per shipment, which adds up.

It’s also important to note that once sellers register for IOSS, they must stick with it. Sellers cannot pick and choose which orders to collect VAT on and ship with their IOSS number…it’s all or none. All low-value orders imported into the EU must include the online retailer’s IOSS number. However, if sellers decide they need to withdraw from using IOSS, it is possible to deregister, but they will have to cancel their VAT registration. They must also be on good terms with the country of VAT registration (current on VAT payments).

IOSS is only applicable for B2C (business to consumer) shipments where the value of the products is equal to or under €150. Retailers considering IOSS should evaluate how many shipments fall under the threshold. Many carriers have gone on record stating that they support the IOSS program since the VAT will be prepaid, and the online retailer will avoid paying the carrier’s advancements or third-party collection fees. Other carriers have said they will only work with IOSS-registered merchants.

IOSS can potentially have a quicker transit time than DDU (delivered duty unpaid) packages. IOSS also has the capacity to provide the best customer experience. The presence of an IOSS number on a package helps increase the potentiality for a more efficient customs clearance process because it lets customs know that VAT will be remitted later to HMRC (Her Majesty’s Revenue and Customs), which allows the package to move directly out for delivery once it has been cleared.

The IOSS number is required on every shipment. Displaying and collecting VAT at checkout [along with the other fees that make up a landed cost] also provides price transparency, letting customers know the entire landed cost at the time of purchase with no surprise fees upon delivery. This allows for a good customer experience, resulting in great reviews, fewer returns or abandoned packages, and possible repeat customers.

Other options

The additional options to manage VAT collection are as follows:

Note that it’s extremely important to consider what kind of experience retailers want their customers to have—displaying and collecting VAT, along with all other fees that comprise the landed cost, at checkout results in a clear, simple, and positive customer experience.

Nearly every parent has experienced abandoning a shopping cart filled to the brim with ice cream, frozen waffles, and fruit snacks as they drag a screaming, flailing toddler out of a grocery store at least once.

Luckily for the store stockers, the parent, and the toddler, that doesn’t happen often.

But if your online store were an actual, physical place, you’d probably have more abandoned carts littering your aisles than products on your shelves.

What is shopping cart abandonment?

Shopping cart abandonment, when online shoppers start to checkout but quit before clicking “complete order,” is a natural and expected part of e-commerce. The virtual version of telling a salesperson, “I’m just looking, thanks,” consumers hit “add to cart” because they want to:

Even though it’s just part of doing business, shopping cart abandonment is an $18-billion-dollar problem for retailers annually.

The average documented shopping cart abandonment rate across all industries is a whopping 69.57%. For mobile users, rates jump up to 85.65%.

That’s a lot of money left on the virtual table. Essential Hub wants to help you get it back.

Top 5 reasons for online shopping cart abandonment

The top 5 reasons consumers give for checkout abandonment are:

  1. Extra costs (shipping, taxes, fees) are unexpected or too high (49%)
  2. The site will not allow checkout without creating an account (24%)
  3. Shipping and delivery timelines were too long (19%)
  4. The checkout process was too long or confusing (18%)
  5. The checkout portal did not appear to be secure (17%)

It’s a tough pill to swallow, but the truth is that Amazon’s Prime program has dramatically impacted consumers’ online shopping and shipping experience.

According to the statistics above, a whopping 68% of online shopping carts are explicitly abandoned because businesses don’t meet consumer shipping expectations. Even more strikingly, 28% of shoppers will abandon their carts if shipping costs show up as an unexpected “gotcha” during the checkout process.

When you combine the expectation of free and fast shipping with increased consumer privacy rights, those top reasons for shopping cart abandonment make a lot of sense.

EHub’s shopping cart abandonment solutions

You’ll never be able to eliminate shopping cart abandonment completely, but there are things you can do to reduce it significantly:

  1. Offer free shipping.
  2. If you don’t have free shipping, be upfront about all extra costs, like shipping, taxes, and fees, from the first click.
  3. Simplify and secure your checkout process to improve page load times and reduce confusion.

Free shipping
According to AlixPartners, 72% of US consumers said that including free shipping “greatly impacts” their online purchasing decisions. There are multiple use cases from businesses that have seen their orders increase by as much as 90% after implementing free shipping.

You must be thoughtful about adding free shipping to your customer service arsenal if you want to stay in the black. Setting up simple reports to track product pricing, profit, and shipping expenses can give you the data to adjust your market pricing strategy effectively.

At EHub, we help you crunch the numbers to determine which of our streamlined shipping solutions will meet your needs. Because we aggregate shipping costs across all our customers, EHub can offer cheaper solutions than you’d get working directly with the shipping company.

Basically, we make offering free shipping more accessible, cheaper, and faster than you thought possible.

Be upfront about shipping costs
If free shipping isn’t feasible, shipping costs must be clearly visible throughout the entire shopping process. Customers will abandon carts with lightning speed if they are hit with an unexpected shipping charge, even if it’s only $15.

EHub’s proprietary API can seamlessly integrate with your checkout processes to make sure your customers know exactly what kinds of shipping costs to expect (which, as we mentioned, are among the industry’s lowest if you use EHub).

Additionally, EHub can deliver faster, provide tracking, and give you detailed reporting and analytics capabilities that will take shipping from your biggest headache to a walk in the park.

It’s a tough pill to swallow, but the truth is that Amazon’s Prime program has dramatically impacted consumers’ online shopping and shipping experience

Simplify and secure your checkout processes
Checkout optimizations can improve your conversion rates by 35.26%, which translates to significant profit growth for a small business. Offering guest checkout, optimizing images for faster page loads, adding a progress tracker, and using HTTPS connections are all steps we can take to help you streamline your checkout process and decrease your shopping cart abandonment rates.

Get those carts to the registers

EHub is here to help you optimize your checkout processes and offer shipping solutions to keep your customers digitally pushing their carts to the “complete purchase” button. Contact us today to see what we can do for you.

How eHub’s API can turn your clunky shoe of a shipping process into a sleek glass slipper that won’t disappear at midnight

What is a shipping API?

An API (application programming interface) is a software program that enables communication between separate apps. Any time you use Facebook Messenger, search for a hotel on Travelocity, or use PayPal to purchase something from a website, you’re using an API.

Shipping APIs are magic wands that let e-commerce businesses automate and uncomplicate their shipping processes by allowing their website or shopping platform to interface directly with shipping carriers’ systems. Properly installed, shipping APIs can:

If you’re looking at those bullet points and thinking, “I spend so much time on those things,” then eHub is ready to be your fairy godmother.

As a premier shipping aggregator, we have a proven track record as domestic and international e-commerce shipping experts committed to providing our customers with transparent, easy-to-understand shipping management services.

Keep reading to discover how our API is the magic bean you need to grow your business.

Alakazam vs. Presto Chango: the differences between a shipping API and a shipping software platform

Businesses that haven’t fully automated their shipping processes often use the terms “shipping API” and “shipping software platforms” interchangeably, but they aren’t quite the same thing.

A shipping API comprises unique code that exists solely to connect existing software platforms. Because APIs work behind the scenes to move information between your selling channels and your preferred carriers, there isn’t a portal or user interface where users do their work.

By contrast, shipping software platforms must be opened to access their features.

Here’s a non-shipping example of the difference between the two:

Say you live in Chicago, but you need to go to Dallas for a convention in two months. Here are two possible ways you could end up booking your flight:

This example is a little oversimplified, but it gives you a good idea of the principles underlying APIs and platforms.

In this scenario, the first option (Google Flights) is an example of an API. Google Flights’ API searches multiple travel websites for selections that match your parameters and brings all the information back to you on the same page. After you book the ticket, the API sends your personal and payment information to Delta to complete the booking process.

The second option, booking directly with Delta, is an example of a software platform. You might end up on the same flight as you would have if you’d used Google Flights, but all your information stays within Delta’s system the whole time.

Knowing which option—a shipping API or a shipping software platform—is suitable for your e-commerce business depends on multiple factors, including the size of your company, the number of packages you ship, whether you ship internationally, your budget, and how much time you have to get your system up and running.

The following chart can help you make your decision:

SHIPPING APIsSHIPPING SOFTWARE
Works best for mid-size to large shippers (but can absolutely help small businesses)Any size business
Work completed in existing workflowsWork completed inside the program
Developer-led installationsQuick, easy installations
Immediately functionalRequires extensive employee training

Making it work—integrating a shipping API

To be fully functional, shipping APIs have to be installed by a software developer. They have the spells er, and technical skills needed to successfully connect platforms that may be built using different programming languages.

EHub’s shipping API has over 200 existing integrations, including for major carriers such as UPS, FedEx, USPS, and DHL, as well as shopping platforms like WooCommerce, Shopify, and Magento.

You can find our complete list of integrations here but know that if we don’t have an integration for your platforms, our talented developers can build one in a snap.

Whether you work on a platform we support or need a custom integration, EHub’s expert team takes pride in guiding you through the entire implementation process so that your processes are as efficient as possible.

Don’t believe us? Check out what our client Sean Clark, CEO of Black Label CBD, says about our implementation process:

Ingredients in the potion: shipping API features

APIs aren’t “programs” like Microsoft Word. They are more like the spell check, word count, and design settings within Word itself.

When you are looking at shipping APIs, you should be looking for a company whose API enables multiple features, including:

EHub’s shipping API offers all the features above, and then some. We’ve negotiated global discount rates with all major carriers (USPS, UPS, FedEx, DHL, etc.) that are lower than their published discounts. We can help you track and insure your packages or use your performance data to drive new efficiencies.

But the most significant difference between EHub and our competitors is the personal touch we’ve made our calling card. Instead of relying on automated chatbots or outdated FAQ pages on a website, our customers know they can call our in-house support team or reach out to their sales representative before, during, or after implementing EHub.

Not to brag or anything, but we’re basically a crystal ball that can answer all your questions.

Mastery is its own form of magic

Okay, this may surprise you a little, but EHub isn’t actually magic.

But we are a company of shipping experts and developer pros who are so good at our jobs that we make it look like magic. If your shipping management program is ready for a bit of abracadabra, let’s talk.

Thanks to Amazon Prime and other large retailers, 75% of consumers expect free delivery on e-commerce orders, even for orders less than $50. When you contrast that statistic with the fact that non-Amazon US retailers sell over $82.5 billion internationally, it’s easy to see the challenges and the opportunities facing small businesses considering going international. So, let’s answer the question: Why is international shipping expensive?

Why is international shipping so expensive?

The expense of international shipping often scares small business owners, but that’s because they don’t know the intelligent shipper savings tips that can save them money and make the expansion they’ve dreamed of possible.

Formulating international shipping rates is complicated, but there are five areas where you can cut costs: package dimensions, fuel surcharges, minimum package charges, value-added services/accessorials, and customs.

  Package dimensions

Shipping companies use the square footage and weight capacity (or similar metric) of their transport vehicles in their rate calculations, which means larger, heavier boxes cost more than smaller, lighter ones.

Smart shipper savings tip: Small businesses looking to expand into international markets can reduce their initial costs by selecting a few products with similar dimensions that can be packed in standard boxes. This will allow you to buy your packaging in bulk and accurately forecast your international shipping costs.

  Fuel surcharges

You pay fuel surcharges for domestic and international (aka cross-border) shipping, but since international shipping involves longer distances with sometimes dramatic differences in fuel prices between countries, international fuel surcharges are substantially higher.

Fuel surcharges are the average, not the actual, fuel cost your carrier pays to deliver your products. Your carrier agreement likely has terms setting a base fuel rate and a base fuel mileage as part of its terms. When the fuel price exceeds your agreed-upon base fuel rate, the surcharge kicks in.

Small business savings tip: Fuel surcharges aren’t set in stone, and they don’t have to be a mystery. A reputable carrier will be upfront about how they calculate their fuel surcharge. It’s also often possible to negotiate a lower fuel surcharge with your carrier(s).

Formulating international shipping rates is complicated, but there are five areas where you can cut costs

  Minimum package charges

One of the primary methods carriers use to protect their profits is minimum package charges, meaning the lowest price a carrier will accept to deliver a package. If you aren’t careful, this fee can cost you a lot of money.

Say your minimum package charge is $7, and your carrier service agreement has a 50% discount on packages shipped to London. You have a package that would typically cost $10 to send across the pond, which, with your discount, should cost $5. But that minimum package charge means you’ll pay $7, and the 50% discount you had budgeted for is now only a 30% discount.

The same thing goes if you are sending a tiny package of earrings to a shop in Notting Hill. Instead of paying the $4.25 it actually costs, that sneaky $7 minimum will cost you an additional $2.75.

Smart shipper savings tip: Like fuel surcharges, minimum package charges can be negotiated. Start tracking how many of your shipments are affected by the minimum package clause in your agreement. If you’re regularly paying more than you should or not getting the total discount in your contract, ask to renegotiate your minimum package charge.

  Value-added services & accessorial fees

Many of the features consumers take for granted are actually value-added services (VAS) or accessorial fees that you, as the shipper, have to pay for. Examples of these fees include:

Small business savings tip: Small businesses, especially e-commerce businesses, ship internationally are much more likely to be adversely affected by these fees. As with minimum package charges, data is your friend when negotiating these fees (which you can do).

First things first, you need to keep track of which charges show up the most often, which accessorials are the most expensive, and what packages/locations are most likely to trigger those charges. Then, examine your operations. Can you pack your products in smaller boxes? Can you use more than one carrier? Can you verify addresses before releasing packages for shipment?

After you’ve lowered your expenses as much as possible on your end, you can negotiate which fees you are assessed and how much you are charged with your carrier.

  Customs/duties/taxes

This is one area you have to budget for. Customs and duties are taxes charged at both ends (export/import) of international shipping, and you can’t avoid them.

Small business savings tip: An international e-commerce shipping software can help you build an accurate estimate of what your customs costs will be so you aren’t ever surprised.

Level up with international shipping solutions for your business

If you want to save money on your international shipping, optimize your packaging, understand your carrier agreement, and negotiate your fees. Click here to find out more about how eHub’s e-commerce shipping software can help you do all of that and more so you can capitalize on opportunities for international trade.

Black Friday is the most significant event for commerce all year. But are you ready?

While it’s essential to plan out your discounts and promotions, many tools make your life easier to prepare for the peak season. Here’s our top list of Shopify tools you can use to take your Black Friday sales to the next level:

Let’s dive in.

1. Countdown Sales Timer by Pixel Union

Urgency is your best friend when it comes to driving sales during Black Friday. You need to highlight the limited-time nature of your offer so that customers have no choice but to make a purchase right away.

That’s where the countdown sales timer by Pixel Union comes in. The app makes it simple to add an action bar on your website that lets visitors know how much time is left to benefit from your offer. No coding knowledge is necessary to set up the timer on your store.

Pricing:

2. Privy

Privy is a tool you can use to create email pop-ups that get the visitor’s attention and invite them to sign up for your list.

Privy will come in handy when customers on Black Friday are about to abandon their carts. You can set up a pop-up offering a discount on the product if they don’t finish their purchase so they can follow through.

It has countless templates to style your pop-up, whatever you’d like. Privy also has A/B testing to experiment with what works best for your pop-up — sometimes, a simple change in color or copy is all it takes to transform your results.

Pricing:

3. Referral Candy

Referral programs are great for spreading the word about your Black Friday sales. Each time a customer refers your discount to one of their friends and family, they receive a special prize. It’s a win-win for everyone!

Referral Candy helps you set up winning referral programs that grow your list and drive new customers. You can create special Black Friday discounts that turn customers into brand advocates and share your sales with people around them.

You’ll be able to generate extra sales with not so much effort on your end.

Pricing:

4. Rise: Gift Cards & Loyalty

If you plan to use gift cards as part of your Black Friday strategy, then Rise is the tool for you. Customers can send their gift cards to their friends or relatives seamlessly with their email addresses.

You can set up as many rules as you want to boost customer loyalty and satisfaction. Rise also allows Shopify stores to issue gift card returns and run bulk discount campaigns.

Pricing:

5. Klaviyo

Email marketing is a big part of running a Black Friday campaign. With customers getting bombarded by brands left and right, however, it can be challenging to make your emails stand out from the crowd.

Klaviyo is an email platform that makes it easy to send engaging, personalized emails that convert. You can segment email campaigns for wherever the customer is at in their purchase, such as if they abandon their cart or are browsing your products.

The tool dives deep into the mind and behavior of your customers so it can structure the best emails. As a result, you’ll always be able to send the right message to the right person during Black Friday.

Pricing:

6. Back in Stock & Restock Alerts

While your goal should be to make as many sales as possible, selling out on items too quickly can make you lose potential opportunities. There are customers out there who wanted your product, and they didn’t get the chance to purchase.

Back-in-stock alerts solve this issue by allowing customers to sign up so you can notify them when your item is back in stock. That way, if you plan to restock after Black Friday, customers can get another chance to buy the product.

You can also use this to gather presale orders. Collect emails from customers who want to be notified when the product is ready for sale!

Pricing:

7. Carthook

An excellent tactic to boost your average order value is upselling. It’s a sales technique that consists of persuading customers to buy other complementary products on top of their original order.

Carthook is a platform that allows businesses to offer three upsell offers for the customer once they make a purchase. It auto-fills the checkout page, so customers don’t have to re-enter their payment information.

You can style your Black Friday upsells however you want with trust symbols, customer testimonials, and countdown timers.

Pricing:

8. Sales Pop Master

Social proof is a powerful tactic to win more sales in e-commerce. It offers trust to the customer and boosts your brand reputation.

With Sales Pop Master, you can showcase social proof in your Black Friday offers to make customers feel they might miss out on something big. By clarifying that the offer won’t last forever, you will be driving extra sales and acquiring more customers.

Pricing:

 

Final Thoughts

From driving urgency to delivering a better customer experience, these tools should provide you with everything you need to spur additional website sales this Black Friday.

Aside from implementing these platforms, however, you need a strategy to promote your Black Friday sales and grow your list before the big day. Check out our last post on how to grow an epic list of hungry customers before the holiday season.