Over the past few years, the direct-to-consumer (DTC) industry has experienced unparalleled growth, which was only compounded by the social distancing recommendations of the past year.
Just how widespread is the growing adoption of eCommerce, specifically within the DTC industry? Over 80% of end consumers are expected to make one or more purchases from a DTC retailer over the next five years. Even in cultures where online shopping hasn’t been truly integrated into the way consumers shop, we are still seeing this same kind of growth. One example of this? In Spain, where there’s been little in the way of development of online sales, the trend towards DTC eCommerce shopping is growing.
We are seeing these same kinds of patterns worldwide, demonstrating a shift towards choosing eCommerce, buying from online DTC brands, and shopping online in general.
With all this growth, DTC brands need support to meet demand. Many DTC brands, subscription services, and other eCommerce businesses are looking to fulfillment services and fulfillment-as-a-service solutions for assistance.
Choosing the right eCommerce fulfillment provider for your brand can make a world of difference. What should you look for when comparing eCommerce fulfillment solutions? Here’s an overview of considerations to incorporate into your decision-making process.
Logistics Management, Shipping Times, & Costs
It wasn’t long ago that waiting five to seven days for a package to arrive was a reasonable window of time. Now, waiting a week is practically unheard of. As shipping speeds for major online retailers quicken, customer expectations are changing, and DTC brands need to keep up to speed up the supply chain.
Many are finding success by working with a third-party logistics (3PL) provider who has access to regional warehouses and can negotiate better shipping rates. This constantly growing demand for faster, more efficient deliveries is putting a strain on even the strongest of supply chains. 3PL providers can help.
One of the main contributors to low shipping costs and fast delivery times has a lot to do with the number of total warehouses each fulfillment service offers. If they have several warehouse locations, they are better able to offer low shipping costs since products do not have to cross through multiple shipping zones to get to their final destination. Having a fulfillment center location nearby means products arrive faster, making for happier customers. How does each fulfillment-as-a-service company stand up?
- OceanX has 3 warehouses.
- Radial has 12 warehouses.
- ShipMonk has 3 warehouses.
- Quiet Logistics has 7 warehouses.
- ShipBob has 4 warehouses.
- PFS Commerce has 5 warehouses.
Technology offerings and Modern 3PLs
It seems that today, there’s a technology solution for almost anything you want to accomplish — but that doesn’t mean that every eCommerce fulfillment provider offers robust software solutions that can enable your DTC brand to gain insights, enable automations, or integrate with your marketplace.
Which 3PL providers offer software and which do not? While OceanX, ShipBob, ShipMonk, Ruby Has, and Radial all offer some kind of software solution, Fosdick, Quiet Solutions, Capacity, and PFS Commerce do not.
Having some kind of technology-focused solution can make all the difference in how your brand operates, but not all eCommerce fulfillment has been created equal. When evaluating fulfillment software solutions, you should look for features like:
- Marketplace integration and inventory management
- Automation including setting inventory reorder points, generating picking lists, and handling returns management
- Insightful, predictive analytics about warehouse management customer buying patterns, inventory forecasting, and more
- Data visualization and dashboards
- Fulfillment and customer care reporting
- Order channel attribution
- Customer journey insights
Having a software-focused fulfillment company is critical. Automation improves customer wait times, and daily order outputs and analytics help you grow your business.
You can use the data collected in your software solution to improve your processes from end to end and automations to streamline your day-to-day operations, but you can only do these things if you choose an eCommerce fulfillment service that offers a modern, feature-rich software solution.
3PL and eCommerce Fulfillment for Beauty and Wellness
There are all kinds of intricacies associated with managing beauty and wellness products. For DTC health and wellness brands, you’re not just selling products that have been haphazardly packed into a box; customers now want a full experience. Plus, many of these items have a shelf life, so inventory management is vital to the success of your brand.
Here at OceanX, we don’t just have insider knowledge about DTC selling and subscription boxes for the beauty and wellness industry — we created the industry and have worked hard to perfect the way we support beauty and wellness DTC brands.
This is why we’re not just focused on fulfillment but also on business metrics, data visualization, dashboards, and customer-based KPIs. This can be immensely helpful as beauty brands are seeing a surge of online sales — one DTC company saw growth of 400% since the onset of the pandemic. Consumers are seeking self-care products from digitally-native brands, and we are working with our partners to become a part of that conversation and convert leads into sales.
At OceanX, we specialize in three industries: Cosmetics, which accounts for 45% of our business, skincare (27%), and health and wellness (10%). How do other eCommerce fulfillment services stack up? What are their top merchandise industries?
- ShipBob: Beauty and personal care (16%), apparel and accessories (14%), nutrition and health (12%)
- ShipMonk: Apparel and accessories (30%), beauty (20%), nutrition and health (15%)
- Fosdick: Home goods (35%), beauty (35%), health (32%)
- Ruby Has: Fashion accessories (40%), apparel (20%), home goods (20%)
- Quiet Logistics: Apparel and accessories (60%), footwear (15%), health and beauty (15%)
- Capacity: Apparel and accessories (43%), health and beauty (33%), sporting goods and accessories (9%)
- PFS Commerce: Health, beauty, and consumer packaged goods (51%), fashion apparel (18%), active lifestyle (13%)
Unlike some other companies that dabble in several different kinds of industries, we’ve spent years gaining knowledge about what’s matters in the health and beauty industry, and we’re ready to pass that wisdom onto our DTC partners and help them scale.
Other Key Considerations
What other fulfillment features will be useful to your brand? Do you want extended access to a team that can help you manage customer requests and concerns? What about a modern fulfillment solution that enables you to offer kitting or subscription models?
Here’s one thing to keep in mind:
OceanX is the only eCommerce fulfillment service with a dedicated client support team.
We’re not talking about just responding to customer emails. Our customer care service includes features such as:
- Phone, Email, and Chat Support
- Adaptive Call Routing
- Caller Recognition
- Agent Matching
- Sales and “Save the Sale” Specialization
- Cancellation and Refunds
- Customer Service Email Templates
- Dedicated Support Team
Because we are the ones shipping your products to your customers, wouldn’t it make sense for us to handle return management or field incoming questions about shipping? Because we function as part of your brand, interacting with customers on your behalf, you don’t have to worry about answering questions about a package or acting as the go-between for your customers and your logistics provider; we handle it all for you.
Managing Large Order Volumes
Fulfillment services and fulfillment centers are designed to help you scale, but can they handle things when your business really takes off? Do they know your brand intimately, or are you one in a sea of thousands? You need to be sure that your 3PL provider can balance two things:
- They can handle large order volumes on your behalf.
- They don’t have so many clients that they can’t advocate for you as a unique brand.
There are plenty of fulfillment centers out there that can handle hundreds of thousands of orders per client per year. ShipBob has well over 3,000 clients. However, they only handle around 1,500 orders for each client annually, and it’s not very likely that they are doing much to help all 3,000+ clients grow their businesses.
At OceanX, we work with around 40 brands. But for each of these brands, we average 525,000 orders annually. This allows us the chance to personalize our work to each client. The only other fulfillment centers that even come close to these figures are PFC Commerce, which works with 67 clients and handles an average of 274,164 orders annually per client, and Quiet Logistics, which offers fulfillment services for 72 clients and averages around 200,000 orders per year, per client.
Choosing an eCommerce fulfillment partner is a deeply personal decision, and each brand must decide what’s best for their company and which provider will help them overcome their unique challenges and meet their key needs.
At OceanX, we believe we’ve attained a special balance of high-performance functionalities and features combined with individualized attention. When you work with us, we become a fully-integrated part of your team. You can learn more about choosing the right 3PL provider here. Want to work with us? Reach out today to learn more!