5 Ways to Improve the Parcel Delivery Experience
“The last mile” is now the Holy Grail of ecommerce shipping. A merchant can do an amazing job of selling and provide an outstanding shopping experience, yet if the package is late or damaged, a customer may complain on social media, even if the carrier is to blame.
You can’t directly control the last mile — i.e., the distance from a local transportation hub to the final destination — but you can improve the communication with your customer to provide excellent service, even when things go wrong.
Here are a few ways that merchants can provide an outstanding delivery experience and produce a positive brand impression.
5 Ways to Improve the Parcel Delivery Experience
1. Avoid porch pirates. Porch pirates are thieves that steal parcels from recipients’ porches. Many articles have been written about how to prevent this type of theft. Ideas include security cameras, lockers, and services like Package Guard, which notifies a recipient when a package is delivered.
But the most foolproof way to avoid theft is to ensure that the customer is home when the parcel arrives. Retailers can schedule delivery times and provide frequent delivery notifications (see 3., below), so consumers know when to be home. Saturday delivery options provide even more opportunities to stop package theft.
2. Provide delivery windows, with options. Customers expect tight delivery windows — ideally, 8 a.m. to 12 p.m. on a specific day, with notification an hour or so before delivery. Provide the ability for your customers to choose a delivery date and, if possible, a time.
Even better, empower them with different ways to receive packages. For example, Jet.com is installing Latch, a sophisticated access system, in 1,000 New York City apartment buildings for easier deliveries. Residents can use their phone as a key, grant access to guests without walking downstairs, and get packages delivered safely without being home.
Also, Amazon Locker is available to merchants using Fulfillment by Amazon. It is similar to a post office box, but only for Amazon deliveries. Customers get an email as soon as the package arrives at the locker and they have three days to pick it up. Similar services include FedEx Ship&Get, USPS Gopost, and UPS Access Point lockers.
Amazon is also testing delivering directly to customers’ car trunks, while Walmart is testing deliveries straight to customers’ refrigerators. Commitment to improving the last mile experience is immense. Independent merchants should not be too far behind.
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I'm Interested in Saving Time and Money3. Send frequent delivery notifications via preferred mediums. Customers have their own preferred forms of communication. The more choices they have, the more likely they are to receive and read your updates. The top three consumer choices for communication are typically email, text message, and a company order-tracking page. As a start, offer all three.
Customers appreciate being notified when an order is going to ship, when it has shipped, where the item is currently located, and ongoing updates about the expected delivery date and time.
There are plenty of exceptions to these typical notices. You’ll earn loyalty points with your customers if you handle them well, and proactively. Examples include:
- Attempted delivery by the carrier, without success.
- Available for pickup at a carrier location, after too many attempted deliveries.
- Cannot schedule a delivery appointment, and the carrier is unable to reach the customer.
- Consignee refused delivery, usually because it was delivered to the wrong address.
- Other exceptions, including expected delays, package held at terminal, and incorrect address.
4. Provide a branded tracking page. A branded delivery-tracking page is a must have. Customers become increasingly engaged with your brand during the period between the purchase and delivery. According to the 2017 “Post-Purchase Benchmark Report” from Navar, a customer loyalty and retention platform:
- Those who track orders visit the tracking page 3.1 times per order.
- The click rate on marketing assets that appear on a branded order-tracking page is 3-times higher than for marketing emails
A branded tracking page will curtail “Where is my order?” customer-service queries. It will also provide your marketing team with better opportunities to cross sell, up sell, and boost engagement.
5. Offer branded and eco-friendly packaging. Branded packaging is a effective way to advertise. It’s similar to a mobile billboard. Remember the first time you saw a package from Jet.com? Or the ubiquitous Echo and Prime advertisements on every Amazon box? The more eye-catching your packaging is, the more your customers and their neighbors will remember it.
Eco-friendly packaging is becoming more important, especially for millennials. One recent study found that more than 50 percent of shoppers would pay more for environmentally friendly packaging.
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Get My Free 3PL RFPExecution Is Key
Parcel delivery strategies are easy to articulate, but hard to execute well. Managing delivery in the last mile requires infrastructure for order and fulfillment that can track real-time package status from origin to the customer’s doorstep and everywhere in between. That information must sync with numerous platforms — website, customer support, email, text messages — and accommodate order and delivery modifications. Get it all right and you’ll have an unfair competitive advantage.

Turn Returns Into New Revenue

Leading Industry Analyst Forrester Adds Pulse Commerce to Omnichannel OMS Report
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Pulse Commerce has been included in the “Now Tech: Omnichannel Order Management Systems, Q2 2018” report by a leading industry analyst. The report can be utilized by retailers to select from a diverse set of vendors and understand the value they can expect from an omnichannel OMS provider. We are very excited to be a part of this chosen list of vendors.
Per Forrester – You can use an omnichannel order management system (OMS) to provide enterprise-level inventory visibility and distributed order management, customer order management, and store fulfillment. But to access these benefits, you’ll first have to select from a diverse set of vendors — vendors that vary by size, target market, geography, and vertical market focus. Digital business pros should use Forrester’s Now Tech report to understand the value they can expect from an omnichannel OMS provider and select vendors based on size and target market.

Turn Returns Into New Revenue

Meet Pulse Commerce at IRCE 2019
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IRCE’s conference offers strategic educational sessions on the topics that matter to you most. With over 130 sessions covering various topics and trends, your needs are met at IRCE. The exhibit hall features 600+ top solution and technology vendors, ready to help your business succeed in every facet.
If you are making your way to IRCE this year, come stop by Pulse Commerce’s booth #1111. We invite all growth-minded merchants to come talk to us about industry best practices and explore how we can improve their business performance.
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Turn Returns Into New Revenue

The Definitive Guide to Distributed Order Management System
In this article
19 minutes
- I. Introduction
- II. The New Ecommerce and Retail Realities in the Age of Amazon Prime
- III. What is Distributed Order Management?
- IV. Distributed Order Management System Capabilities
- V. Omnichannel Commerce and Distributed Order Management – A Match Made in Heaven
- VI. Distributed Order Management Software Deployment Models
- VII. Distributed Order Management System Software Vendor Selection
- VIII. How to Calculate the ROI on Order Management Systems
- IX. Tips for Successful Distributed Order Management System Implementation
- X. Conclusion
I. Introduction
Almost every “next year’s retail trends” article includes omnichannel commerce as one of the potential saviors of non-Amazon retail as we know it. The conventional knowledge is that multichannel merchants’ only chance of surviving is to take advantage of their biggest assets, their stores, to deliver services that Amazon cannot. By combining the power of their stores and their ecommerce websites they can create a retail whole greater than the sum of its parts.
How can siloed commerce systems and processes transform into a unified platform — one that can deliver on the promise of omnichannel commerce? BPR’s Ken Morris’ perspective is that, “Retailers aren’t going to throw their legacy applications away, they’re not going to throw their investments away, but what they have to do is link it all in real time.” The solution: “The most important component is a middleware layer—a piece of software that connects the dots.”
Distributed Order Management System (DOM) is that middleware. Distributed Order Management is the unsung hero of omnichannel Retail Commerce, a hero rarely mentioned in articles about buy online pickup in store.
Continue reading to learn why distributed order management systems have taken on such an important role in retail innovation, and the practical implications for your business.
II. The New Ecommerce and Retail Realities in the Age of Amazon Prime
Amazon generated over 25% of all U.S. Retail growth in 2016[1], and their sales represented 5% – 6% of total U.S. retail sales. This one behemoth pushed all others aside to eat an outsized chunk of retail pie growth. Many analysts consider Amazon Prime to be a significant growth driver, with over 90mm Prime members[2] who have access to movies, e-books and photo storage, at no additional charge. Of course, free 2-day shipping is included too.
For perspective, at $99 per year, that’s $9B in Prime Membership revenue, before a single purchase is made on the site. Collectively, consumers with Prime Memberships have a $9b incentive to purchase on Amazon to take advantage of 2-day free shipping. The psychological pull is strong — “Why should I try to meet the $75 free shipping minimum on otherwebsite.com when I already have free shipping on Amazon?”
The new ecommerce realities are margin eaters. Over 90 million Prime consumers expect:
- Free and fast shipping options
- Date-certain delivery choices (Amazon typically offers 4 options)
- Frequent, accurate, multi-device order status updates (website, mobile, text)
- Frictionless returns
- Lower prices, with multiple merchants offering the same products on Amazon Marketplace
As a result merchants face new challenges. How can you capture your fair share of ecommerce growth, while also:
- Adding free shipping and multiple, date-certain delivery choices
- Providing frequent, accurate, order updates
- Offering simple returns and exchanges processes
- Holding prices in check
Meanwhile, many pure play ecommerce businesses are far more complex today than they were 15 years ago. The days of a single ecommerce storefront are long gone, with many pure-play ecommerce merchants also selling through marketplaces, including Amazon, to ride the coattails of their huge traffic. In terms of sourcing, merchants purchase from multiple vendors, and they’re also selling products fulfilled by drop-shippers.
Multichannel retailers with bricks and mortar storefronts entered the ecommerce fray quite a while ago. Their challenges are even more daunting. Sales channels no longer operate in silos. Many are seeking to offer omnichannel services that pure play ecommerce player like Amazon cannot (until recently). Buy online and pickup in the store; buy online and return to the store; inventory optimization across stores, ecommerce storefronts, and warehouses; persistent shopping carts that remain current as consumers move from the website to the mobile device to the store; ship from store. The list is growing.
The new reality is that the companies who are capable of creating omnichannel experiences for customers, to differentiate versus Amazon, are most likely the ones who will come out ahead in the retail shakeout currently underway. The merchants that consistently deliver stellar and consistent service as consumers shop across channels, and transform their sales channel silos into an integrated whole will be the winners.
[1] https://www.digitalcommerce360.com/2017/02/17/us-e-commerce-sales-grow-156-2016/
[2] http://www.businessinsider.com/amazon-prime-subscribers-chart-2017-10
III. What is Distributed Order Management?
We’ll define Distributed Order Management by first defining Order Management in the context of a simple ecommerce business with an online storefront and a single fulfillment center.
Order Management is the capture and processing of a customer order, followed by the assignment of that order to a fulfillment center or 3PL to pack and ship the item(s). Order management also includes reverse logistics (returns). In this simple case, there is only one location receiving returns, so tracking is straightforward, as is adding the item back into inventory.
Distributed Order Management (DOM) was born out of challenges that arose as ecommerce grew more complex. A DOM addresses the challenges that channel proliferation and rising expectations introduced. Many online-only businesses now sell through multiple channels – their own storefronts plus multiple marketplaces. Sourcing and fulfillment are more complex too, with products fulfilled by multiple warehouses, dropshippers, and 3PL’s.
New challenges are plentiful:
Challenge #1: With multiple sales channels, how do you ensure you only sells items that are in stock?
How does the ecommerce storefront evaluate whether an item in the shopping cart is still in stock? If the last item is sold through your storefront, will your marketplace stop selling the item? Or continue selling?
Challenge #2: How do you decide which fulfillment center should handle an order?
With orders coming in from multiple storefronts, and being distributed to multiple fulfillment centers, a new question emerges. Should you ship from the fulfillment center closest to the ship-to-address? Or to the fulfillment center with the highest days of inventory on hand? How will you handle an order that includes 2 items that are not in the same warehouse? What about an item that is out of stock, but on its way to the warehouse?
Challenge #3: Which carrier should be used to ship faster and cheaper?
Even with Amazon’s economies of scale, shipping costs were over 17% as a percent of their average order value in 2016. To keep shipping costs in check, which carrier should you use for a specific delivery — e.g. which one has the best price for 2-day guaranteed delivery from North Carolina to Texas?
Challenge #4 (and 5 and 6): Bricks and Mortar
Now add brick-and-mortar storefronts into the mix. How can you keep a real-time holistic pulse on inventory with orders coming in from online sources and items also being sold in stores? How can you squeeze synergy out of bricks and clicks? How can your store associates accept a return for an item purchased online? Will it be reflected in inventory? If an item is out of stock in your fulfillment center, can you sell it online and ship from a store? The questions, challenges and opportunities are endless.
Taking these questions a step further, If a retailer intends to deliver consistent experiences across all channels, and to put all of their inventory to work (e.g. an online order can be shipped from a store), complexity increases exponentially. Silo’d systems can’t possibly keep up.
A Distributed Order Management System processes orders from multiple sales channels and intelligently routes them to the ideal fulfillment center. Some can even select the ideal shipper, too. Orders are turned around faster and more accurately; inventory turns increase; shipping costs decrease. Implemented properly, the Order Management System squeezes more out of your prior commerce technology investments, unifying them to orchestrate streamlined operations, optimized inventory, faster order turnaround, and better cross-channel customer support.
IV. Distributed Order Management System Capabilities
An order management system resolves the challenges outlined above by:
- Synchronizing real time Order and Inventory data with all sales channels and fulfillment centers
- Processing orders from multiple sales channels (e.g. fraud checks, payment processing, address correction)
- Calculating the optimal fulfillment location based on priorities (e.g. closest to customer; fulfillment center with highest inventory)
- Routing the order to the ideal fulfillment center and maintaining up-to-date inventory information.
The distributed order management system also does far more. It not only routes the order, it prioritizes fulfillment of each order against the others, and manages back-orders and reservations for pre-launch products.
Source: Gartner Market Guide for Retail Distributed Order Management Systems, 2017
Capabilities include:
- Single data repository of all orders and all inventory from all retail channels and fulfillment centers, providing real-time inventory to POS, fulfillment, and ecommerce platforms. An enterprise DOM will also house customer order histories, and product and pricing information.
- Order acceptance from multiple sales channels, including marketplaces.
- Payment processing and checkout, including credit checks, fraud checks, payment authorization, tax and export duty calculations, and refund payment processing.
- Order routing to the ideal fulfillment center or dropshipper based on customized rules and priorities, to optimize inventory turns, or reduce shipping costs and delivery times. Typically integrated with shipping carriers, the DOM can select the ideal carrier for the order.
- Order modification or cancellation via any channel (online, store, contact center) prior to shipping.
- Order tracking and lead-time estimates throughout the entire order lifecycle.
- Omnichannel service enablement for buy online pickup in store, buy online return to store, ship from store, and ship to store services
- Sophisticated handling of pre-orders, back-orders, and order splitting. For example, routing pre-orders and backorders to fulfillment as soon as inventory is available.
An enterprise strength DOM also manages product information across multiple sales channels and includes business analytics tools and reporting to make maximum use of the DOM’s robust order and inventory data.
The power of these capabilities is immense. Consider some real-life shopping situations.
A shopper is in a fashion retail store, and the store doesn’t have the blouse in stock in her size.
Without a DOM, she will leave empty handed. At best, a high-touch store associate can call around to other stores to find one with the item in stock. These calls take time, and may be fruitless. With a DOM, they have real-time access to inventory availability across the entire enterprise. A store associate can rapidly order online for in store pickup, order online for delivery to the customer, or have the item shipped from another store to the customer.
A consumer needs to buy a specific item tonight, and wants to make sure the item is in stock first.
Without a DOM, it’s not possible for the ecommerce site to display store product availability. The information sits in silos. If he’s shopping on REI.com, he’ll find out the closest store with the item in stock, and will be given the option to buy online and pickup in the store. The ecommerce website reveals real-time inventory across every store. Each store’s POS is linked to the DOM, updating inventory every time the cash register rings.
A consumer buys online and wants to modify the order before it has shipped.
Without an Order Management System, once the order is sent to a fulfillment center, there is no turning back. It’s in a queue to ship. The consumer will have to wait for it to ship, and to be delivered, in order to exchange it. With a DOM, the consumer can modify the order in the store, via the contact center, or on the ecommerce website. Each has order-level data, with up-to-date fulfillment information, and the ability to change the order and update all of the systems touching the order.
Behind the scenes, a DOM’s impact on inventory turnover can be profound too. A 5% reduction in out of stocks and a 5% reduction in overstock situations can move a merchant from being in the red to in the black — especially during the holidays! The DOM accomplishes this by intelligently routing orders to optimize inventory across every fulfillment center, retail location, and ecommerce website.
V. Omnichannel Commerce and Distributed Order Management – A Match Made in Heaven
To see why Omnichannel Commerce and Distributed Order Management make such a wonderful couple, it’s worth taking the time to understand some related terms.
Multichannel Retail is exactly what it sounds like. For example, a retailer may sell through a handful of brick-and mortar stores, an ecommerce storefront, and Amazon marketplace. Whether the channels act as silos or are integrated, the term multichannel refers to selling products through multiple sales channels. These channels can operate in distinct silos from end-to-end. E.g. different warehouses for online versus stores.
Omnichannel Commerce refers to seamless, consistent, effortless, integrated customer experiences for shoppers as they traverse different sales and support channels. Shoppers enjoying a stellar omnichannel experience feel like, regardless of sales channel, that they’re interacting with a single company that sees them as one individual — whether on the website, in a store, or on the phone with a contact center rep, the shopper sees one company. For example, customers may have a single, persistent shopping cart on the website, their mobile device, and even on in-store tablets (e.g. Crate & Barrel’s wedding registry). Or a customer may buy online and wish to return to a store. Or a shopper may buy online, and make an exchange in-store before the item has even shipped. At every step, the store associate, contact center rep, and website have the necessary information and processes at their fingertips to serve the customer with knowledge of their past interactions.
How can a merchant make this happen? How can a store associate modify an online order? When they do, how will the fulfillment center be informed not to ship? How will inventory be tracked across all channels? Distributed Order Management.
Omnichannel Commerce and the Distributed Order Management System is a match made in heaven. A DOM enables Omnichannel Commerce to flourish. Without demand for omnichannel commerce, a DOM’s purpose in life would be far diminished.
VI. Distributed Order Management Software Deployment Models
An Order Management System can unify existing, siloed, commerce technology to unleash a commerce whole greater that the sum of its technology parts. Deep business significance is hidden between these buzzwords. Most merchants did not start out as multi-channel businesses. An online only store might have, over time, decided to sell through marketplaces. Or, a brick and mortar chain may have decided to begin selling online. Growth-minded merchants find, at some point, that technology that worked so well when they served only one channel is not up to the complex tasks of breaking down business silos.
A Unified Commerce Platform integrates the commerce technology stack to enable these complex transactions. A Distributed Order Management system is the catalyst that transforms existing, siloed technology into a Unified Commerce Platform.
If you’re planning to implement a robust order management system, what is the best approach? For a comprehensive overview, see our blog post and whitepaper, “Which OMS is Best for Me? Home Grown, On-Premise, or SaaS?” Given today’s technology trends, start with the assumption that a cloud-based solution is probably the best choice, because you’ll avoid the headaches of running a data center, updating software, managing compliance, and other distractions from your core expertise. Answering a handful of questions can help a mid-market merchant decide which approach is best for their business:
Question 1: Does your business have a state of the art data center? If not, then there’s little point in considering anything other than SaaS. With increasing security concerns, especially in ecommerce, the risks are simply too high to run your commerce technology on anything less than a top-notch data center.
Question 2: Does your business have truly unique needs that would require customization? If so, are these unique needs due to the nature of your legacy systems? If you’re customizing to put a bandaid on old technology, then it’s time to update the house of cards rather than add more complexity. If you truly do need customization, then a premise-based solution will offer greater customization capabilities.
Question 3: Are your customization needs so vast that even a premise-based solution can’t meet your needs? Are you considering building instead of buying? If so, then you should only consider going forward if software development is a core strength and differentiator for your company. If not, then you’re heading down a treacherous path building a homegrown solution.
VII. Distributed Order Management System Software Vendor Selection
The most important step in selecting an Order Management System is to very clearly identify all of your requirements. You can find a comprehensive overview of potential features in our Order Management System RFP Template. You can also find an overview requirements often missed until it’s too late in, 5 Hidden Costs to Avoid when Buying an OMS. Following is just a sampling of the kinds of requirements you may not have considered without some prompting.
Distributed Order Management: Do you need purchase order support for B2B ecommerce? Do we want to enable customers to choose their delivery date? Do we intend to enable customers to set up recurring orders (e.g. subscribe and save)? Do we need to integrate drop shipping into our OMS?
Inventory Management: Do you need to track inventory across multiple sales channels and fulfillment centers? Do you need the OMS to create vendor purchase orders? In bulk? Do we intend to use store inventory for ship-from-store and buy online, pickup in store services?
Customer Service: Do CSRs need to be able to search all orders across channels? Do you intend to empower CSRs to modify website orders? Do you want CSRs to issue refunds and credits?
Stores and Fulfillment: Do you want to customize shipping criteria or carrier by SKU or delivery location? Do you intend to support for buy online pickup in store / return to store?
Other Systems: With which systems must the DOM integrate?
If this is your first DOM procurement, the requirements phase is absolutely critical. Even our list of over 150 features (see above) doesn’t cover everything one might need.
With a clear view of your needs and their relative importance, comparing and selecting vendors becomes a typical procurement exercise. Just never take your vendor’s word for their depth of capabilities. Make sure you see all of it in action.
VIII. How to Calculate the ROI on Order Management Systems
The Return on Investment for Order Management Software is gained through a combination of efficiency gains that reduce costs and free up cash.
Inventory Optimization
A DOM pulls a number of levers to increase top line revenue (fewer stockouts) and increase inventory turns (less overstock). Enterprise-wide visibility reduces need for “just in case” inventory while Intelligent Order Routing reduces “slow inventory.” The ability to “ship from store” enables you to fulfill orders when your warehouse is out of stock. All of these improvements reduce the inventory needed to run the business, freeing up cash and saving on warehouse costs (i.e. fewer square feet needed).
Return = Reduction in average inventory x Line of Credit Interest Rate
Fulfillment Efficiency
The DOM routes orders near-instantaneously to the optimal fulfillment center. The routing includes accurate packing slips and shipping labels (i.e. employee proof). Error reduction is a hard cost saving, with less return shipping, customer support hours, and reverse logistics management.
Return = Reduction in return shipping expense + reduction in reverse fulfillment labor costs + reduction in returns-related customer service call labor expense
Employee Efficiency
The DOM assigns orders for more efficient fulfillment, including packing slips and shipping labels, shedding some man hours. Contact center reps benefit handsomely, with the ability to see all orders, inventory, shipping status and customer order history with one login. Issue resolution time can be cut dramatically.
Return = reduction in issue resolution time x CSR pay rate
Pulse Commerce’s OMS ROI Calculator calculates these potential profit impacts, based on your own inputs and assumptions.
IX. Tips for Successful Distributed Order Management System Implementation
The success of your deployment, or lack thereof, can be the difference between a high ROI investment and a negative one. The most important component of a successful implementation is your requirements gathering effort during procurement. In general, the success of a SaaS implementation is driven by three factors:
(1a) Did you seek all of the capabilities you’ll need (see above)?
(1b) Does the software do all that you were told it does? This includes performance, latency and uptime, too.
(2) Does the OMS integrate well with your existing commerce technology?
A successful deployment rests on the OMS’ API’s. Robust and well-documented APIs, bode well for the implementation. If custom API’s are needed, then you may be on track for project overruns — in both time and money.
(3) Is vendor technical support a partner? Or an adversary? Will you spend more time convincing tech support to help? Or more time getting help? This is one of the most important areas to pressure test with customer references.
X. Conclusion
At its core, omnichannel commerce is just a fancy way of saying, “treat customers as they’d expect you to if everyone in your company and all of your systems knew every interaction you’ve ever had. All while allowing customers to treat all sales channels and touchpoints as one, single entity. As customers go from Pinterest to your website, to your store, it all feels like one seamless shopping experience. A Distributed Order Management System is that centralized memory and up-to-date repository of these insights. It’s also the conductor of the modern retail commerce orchestra — a conductor that appears to be on the verge of fame.

Turn Returns Into New Revenue

3 Strategies to Fulfill Like Amazon
If Amazon reduced shipping costs by just 1 percent, it would save $162 million. Amazon spent $16.2 billion on shipping in 2016. We can be certain that it is spending millions to improve and optimize its shipping processes. Ecommerce merchants can take advantage of Amazon’s efforts to increase profits.
Amazon’s 2016 shipping expense was 17.7 percent of direct ecommerce revenue. That’s $8.85 for every $50 order, which is achievable by most merchants.
This post, describes three strategies to fulfill like Amazon, even if you have a fraction of its scale and infrastructure
- Manage Carriers
- Manage Yourself
- More Choices, Urgency
Manage Carriers
Manage carrier contracts by the numbers. Negotiate better rates using data and analytics.
Analyze accessorial charges. These are extra fees assessed on top of the base rate. Compare every accessorial line item, by carrier, as a percentage of total shipping costs.
- Errors, such as address correction, return charge, and incorrect weight.
- Extra services, such as residential or rural delivery, remote area delivery, and Saturday delivery.
- Surcharges, including fuel charges, hazardous materials and international dangerous goods, and holiday season surcharges.
Analyze standard shipping fees for each cost driver.
- Distance, weight, volume.
- Size to weight ratio — e.g., dimensional weight surcharges for light (but big) items.
- Service level — e.g., next day air versus 5-day ground.
Negotiate like a pro.
- Focus on the accessorial fees that have hit you the hardest.
- Negotiate shipping fees with each carrier to match the lowest priced carrier for each category.
- Negotiate insurance fees with each carrier as well as with pure-play insurers.
Enforce each carrier’s service level agreement and negotiated prices.
- Validate that carrier bills are indeed reflecting your negotiated prices.
- File timely reimbursement claims for SLA violations — within 15 days, typically.
Automate intelligent carrier and service selection. In my experience, companies can save up to 25 percent on shipping costs from this strategy alone. No single carrier offers the best rates for every situation. The carrier that charges the least for an in-zone ground shipment may not be the one that charges the least for a 2-pound next day air delivery.
Create decision rules for choosing carriers and service types based on factors such as dimensional weight and delivery zone. Rather than attempting to cover every possibility, start by implementing the rules for 80 percent of your orders. Make sure to meet the minimum volume that you promised a carrier to secure your discounts and negotiated rates.
Implement these intelligent rules across all fulfillment centers and drop-ship vendors and then automate the selection process for your entire order management and warehouse management systems. Here are two examples.
- Geography-based rules. Shipper A charges the least for shipments from New York to Arizona while Shipper B charges the least for same-zone shipments.
- Weight-based rules. Shipper C charges the least for next-day air packages under two pounds.
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I'm Interested in Saving Time and MoneyManage Yourself
Like Amazon, audit and analyze your own operations routinely to deliver orders faster and cheaper. This may seem obvious, but many mid-market retailers lack the technology and infrastructure. Your ecommerce systems should facilitate automated rules, in addition to answering the following questions:
- Which products are generating the highest discrepancies between the shipping fee invoiced to the customer versus what’s charged by the carrier?
- What is the best carrier for each product, order size, and geography?
- Which shipments resulted in missed carrier SLAs or actionable exceptions?
Eliminate costly errors. Accessorial charges are typically the result of errors. According to Refund Logistics, 31 percent of carriers’ invoices include these extra fees, on average. Common errors and resulting fees include:
- Incorrect address, resulting in address correction and return fees.
- Incorrect dimensions and weight, resulting in DIM charges, which can be eliminated by ensuring product catalog data is accurate.
Intelligent order routing. Route orders to the fulfillment center(s) closest to the customer.
- Ship faster and reduce shipping costs up to 25 percent.
- Pick the least expensive shipping type that gets the package to its destination within the promised delivery date commitment.
Go omnichannel. If you’re an ecommerce merchant with physical stores, leverage those stores as fulfillment centers.
- Ship from store. Shipping from stores can reduce shipping costs and speed up delivery. For example, Best Buy reduced average shipping time by two days with its ship from store program. Revenue may increase, too, with this strategy. American Apparel reported a 30 percent increase in sales from using stores as backup fulfillment centers.
- Buy online, pick up in-store. Offer pickup in-store as a delivery option for online customers. It eliminates shipping fees and increases customer satisfaction. Plus, customers spend an additional 20 percent, on average, when picking up their items.
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Offer more choices. Increase conversions by giving customers delivery options that provide greater certainty of delivery times. For example, Amazon offers these shipping choices:
- “Tuesday, Sept. 12: $5.99 One-Day Shipping.”
- “Wednesday, Sept. 13: Free Two-Day Shipping.”
- “Friday, Sept. 15: Free No-Rush Shipping + Get $5 Reward for Prime Pantry.”
Create urgency to increase conversions. On your product details, shopping cart, and checkout screens, show how much time is remaining to complete the order and still receive guaranteed delivery by the desired date.
If you are already implementing these techniques and are looking for more tips and tricks, check out this comprehensive guide to profitable free shipping

Turn Returns Into New Revenue

IRCE at RetailX 2020
In this article
1 minute
June 9-11, 2019 | McCormick Place, Chicago
Are you making your way to IRCE at RetailX in Chicago this year? Come meet us at our booth #809.
IRCE is your one-stop-shop for all your e-commerce needs. This conference and trade show offers you everything your business needs to stay ahead of your competition, in one simple location. IRCE @ RetailX will take place in the world-class city of Chicago, June 9-11, 2020. IRCE’s conference offers strategic educational sessions on the topics that matter to you most. With over 130 sessions covering various topics and trends, your needs are met at IRCE.
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Shoptalk 2020
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Mar 22-25, 2019 | Mandalay Bay, Las Vegas, NV
Shoptalk is where 8,000+ retail changemakers come together every year to create the future of retail. For 5 years, They have defined the industry’s digital community by bringing established retailers and brands together with direct-to-consumer and tech startups, large tech and Internet companies, venture capital investors, real estate developers, equity analysts, media and others.
The industry-defining agenda, world-class speaker lineup and unique networking and collaboration programs as well as newly introduced Shoptalk Original Content ensure you’ll get smart about the technologies, trends and business models that continue to transform the sector globally.
Register today to meet us there!
Slash Your Fulfillment Costs by Up to 30%
Cut shipping expenses by 30% and boost profit with Cahoot's AI-optimized fulfillment services and modern tech —no overheads and no humans required!
I'm Interested in Saving Time and Money

Turn Returns Into New Revenue

Shoptalk 2023
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1 minute
Mar 26-29, 2023 | Mandalay Bay, Las Vegas, NV
The world’s biggest, most influential and rising retailers and brands unite at Shoptalk for unrivaled business-critical connections, conversations, insights and extraordinary shared experiences to re-imagine the future together.
The Shoptalk agenda covers the latest technologies, trends and business models, as well as the rapid transformation of what consumers discover, shop for and buy—everything ranging from apparel and electronics to beauty and grocery. We look forward to seeing you there! You can register here.
Slash Your Fulfillment Costs by Up to 30%
Cut shipping expenses by 30% and boost profit with Cahoot's AI-optimized fulfillment services and modern tech —no overheads and no humans required!
I'm Interested in Saving Time and Money
Turn Returns Into New Revenue

Shoptalk 2024
In this article
1 minute
Mar 17-20, 2024 | Mandalay Bay, Las Vegas, NV
Join the industry’s elite at Shoptalk, the ultimate gathering of retail’s top 10,000+ executives. Held annually in Las Vegas, Shoptalk is an unprecedented gathering of individuals and companies reshaping how consumers discover, shop and buy.
The event provides a platform for large retailers and branded manufacturers, startups, tech companies, investors, media and analysts to learn, network, collaborate and evolve. Pulse Commerce hopes to see you there! You can register here.
Slash Your Fulfillment Costs by Up to 30%
Cut shipping expenses by 30% and boost profit with Cahoot's AI-optimized fulfillment services and modern tech —no overheads and no humans required!
I'm Interested in Saving Time and Money
Turn Returns Into New Revenue

Shoptalk Spring
In this article
1 minute
March 24-27, 2025 | Mandalay Bay, Las Vegas
Shoptalk is the ultimate gathering of retail, where 10,000+ retail decision-makers converge to discover the future of retail. Get ready for three action-packed days that will expand your horizons and catapult your business forward.
Slash Your Fulfillment Costs by Up to 30%
Cut shipping expenses by 30% and boost profit with Cahoot's AI-optimized fulfillment services and modern tech —no overheads and no humans required!
I'm Interested in Saving Time and Money
Turn Returns Into New Revenue
