How To Offer Free Shipping on Your Ecommerce Store & Still Make a Profit – Episode 5

Welcome to the fifth episode of the Ultimate Guide to Profitable Free Shipping. This week we will be exploring different third party logistics services to offer fast shipping profitably. Over the past couple of years, online customers have been conditioned to expect two day and same day deliveries, but as an independent seller it might be too costly or even impossible to reach the customer in two days. A mainstream solution is to distribute inventory geographically with the help of a third party logistics or three PL providers. Points 21 through 25 in this episode, talk about different models of three PL providers for e commerce businesses. Number 21 fulfilled by Amazon Fulfilled by Amazon or FBA is a benchmark of e commerce fulfillment that has pushed the boundaries in fast shipping and customer service. FBA requires you to ship your products to the fulfillment centers across the country and the rest is taken care of by Amazon. The items are stored in the warehouse and after the order is received on your Amazon account, Amazon packs and ships products to the customers. The fees are extremely competitive and simplified into two fulfillment fees and monthly storage fees. Fulfillment fees include discounted shipping rates. FBA customers enjoy other perks such as prime badging, a higher probability of getting the buy box and protection against faulty shipping experience to customers. However, FBA storage costs can add up if your products don't sell fast enough. Fulfillment costs also almost double for orders received on other online marketplaces. Number 22 traditional 3 PLs conventional logistics companies such as FedEx, UPS and C.H. robinson have now created specialized offerings for e commerce businesses. They use their pre existing warehouse and logistics infrastructure to offer an end to end solution including inbound freight, storage, fulfillment, shipping and returns. Since they are a conventional service catering to industry level clients, the pricing is volume based and you get discounts proportional to your orders. The advantage of having traditional 3 PL on your side as it is easier to do omnichannel fulfillment and expand internationally through a comprehensible global network. However, online sellers can feel ignored when 3pls have larger clients to deal with. 23. 1. Stop outsourced service partners if you are a merchant with no experience or willingness to manage an online store, you might need a service provider that goes just beyond fulfillment. Whitebox and CPG IO are examples of third party solutions that do everything from setting up your product page to processing returns. They manage your stock numbers, optimize your listings and run marketing campaigns. In addition to storing your inventory and fulfilling your orders, the logistics are also managed by them and generally through a 3 PL partner such as FBA. Their fees generally include a fixed manager, stock numbers, onboarding fee and a la carte pricing for the level of service needed. It is great for sellers who wanted to focus on their offline operations and trust experts to manage their online visibility and fulfillment. Number 24 on demand warehousing on demand warehousing such as Flex, Flowspace and Where to Go are asset light three PL solutions that act as a marketplace of warehouses for sellers. Warehouses list their unutilized space on the platform and sellers can rent storage space and fulfillment services from the platform. Platforms deploy technology solutions at warehouses to ensure inventory management, right storage conditions and optimal packaging. Warehouses and sellers both have visibility into their operations through separate user interfaces along with customer support. The advantage of on demand warehousing is you only pay for the space you need at any given time. However, the storage space may not be guaranteed in every geography depending on the availability of the warehouses. 25 emerging 3 PL solutions for new Sellers There are a number of emerging models in 3 PL space for sellers who want to access distributed warehousing on platforms other than Amazon at low cost and commitment. Shipbob, for one, specializes in batch fulfillment and provides an end to end solution for businesses who have a seasonal product or a crowdfunded business. You don't need to have regular sales or high volumes deliver, on the other hand, focuses on inexpensive fast shipping by providing a no frills solution with emphasis on distribution to regions with substantial sales only. This enables them to offer low costs of fulfillment for fast shipping to most customers. These models are still in a nascent stage and the quality of service can be inconsistent without the scale of operations like other 3 PL providers. To summarize, 5th episode 21 fulfilled by Amazon 22 traditional 3 PLs 23 once top outsourced service partners, 24 on demand warehousing and 253 PL solutions for new sellers thanks for watching the 5th episode of our series. If you enjoyed our content, please share this post with a friend or colleague who might benefit from this series. Subscribe for more such content and keep an eye out for episode six next week in which we will share how to make free shipping profitable with alternatives to parcel shipping. And lastly, sign up to our newsletter for even more awesome content delivered right to your inbox. See you next time.