At Cahoot, we believe today’s eCommerce industry needs next-generation shipping software. But before we talk about this amazing technology, it’s first worth asking – why is now the time? After all, legacy shipping software has been around for years. Thousands of sellers are already using these tools – why make the switch?
We believe the present moment is perfect because eCommerce is dramatically different from how it looked just twenty years ago. The event that changed everything was the introduction of Amazon Prime in 2005. Just like the first iPhone revolutionized society’s experience with personal technology, Prime’s introduction transformed everything in the eCommerce industry. Sellers had to throw out old strategies and create entirely new ones to run their businesses.
The differences are stark, but we’ve summarized them in this table:
Parameter | Old World (1990’s, early 2000’s) | New World (2010 – Present) |
|---|---|---|
Sales Channels | ||
Competitive Pressure | ||
Customer Expectations | ||
# Warehouses | ||
Carrier Mix | ||
Order Profile | ||
Carrier GRI | ||
Warehouse Staffing | ||
Warehouse Leasing |
Let’s begin by going back to the 1990’s and early 2000’s to see what the ‘old world’ of eCommerce looked like, for sellers and customers.
The ‘Old World’ of eCommerce
Lower Complexity
Just One Channel to Manage
In the old world, Amazon was not the ‘everything store’ yet. It was largely a first-party seller of a few products like books, CDs and DVDs. They did not face much competition – Walmart and Target restricted themselves to physical stores, while shopping cart platforms like Shopify and BigCommerce did not exist. All this meant that sellers did not have multiple sales channels to sell and take care of customers on. There was usually just one channel – their own website. With just one channel to support, it was also possible to operate with smaller sized teams.
Minimal Competitive Pressure
In the 1990’s, online marketplaces did not exist. Amazon launched their third party marketplace only in 2000. In this environment, customers did not have a lot of choices. Sellers had to ensure they drew customers to their website through good marketing. Once they found you, it was not easy to do comparison shopping across different listings, brands or platforms. There was little pressure on sellers – it was unlikely a competitor would undercut you on price, or beat you on shipping speed.
Low Customer Expectations
Perhaps most importantly, customers had no expectation of free and fast shipping. Before Prime’s introduction in 2005, customers had never tasted that experience. They were willing to wait 7-10 days for orders, and covered the cost of shipping. Even if they did not like this experience, there was no social media platform at the time where they could share their frustration.
Single Warehouse, Single Carrier
The combination of lower customer expectations and sales through a single channel meant that sellers could get by with operating from a single warehouse location, or two if they really needed the space. Customers living far away were okay with waiting as long as 1-2 weeks for their orders. And because customers were willing to cover shipping costs, sellers saw no reason to compare and find the lowest rate among multiple carriers. It was easier to just sign a contract with the one carrier with whom you could negotiate decent rates. Why bother with cost optimization when it was the customer paying the bill?
Small and Simple Orders
In the old world, lower basket sizes (units per transaction) were common because customers were yet to trust making payments over the internet. The least risky way to test eCommerce was to just buy one item. As customer confidence grew, so did basket sizes. In the old world, Multi-Line, Multi-Quantity (MLMQ) orders were less frequent. MLMQ orders require sellers to provide workers on the warehouse floor with various kinds of boxes. Workers also need to spend more time on MLMQ orders, figuring out the best sized box to use. In the old world, order processing complexity was lower – you could order a few boxes of standard sizes, and your team in the warehouse could pack orders faster.
In summary, sellers faced little complexity in running their businesses in the old world. The environment was favorable – they had to sell on just a single channel, faced minimal competitive threats and could easily satisfy their customers. All of this translated into simpler operations across the shipping lifecycle – be it warehouses, carriers or packing boxes used.
Lower Costs
We’ve taken a look at how operationally simpler it was to run an eCommerce business in the old world. But this was not the biggest advantage sellers had – we’ll now explain how costs were lower back then.
Shipping Cost was Cheaper
Carrier General Rate Increases (the annual rate hikes made by the shipping carriers) held steady at 4.4% to 4.9% through the entire 1990’s, well into the 2010’s. This provided sellers better predictability and control over operations.
Labor was Cheaper
In the old world, Amazon did not have a massive logistics network, requiring hundreds of thousands of workers. Walmart and Target did not have eCommerce operations. Without a large proportion of the labor pool being diverted to these large players, Sellers could easily staff their warehouses at wages that protected their margins.
Space was Cheaper
The number of warehouses in the country has stayed relatively flat between the old world and the new world of eCommerce. But back in the old world, there were far fewer sellers requiring this space. Warehouse space has never been easy to find – after all, they were not lying around vacant, waiting for the eCommerce boom to happen. However, because the competition for limited space was much lesser back then, sellers could find space more easily, and at lower lease rates.
Across the order fulfillment workflow, sellers had lower costs, which gave them more certainty and confidence. They could have reasonable confidence that carrier rates, labor wages and warehouse lease rates were going to stay steady. They did not have to worry about any of these expenses creating a negative impact on margins.
Inefficiency in Operations Did Not Impact Margins
In a world without marketplaces, there was no significant threat forcing merchants to optimize costs. With customers willing to pay shipping fees and no social media for them to voice their feelings, there was no need to creatively innovate to find savings. And with it being comparatively much easier to hire workers and lease warehouses, there was no pressure to maximize resource utilization, or scrap to cut costs. After all, margins were protected without having to do any of those things.
The ‘New World’ of eCommerce
Now that we’ve taken a look at the old world of eCommerce, it’s time to remind ourselves of the world we live in today – Prime’s launch in 2005 changed everything about eCommerce, for both sellers and customers.
High Operational Complexity
Many Channels to Manage
Today, Amazon’s massive third party marketplace has made it the ‘everything store’ it dreamed of becoming. Major retailers – including Walmart and Target – have now expanded into eCommerce, while shopping cart platforms like Shopify and BigCommerce help merchants sell directly to customers. Even firms like Macy’s and Nordstrom, which stayed focused for a long time on their physical department stores, are now aggressively investing in eCommerce. This means sellers now need to run marketing, sell, and support customers on multiple channels. This has also meant they need to hire larger teams to manage this complex operation.
Intense Competitive Pressure
The rise of online marketplaces has meant that sellers now face more intense competition than they ever did in the old world of eCommerce. Today, no seller can relax once their marketing has attracted a customer to their listing or website. Customers have almost infinite choice and constantly compare products, prices and shipping speeds across different platforms before they checkout. There is a constant threat of someone undercutting you on price, or offering faster shipping. Worst of all, there is a growing trend of knock-off products which erode the sales of the original brand by shipping faster or being lower priced.
Sky High Customer Expectations
The biggest change is that customers are now used to the 1-day and 2-day free shipping experience. They abandon their carts if they do not see free and fast shipping offers. And if they see any drop in quality, they can use the power of social media to hurt your brand equity and customer sentiment.
Multiple Warehouses, Multiple Carriers
Free and fast shipping has become central to today’s customer experience, but making it happen is neither easy nor economical for sellers. Prime raised customer expectations to a whole new level. To highlight just how dramatic the shift has been, consider this. When Prime introduced free 2-day shipping in 2005, it took competitors like eBay and Walmart over a decade to catch up, with the launch of their competing services in 2017. However, when Amazon announced its plans to move Prime from 2-day to 1-day shipping in 2019, competitors responded almost immediately. This highlights just how important free and fast shipping has become across every channel today. However, offering free shipping on every order is not an easy task. The only economical way for sellers to make it happen is through distributed fulfillment. Inventory needs to be spread across a strategically located network of warehouses. This ensures that products are placed closer to customers, shortening transit times. It also ensures a reduction in the number of shipping zones packages must cross, making operations more economical for sellers. To preserve margins and profits while still offering free shipping, sellers must now also work with a wide mix of carriers to ensure they can pick the cheapest label on every shipment.
Large and Complex Orders
Orders are more complex to process in the new world of eCommerce, with a higher proportion of Multi-Line, Multi-Quantity (MLMQ) orders. This has been driven by two major reasons. The first is that not everyone is deep-pocketed enough to offer free shipping on every single order. To make the economics work, sellers set high free shipping thresholds (you’ll get free shipping if you order $50 worth of items). This means orders are likely to be larger and contain multiple items. The second is that consumer confidence in making payments and purchasing products over the internet has increased significantly today. Customers are more likely to add multiple items to their cart today than they were in the old world of eCommerce. However, with more complex orders, you need to provide your team on the warehouse floor with more boxes of various sizes. This also means your team has to spend more time on orders, figuring out the best box to use to pack them.
Today, sellers face a lot of challenges running their business. The environment can seem hostile – there are multiple channels to sell on, competitive pressure is unrelenting and customer expectations are sky high. All this has resulted in having to reinvent every step of the shipping workflow – through distributed fulfillment, multi-carrier rate shopping and figuring out how to effectively process larger orders.
Rising costs
We’ve now seen how complex it is to run an eCommerce business today. To compound the problems of sellers, costs in the new world are significantly higher.
Shipping Cost is Expensive
It is becoming increasingly difficult for sellers to absorb the costs associated with making deliveries. Carrier GRIs which held steady for nearly three decades are now increasing. UPS and FedEx imposed a 6.9% GRI for 2022, while their 2023 and 2024 increases are 5.9%. These increases are significantly higher than historical trends and exceed the prevailing inflation rate, making it difficult for sellers to handle the impact. These increases after years of stability have provided sellers with little time to adjust their operations and budgets.
Labor is Expensive
Sellers also have to deal with increased competition in the warehouse labor market, which is driving wages up. Amazon is no longer the only major employer of warehouse workers. The company is now facing competitive pressure from Walmart, Target and other retailers getting into eCommerce. Workers now have a variety of options to pick from – driving up the wages and benefits packages that companies must offer workers. Warehouse staff now expect to be paid $19 / hr on average. At this rate, this is no longer a minimum wage occupation. And with the pool of workers being diverted to these major players, it has become very difficult for other brands and retailers to staff their warehouses sufficiently.
Space is Expensive
Lastly, warehouse availability is at an all-time low, driving leasing rates up. Conventional wisdom would suggest that the number of warehouses would have increased proportionally with the growth of eCommerce, ensuring sellers today paid roughly the same to lease warehouses as those in the old world. The reverse is actually true – the number of sellers is ever increasing, while the construction of warehouses lags well behind. According to research from real estate firm JLL Inc, the average US warehouse is 42 years old! A 2021 Cushman and Wakefield LLC study found that as many as 70% of America’s warehouses were built before 2000. This has meant that a huge number of sellers are now competing for the same limited space – driving leasing rates up.
Sellers today are caught in a tough spot – while they’re trying really hard to catch up to customer expectations, they’re also facing cost pressures on many of the elements required to make it happen. With carrier rates, leasing rates and labor wages all beginning to climb upward after years of relative stability, it adds to the stress and uncertainty that sellers are already facing in today’s deeply competitive environment.
Efficient Operations Essential for Margins and Profits
In the world of marketplaces, sellers need to constantly find innovative ways to drive down costs to stay ahead of competition. If they do not find creative ways to offer free and fast shipping, customers will simply abandon their carts and go to a competitor. And in a world where everything has become more expensive, maximum resource utilization is vital. Today, scrappy and smart solutions to pool resources and cut costs are essential. In the new world of eCommerce, it’s the only way to preserve margins, stay competitive and win.
Why Sellers Need to Switch to Next-Gen Shipping Software
Now that we’ve taken a look at the old and new worlds of eCommerce, you might be wondering what role does shipping software play in all of this?
We believe that legacy shipping software was designed and built from the ground up for the old world of eCommerce. We are not saying these tools are bad – they worked well in the old world that they were designed for, but we believe they are not well-equipped to handle the challenging demands of the new world of eCommerce. We’ve already seen how costs were lesser, hiring was easier and operations were simpler in the old world. Legacy software does not provide sellers meaningful automation or cost savings, because there was no need for it in the old world. In the new world, it is actually adding to the problems sellers face by increasing costs and consuming their time. Rather than automating and simplifying, their technology creates more problems.
We think a small tweak or minor enhancements will not cut it. Today’s sellers need purpose built, next generation shipping software designed for the new world of eCommerce. As we all know, operations are complex, costs are rising and staffing is harder today. Sellers need all the automation and cost savings that technology can generate. They need technology that helps, not hinders.
The next generation eCommerce shipping software must solve 3 key problems which are at the heart of the differences between the old and new worlds:
- Simplify the operational complexities of the new world of eCommerce
- Drive operational efficiencies and productivity gains for your team
- Generate meaningful cost savings across each step of the shipping and order fulfillment workflow
In the coming sections, we’ll dive deeper into each of these aspects, and explain how legacy software fails to solve these challenges. We’ll also explain how our next generation software is purpose built to address these key requirements.
The differences are many, so we’ve summarized them into this table for a quick overview:
Parameter | Legacy Software | Next-gen Software |
|---|---|---|
Order Routing | ||
Exception Management | ||
Multichannel | ||
Integration with Fulfillment Networks | ||
Data Security | ||
Automated Shipping Workflows | ||
Simplifying complex orders | ||
Always pick the cheapest label | ||
Carrier fees on complex orders | ||
Ease of use |
Simplifying Operations: Making Today’s Complex eCommerce Effortless
Based on research we’ve conducted, a merchant seeking to cover the continental US (the lower 48 states) with 2-day shipping requires inventory to be positioned in 4 strategically located warehouses. If they’re seeking to achieve 1-day delivery, that number rises to 9 fulfillment centers.
As the number of sales channels and warehouses increases, the operational complexity increases exponentially. Legacy shipping software was built for the old world, where fulfilling orders from just a single warehouse location was the norm. It was never built to handle the complexities of distributed fulfillment. Too many things at the core of the software would have to change to elegantly handle distributed fulfillment. This means merchants often try to get by with complex, convoluted workarounds that keep breaking.
Today’s multi-warehouse, multi-channel environment creates many problem areas for sellers to manage:
- When inventory is spread across such a large number of warehouses, which location should each order be routed to?
- Distributed fulfillment offers possibilities if there are problems at any one warehouse location – such as receiving orders after the cut-off time, running out of inventory or inclement weather. How can software make identifying such exceptions and rerouting them easier?
- How can fulfillment be handled across multiple sales channels while ensuring a consistent, cohesive experience for customers?
- Can the system natively integrate with best-in-class fulfillment networks to unify your logistics technology and operations?
- With eCommerce growing all the time, people are sharing more sensitive data than ever online. With an increased consumer demand for privacy protection, how does your shipping software keep data secure?
We’ll now take a look at each of these, examining the differences in the way legacy and next-generation eCommerce shipping software handle them.
Automatic Order Routing and Label Generation
Legacy Software - Crude and Primitive Routing
Many of today’s popular legacy software have automated order routing features. However, do not be fooled – these capabilities are limited and prone to error.
In systems like ShipStation, a “Ship From” location can be set based on specified criteria – such as the SKU ordered or the customer’s address. However, a large number of clunky automation rules have to be written – for example, writing a rule to have all orders from West Coast customers be shipped from your California warehouse. Similar rules mapping other states to respective fulfillment locations have to be manually written. Similarly, if you have certain SKUs available only in specific locations, you need to write rules to assign orders accordingly.
Creating such a large number of automation rules is an error-prone, painful process for many reasons. Here are a few of them:
- So much to configure. Merchants need to ensure they’ve captured every business process through a rule. If they forget to set up any rule (quite possible, given the high levels of operational complexity today), it can create problems and cost leakages. Even the simplest of workflows require rules to be defined. For example, imagine that you wish to use only certain carrier services to make deliveries to residential addresses. Even in that case, you need to define automation rules mapping the address type to appropriate services.
- You’re guessing and hoping. Because your rules are manually defined by mapping SKUs or customer addresses to fulfillment locations, there could always be cases where the rules don’t make the most optimal decision. Without doing a deep, time-consuming manual investigation, you’ll never be able to actually tell.
- Requires constant maintenance. Rules become obsolete if carriers change or update their services. For example, when USPS introduced Ground Advantage, your rules don’t automatically update to factor in the new service. This means you’ve to spend hours updating and rewriting them.
Slow process. Sellers don’t feel comfortable beginning shipping with the software until they’re confident they’ve captured all of their processes through automation rules. This delays go-live, ultimately increasing your time to value.
Next-Gen Software - Intelligent, Powerful Routing Technology
Cahoot’s next generation shipping software comes with end-to-end intelligent automation. When you receive an order, the system intelligently compares multiple warehouse locations, inventory levels, carriers and shipping services to pick the cheapest label that will meet the delivery SLA committed to the customer.
With our technology, you won’t face the automation problems that we’ve highlighted with legacy software. Our intelligent order routing capabilities provide sellers with many benefits:
- Nothing to configure – it just works. You don’t need to spend time worrying whether you’ve captured all your business workflows through automation rules. Cahoot factors in all variables like shipping services, warehouse locations and inventory levels to pick the optimum fulfillment location on every order automatically.
- Based on the lowest cost, no more guessing. There’s no need to worry about whether your automations have been configured correctly to truly pick the best location every time. You can rest assured knowing that the decision is in the hands of technology, which makes the right choice on every order.
- No maintenance. The system automatically factors in any changes that carriers make to their services. There are no hand-written automation rules to update or overwrite. When new services like Ground Advantage are launched, the system factors in this additional information, and continues to automatically route orders correctly.
- Ready-to-go.Sellers can begin shipping in days or weeks, not months with our software. There’s no need to spend time wondering whether you’ve captured workflows through elaborate automations. This means you’ll be able to go live faster, and shorten your time to value.
Multi-Warehouse Exception Management
Legacy Software - Limited Rerouting Capability
With legacy software, it’s difficult to plan for the unexpected. Let’s imagine you have 2 warehouses – one in Chicago, and the other in Southern California. Suppose a blizzard strikes the Chicago location.
When working with legacy systems, you don’t have an easy way to temporarily suspend locations. All you’re looking for is a way to temporarily put fulfillment from your Chicago location on hold, while you wait for the weather to improve.
In legacy systems like ShipStation, each SKU is mapped to a list of warehouses from where it can be shipped. You will need to update this mapping between SKUs and fulfillment locations to stop fulfillment from one of your warehouses. This is a painful workaround that you have to perform for a very short period of time – once the weather improves, you’ll have to repeat the process to restore the original configuration.
All this adds to what is already a stressful time, making it difficult for your business to quickly adjust to, and recover from unexpected events.
Next Gen Software - Agile, Flexible Order Rerouting
With next generation shipping software, adverse events don’t have to mean disaster for your business. If one of your fulfillment locations goes down, you can quickly toggle it off – and Cahoot will do the rest. The system will automate shipping from the other available locations, helping you keep your customer promises and continue selling.
There are other scenarios when you might require intelligent exception management which need not be emergencies – for example, if one of your warehouse locations needs to close for a holiday, the system can exclude that location and continue to simplify shipping for you across the other active locations.
There are no automations to undo or rewrite. You don’t have to spend a lot of time restoring your system to its original system once the affected location is back up and running again – it’s just a simple toggle to flip on. This ensures that your business can continue operating normally during such events, and quickly recover from them with minimal impact.
Multichannel Capabilities
Legacy Software - Many Integrations, but of What Value?
One advantage that legacy software has by virtue of having been around for a longer time is its long list of integrations. These tools, such as ShipStation, Desktop Shipper and Shipping Easy all have a long list of integrations with shopping cart platforms, online marketplaces and other tools that eCommerce sellers use.
However, while this is definitely a positive, we think this is a case of winning the battle, but losing the war. In the above sections, you’ve seen some of the limitations of these tools (keep reading to see more deficiencies), and how they can hamper your productivity and hurt your costs on every single order. You might save a little time with out-of-the-box integrations to more platforms, but does it really matter if these tools negatively impact your bottom line?
Next-Gen Software - All the Integrations You’re Used to
Cahoot’s next-generation shipping software is tightly integrated with all leading online marketplaces and shopping cart platforms, including Amazon, Walmart, Shopify, eBay, BigCommerce, WooCommerce and Magento. We’re also integrated with all leading shipping carriers and eCommerce tools that sellers use today.
What really matters is the depth of integration between the channel and your shipping software. A simple integration may fetch orders from Shopify or Amazon into your shipping software, but fail to sync inventory or push back tracking information. With our integrations, Cahoot automatically fetches all information required to fulfill an order from the sales channel, and intelligently pushes back tracking information to the channel. We also maintain an inventory sync, ensuring that you won’t accept orders on out-of-stock items, preventing overselling. The system also provides you with color-coded alerts to quickly alert you to dipping inventory levels, enabling timely, proactive replenishment rather than reacting to customer frustration on canceled orders.
While our list of integrations might be comparatively smaller (but growing!), you won’t feel the difference – our API allows you to connect Cahoot with any other system you’re using. And as we’ve highlighted in the above sections (keep reading for more!), the system offers real cost savings and productivity gains on every single order.
Integration With Fulfillment Networks
Legacy Software - Cobbled Together and Disjointed
Legacy eCommerce shipping software works well if you’re fulfilling a small number of orders from your own warehouse location. However, if you’re partnering with multiple 3PLs, have a combination of in-house and outsourced fulfillment, or are working with order fulfillment networks, cracks start to emerge. This stems from the lack of native integration with fulfillment networks that legacy software have.
With tools like Deliverr, you can’t expand nationwide coverage through their network while still running your own operations. For example – what if you wish to fulfill certain orders from your own warehouses if you have inventory and rates are cheaper? Deliverr seeks to capture all volume even if it is inefficient to do so because they don’t integrate with all your fulfillment nodes. Many legacy software have a similar problem, where they find it difficult to manage a combination of in-house and outsourced fulfillment. Rather than the system intelligently identifying which orders need to be outsourced, the seller has to define this – which is time consuming and error-prone.
Other forms of chaos can emerge when you’re trying to force a legacy shipping software and 3PL vendor (like Flexe, for example) to work together. The 3PL might require you to figure out which orders you’re going to ship with them, generate a PDF with all that information and send it over to them. If you’re trying to participate in a program like Seller Fulfilled Prime, you have tight cut-off times and very little room to maneuver. Imagine scrambling in the limited time you have between the cutoff time and the carrier pickup to send over this information to them. You have to hope and pray that you haven’t made a mistake, and that you’ve sent the information in time for your 3PL to process the shipments.
Lastly, let’s imagine a scenario where you’ve partnered with multiple 3PLs to achieve nationwide coverage. You’ve to either use the shipping software to print labels manually and hand that over to each of the 3PLs, or share your credentials with all of them. This increases the number of parties your carrier credentials go to, increasing risk and vulnerability for your business.
If you’re experiencing some of these frustrations and want to migrate from your existing fulfillment partner, we know that it’s easier said than done. The process can be uncertain, confusing and stressful for your business. We’ve put together a step-by-step guide to help you make the switch from one fulfillment partner to another, which you can read here!
Next-Gen Software - Natively Integrated
Cahoot’s shipping software is tightly integrated with our order fulfillment network (having over 100 warehouses in the US). The system is also flexible enough to accommodate any fulfillment locations you run your own operations from – making handling scenarios where there is a combination of inhouse and outsourced fulfillment easy to manage. In such cases, the system is able to intelligently and automatically identify the orders where fulfillment is cheaper through outsourcing rather than being handled at your own warehouse. This frees up your time and ensures you’re getting the best deal on every order.
You also don’t need to spend time acting as the middleman between your shipping software and 3PL, where you drown in busy work generating PDFs and handing them over to your fulfillment partner. With us, your fulfillment partners see all orders instantly, and can print labels in one click. This agility and simplified workflow is just one of the reasons that help sellers using our fulfillment network meet and surpass the challenging cut-off times and demanding criteria that Amazon expects them to meet on Seller Fulfilled Prime.
It’s not just SFP where requirements are challenging. On Walmart, merchants hoping to see increased conversion and sales must offer free nationwide 2-day delivery with over 95% of orders expected to reach customers by the promised time.
And while you may scale to use many warehouses on the Cahoot network, none of our fulfillment partners know your carrier credentials – you share that only with us on the platform. This reduces risk and keeps your credentials safe, while scaling nationwide fulfillment for you.
Information Security and Data Protection
Legacy Software - Poor Security and Privacy
Legacy eCommerce shipping software provides minimal data protection measures. Everything is fine if you own your own warehouses and are using these tools to fulfill orders. However, if you’re partnering with a 3PL (and they use legacy tools to process orders), you’ve handed over all your brand and customer data to them.
While you may sign agreements to prevent misuse, personally identifiable information about your customers (full name, email) and proprietary business data is openly available to your 3PL. While they may operate with good intentions, your confidential data is now at the mercy of their information security practices.
This increases the risk and exposure for your business, with little safeguards in place to protect sensitive information.
Next Gen Software - Robust Data Protection and Governance
With next generation shipping software, we ensure that only the essential information needed for order fulfillment is transmitted to your fulfillment partner. We hold back or redact other information – for example, even on a shipping label, your fulfillment partner sees only the initial of the last name of the customer – making it difficult for them to reconstruct personal customer data.
We also keep non-essential customer, brand and product information walled off and accessible only to you. This ensures that your data is secure and accessible to only one party – you.
Efficiency: Supercharge Productivity for Your Team
We’ve now discussed how shipping software needs features that help you simplify the complex new world of eCommerce. But sellers are not just focused on simplifying operations inside their businesses. Pressure from outside continuously bears down on them – whether it’s rivals on online marketplaces, multiple channels to market and sell on or demanding customers.
And all this is happening amid a competitive labor market, where staffing has become expensive and challenging. It isn’t good enough if an eCommerce shipping software is capable of reducing operational complexity. It must do so in a way that requires minimal human intervention and resources, allowing you to do more with less. Crucially, the software must unlock productivity gains for today’s small teams, allowing them to focus their attention on value-adding higher order work.
In the previous section, you might’ve seen that legacy software has features that can simplify operations complexity. However, those features are often painful and convoluted to implement by a small team of seasonal or part-time workers. We think there are 3 major areas where shipping software must streamline workflows efficiently:
- Does the software have humanless automation across shipping workflows? Can it free up your team to concentrate on other work, or does it require constant babysitting?
- In a world with increasing basket sizes, your team on the warehouse floor loses time on every order, figuring out the best packaging box to use. Can it unlock time savings for your team, allowing them to get orders out the door faster?
- How easy is it to use the product? Can it be used by seasonal or part-time workers, or does it need staff with specialized training to take care of it?
In the coming sections, we’ll take a look at each of these areas, examining how legacy software reduces productivity and consumes your team’s time in deploying and managing it. We’ll also highlight how next-generation shipping software is built to ensure your team gets back time they’ve been losing, boosts their productivity and drives greater efficiency across your business.
Automated Shipping Workflows
Legacy Software - Labor Intensive and Painful
The most important thing that teams do inside shipping software is route orders to fulfillment locations, and identify the cheapest label to use to ship an order.
Legacy shipping software has manual processes for printing labels which are labor intensive, repetitive and prone to error. On most of these tools, the process takes multiple steps and clicks, and looks something like this (after logging in, and identifying the orders that need to go out today):
- Open an order
- Fix address issues
- Identify which warehouse has the SKU in stock
- Assign a Ship From location based on customer address
- Make packaging choice
- Rate shop across all carriers and services
- Pick the cheapest service
- Print Label
- Go back to step 1 for the next order
Some of these steps can be automated through crude, hard-coded automation rules but those are time consuming to configure and can still be inaccurate. A rule is needed for almost every single workflow. Here are some reasons why this process is so elaborate and painful:
- Automations in most legacy software require certain criteria to be defined. When orders meeting these criteria (for example, orders for a certain SKU) enter the system, the rule is triggered to execute certain actions (like assigning a certain carrier or service). But what are all these rules defined for? Their ultimate aim is to find the lowest priced shipping label on every order. These rules simply trigger certain actions to occur, rather than rate shopping for the cheapest label by comparing carriers and services.
- Even simple steps of the process need a rule. For example, if you’re delivering to a residential address, then only certain services can be used – like FedEx Home Delivery, for example. A rule needs to be written to ensure this mapping is considered by the system. All this makes it enormously difficult to cut down the number of keystrokes and clicks.
- ShipStation’s ‘Auto-routing’ feature which is currently in Beta, only factors in which locations have a product and their distance from the customer before assigning orders to a fulfillment center. It still does not support comparing shipping carriers and services to actually make a full and final decision, based on the actual rates.
In our estimation, it would take the average human over 5 hours to print labels for 1000 orders!
And as we all know, a human is not a computer. When doing a repetitive task for such a long period of time, fatigue and the possibility of errors increase dramatically. It’s also worth asking – why should a human be engaged in such repetitive, low-value work all day long?
Next-Gen Software - Humanless and Seamless
With next generation shipping software, the difference is like night and day. The system intelligently compares warehouse locations, carriers, shipping services, inventory levels and packaging boxes to instantly and automatically generate shipping labels for every single order.
Here’s the sequence of steps to accomplish the same goal on Cahoot (after logging in)
- Verify the address corrections made by the system
- Print labels in bulk
The system automates multiple steps that legacy software doesn’t – it spots potential issues with addresses and makes suggestions to fix them, only considers warehouses that have inventory available, makes packaging choices and rate-shops for the cheapest service.
It’ll take the average human just 15 minutes to print labels for 1000 orders on Cahoot. We’ve made a video where you can get a glimpse of how this works, and how we stack up against popular legacy shipping software ShipStation (if you’d like to see a little more about how Cahoot compares to them, read our comparison here!) You can sit back and relax, knowing that the optimal selection was made using technology on every single order. You can also free up your time to be doing other tasks that add more value to the bottom line. If you’re finding it difficult and expensive to hire more people, you can ensure that the people you do have are focused on the problems that matter the most.
Making Large, Complex Orders Easy to Handle
Legacy Software - Left to Humans and Heuristics
Legacy shipping software is mainly focused on one portion of the fulfillment workflow – printing shipping labels. In a world of rising basket sizes, merchants have complexity in other steps of the shipping process, including packaging selection.
This is a common problem that customers of legacy software like ShipStation face. On complex orders which might require multiple boxes of various sizes, they are forced to enter the box dimensions manually each and every time based on the SKUs in the order. The customers from their forums below are requesting for a pull-down list of the common boxes they use, so that they can quickly make the selection rather than manually entering dims.
The customer is also highlighting a more important issue – they can add a set of boxes as a “base” in ShipStation. This feature aims to serve as a default, which can be applied on most MLMQ orders. However, unless you’re lucky that most of your MLMQ orders consist of the same unique combination of SKUs, such a feature is pointless.
The list of hard-coded automation rules (mapping SKU combinations to boxes) to write can be dizzyingly long, and involves you having to figure out all the possible SKU permutations.
As the classic saying goes, customers are great at highlighting problems, but not identifying solutions. We think this is a big pain point which next generation software can solve for.
Next-Gen Software - Powered by Machine Learning
Cahoot’s next generation shipping software solves both of these problems. We don’t think the solution is a drop-down list, because you’re just replacing keystrokes with clicks. It’s still human effort.
Our software remembers the box selection you make the first time, and applies it by default the next time. This ensures you’re freed up from repetitive manual entry and clicks.
We don’t believe the solution to pick the most optimal box on every MLMQ order is an arbitrary default or crude automation rules. Our system comes with breakthrough innovation, with our 3D Package Manager. Whenever you receive MLMQ orders, the software uses 3D Bin Technology to intelligently evaluate the % fit of items in boxes, making sure the most optimal box is selected every time.
This frees up your team’s time from data entry and having to spend minutes on every order figuring out which box to use. This unlocks time savings for your team to focus on more valuable tasks that grow your sales and business.
Savings: Stay Ahead and Boost Margins Despite Rising Costs
We’ve now identified two key things that a next-generation eCommerce shipping software must do – it must simplify operations in today’s complex world, while also doing so in a way that boosts your team’s productivity and frees up their time.
However, the biggest pressure merchants face today is around costs. In a world where carrier GRIs, worker wages and warehouse leases are all going up, sellers need to scrap to save every penny, to protect and increase their margins. It can make the difference between going out of business and finding success.
Legacy software does a poor job of unlocking savings because it was built for a world where resource optimization or cost-cutting was not needed. We believe there are 3 key areas of the shipping workflow where software must be able to unlock cost savings:
- Does the software pick the cheapest shipping label every time?
- Does the software optimize packaging and shipping costs in a world of large, complex orders?
- Is the software easy to use, with minimal human oversight? Does it allow you to do more with limited resources? Can it work even if those resources are untrained, seasonal or part-time labor?
Pick the Cheapest Label Automatically, Every Time
Legacy Software - You’ll Never Know if You’re Saving Money
As we’ve seen in the sections above, legacy software requires a lot of manual automations to be written to capture workflows. But why do merchants go to all this trouble and take the time to do so? The answer is simple – identify the cheapest shipping label on every order.
However, the automations (mapping SKUs and customer addresses to fulfillment locations and carrier services) are simply a means to an end. There is no way to actually tell whether the rules are ensuring that the cheapest option is being picked every time.
To actually identify that, manual and deep cost comparison analysis has to be done to figure out the reality. The possibility of cost leakage is a real one. And in a world where customers expect free and fast shipping on every order, every last dollar and penny matters. You need certainty and confidence in the labels your shipping software is picking.
Next-Gen Software - Savings on Every Label
Cahoot’s software eliminates the maze of complex human-defined, hand-written automation rules. With these rules gone, you don’t need to worry about whether you’ve optimized your automation rules for maximum savings. The system intelligently factors in all available parameters to make the right choice, every time.
It’s possible to overlook many possibilities when defining automation rules by hand – for example, a 1 unit order of a certain SKU might weigh less than 1 lb, allowing you to use USPS Ground Advantage. But what if someone orders 3 units? Or 6 units? In each case, the system factors in all data and parameters to make the right decision.
You don’t need to spend time doing a deep, detailed investigation into whether you’re actually saving money. You can rest assured knowing that you’re getting the best label every time.
Pay the Right Shipping Fees, Even on Complex Orders
Legacy Software - Cost Leakages From Human Error
We’ve highlighted how legacy software makes it more complicated for your team on the warehouse floor to handle Multi-Line, Multi-Quantity Orders. By leaving the judgment of which box to use in the hands of humans, you don’t just sacrifice productivity – you could also lose money on every order.
The shipping carriers set their rates based on dimensional weight. If your team uses a box of a larger size than is actually needed, the item can have higher DIM weight, costing you more money on the rates you pay the shipping carriers.
With no automation or decision guidance from your shipping software, the decision is left to the eyeball judgment of your team, which increases the possibilities of errors.
Next-Gen Software - Pay the Optimum Rate Every Time
With Cahoot’s 3D Package Manager and powerful automations on Multi-Line, Multi-Quantity Orders, you can rest assured knowing that you’re using the right box on even your most complex orders.
This means that items go in the most optimum boxes, and that you pay only what’s needed to the shipping carriers. With decision making guided by technology, the possibility of errors is reduced, ensuring that you save every last penny.
Ease of Use
Legacy Software - Needs Staff to Babysit the Tool
As we’ve seen, legacy software is clunky and complicated to use. At every turn, the tool requires manual data entry, workflow configuration and updating by humans. Once you configure these tools, you can’t ‘set it and forget it’. Changes from the carriers or updates to your product catalog break automations and configured workflows, requiring someone to constantly babysit and oversee the tool.
Most sellers hire dedicated resources or even teams just to configure, deploy and maintain their eCommerce shipping software. In a world of rising costs, this means you lose money on expensive staffing. To make matters worse, those members of your team are perpetually stuck maintaining legacy software, rather than contributing in other, more valuable areas.
Next-Gen Software - Anyone Can Use it
With Cahoot’s next generation software, most workflows are taken off your team’s plate and are automated by the system. Changes that occur at your end or from the carrier’s are easily factored in by the system’s automation. This ensures that you don’t need to deploy dedicated resources to implement or maintain the system.
It is possible for untrained, part-time or seasonal employees to quickly learn and use Cahoot. In today’s competitive labor market, this can unlock competitive advantage by allowing you to do more with less. Your team members are also freed up to focus on more value adding tasks, rather than spending all day ensuring that your shipping software doesn’t fall apart.
Conclusion: Next Generation Software is Critical to Winning in the New World
We believe everything has changed in eCommerce, and highlighted how Prime has changed the industry in a manner comparable to how the iPhone changed society’s experience with technology.
Prime transformed one aspect of eCommerce more than any other – shipping. However, as we hope you’ve seen from the sections above, this is the area where the least technological advancement has occurred. We believe legacy tools are costing sellers time, money and productivity on every order. In a world of competitive online marketplaces, sky-high customer expectations and rising costs, sellers have it extremely hard as is. They don’t need technology adding to their list of worries. They need software that helps them compete and win in this world.
Such a tool must be capable of addressing some of the key challenges of the new world of eCommerce – simplifying operational complexity, providing efficiency and productivity gains for your team to focus on the things that matter most and providing savings that restore margins in an intensely competitive environment. We believe our tool does exactly that.
We believe this tool can provide you with strategic and competitive advantages in today’s complex eCommerce industry. Are you ready to make the switch?
