Using Rithum to Optimize Multi-Channel Fulfillment and Dropshipping

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Rithum isn’t just a rebrand, it’s a reinvention. Born from the merger of ChannelAdvisor, CommerceHub, and DSCO, Rithum is now one of the most powerful platforms for brands, retailers, and suppliers navigating the connected ecommerce world. According to Rithum’s CEO, the rebrand marks the beginning of a new era focused on innovation, growth, and supporting customers at every stage of their journey. With over $50 billion in GMV flowing through its pipelines annually, Rithum is quietly powering some of the world’s greatest brands, and making optimized consumer shopping journeys feel seamless.

If your ecommerce strategy includes multi-channel order fulfillment, dropshipping, and scalable growth, Rithum might be the platform you didn’t know you needed. Rithum supports businesses from the very beginning of their ecommerce journey, streamlining onboarding and initial setup to ensure a smooth start.

What Is Rithum?

Rithum is a multi-module platform focused on creating connected ecommerce experiences. It brings together marketing, commerce, delivery, and discovery into one scalable solution, helping brands and retailers operate more efficiently across marketplaces, DTC sites, retail media networks, and fulfillment channels. Rithum is designed to help launch, manage, and grow any type of ecommerce business, supporting the entire commerce operation from inventory management to multi-channel sales.

In other words, Rithum gives you the tools to grow sales, manage inventory, expand fulfillment, automate operations, and scale, all from a centralized command center. It’s built for the brands, retailers, and suppliers who want to stop juggling disconnected systems and finally integrate everything, supporting users every step of the way as they integrate their systems.

Rithum at a Glance

  • Annual GMV: $50+ billion
  • Order Volume: Over 400 million orders processed per year
  • Products Listed: 2.4 billion+ SKUs across 420+ channels
  • Customer Base: 40,000+ companies, including major global retailers and niche DTC brands
  • Trusted by the industry’s leading retailers and brands: Rithum supports the growth and profitability of retailers and brands across the ecommerce ecosystem.
  • Legacy: Combines the capabilities of ChannelAdvisor, CommerceHub, DSCO, Cadeera, and more

That’s not just a lot of scale, it’s a lot of trust. Rithum powers commerce infrastructure for companies ranging from Fortune 500 retailers to fast-growing ecommerce entrepreneurs. As the industry’s most trusted commerce platform, Rithum delivers comprehensive solutions for retailers and brands navigating today’s market challenges.

Core Capabilities: Rithum Modules Explained

Rithum’s strength lies in its modular architecture. Businesses can tap into one, two, or all four of the core modules depending on their needs. Rithum supports businesses at every step, whether they choose a single module or implement the full suite, ensuring a smooth progression through each stage of their journey.

1. Commerce Solutions

This is the backbone. Rithum enables sellers to list products across hundreds of marketplaces, websites, social platforms, and retail sites, streamlining data sync, inventory updates, and pricing strategies.

Whether it’s Amazon, Walmart, Target Plus, Zalando, or your own Shopify site, Rithum’s software lets you manage product listings from one place. You can push updates to every sales channel instantly and reduce the lag that costs time, money, and customers.

2. Marketing Solutions

Rithum helps brands drive performance across paid search, social ads, and retail media networks. Think: Google Shopping, Meta Ads, Instacart, Criteo, Roundel, CitrusAd, you name it.

You can create optimized campaigns directly inside Rithum’s platform and integrate with leading analytics tools to tie ad spend to order fulfillment and margin impact. This means tighter control over ROAS, and faster decisions on what’s working and what isn’t.

3. Delivery Solutions

Order fulfillment isn’t just about speed, it’s about flexibility. Rithum’s delivery solutions automate routing based on inventory availability, warehouse proximity, shipping method, and cost-efficiency. This includes direct-to-consumer fulfillment, third-party logistics (3PL), and dropshipping.

Even better, Rithum integrates with Amazon MCF (Multi-Channel Fulfillment), letting brands use Amazon’s fulfillment infrastructure for non-Amazon orders. This creates margin advantages without the overhead of managing your own warehouses (though it’s quite a bit more expensive than outsourcing to 3PLs).

4. Discovery Solutions

Using AI and behavioral data, Rithum identifies top-performing suppliers, curates catalogs for buyers, and matches brands with new retail partners. This is especially powerful for B2B marketplaces and dropship networks looking to expand their assortments strategically.

The goal? Help suppliers work smarter, not harder, and give buyers access to high-margin, in-demand products without wasting time.

Why Rithum Matters for Modern Commerce

Let’s face it: managing ecommerce operations across 10+ sales channels is chaos without a platform like Rithum. The industry’s top brands use Rithum to automate, integrate, and grow. Here’s how:

1. Unified Inventory Management

Forget spreadsheets. Rithum provides real-time inventory visibility across all your selling channels. This helps reduce stockouts, improve fill rates, and prevent costly overselling.

2. Streamlined Order Fulfillment

Orders from Amazon, Shopify, Walmart, and your DTC site all route through a single order management system. Rithum auto-selects the best fulfillment method, be it internal warehouse, dropship partner, or Amazon MCF.

3. Data-Driven Marketing

Tie your product data to your ad performance. Rithum’s platform ensures that your marketing campaigns reflect inventory levels, promotions, seasonal trends, and shipping timelines.

4. Optimized Margins at Scale

One of the most underrated advantages of using Rithum is margin optimization. By automating fulfillment and identifying cost-saving delivery solutions, you increase profit per unit while maintaining fast delivery speeds.

5. Powerful Integrations

Rithum offers prebuilt connections with all major ecommerce platforms, marketplaces, and ERPs. Whether you’re using NetSuite, BigCommerce, Adobe Commerce, or Salesforce Commerce Cloud, Rithum plays nicely in the sandbox.

Use Case: A Dropshipping Brand Using Rithum

Let’s walk through a simplified scenario:

1. A brand lists 10,000 SKUs using Rithum’s commerce solution.

2. Rithum syndicates those listings to Amazon, Walmart, and a DTC site.

3. Inventory levels sync across platforms in real-time.

4. Orders start coming in from all channels.

5. Rithum routes the orders to a mix of 3PL warehouses and dropship suppliers based on margin and speed.

6. The marketing team uses Rithum’s tools to launch ad campaigns based on best-sellers and restock timelines.

7. The operations team reviews delivery metrics and margin performance using Rithum’s dashboard.

8. The brand expands to a European marketplace, using Rithum’s localization features and supplier discovery module.

Rithum enables brands, retailers, and suppliers to work together seamlessly throughout the dropshipping process, ensuring efficient collaboration and smooth order fulfillment.

From listing to delivery, everything flows through one platform, Rithum, acting as the heartbeat of your dropshipping operation and keeping every part running smoothly.

Brands and Retailers Benefiting from Rithum

Retailers like Belk used Rithum to onboard over 500,000 SKUs in under 90 days, resulting in a 36% YoY increase in GMV. Similarly, brands like Superdry and Marks & Spencer have leaned on Rithum’s marketing automation and fulfillment capabilities to grow international sales and reduce channel friction.

For smaller companies, the appeal is just as strong. Rithum lets lean ecommerce teams punch above their weight, automating order fulfillment, syncing inventory, and scaling ad campaigns without adding headcount.

Challenges to Be Aware Of

No platform is perfect. Here are a few potential drawbacks:

  • Complex Onboarding: Rithum’s capabilities are powerful, but not plug-and-play. Implementation often requires a dedicated team or integration partner.
  • Cost Structure: After the ChannelAdvisor/CommerceHub merger, some users reported pricing increases of 4–7x. Smaller businesses may need to weigh the ROI carefully.
  • Support Transition: With consolidation comes some turbulence. Support quality can vary depending on your plan, region, and internal rep.

Still, these challenges are manageable if you’re serious about long-term scale.

How Rithum Compares to Other Platforms

Platform
Strengths
Weaknesses
Rithum
Unified commerce, delivery, marketing
Complex onboarding, premium cost
Zentail
Easy setup, automation
Fewer marketplaces supported
Feedonomics
Robust product feed optimization
Limited fulfillment capabilities
Skubana
Inventory automation
Light on marketing tools
Cahoot
Fastest fulfillment via P2P network, most profitable reverse logistics
Primarily focused on shipping/logistics

Rithum is ideal for businesses seeking an end-to-end platform that supports everything from product discovery to last-mile delivery, especially if those businesses operate across multiple sales channels and want to optimize every piece of the puzzle.

To see how Rithum can help your business, schedule a demo to view the platform in action and learn more about its features and benefits.

Where Cahoot Fits In

For ecommerce sellers using Rithum but seeking faster, more cost-efficient fulfillment, Cahoot can be a perfect complement. While Rithum automates order routing and marketplace connections, Cahoot offers peer-to-peer fulfillment with 1-day ground delivery coverage across the U.S., at rates that beat most traditional 3PLs.

By integrating Cahoot into the Rithum workflow, brands can unlock smarter delivery solutions that drive higher margins and better customer experiences.

Final Thoughts

Rithum is more than just a new name; it’s a new rhythm for ecommerce. By merging legacy giants like ChannelAdvisor and CommerceHub, the Rithum platform is enabling connected ecommerce experiences at scale. With modules for commerce, marketing, delivery, and supplier discovery, it empowers brands, retailers, and suppliers to build lasting commerce businesses. Rithum also offers valuable resources to support teams and foster community within the ecommerce ecosystem.

It’s not for the faint of heart. Implementation takes planning. Costs can add up. But for ecommerce teams aiming to automate, scale, and integrate across channels, Rithum delivers.

Whether you’re launching a DTC brand, scaling a supplier network, or operating as one of the world’s greatest brands, Rithum helps create the infrastructure needed to move at speed, sell with confidence, and thrive in a fragmented retail world. Users love the seamless experience and impressive results they achieve with Rithum.

Frequently Asked Questions

What is Rithum, and what companies is it built from?

Rithum is a connected ecommerce platform formed by merging ChannelAdvisor, CommerceHub, DSCO, and other technology providers. It supports global brands, retailers, and suppliers.

How does Rithum improve order fulfillment and delivery solutions?

Rithum automates order routing across warehouses, dropship suppliers, and Amazon MCF, helping companies optimize shipping speed, cost, and customer satisfaction.

Which types of businesses should use Rithum?

Rithum is best suited for ecommerce brands, retailers, and suppliers managing sales across multiple marketplaces who need scalable software for fulfillment, marketing, and inventory.

Does Rithum offer tools for marketing and retail media?

Yes, Rithum’s marketing solutions connect directly to platforms like Google, Meta, Instacart, and retail media networks, helping businesses drive optimized consumer shopping journeys.

How does Rithum help brands expand globally?

Rithum’s commerce and discovery modules allow brands to manage listings across 420+ channels, onboard new suppliers, and localize product data to grow into new markets efficiently.

Written By:

Jeremy Stewart

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

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Cahoot vs Veeqo: A Value-Driven Comparison for Modern Ecommerce Sellers

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When ecommerce sellers start scaling across marketplaces like Amazon, eBay, Walmart, and Shopify, their shipping software can either accelerate that growth or slow them down. Two platforms built to handle multi-channel shipping are Veeqo and Cahoot. Both offer discounted shipping labels and order management tools, but the similarities end there. This in-depth comparison will explore what each software delivers, what it lacks, and which one ultimately supports fast-moving ecommerce teams better.

At a Glance: Cahoot vs Veeqo

Feature
Cahoot
Veeqo
Multi-Channel Order Import
Yes
Yes
Discounted Carrier Rates
Yes
Yes
Rate Shopping Across Carriers
Yes
(Autonomous)
Yes
(Basic)
Bulk Label Printing
Yes
(Autonomous)
Yes
(Traditional)
Support for Own Carrier Accounts
Yes
Yes
Automation Rules & Order Routing
Yes
(Highly Configurable)
Limited to Presets
Intelligent Package Selection (Cartonization)
Yes (AI-powered)
No
WMS Features
Yes
Partial
Inventory Visibility
Yes
(real-time)
Yes
(limited granularity)
Returns Workflow Integration
Optional Peer-to-Peer Returns
Basic RMA
Live Customer Support
Yes
(Help Desk, Phone)
No phone support
Amazon Buy Shipping API Certified
Yes
Yes
Supports Amazon SFP
Yes
No
Open to 3PLs
Yes
No

Pricing Models & Carrier Rates

Both Cahoot and Veeqo offer access to discounted shipping rates from major carriers like UPS, FedEx, and USPS. Veeqo highlights its access to Amazon-negotiated carrier rates, especially beneficial for FBM sellers. However, it’s worth noting that Cahoot also offers deeply discounted rates through its aggregated carrier network, and unlike Veeqo, sellers aren’t required to be Amazon merchants to access them.

Users have praised Veeqo’s rates in particular, though some feel that the real-world savings depend on volume and location. One user on Trustpilot noted, “Veeqo offers good rates, but it doesn’t always beat what I negotiated directly with FedEx.” That said, having an option for both Veeqo and using your own account provides flexibility.

Cahoot lets sellers compare real-time rates across carriers, or even better: automate all the rate shipping and bulk shipping label generation based on the desired logic (cheapest, fastest, delivery promise, signature-required, etc.). This level of autonomous support (removing the human) goes a step further than Veeqo’s more manual workflows.

Order Routing & Workflow Automation

This is where the gap between the two platforms widens. Cahoot excels at automation.

Cahoot’s rule engine lets sellers automatically assign orders to specific warehouses, select packaging based on product dimensions, and pick carriers based on dynamic rules. It includes AI-powered cartonization, reducing overpackaging and optimizing label selection at scale. This feature alone can save high-volume shippers thousands per month.

Veeqo supports some automation, but according to multiple reviews, the rules engine lacks flexibility. As one user put it: “You can automate some parts of the shipping process, but complex routing logic just isn’t possible.” Another noted on G2, “Our warehouse team constantly has to manually override presets in Veeqo to get the right shipping option.”

Cahoot also offers the option to import product master data, assign SKUs to multiple warehouses, and automate routing for distributed fulfillment. These features are especially helpful for sellers managing multiple sales channels and warehouse locations.

Multi-Channel Capabilities

Both platforms support multi-channel order import from Amazon, eBay, Shopify, Walmart, Etsy, and more. Veeqo is tightly integrated with Amazon (it’s owned by Amazon), which brings advantages for FBM sellers, like access to Buy Shipping and automated order syncing.

However, some sellers note that Veeqo prioritizes Amazon workflows and that the support for non-Amazon channels lacks depth. A Trustpilot reviewer stated, “It’s clearly built with Amazon in mind. Shopify orders don’t always sync correctly, and the custom mapping is limited.”

Cahoot offers native integrations with all major ecommerce platforms, with equal priority across sales channels. That neutrality is useful for brands expanding beyond Amazon and looking to centralize operations across multiple storefronts.

It also means Cahoot isn’t limited by Amazon policy shifts or ecosystem changes. For businesses hoping to grow a multi-platform brand, that independence matters.

Inventory & Warehouse Management

Veeqo includes basic inventory tracking tools but doesn’t offer a full warehouse management system (WMS). Its UI shows available stock and syncs between platforms, but lacks pick/pack workflows, barcode scanning, and location-based inventory management.

Cahoot includes WMS features as part of the platform, with no need for third-party plugins. Sellers can assign bin locations, manage cycle counts, and generate pick lists automatically. One Cahoot user shared, “We reduced picking errors by 60% after switching from ShipStation to Cahoot because the WMS features are built in.”

For growing brands with even modest warehouse operations, this difference is key. It consolidates tech stack complexity and reduces reliance on disconnected tools.

Support & Learning Curve

Cahoot provides live onboarding, in-platform chat, and phone support. Multiple users note how responsive the support team is. One review on G2 says, “Every time I had an issue, Cahoot got back to me within minutes. I never felt like I was waiting around.”

Veeqo, on the other hand, has no phone support, and several users on Trustpilot and Reddit cite frustrating support delays. One review read, “You submit a ticket and wait… sometimes for days. It’s not great when your entire shipping flow is paused.”

Veeqo also has a steeper learning curve for non-Amazon users. The dashboard is robust but not intuitive for sellers focused on Shopify or direct-to-consumer models.

Amazon Buy Shipping & SFP

Both platforms are certified for Amazon Buy Shipping, meaning they help sellers remain compliant with Amazon’s policies and tracking requirements. However, only Cahoot supports Seller Fulfilled Prime (SFP).

For Amazon SFP sellers, this is a major differentiator. Cahoot’s compliance engine ensures same-day label printing, cut-off time enforcement, and late-delivery prevention. Veeqo does not support this, which rules it out for many brands trying to maintain the Prime badge.

Data You Can Actually Use

With Veeqo, many sellers are flying blind. Sales data is fragmented. Shipping costs aren’t always transparent. And pulling that data often means wrangling spreadsheets with missing headers or running into failed exports.

Cahoot makes it easy to analyze profits, understand shipping costs, and track eligible shipments in one dashboard. You get full access to real performance data without needing to bounce between platforms.

Built for Amazon Sellers, but Not Owned by Amazon

Veeqo is owned by Amazon. That means anything you do on the Amazon platform is potentially visible. For Amazon sellers trying to protect their strategy or operate across other channels, that’s a problem.

Cahoot is fully compatible with Amazon FBM, FBA, and Buy Shipping, but stays independent. You get the lowest rates available, without locking yourself in deeper with Amazon or giving up your leverage.

Pros & Cons

Veeqo Pros:
  • Owned by Amazon, with tight FBM integrations
  • Free to use (zero software cost)
  • Access to Amazon-negotiated carrier rates
  • Clean UI for basic shipping workflows
  • Veeqo Cons:
  • Limited automation rules engine
  • Inability to export meaningful data to inform decisions
  • No support for SFP
  • No phone support
  • Lack of cartonization or packaging optimization
  • No built-in WMS features
  • Support delays are frequently cited in reviews (think: Amazon-like Support)
  • Cahoot Pros:
  • Advanced shipping automation and AI-powered cartonization
  • Built-in WMS with pick/pack/scan tools
  • Full Help Desk and phone support with fast response times
  • Channel-agnostic approach supports real multi-platform growth
  • Fully supports Amazon SFP
  • Highly configurable rules engine for complex workflows
  • Cahoot Cons:
  • Not free (pricing is customized based on volume)
  • Currently optimized for the U.S. market only (international support expanding)
  • Cahoot vs. Veeqo: What Sellers Are Saying

    “Using Veeqo costed us so much time. Exports kept failing, inventory didn’t match, and the UI was just confusing. Cahoot gave us back control.”

    ~ Multichannel seller, apparel industry

    Speak to a fulfillment expert



    “The only reason I stuck with Veeqo was because it was free. But once our shipping volume increased, we needed more, and Cahoot delivered.”

    ~ Electronics brand owner

    Speak to a fulfillment expert



    Final Verdict

    Veeqo is a solid, free tool for Amazon-first sellers who want to print shipping labels and access decent rates with minimal setup. But it lacks depth in automation, support, and warehouse operations.

    Cahoot, by contrast, is built for scale. It’s ideal for ecommerce brands that are serious about operational efficiency and growth. From smart automation to robust warehouse tools and superior customer support, Cahoot is the better long-term investment for sellers looking to streamline operations across multiple platforms.

    If you’re running a high-volume ecommerce business that ships across multiple sales channels, handles inventory in multiple locations, or simply wants to reduce costs and errors at scale, Cahoot is the clear winner.

    Don’t settle for free if it slows your business down.

    Choose smarter. Explore how Cahoot can simplify your shipping and scale with your brand.

    Frequently Asked Questions

    Is Veeqo really free, and what’s the catch?

    Yes, Veeqo is technically free, but many sellers report that key features like bulk shipping, inventory management, and reporting are limited. You may still need your own carrier accounts, and support can be slow.

    How does Cahoot’s shipping software help reduce shipping costs?

    Cahoot gives sellers access to discounted rates across major carriers like UPS, FedEx, and USPS, with no Veeqo credits or software bugs required. Plus, bulk shipping tools and data-driven insights help optimize your entire shipping process.

    Can I use Cahoot if I sell on Amazon and other ecommerce channels?

    Absolutely. Cahoot supports multiple sales channels, including Amazon, Walmart, eBay, and Shopify, while keeping inventory levels synced across all platforms. Unlike Veeqo’s integration, Cahoot’s system is fast, clean, and flexible.

    What makes Cahoot better for inventory management than Veeqo?

    Cahoot simplifies multi-channel inventory with real-time stock tracking, automated syncing, and alerts to prevent overselling. Veeqo users often struggle with managing inventory across platforms due to sync lags and poor data visibility.

    Why do sellers leave Veeqo for Cahoot?

    Many sellers switch when they realize Veeqo’s free model comes with trade-offs: limited support, Amazon ownership, clunky UI, and frustrating data export issues. Cahoot offers a full-featured, seller-first solution that saves time and drives smarter decisions.

    Written By:

    Indy Pereira

    Indy Pereira

    Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

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    Turn Returns Into New Revenue

    Convert returns into second-chance sales and new customers, right from your store

    Peer-to-Peer Returns Platform: How It Benefits Emerging DTC Brands

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    Returns are the terrible, horrible, no good, very bad part of running an ecommerce business. Not just for shoppers (waiting around for a refund) but for emerging ecommerce brands, especially DTC operations. Every return cuts into profit, eats up time, and piles up inventory no one wants to touch. But here’s the twist: what if returns didn’t go back to the warehouse at all? What if they went directly to a new buyer instead? That’s the magic behind the peer-to-peer returns platform. This model introduces key advantages for DTC brands, such as reducing costs, minimizing waste, and improving customer satisfaction.

    Cahoot, known for shaking up ecommerce logistics, is leading the charge with this innovative approach in the peer-to-peer returns space. And no, it’s not a borrowing scheme like peer-to-peer lending or a financial product like personal loans. But it does borrow some DNA from those systems, distributed networks, smart matching, and skipping the middleman. Online platforms in the peer-to-peer space facilitate these direct connections, much like how they connect borrowers and lenders in financial contexts, streamlining the process for all parties involved. Think of it as the social lending of ecommerce returns, where the system connects returners directly with new buyers, just as peer-to-peer platforms connect borrowers directly with lenders.

    The Real Pain of Traditional Returns

    Traditional returns work like this: a customer changes their mind, prints a label, ships the item back to you, and then you have to receive, inspect, restock, maybe repackage, and eventually resell it, often at a steep discount. Add in return shipping costs, warehouse labor, customer service tickets, and even potential late fees for delayed processing, and it’s a recipe for negative ROI.

    For a small ecommerce business or a founder running lean, this isn’t sustainable. Shipping every return back to your warehouse is like using a bank account with constant fees and zero interest. It drains your cash flow. You could compare it to funding loans with higher risk and low return, much like the challenges faced with traditional loans when penalties and late fees add up. Frankly, it’s a bad deal.

    Enter Peer-to-Peer Returns

    Instead of sending the returned item to your fulfillment center, Cahoot’s peer-to-peer returns platform lets the original customer ship it directly to a new buyer. Here’s how it plays out:

    1. A customer initiates a return.

    2. The platform asks them to upload photos, confirm the condition, and hold the item for a few days.

    3. AI kicks in, verifying the item’s resale quality, analyzing the returner’s history, and scanning for fraud (risk management). The platform’s technology enables streamlined processes, making the entire experience faster and more user-friendly.

    4. Meanwhile, the item is automatically relisted on your store as open-box in real-time, discounted slightly, but still your branded product. The relisting and resale process is transparent and clear, much like how peer-to-peer lending platforms provide comparable loan terms, so both buyers and sellers know exactly what to expect.

    5. When a new customer buys it, the returner gets a label to ship it out directly.

    6. They’re refunded once tracking confirms it’s on the way or received. In terms of risk management, the risk of a single failed return transaction can be compared to a single default event in lending, highlighting the importance of robust verification and diversification strategies.

    Now, instead of a refund eating your margins, you’re reselling the item at 85–95% of retail, skipping warehouse handling and double shipping. It’s fast. It’s efficient. And yes, it saves money.

    Slash Your Fulfillment Costs by Up to 30%

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    Why This Works (Especially for Small Businesses)

    This isn’t just a fun gimmick. Cahoot’s peer model addresses real ecommerce challenges:

    • Shipping Costs: You skip the return leg to the warehouse.
    • Inventory Management: The item never clogs up your system.
    • Speed: New customers get the item faster. Returners get refunded sooner.
    • Customer Satisfaction: Everyone feels good helping the planet and their wallet.

    For small businesses, this model is similar to how small business loans and business loans provide alternative financing options to cover major expenses, supporting growth and development when traditional funding is limited.

    It’s like a micro version of peer lending. Instead of funding loans with capital, you’re moving product through customer participation. Instead of worrying about borrower defaults, you’re focused on buyer satisfaction and ensuring compliance through verified transactions. The platform also helps brands achieve their financial goals by offering accessible and flexible solutions. Other benefits of the peer-to-peer returns model include improved business insights, better payment terms, and fostering a supportive community for both buyers and sellers.

    The Financial Angle

    Okay, let’s talk money. The traditional return process? It’s basically like investing in traditional savings accounts, low return, high friction. With peer-to-peer returns, you’re now in the world of alternative investments. You’re getting more value, faster turnover, and lower risk.

    Just as peer-to-peer (P2P lending) platforms allow individual and institutional investors to invest in loans, with returns shaped by interest rates and regular interest payments, our model lets you realize value more efficiently. On lending platforms and lending sites, loan offers are determined by factors like minimum credit score, good credit, and the borrower’s profile, much like how our platform assesses transaction eligibility and risk.

    Your effective recovery rate improves. That espresso machine that used to cost you $50 to restock and repackage? Now it’s resold in 72 hours at 90% retail with no warehouse touch. That’s the kind of turnaround most lending sites or lending platforms would kill for.

    Built-In Risk Management

    Cahoot doesn’t wing it. Our P2P returns platform is built with risk tolerance settings, fraud detection layers, and condition verification, all using AI. That means you’re not just trusting your customers blindly. These tools empower brands to make informed decisions about approving returns and managing risk.

    It’s like when institutional investors assess borrower defaults, they don’t rely on vibes. They crunch data, assess credit risk, and build safeguards. Cahoot’s doing the same for your returns: historical data, photo analysis, shipping trends, and user history all factor into who gets approved for peer-to-peer returns.

    Customer Experience

    Customers like this model. It’s interactive. It feels more personal. They get to feel like part of a sustainability loop. It’s like when borrowers connect with individual lenders on lending platforms, there’s emotional value. A product gets rehomed instead of returned to some faceless warehouse.

    Returners are rewarded with small credits or perks for participating. Buyers get a deal. You recover more revenue. And the planet breathes a little easier. That’s what we call attractive returns.

    Wrapping It Up

    Peer-to-peer returns aren’t just a clever workaround; they’re a full-on rethinking of ecommerce reverse logistics. For small business owners, they offer a practical way to save money, improve customer satisfaction, and align with sustainability goals. For larger brands, they unlock serious cost savings and scalability.

    So, whether you’re selling sneakers, smart home gear, or skincare, if returns are eating your margins, it might be time to make a move.

    Because unlike traditional financial institutions, this isn’t built on bureaucracy. It’s built on agility, innovation, and a willingness to rethink the rules. Sound familiar?

    That’s ecommerce done smarter.

    Frequently Asked Questions

    What is a peer-to-peer returns platform, and how does it work?

    A peer-to-peer returns platform connects the original buyer of a product with a new customer who wants to purchase it, avoiding the need to ship the item back to the brand’s warehouse. Instead of returning it to a traditional logistics hub, the returner ships the item directly to the next buyer. This innovative approach reduces return costs, speeds up resale, and supports sustainability goals for small businesses.

    How is a peer-to-peer returns model different from traditional returns?

    Traditional returns involve sending the product back to a brand or warehouse, where it’s inspected, restocked, and resold. A peer-to-peer system skips that step. The original buyer holds the item temporarily while the platform finds a new buyer. Once sold, the item ships directly to the new customer, eliminating an entire shipping leg and creating a more efficient, cost-saving process similar to how peer-to-peer lending eliminates middlemen in finance.

    Are peer-to-peer returns safe for ecommerce businesses and customers?

    Yes. Platforms like Cahoot use advanced fraud detection, data analytics, and AI verification to ensure the returned item matches quality standards before resale. Buyers can review photos, condition grades, and return policies. Just like in peer lending, where borrower defaults are managed through credit checks and risk scoring, P2P returns include safeguards to protect both original and new customers.

    What types of ecommerce brands benefit most from peer-to-peer returns?

    Virtually any ecommerce brand can benefit from peer-to-peer returns as long as the products aren’t perishable, dangerous (hazmat), or otherwise require a tighter level of control (contamination concerns). From emerging DTC brands and small businesses to large enterprises, companies offering fast-moving consumer goods see the biggest gains. Peer-to-peer returns help reduce operating costs, improve cash flow, and increase customer satisfaction, especially for businesses without access to traditional loans, large warehouses, or institutional investor backing.

    How can I start using a peer-to-peer returns platform?

    To get started, ecommerce sellers can partner with a platform like Cahoot that offers peer-to-peer returns as part of its fulfillment solution. The platform handles the tech, including photo-based grading, shipping logistics, and fraud prevention. It’s as simple as integrating the system, setting product eligibility rules, and letting the platform connect returns with new buyers, streamlining processes, and unlocking attractive returns on previously lost sales.

    Written By:

    Indy Pereira

    Indy Pereira

    Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

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    Why Temperature-Controlled 3PL Fulfillment Services Is Hot

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    So here’s the deal: not all products like to chill the same way. Some want crisp air. Others prefer it mild. And then there are the divas, like cheese, chocolate, and pharmaceuticals, that absolutely must stay within a consistent temperature range or things go sideways fast. Enter the world of temperature-controlled 3PL fulfillment services, where warehouses become climate whisperers and storage becomes science.

    And let’s be honest, if you’re shipping temperature-sensitive products without the right temperature control setup, you’re flirting with spoilage, recalls, and angry emails. No one wants that.

    Why Brands Are Getting Serious About Temperature-Controlled Warehousing

    Blame it on the rise of DTC food, supplements, skincare, and all those perishable goods showing up on doorsteps. Ecommerce has exploded into categories that used to be strictly brick-and-mortar. Now everyone’s shipping salsa, serum, and medicinal products, and they all demand different temperature ranges and humidity levels.

    That’s where temperature-controlled warehousing steps up. It’s not just about slapping an AC unit in the corner and calling it a day. A true climate-controlled warehouse is a carefully calibrated environment, with everything from refrigeration equipment to humidity control, air conditioning, and yes, even sandwich panels to regulate insulation.

    Think of it like this: the temperature-controlled warehouse maintains product integrity the way a museum maintains art. It’s protection. It’s preservation. It’s essential.

    Four Ranges, Endless Requirements

    Let’s talk numbers. Most temperature-controlled facilities operate within four different temperature ranges:

    1. Frozen (-10°F to 0°F): For ice cream, frozen meats, and products that prefer sub-zero vibes.

    2. Refrigerated (33°F to 40°F): Think produce, pharmaceutical products, food grade items, and alcoholic beverages that demand cool-but-not-frozen conditions.

    3. Ambient storage (50°F to 70°F): This is your standard controlled environment, great for supplements, makeup, or dry snacks.

    4. Room temperature with humidity control: Often overlooked but critical for chocolate, electronics, and other temperature-sensitive goods.

    Without proper temperature monitoring, one spike in heat or dip in cold air, and your stored goods could be toast. Literally. Improper storage doesn’t just shorten shelf life, it can lead to product quality issues, regulatory compliance headaches, and, worst-case scenario, a full-blown recall.

    The Cold Storage Supply Chain Is Booming

    We’ve all heard of the cold chain, but the spotlight on cold storage really intensified during the pandemic. Vaccines, fresh produce, and meal kits made everyone realize how fragile product integrity can be when temps aren’t dialed in just right.

    Now that ecommerce has leaned hard into consumables, the need for temperature-controlled warehouse facilities isn’t just for Big Pharma or Big Food. Even indie brands selling elderberry syrup or adaptogen smoothies need safe storage that meets safety standards.

    And that’s where 3PLs with temperature-controlled warehousing solutions come in hot (and cold). They’re building out storage space with energy consumption top of mind, balancing optimal storage with sustainability. It’s a delicate dance, keeping products stored safely while not blowing up the power bill.

    When Is Controlled Warehousing the Right Move?

    If you’re shipping anything that falls under sensitive products, perishable products, or items with “store below 72°F” on the label, yes, it’s time. That includes:

    • Food products (fresh, frozen, or fancy)
    • Pharmaceutical products
    • Alcoholic beverages (yes, some spoil)
    • Temperature sensitive goods like vitamins, probiotics, and CBD
    • High-end cosmetics and skincare with active ingredients
    • Specialty beverages, dairy alternatives, etc.

    Look, there’s no one-size-fits-all in fulfillment. But if your goods don’t like high temperatures, or they melt, separate, rot, or grow fur in transit, temperature controlled storage isn’t optional. It’s critical.

    Key Benefits of Temperature-Controlled 3PL Fulfillment

    Here’s what a solid temperature controlled warehousing partner brings to the table:

    • Consistency. A climate-controlled setup isn’t just cool sometimes. A good 3PL keeps a consistent temperature 24/7 using smart sensors, alarms, and responsive temperature monitoring systems.
    • Flexibility. Need 1,000 square feet today and 10,000 next month? The right provider scales storage units and square footage with your seasonal swings.
    • Regulatory compliance. Whether you’re dealing with FDA, USDA, or international guidelines, these folks help ensure compliance so you don’t get flagged or fined.
    • Product quality. When your stored goods arrive fresh, intact, and ready to use, your customers notice. And so do your reviews.
    • Lower risk. No more worrying about improper storage, spoiled batches, or losing a pallet because someone didn’t close the fridge door right.

    What to Look for in a Temperature-Controlled Facility

    Not all warehousing solutions are created equal. If you’re shopping for a 3PL, ask the awkward questions:

    • What temperature ranges do they support?
    • Can they offer different temperature zones in the same facility?
    • Do they offer cold chain tracking or just ambient delivery?
    • How often do they inspect and recalibrate their refrigeration equipment?
    • What’s their backup power situation if temperatures rise unexpectedly?

    Oh, and don’t forget the nerdy stuff, like expansion valves, airflow testing, and environmental conditions reporting. It’s not sexy, but it matters.

    Final Thoughts

    As ecommerce keeps moving into categories like wellness, food, and pharma, temperature-controlled warehousing needs are becoming the norm, not the niche. A few degrees can make or break a customer experience. A few missed requirements can sink a whole product launch.

    So if you’re scaling a brand that relies on product integrity, get serious about your controlled warehousing strategy. Because when it comes to sensitive goods, the wrong warehouse is worse than no warehouse at all.

    And if you’re still storing collagen gummies in your garage, well, it’s time to upgrade.

    Frequently Asked Questions

    What is temperature-controlled warehousing, and why does it matter?

    Temperature-controlled warehousing is a storage solution that keeps goods within specific temperature and humidity ranges. It protects temperature-sensitive products from spoilage, ensuring quality, safety, and compliance across the supply chain.

    Which products require temperature-controlled storage?

    Items like perishable food, pharmaceutical products, skincare, supplements, and alcoholic beverages often need controlled temperatures to maintain product integrity and shelf life.

    What temperature ranges are used in temperature-controlled warehouse facilities?

    Most facilities operate within four different temperature ranges: frozen (-10°F to 0°F), refrigerated (33°F to 40°F), ambient (50°F to 70°F), and room temp with humidity control.

    How does temperature-controlled warehousing support regulatory compliance?

    By maintaining a consistent temperature range and offering detailed temperature monitoring, controlled facilities help brands meet FDA, USDA, and food safety standards.

    Can a 3PL offer both ambient storage and cold chain solutions?

    Yes. Many modern 3PLs provide flexible temperature-controlled warehousing solutions that include cold storage, ambient zones, and climate-controlled spaces, all under one roof.

    Written By:

    Indy Pereira

    Indy Pereira

    Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

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    New 2025 Amazon Premium Shipping Requirements

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    Amazon’s Premium Shipping program has always driven better conversion rates, improved Buy Box share, and happier customers. But come June 29, 2025, Amazon is rolling out sweeping changes to Premium Shipping performance requirements, and they’re not kidding around. If you’re an ecommerce pro, brand operator, logistics expert, or retail strategist, buckle up. Here’s everything you need to know, served in a conversational style, with a dash of candor, and a sprinkle of “keep-your-cool” honesty.

    From Monthly Roll-Ups to Weekly Check-Ins

    Let’s cut to the chase: under the old system, you needed a 97% on-time delivery rate (OTDR) over a rolling 30-day window to keep that Premium Shipping eligibility. Amazon looked at your performance once a month, sent one warning if OTDR dipped below 97%, and gave you until the next month to fix it. Easy enough—if you had a random bad week, you could smooth it out with stellar performance the rest of the month.

    Starting June 29, though, those monthly buffers disappear. Amazon will track OTDR on a weekly basis, from Sunday through Saturday, and drop any Seller Fulfilled Prime (SFP) orders from that calculation. If your OTDR for Premium Shipping falls below the new minimum, 93.5%, you’ll get your first email warning. Do it again next week, and you’ll receive a second warning. Miss the same threshold three times within four consecutive weeks, and you’re out of Premium Shipping until you earn it back.

    Why 93.5%? Amazon’s rationale is that they want customers to experience the same reliability they’ve come to expect from the Prime program. Dropping the requirement from 97% to 93.5% might seem like a concession, but trust me, hitting 93.5% every single week is not easy when you’re dealing with carriers that are out of your direct control.

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    Why This Matters (and Why It’s Tougher Than It Sounds)

    No More “Average” Weeks

    Under the old model, you could have one sloppy week at, say, 94%, and then three spectacular weeks at 99%, and your overall 30-day OTDR would still be above 97%. Now, if that first week is below 93.5%, you’ll get dinged immediately. A single underperforming week can trigger a warning, and you can’t “erase” it with future weeks once that four-week window closes.

    Carriers Need to Be in Your Back Pocket

    Amazon explicitly calls out approved carriers like UPS, FedEx, USPS, and OnTrac. If a carrier misses scans, delays pickups, or delivers late, you’re on the hook. The OTDR calculation counts the percentage of orders that arrived on or before the promised “Deliver by” date. If your package is scanned late, or not scanned at all, Amazon assumes it’s going to be late unless an on-time delivery scan is received later. That’s why it’s more important than ever to monitor each carrier’s performance, review their “Last-Mile Delivery” scorecards, and swap out underperformers.

    Shipping Settings Automation & OTDR-Protected Labels

    Good news: Amazon is offering tools to help you hit your weekly targets. Shipping Settings Automation (SSA) will calculate transit times automatically so your “Deliver by” promises match real-world carrier performance. You still need to set accurate handling times, but SSA can help avoid accidentally over-promising.

    Then there’s OTDR protection: if you enable SSA and purchase an OTDR-Protected label through Amazon Buy Shipping, Amazon won’t penalize you for late deliveries as long as the delay is due to factors outside your control. It’s essentially a safety net—except it only applies if you do everything else right (set your handling time properly, buy the right label, and ship on time).

    What Sellers Must Do Right Now

    1. Audit Your Carriers

    • Pull up your Carrier Scorecard in Seller Central each Monday morning.
    • Look for patterns: Who’s got the slowest last-mile scans?
    • Drop carriers that regularly clock in under 95% weekly on-time scans, because once you hit 93.5%, there’s zero wiggle room.

    2. Enable SSA on Every Shipping Template

    • Navigate to Shipping Settings → Edit Template → Toggle on Shipping Settings Automation.
    • Let Amazon calculate transit times based on carrier data. If you don’t do this, you’re basically flying blind and promising delivery dates you can’t reliably meet.

    3. Purchase OTDR-Protected Labels

    • Go to Manage Orders → Buy Shipping and look for the shield icon indicating “OTDR Protected.”
    • If you use an external tool like Cahoot, make sure it’s integrated and configured to buy the correct labels.

    4. Track Your OTDR Like a Hawk

    • Check your Account Health → Shipping Performance → On-Time Delivery Rate view, filtered to the “Last 7 Days.”
    • Log it in a simple spreadsheet or dashboard; if you’re at 95% on Thursday but have a big FedEx hiccup on Friday, you might dip under 93.5% by Saturday.

    5. Prepare an Appeal Template

    • If you get that dreaded second warning email, you have two weeks to appeal.
    • Your appeal should include:
      • Specific orders that caused the miss (order IDs, promised vs. actual dates).
      • Evidence that you used SSA and OTDR-Protected labels (screenshots help).
      • Steps you’re taking to prevent a repeat (e.g., switching carriers, adjusting handling times).

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    The Ripple Effects on Your Business

    Margin Compression vs. Service Reliability

    Yes, spending more on premium carriers or buying OTDR-protected labels adds cost. But losing Premium Shipping can crater your conversion rate, tank your Buy Box percentage, and even affect organic search ranking. You have to run the numbers: maybe offering fewer SKUs with Premium Shipping is cheaper in the long run than risking weekly OTDR failures that affect your sales on your highest-performing SKUs (by being kicked out of the program).

    Operations & Inventory Juggling Acts

    Keeping enough stock in the “right” warehouses, so carriers aren’t shipping from the opposite coast, matters more than ever. If you sell nationally, you may need multiple fulfillment locations (a 3PL or micro-fulfillment center network). Staggering your replenishment orders (especially around holidays) can prevent stockouts that force you to oversell and then ship late.

    Small Sellers vs. Big Sellers

    Large brands with multi-warehouse setups and teams dedicated to carrier management can adjust more fluidly. If you’re a one-person operation fulfilling out of your garage, you’ll need to be extra strategic—maybe select just two to three proven carriers and ship as many orders as possible the same day you pick them. The bar is higher now, and patience for shipping errors is slim.

    A Few FAQs to Keep You Sane

    Q: What happens if a hurricane or blizzard slows down my carrier?
    A: If Amazon deems it a “major disruption event,” late deliveries in that region won’t count against your OTDR. But you still need SSA + OTDR-protected labels before the delay. Don’t wait for your messages to start flooding; enable those tools now.

    Q: Will this affect Seller Fulfilled Prime?
    A: Sort of. SFP has its own stricter OTDR requirements, also on a weekly cadence, but it’s evaluated separately. Just remember, your SFP and Premium Shipping OTDRs are on parallel tracks; a slip in one doesn’t automatically tank the other, but it’s best to nail both.

    Q: Can I regain Premium Shipping status after removal?
    A: Yes, but you must meet all OTDR requirements for four consecutive weeks after your third infraction (without another miss). It’s basically a “clean slate” window: stay above 93.5% each week for four weeks, and Amazon resets your eligibility for that specific requirement.

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    Final Thoughts: Embrace the Change (or Get Left Behind)

    Amazon’s shift from a 30-day OTDR roll-up to a 7-day weekly check is a clear message: if you want to hang with Prime-level sellers, you need rock-solid operational consistency and carrier partnerships. There’s no “coasting” on the back of a stellar month anymore; you have to nail every single week.

    Yes, the change feels daunting. Your margins may squeeze, and your team (even if it’s a team of one) will need to revamp processes. But savvy ecommerce pros know adversity breeds opportunity. Rethink your shipping playbook:

    • Lean into SSA and OTDR-protected labels.
    • Cultivate trusted carrier relationships (and ditch underperformers ASAP).
    • Monitor your weekly OTDR like your P&L depends on it (spoiler: it does).
    • Build redundancy, FBA hybrid, multi-warehouse, or strategic 3PL partnerships.

    Master these moves, and you won’t merely survive—you’ll thrive. Happy selling, and may your weekly OTDR always stay north of 93.5%.

    Citations

    Written By:

    Jeremy Stewart

    Jeremy Stewart

    Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

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    Fewer Sellers, Bigger Gains: Seizing Amazon’s Shrinking Competition in 2025

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    Amazon used to feel like a never-ending battlefield: millions of sellers duking it out for every eyeball. Fast-forward to 2025, and things have quietly shifted. Yes, a ton of new sellers keep signing up—roughly a million a year—but the number of active sellers (those getting at least one review in the past year) has actually fallen from about 2.4 million in 2021 to under 1.9 million in 2025. That’s a 20% drop, and it means there’s more traffic up for grabs per seller. In plain English, the average Amazon seller now gets nearly 31% more visits than four years ago. Cue the confetti for anyone still standing, and some serious sticker shock for those just starting out.

    Why the Dip in Active Sellers Matters

    Let’s unpack that number: Amazon’s overall traffic has stayed roughly level since 2021, clocking in at around 5 billion visits per month across its global network. But active sellers declined from 2.4 million to 1.9 million between 2021 and 2025. Divide the same or slightly higher traffic by fewer storefronts, and voilà, monthly visits per seller climbed from 2,162 to 2,837. In other words, if you’re still in the game, you’ve got about 31% more potential buyer eyeballs on your listings than your counterparts did a few years back.

    That traffic bump isn’t just academic. With Amazon’s revenue surging 36% (from $470 billion in 2021 to $638 billion in 2024), it’s clear the pie is growing even as some sellers fall out. Third‐party sellers, who already sold 56% of units in Q4 2021, pushed their share up to 62% by Q4 2024. Translation: More of a bigger pie is yours for the taking if you can navigate the challenges.

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    Why Sellers Are Fading Out

    Okay, so why are fewer “active sellers” sticking around? A few big reasons: rising fees, logistical headaches, and cutthroat price wars.

    • Amazon’s Fees Have Ballooned
      • In some categories, referral, FBA pick‐and‐pack, and storage fees now gobble up over 50% of a product’s list price.
      • Monthly or seasonal storage surcharges and random “reclassification fees” can make it feel like Amazon’s charging you just for breathing.
      • The result? Margin erosion that many newcomers can’t stomach.
    • Inventory & Case-Management Headaches
      • FBA is a blessing until your inventory gets stranded, buried under storage‐fee surcharges, or stuck in removal limbo. Solving these requires hours of back-and-forth with Seller Support.
      • Switching to FBM (Fulfilled by Merchant) isn’t a slam dunk either; sourcing reliable carriers, managing returns, and weathering holiday shipping bottlenecks add a new layer of complexity.
    • Regulatory & Tariff Unknowns
      • Tariff rates have been fluctuating unpredictably, particularly for goods from China or certain apparel categories. A 10% hike overnight can wreck your COGS (cost of goods sold) if you’re unprepared.
      • Sales tax laws and cross-border customs rules shift every few quarters. Small sellers risk penalties if they slip up.
    • Chinese Seller Dominance
      • Chinese merchants make up over half of the top-performing Amazon accounts, often undercutting U.S. sellers with razor-thin margins. It’s tough to compete on price when factory-direct sellers list at rock-bottom rates.

    Put those together, and it explains why many hopeful sellers register, list a few products… and then disappear. In fact, more than 60% of the top 10,000 Amazon sellers launched before 2019, proving that experience and staying power are huge advantages.

    Why the U.S. Marketplace Still Reigns Supreme

    If you’re deciding where to list, the U.S. marketplace is still the gold standard. Sure, places like Saudi Arabia boast 8,228 visits per seller, and South Africa is close behind at 8,065. But those markets simply don’t have the total volume or category breadth of Amazon.com. In the U.S., a niche term like “sourdough starter jar” gets roughly 26,766 monthly searches, compared to 179 in Australia or zero in Saudi Arabia. In other words, niches thrive stateside in a way they can’t elsewhere.

    Even better: 73% of U.S. sellers who joined in the past year hit their first sale within 12 months. That’s substantially higher than Germany (38%), the U.K. (32%), or Canada (16%). For new sellers looking for quick validation, the U.S. simply offers the best odds.

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    Challenges to Confront Head-On

    More traffic is great, but it doesn’t magically overcome the hurdles. Here’s what you’ll face if you jump into Amazon today:

    • Margin Erosion: Even with extra visits, if your fees and COGS leave you with negligible profit per unit, those extra eyeballs won’t matter. Carve out a robust pricing model, know your true landed cost—including tariffs, shipping, Amazon fees, and PPC.
    • Inventory Planning: Sell-through rates matter. Overstocking triggers costly storage fees; understocking loses you the Buy Box and lets competitors swoop in. Sophisticated 3PL integrations or tools like Forecastly can help you thread the needle.
    • Competitive Pricing & Buy Box Battles: Repricers can help, but they’re not magic. When Chinese sellers aggressively undercut, you risk starting a race to the bottom. Focus on unique value propositions, bundling, subscription offers, or enhanced branding to stand out.
    • Regulatory Compliance: Keep up with tariff updates. For instance, electronics gear imported from Asia might incur new duties under a 2025 trade ruling—know it before it blindsides your margin.
    • Account Health Vigilance: A single A-to-Z claim or policy violation can drop your seller rating. If you rely on Amazon for 80% of your sales, a suspension can be devastating. Build redundancies: own a Shopify store or diversify into Walmart Marketplace.

    How to Capture Your Piece of the (Growing) Pie

    1. Lean Into Niche Categories: If you’re selling something ultra-specialized—think artisan beard balm, eco-friendly pet toys, or limited-edition kitchen gadgets—your “competition” pool is smaller. Use tools like Helium 10 to spot emerging micro-niches before they catch fire.

    2. Optimize Listings with SEO & Enhanced Content: Keywords matter, but so does conversion. High-res images, 360-degree product videos, and A+ content can take your listing from meh to must-buy. When you’ve got 30% more visits, conversion-rate improvement is pure gold.

    3. Strategic PPC & DSP Budgets: With that extra traffic cushion, you might discover that CPCs (cost per click) in your niche are actually lower now due to lighter competition. Run a lean Sponsored Products campaign; if your listing’s solid, you can turn that paid traffic into organic momentum.

    4. Leverage Prime & Subscription Models: Products eligible for Prime enjoy a higher click-through rate. If the margin allows, consider bundling or small subscription programs to lock in recurring revenue rather than one-off purchases.

    5. Diversify Fulfillment Options: FBA is convenient, but a 3PL (third-party logistics company) hybrid or FBM can be more cost-effective once you hit a certain volume. Free two-day shipping is table stakes; just make sure your margins survive the shipping fees.

    6. Plan for International Growth, But Don’t Rush: The data shows 69% of sellers stay confined to one marketplace. If you nail the U.S., expanding later to Canada or Mexico can be a logical next step. But don’t spread inventory too thin across 22+ marketplaces when your U.S. business still has growth levers to pull.

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    The Road Ahead

    As Amazon’s marketplace matures, the landscape will keep shifting—new fees might pop up, algorithm tweaks could rearrange SERP rankings, and global trade winds will bring fresh tariff puzzles. But right now, a rare alignment exists: fewer active sellers, steady or growing buyer traffic, and a rising slice of third-party volume. For brands with grit, this means more opportunity if you’re willing to do the heavy lifting.

    The parting advice? Amazon’s game has always been about endurance. Weather the headwinds, optimize your listings, master your costs, and don’t be afraid to lean into niche categories—and you might just ride this 30% traffic bump into the kind of scale that felt impossible a few years ago.

    Is it crowded? Sure. Is it still worth it? For those who can adapt, absolutely.

    Citations

    Written By:

    Manish Chowdhary

    Manish Chowdhary

    Manish Chowdhary is the founder and CEO of Cahoot, the most comprehensive post-purchase suite for ecommerce brands. A serial entrepreneur and industry thought leader, Manish has decades of experience building technologies that simplify ecommerce logistics—from order fulfillment to returns. His insights help brands stay ahead of market shifts and operational challenges.

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    Best 3PL Companies: Why Hiring a Traditional 3PL for Fulfillment Is a Mistake

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    Rapidly evolving customer expectations, such as next‐day delivery, free shipping, and impeccable order accuracy, have put immense pressure on ecommerce businesses to optimize their supply chain and fulfillment operations. For years, the conventional wisdom held that outsourcing to one of the best 3PL companies (third-party logistics providers) was the gold standard for reliable delivery services. Yet today, many merchants are discovering that traditional 3PL companies carry hidden costs, limited flexibility, and operational inefficiencies that hinder business growth. In many cases, partnering with a 3PL company is seen as a way to support a business’s growth by streamlining logistics and enabling scalability, but these benefits are not always realized with traditional providers. In contrast, peer-to-peer fulfillment networks, like Cahoot, leverage existing ecommerce expertise, distributed inventory management, and advanced logistics technology to deliver seamless, technology-driven fulfillment services. This article explains why partnering with a traditional 3PL for logistics operations can be a mistake and offers actionable advice on how to evaluate alternatives, with a focus on Cahoot’s assetless, peer-to-peer model.

    The Traditional Third-Party Logistics (3PL) Model: How It Works & Why It Falls Short

    Third-party logistics companies (3PL) have historically provided comprehensive supply chain solutions: warehouse storage, pick-pack-ship, freight forwarding, reverse logistics, and value-added services such as kitting or custom packaging solutions. These services are part of the broader supply chain management functions that 3PLs handle for their clients, including activities like warehousing, transportation, inventory management, and order fulfillment. 3PLs also offer logistics management as a core service, encompassing warehousing, transportation, and inventory control to streamline and optimize supply chain operations. They often own or lease large fulfillment centers, invest heavily in robust logistics infrastructure, and tout their extensive global network. The logistics capabilities of 3PLs support ecommerce business operations by enabling companies to scale, improve efficiency, and meet customer demands effectively. While these supply chain management services sound appealing in theory, promising operational efficiency and cost savings through economies of scale, in practice, many merchants discover that traditional 3PLs introduce new challenges.

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    Centralized Warehousing & Fixed Asset Overhead

    Traditional 3PL providers typically own or lease multiple fulfillment centers across regions, relying on a robust network of facilities to support their operations. Their extensive network enables broad geographic reach and scale, investing in forklifts, racking, and extensive staffing for supply chain operations. This means they carry significant fixed asset costs, warehouse rent, utilities, labor, and equipment depreciation that must be recouped through minimum-volume contracts and storage fees. During slow seasons, those costs remain constant, leading 3PL companies to impose strict minimum-monthly invoices or chargeback penalties when order volumes dip.

    Actionable Takeaway: Request a fully itemized quote from your 3PL, asking specifically about storage minimums, seasonal surcharges, and long-term lease obligations. If their base overhead drives your logistics costs up regardless of your sales volume, consider alternative models with usage-based pricing.

    Standard Operating Culture vs. Seller-Mindset

    Employees at a legacy fulfillment center often fulfill orders for dozens or hundreds of different ecommerce businesses. While service-level agreements (SLAs) and performance metrics exist, many 3PL staff “punch a clock” under broad policies rather than taking ownership over specific brands. This lack of ownership can negatively impact the delivery of quality service, leading to less attention to detail and lower customer satisfaction. As a result, packaging may be generic, void fill may be minimal, and handling may prioritize speed over customer satisfaction. In contrast, partner sellers in a peer-to-peer network like Cahoot are ecommerce experts who ship their own orders all day, every day. They treat Cahoot orders with the same care they give their own, using right-size packaging, quality dunnage, and ensuring precise pick-pack accuracy to enhance customer satisfaction and maintain brand reputation.

    Actionable Takeaway: Ask your current 3PL to provide photos or video walkthroughs of their order fulfillment workflow, including how they pick, pack, and palletize your merchandise. Compare that to Cahoot’s model, where partner sellers share their own fulfillment processes and quality control protocols. If your 3PL’s service quality feels generic, it’s time to reevaluate.

    Contractual Rigidity & Onboarding Timelines

    Signing a multi-year contract with one of the best 3PL companies can lock merchants into rigid rate cards, annual volume commitments, and early-termination penalties. These rigid contracts often prevent businesses from accessing scalable solutions that can adapt to changing demand, such as seasonal spikes or rapid growth, and may also limit the availability of tailored solutions for businesses with unique or evolving logistics needs. Moreover, onboarding a new account at a 3PL often takes 4–8 weeks: mapping SKUs into the warehouse management system (WMS), negotiating carrier contracts, and configuring inventory management integrations with your ecommerce platform. Slow ramp-up times delay your time-to-market, making it nearly impossible to pivot quickly for seasonal promotions or unexpected demand spikes.

    Actionable Takeaway: Compare your current 3PL’s onboarding timeline to Cahoot’s plug-and-play setup. Cahoot can typically be ready to fulfill orders within a few days without long-term commitments. If your business requires faster time-to-market, a flexible network model will better support supply chain optimization.

    Cahoot’s Peer-to-Peer Fulfillment Network: Key Differentiators

    Cahoot’s peer-to-peer model transforms traditional logistics by partnering with established ecommerce sellers, businesses that are already shipping their own orders to end customers every day. This cooperative design creates a distributed network of fulfillment centers without the burden of fixed assets, delivering tailored logistics solutions and tailored services that address the specific needs of different businesses. Cahoot’s advanced technology enables optimized logistics processes, enhancing operational efficiency and delivery accuracy while reducing logistics costs and supporting scalable growth.

    Assetless, Cooperative Design vs. Legacy Overhead

    Unlike traditional 3PL providers that own or lease expensive real estate, Cahoot operates an assetless model: it leverages partner sellers’ excess storage space and fulfillment capacity. These partner sellers maintain their own robust logistics infrastructure for their own brands, temperature-controlled rooms for supplements, secure areas for electronics, and specialized racks for apparel. By tapping into this existing network, Cahoot eliminates the need for merchants to pay for underutilized warehouse space or fixed labor costs. This approach delivers efficient logistics solutions by reducing overhead and maximizing resource utilization. Pricing becomes purely usage-based, reflecting only the actual pick-pack-ship labor and shipping costs without hidden overhead.

    Actionable Takeaway: Run a direct cost comparison: request a quote from your 3PL that includes all overhead fees, minimum storage fees, cross-dock charges, and dedicated labor costs. Then request Cahoot’s usage-based rates, which show exactly what you’ll pay per order. Clients routinely confirm that the predicted ROI is indeed achieved. You’ll likely discover 20%–30% cost savings of your own.

    Expertise & Quality Mindset of Partner Sellers

    Cahoot’s partner sellers are ecommerce experts who ship thousands of orders per week for their own businesses. They care deeply about customer experience and loyalty, continuously optimizing their logistics operations to maximize customer satisfaction and reduce returns. In addition to their expertise, partner sellers can provide specialized services tailored to specific product types or unique business requirements, ensuring custom fulfillment and supply chain solutions. When these same sellers fulfill Cahoot orders, they apply identical rigor: right-size packaging, high-quality void-fill, and precise SKU handling. This level of specialized expertise, combined with Cahoot’s Fulfillment Verification technology, makes it nearly impossible to ship the wrong item to the wrong customer, thus allowing them to claim a 100% fulfillment accuracy rate. The resulting high quality helps merchants qualify for the most rigorous programs, such as Amazon Seller-Fulfilled Prime (SFP), which demands near-perfect fulfillment accuracy and rapid transit times.

    Actionable Takeaway: Identify two high-volume SKUs you currently ship via a third-party. Ask the 3PL how they pack and ship those exact SKUs, review box dimensions and dimensional weight, dunnage materials, and packing checklists. Compare that to the size and weight of your SKUs and confirm that you’re not overpaying for shipping using a too-large box vs. using a right-sized box.

    Distributed Network for Supply Chain Optimization, Speed & Reliability

    Traditional 3PL fulfillment centers typically rely on regional warehouses. If your end customer falls outside the core distribution zone, standard ground shipping can take 3–5 days. In contrast, Cahoot’s distributed network places inventory at partner nodes strategically located near population centers. This enables next-day or two-day delivery to over 95% of U.S. zip codes, even for merchants based in only a few regions. By leveraging this distributed network, Cahoot provides seamless logistics solutions that ensure fast and reliable delivery. Additionally, Cahoot ships six days a week, unlike many 3PLs that only operate Monday through Friday, and offers a later same-day fulfillment cutoff. This flexibility reduces weekend order backlogs, enhances customer experience, and ensures that ecommerce businesses can meet high customer expectations for fast, reliable delivery.

    Actionable Takeaway: Map your top 10 zip codes by sales volume and calculate current transit times from your 3PL’s central warehouse(s). Then ask Cahoot to provide average transit times from its nearest location to those same zip codes. If Cahoot offers a two-day improvement on average, you’ll boost customer satisfaction and reduce cart abandonment related to slow shipping.

    Plug-and-Play Technology & Real-Time Visibility

    Leading 3PL companies offer logistics software that integrates with ecommerce platforms, but many suffer from delayed data (24–48 hour lags) or clunky user interfaces. Cahoot’s technology-driven fulfillment services are built for real-time integration: native connectors for Shopify, WooCommerce, Amazon Seller Central, BigCommerce, and more. As soon as an order is placed, the Cahoot dashboard updates inventory levels, routes the order to the optimal node, and displays carrier tracking in real time. This real-time integration enables businesses to address their unique logistics needs more effectively, ensuring that specific requirements and complexities are managed with greater precision. Built-in analytics and supply chain consulting tools help merchants proactively identify stockouts, detect inventory shrinkage, and optimize reorder points, all within a single, intuitive interface.

    Actionable Takeaway: Request demo access to both your current 3PL’s portal and Cahoot’s dashboard. Place a sample order and track how quickly each platform updates order status, inventory levels, and shipping confirmations. If Cahoot’s live updates reduce latency and improve decision-making, you’ll gain a competitive advantage.

    Side-by-Side Comparison: Traditional 3PL vs. Cahoot

    A direct comparison between industry-leading 3PL providers and Cahoot’s peer-to-peer network makes it clear why many merchants choose to switch. While traditional 3PLs offer standard order fulfillment services, Cahoot provides a more innovative and distributed approach, allowing for greater flexibility and efficiency in handling diverse ecommerce needs.

    When it comes to shipping and delivery, flexible transportation solutions are crucial for meeting customer expectations and ensuring timely, reliable order fulfillment.

    Cost Structure & Overhead

    • Traditional 3PL Companies:
      • Monthly storage fees based on reserved cubic footage or pallet positions; surcharges during peak seasons.
      • High minimum monthly invoice requirements.
      • Fixed labor costs for pick, pack, and ship; potential overtime fees during surges.
      • Additional value-added services (kitting, returns processing, custom packaging) are often billed at premium rates.
      • Fulfillment costs can be significant, as traditional 3PLs may charge extra for tailored ecommerce logistics and fulfillment solutions.
    • Cahoot’s Peer-to-Peer Network:
      • No fixed storage minimums, uses partner sellers’ excess capacity, so monthly invoicing matches actual usage.
      • Every order is rate-shopped across all carriers and services supported from every location that has inventory in stock and is assigned to ship for the lowest cost identified, eliminating dimensional-weight surprises.
      • Value-added services are billed strictly as time and materials, at transparent, market-competitive rates, reflecting actual usage.
      • Fulfillment is optimized for ecommerce businesses, reducing costs by streamlining warehousing, distribution, and fulfillment through a flexible (“elastic”) network.

    Actionable Takeaway: Build a simple spreadsheet comparing the cost per order (storage + pick/pack + shipping) for both models over a 30-day period. Include any one-time onboarding fees and account management. If Cahoot’s total landed cost per order is at least 15% lower, you stand to save tens of thousands of dollars annually. Note: Cahoot will do the calculations for you.

    Fulfillment Speed & Geographic Reach

    • Traditional 3PL Providers:
      • Centralized fulfillment often results in 3–5 day ground shipping to certain regions, especially if orders ship from a single warehouse.
      • Limited weekend operations; orders placed on Fridays may not ship until Monday, delaying delivery and impacting customer satisfaction.
      • Peak-season capacity constraints can force overflow to slower carriers or result in shipping delays.
    • Cahoot’s Distributed Network:
      • Inventory is placed at multiple fulfillment centers (partner nodes) close to end customers, enabling next-day or two-day delivery to 95% of U.S. zip codes.
      • Six-day shipping and later same-day shipping cutoff times ensure weekend orders are processed promptly, delivering to your customers faster.
      • During peak seasons and when weather negatively impacts the ability for a carrier to move packages through their shipping network, Cahoot dynamically routes orders to partner sellers with available capacity, mitigating bottlenecks and ensuring high on-time delivery rates.

    Actionable Takeaway: Identify your top five high-volume zip codes by sales. Compare average transit days from your 3PL’s warehouse(s) to those zip codes versus Cahoot’s nearest nodes. If Cahoot promises a two-day improvement, you’ll decrease order-related support tickets and boost repeat purchase rates.

    Scalability & Flexibility

    • Traditional 3PL Companies:
      • Staffing levels are fixed; adding labor during surges often comes at a high premium.
      • Forecasting must be done months in advance; inaccurate forecasts lead to overstock fees or stockouts.
    • Cahoot’s Peer-to-Peer Model:
      • Scales dynamically with demand, and partner sellers adjust capacity in real time.
      • Flexible inventory allocation: Merchants can move stock between partner nodes quickly and easily, reducing excess inventory and stockouts in key regions.

    Actionable Takeaway: Analyze your last two Black Friday/Cyber Monday seasons. Document the percentage of orders your 3PL delayed or rerouted due to capacity limits. Then request Cahoot’s peak-season performance metrics for similar volumes. If Cahoot processed 100% of orders on time compared to your 3PL’s 90%, the flexibility is clear.

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    Quality Control & Accuracy

    • Traditional 3PL Providers:
      • Large warehouses lacking the robust technology to handle tens of thousands of SKUs can yield mis-pick rates exceeding 1%.
      • Generic packaging solutions may not meet brand standards, resulting in higher damage rates and customer returns.
      • Reverse logistics and returns processing may be siloed, leading to delayed refund issuance and negative customer experiences.
    • Cahoot’s Partner-Seller Expertise:
      • They apply the same high standards, checklists, barcode scanning, and dual verification to Cahoot orders as they do their own, delivering efficient fulfillment services with high accuracy and low error rates. Plus, partner sellers can ONLY ship Cahoot orders using the Cahoot technology. There’s no option otherwise. The technology literally prevents fulfillment defects.
      • Specialized partner sellers offer custom solutions such as cold storage, cold pack shipping, food grade storage, FDA registration, FBA Forwarding, oversized SKUs, hazmat, fragile…you name it.
      • Integrated reverse logistics network streamlines returns, orders are inspected locally, restocked quickly, and refunds are issued promptly, enhancing customer satisfaction. Plus, Cahoot’s Peer-to-Peer Returns solution virtually eliminates returns altogether.

    Actionable Takeaway: Request fulfillment accuracy reports (mis-pick and damage rates) from your current 3PL for the past six months. Then ask Cahoot for average accuracy metrics across partner nodes. If Cahoot outperforms by at least 0.5%, you’ll see fewer costly re-shipments and better customer reviews.

    Product Categories Most Vulnerable to Traditional 3PL Limitations

    While every business has unique supply chain requirements, certain product categories tend to suffer disproportionately under the traditional 3PL model. Limitations in traditional 3PLs can disrupt supply chains, leading to inefficiencies and reduced visibility for these products. Cahoot’s peer-to-peer network, with its specialized expertise and distributed infrastructure, addresses these vulnerabilities directly.

    Perishable Goods (Food, Supplements)

    • Challenges with Traditional 3PL:
      • Centralized fulfillment centers may be geographically distant from end customers, increasing transit times and risking spoilage.
      • Limited temperature-controlled capacity, 3PL inventory is stored in shared cold rooms, potentially compromising compliance with food safety regulations.
      • Ineffective transportation management can further jeopardize the timely and safe delivery of perishable goods, increasing the risk of spoilage.
      • Returns or damaged goods due to spoilage create logistical headaches and erode profit margins.
    • Cahoot’s Peer-to-Peer Advantage:
      • Local partner sellers often maintain temperature-controlled facilities near high-demand markets, ensuring same-day or next-day delivery that preserves freshness.
      • Specialized sellers follow strict inventory management processes, FIFO (first in, first out), batch tracking, and FDA-compliant storage protocols.
      • Reverse logistics for perishable returns are handled promptly, minimizing disposal costs.

    Actionable Takeaway: Select two SKUs of perishable goods; compare spoilage or damage rates between your 3PL and Cahoot’s local nodes over a 30-day testing period. The difference in product integrity will be stark.

    “Cahoot has amazing technology in addition to their large warehouse network, sort of like Amazon FBA but without the hefty fees or restrictions. Cahoot saved our peak-selling ecommerce season!”

    ~ Joel Frankel, Fames Chocolates

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    Bulky/Oversized Items (Furniture, Fitness Equipment, Home Décor)

    • Challenges with Traditional 3PL:
      • Central warehouses often rely on national LTL (less-than-truckload) carriers, incurring high dimensional-weight fees and extended transit times.
      • Packaging materials may not be optimized for oversized items, leading to damage or higher freight forwarding surcharges.
      • Lack of specialized handling can result in higher return rates and frustrated customers.
    • Cahoot’s Peer-to-Peer Advantage:
      • Partner sellers network with regional LTL or white-glove specialists, reducing freight costs and offering more reliable and faster delivery for bulky items.
      • Custom packaging solutions, reinforced boxes, corner protectors, and void fill ensure safe transport.
      • Flexibility to route orders to the nearest node with capacity, minimizing transit distance and shipping costs.

    Actionable Takeaway: Calculate your average dimensional-weight fee for bulky SKUs under your 3PL model. Then request Cahoot’s negotiated regional LTL rates for those same items. If Cahoot reduces freight costs by 20% or more, you’ll see immediate improvement in operational efficiency.

    Seasonal Apparel & Flash-Sale Merchandise

    • Challenges with Traditional 3PL:
      • Requires forecasting inventory levels 3–6 months in advance; inevitable inaccuracies lead to overstock charges or costly stockouts.
      • Peak-season storage fees skyrocket, and underutilized space during off-season remains a sunk cost.
      • Limited ability to quickly redistribute merchandise across multiple fulfillment centers.
    • Cahoot’s Peer-to-Peer Advantage:
      • No storage minimums; merchants pay only for what they store and ship, eliminating off-season overhead.
      • Ability to quickly shift inventory between partner nodes based on real-time demand analytics.
      • Network flexibility ensures that flash-sale items are placed close to buyers as soon as sales data emerges, reducing lead times and lowering return rates.

    Actionable Takeaway: Analyze your previous two seasonal peaks, quantify days of stockouts and overstock costs under a 3PL model. Then compare to Cahoot’s pilot performance over the same period. If Cahoot reduced stockouts by 30% and eliminated off-season fees, seasonality becomes a strategic advantage.

    High-Value Electronics & Luxury Goods

    • Challenges with Traditional 3PL:
      • Longer transit times increase the risk of theft or damage; generic packaging may not meet premium-brand quality standards.
      • Many 3PLs treat high-value SKUs the same as everyday commodity items, leading to higher insurance claims.
      • Standard returns processing can be slow, frustrating customers when expensive items need repair or replacement.
    • Cahoot’s Peer-to-Peer Advantage:
      • Specialized partner sellers can offer dedicated white-glove service and custom secure shipping, ensuring better tracking and handling for luxury items.
      • Custom packaging solutions, anti-static bags for electronics, and reinforced packaging for fragile components reflect a brand’s commitment to quality.
      • Integrated reverse logistics allow expedited returns, enhancing customer loyalty and reducing potential chargebacks or disputes.

    Actionable Takeaway: Track your shrinkage or damage claim rates for high-value SKUs over six months with a traditional 3PL. Then run a small pilot with Cahoot for those same items. If Cahoot’s damage rates decrease significantly, perhaps by over 50%, you’ll safeguard both profit margins and customer satisfaction.

    Risk Analysis & Mitigation for Each Model

    Every fulfillment decision carries risks. By understanding and quantifying those risks, merchants can make informed choices aligned with supply chain performance goals.

    Hidden Fees & Contract Penalties (Traditional 3PL)

    • Risks:
      • Automatic rate escalators tied to fuel surcharges or annual inflation adjustments.
      • Excessive storage charges when inventory dips below or exceeds contract expectations.
      • Early termination penalties that can amount to thousands of dollars if you switch providers mid-contract.
    • Cahoot’s Mitigation:
      • Transparent, usage-based invoicing with no hidden surcharges; each line item (pick/pack, packaging, shipping) is clearly detailed.
      • No long-term commitments.
      • Dynamic pricing that reflects current market rates for shipping carriers, reducing the risk of unexpected cost spikes.

    Actionable Takeaway: Ask your 3PL rep to provide a full 12-month cost breakdown, including all surcharges, storage minimums, and penalty clauses. Then request Cahoot’s itemized quote. If Cahoot’s transparency reduces your logistics costs by 15% or more, the assetless model is clearly superior.

    Inventory Management: Shrinkage & Mis-Picks

    • Risks (Traditional 3PL):
      • Large fulfillment centers handling thousands of SKUs often exhibit mis-pick rates above 1%, leading to returns (lost sales) and re-shipments (lost inventory and lower overall margins).
      • Generic security protocols may not deter employee collusion or theft.
      • Limited fraud detection software within legacy warehouse management systems (WMS).
    • Cahoot’s Mitigation:
      • Partner sellers use barcode scanning, dual verification, and built-in fraud detection software to maintain mis-pick rates near 0%.
      • Inventory is treated as if it’s their own; partner sellers have a vested interest in reducing shrink, since they rely on the same processes to ship their own products.
      • A distributed network reduces the impact of a single node’s shrinkage; issues are localized and resolved quickly.

    Actionable Takeaway: Review your 3PL’s last inventory shrinkage report. Then request Cahoot’s average shrinkage metrics. If Cahoot’s partner network consistently demonstrates lower shrink and mis-pick rates, you’ll reduce costly re-shipments and improve customer trust.

    Peak-Season Capacity Constraints

    • Risks (Traditional 3PL):
      • Limited storage and labor capacity during Black Friday/Cyber Monday and other major sale events often leads to delayed orders, oversell situations, or surcharges.
      • Forecasting must be done months in advance; inaccurate projections result in expensive last-minute labor or off-site warehousing.
      • Manual rerouting may be required when capacity thresholds are breached.
    • Cahoot’s Mitigation:
      • Dynamic, distributed network with partner sellers that can onboard additional capacity within days, no long-term forecasting required.
      • Automated order routing ensures that orders flow to nodes with available capacity, avoiding bottlenecks.
      • Real-time analytics highlight potential constraints hours before they occur, allowing preemptive adjustments.

    Actionable Takeaway: Compile data on how many orders your 3PL delayed or rerouted during your last two peak seasons. Compare that to Cahoot’s performance metrics for similar volumes. If Cahoot processes over 99% of orders on time versus your 3PL’s 90%, the distributed model mitigates peak risks effectively.

    Lack of Customer-Centric Focus

    • Risks (Traditional 3PL):
      • Employees may lack brand-level context, leading to packing errors or suboptimal customer experiences.
      • Generic customer service tools and slow resolution of order issues can harm brand reputation.
      • Limited ability to create tailored logistics solutions, returns, custom packaging, or premium unboxing experiences.
    • Cahoot’s Mitigation:
      • Partner sellers have skin in the game; they ship their own products, so they protect brand reputation, customer loyalty, and lifetime value.
      • Cahoot’s integrated customer service tools enable real-time chat and immediate escalation for order issues, reducing resolution time.
      • Custom packaging solutions, print-on-demand boxes, branded inserts, or kitting are offered by specialized sellers with experience enhancing the unboxing experience.

    Actionable Takeaway: Learn about how Cahoot partner sellers prioritize order quality and customer satisfaction. Compare that cultural mindset to feedback from your existing 3PL’s account manager. If Cahoot’s partner sellers demonstrate deeper brand alignment, you’ll foster stronger customer loyalty.

    How Sellers Should Evaluate Fulfillment Options

    Choosing the right fulfillment partner requires objective metrics, targeted questions, and a thorough pilot test. For ecommerce businesses, it is crucial to select a partner that understands the unique challenges and requirements of online sellers, offering solutions that support growth and operational efficiency. When evaluating providers, be sure to consider their expertise in ecommerce fulfillment, ensuring they can deliver tailored logistics and warehousing solutions that meet your business needs. Below is a step-by-step guide.

    Define Core Metrics Up Front

    1. Total Landed Cost Per Order (pick/pack + packaging + shipping + storage)

    2. On-Time Delivery Rate (aim for ≥ 99% two-day or next-day success)

    3. Order Accuracy (target ≥ 99.7% pick/pack accuracy)

    4. Customer Satisfaction (returns rate, net promoter score post-delivery)

    5. Supply Chain Performance (inventory turnover, shrinkage, stockout events)

    Actionable Takeaway: Create a weighted scorecard with these metrics (e.g., cost 40%, speed 30%, accuracy 20%, satisfaction 10%) to compare providers objectively.

    Ask the Right Questions in Your RFP

    • “What is your average onboarding time for a midsize merchant (5,000 orders/month)?”
    • “Can you guarantee two-day delivery to our top 10 metros six days a week, and what are your cutoff restrictions?”
    • “How do you handle specialized logistics services, custom packaging, kitting, or temperature-controlled storage?”
    • “What is your mis-pick rate and inventory shrinkage percentage over the past 12 months?”
    • “Describe your technology integration: how often is my dashboard updated, and how do you handle returns or reverse logistics?”
    • “What are your fees for dimensional-weight shipments, peak-season surcharges, and storage minimums?”

    Actionable Takeaway: Compile these questions into an RFP spreadsheet. Assign each answer a score (1–5) to ensure apples-to-apples comparison between prospective 3PL providers and Cahoot.

    Run a Two-Week, 10-SKU Pilot

    1. Select 10 Representative SKUs: Choose a mix of high volume, high value, bulky, perishable, and seasonal products. This step is especially important for an ecommerce business aiming to optimize its logistics and ensure that fulfillment solutions can support growth and operational needs.

    2. Split Shipments: Ship half of those SKUs through your incumbent 3PL and half through Cahoot for 14 days.

    3. Measure Key Metrics:

    • Total cost per order (including any hidden fees)
    • Fulfillment speed (order cutoff to delivery)
    • Return handling efficiency (time to refund, restocking accuracy)
    • Customer feedback (surveys or NPS scores post-delivery)
    • Carrier claim incidents (damages, lost packages, mis-picks)

    4. Analyze Results Side-by-Side: Document pilot results in a side-by-side table.

    5. Make an Informed Decision: If Cahoot saves ≥ 20% on total cost per order or improves on-time delivery by ≥ 2 days, plan to transition fully within 60 days.

    Actionable Takeaway: Schedule your pilot as soon as possible, ideally spanning a weekend, to test Cahoot’s six-day shipping and late cutoff capabilities. Use actual order data to ensure an accurate comparison.

    Conclusion & Next Steps

    Outsourcing logistics to one of the best 3PL companies once seemed like an easy path to supply chain optimization. Yet traditional 3PLs, with fixed asset overhead, rigid contracts, and a cookie-cutter approach to fulfillment, often burden merchants with hidden fees, slower speeds, and lower service quality. Cahoot’s peer-to-peer fulfillment network, on the other hand, leverages partner sellers’ existing logistics infrastructure, advanced technology integration, and specialized expertise to deliver scalable, tailored logistics solutions that enhance customer satisfaction, reduce logistics costs, and drive business growth.

    Immediate Actions for Merchants

    1. Build Your RFP Scorecard: Include metrics for cost, speed, accuracy, and customer satisfaction, and use it to evaluate your current 3PL and Cahoot side-by-side.

    2. Schedule a Two-Week Pilot: Select 10 representative SKUs and ship through both providers to gather real data on costs and performance.

    3. Negotiate Exit Clauses: If you’re under contract with a 3PL, review your termination penalties and create a transition plan to minimize fees.

    Long-Term Fulfillment Strategy

    • Annual Review of Fulfillment Partners: Market dynamics, shipping costs, customer expectations, and technology evolve rapidly. Revisit your fulfillment strategy every 12 months to ensure you remain agile.
    • Invest in Technology-Driven Fulfillment Services: Embrace platforms that offer real-time inventory management, automated supply chain optimization, and integrated customer service tools.
    • Leverage a Robust Logistics Network: Whether you choose a peer-to-peer model like Cahoot or another 3PL provider, prioritize a distributed, scalable network with specialized expertise in your product category.

    By proactively evaluating fulfillment options, considering both traditional 3PL companies and innovative networks like Cahoot, merchants can optimize logistics processes, enhance supply chain performance, and ultimately deliver the best possible customer experience.

    Frequently Asked Questions

    What are the main differences between traditional 3PL companies and Cahoot’s peer-to-peer fulfillment network?

    Traditional 3PLs operate large, centralized fulfillment centers they own or lease, carrying significant fixed-asset overhead and often requiring long-term contracts with minimum-volume commitments. Staffing in these warehouses typically fulfills dozens of brands, which can lead to generic packaging, higher mis-pick rates, and slower response times. In contrast, Cahoot partners with established ecommerce sellers who ship their own orders daily. Because these partner sellers treat Cahoot orders like their own, using right-size packaging, quality dunnage, and rigorous inventory management, order accuracy is higher, and customer satisfaction improves. Cahoot’s assetless, distributed model leverages excess capacity across multiple fulfillment centers, resulting in usage-based pricing without hidden storage fees, six-day shipping with a later cutoff, and real-time, technology-driven visibility.

    How do logistics costs compare between a traditional 3PL and Cahoot’s model?

    With traditional 3PLs, merchants often face minimum monthly storage fees, peak-season surcharges, and dimensional-weight penalties, even when order volumes dip. They also pay a markup on labor for pick/pack services. Cahoot’s peer-to-peer network eliminates fixed storage minimums by using partner sellers’ excess space, so you pay only for what you store and ship. Cahoot’s blended per-order rates include negotiated carrier discounts, reducing transportation costs. In practice, many merchants see 15%–30% lower total landed cost per order with Cahoot because there are no hidden surcharges, and pick/pack labor comes from existing ecommerce experts rather than centralized warehouses with fixed overhead.

    Which product categories benefit most from switching away from a traditional 3PL?

    Certain categories suffer most under a centralized model:

    • Perishable Goods (Food, Supplements): Traditional 3PL warehouses can be far from end customers, increasing transit times and spoilage risk. Cahoot’s local nodes often include partner sellers with temperature-controlled facilities near key markets, ensuring same- or next-day delivery and reducing waste.
    • Bulky/Oversized Items (Furniture, Fitness Equipment): Centralized LTL freight lanes incur high dimensional-weight fees and longer transit. Cahoot dynamically matches orders to regional LTL or white-glove carriers, lowering freight costs and improving reliability.
    • Seasonal Apparel & Flash-Sale Merchandise: Traditional 3PLs require months of forecasting and charge steep peak-season storage fees. Cahoot can adapt to real-time changes swiftly and redistribute inventory between nodes, avoiding both overstock and stockout situations.
    • High-Value Electronics & Luxury Goods: Central fulfillment delays increase theft/damage risk; generic packaging may not meet premium standards. Cahoot’s specialized partner sellers provide custom packaging and secure carrier options, leading to lower damage rates and higher customer satisfaction.

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    How should I evaluate fulfillment options to decide between a traditional 3PL and Cahoot?

    Start by defining core metrics such as total landed cost per order (storage + pick/pack + shipping), on-time delivery rate, order accuracy, and customer satisfaction (returns rate or NPS). Build an RFP scorecard where you score each provider on these weighted metrics. Ask targeted questions: onboarding timeline for a midsize merchant, two-day delivery capabilities six days a week, mis-pick and shrinkage rates, technology integration, and real-time reporting, and fees for dimensional-weight or peak-season surcharges. Finally, run a two-week, 10-SKU pilot, splitting those SKUs between your incumbent 3PL and Cahoot, to compare actual costs, delivery speed, return handling, and customer feedback. If Cahoot outperforms on cost or speed, it’s likely the better choice.

    What technology and customer-centric features set Cahoot apart from traditional 3PL logistics services?

    Many legacy 3PLs offer a portal for inventory management and order tracking, but data often lags 24–48 hours, and interfaces can be clunky. Cahoot’s technology-driven fulfillment services integrate natively with major ecommerce platforms, Shopify, Amazon Seller Central, BigCommerce, and more, providing real-time updates on inventory levels, order routing, and carrier tracking. Cahoot’s dashboard also includes built-in reverse logistics workflows to streamline returns. Because partner sellers are also merchants, they apply a customer-first mindset: they use premium packaging, rigorous quality control, and responsive customer service tools, ensuring every order meets high expectations and enhances brand loyalty.

    Written By:

    Manish Chowdhary

    Manish Chowdhary

    Manish Chowdhary is the founder and CEO of Cahoot, the most comprehensive post-purchase suite for ecommerce brands. A serial entrepreneur and industry thought leader, Manish has decades of experience building technologies that simplify ecommerce logistics—from order fulfillment to returns. His insights help brands stay ahead of market shifts and operational challenges.

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    How To Choose The Best Faire 3PL For Your Orders

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    Faire.com is a global B2B wholesale marketplace that connects independent brands (makers/artisans) with retail store buyers. In Faire’s model, Sellers list products at wholesale prices and fulfill orders themselves from their own warehouse or a 3PL. Orders are usually placed in bulk by retailers (often 1–100 units or more) and shipped via standard freight or parcel carriers to store locations. Faire fulfillment is a specialized service tailored to the needs of brands and retailers on Faire, supporting efficient and reliable wholesale operations.

    Faire handles order discovery, promotions, and payments, and provides buyers 60-day net terms and (commonly) free first-order shipping. Sellers can join Faire by application; no invite is strictly required, and they maintain full control of inventory.

    To fulfill orders efficiently, many Faire Sellers partner with third-party logistics (3PL) fulfillment providers; these companies specialize in various aspects of order fulfillment, including warehousing, shipping, and inventory management. These 3PL companies integrate with Faire’s API to automatically sync orders, inventory levels, and tracking. As such, the Faire integration streamlines the fulfillment process and ensures accurate order syncing between the Seller’s Faire account and the logistics provider.

    Why Selling on Faire Is Great for Ecommerce Merchants

    Faire offers a unique platform connecting independent brands with retailers, providing an avenue for ecommerce businesses to expand their wholesale operations. The platform’s user-friendly interface and extensive retailer network make it an attractive option for merchants seeking to grow their customer base. Faire enables ecommerce businesses to efficiently meet increased demand, especially during seasonal peaks or periods of rapid growth. Its features are designed to enhance operational efficiency and deliver a seamless customer experience, helping merchants build loyalty and satisfaction.

    Faire Case Studies (Brand Success Stories)

    Faire’s own “Stories” highlight numerous brands that grew via the marketplace. Jordan’s Skinny Mixes (specialty beverage brand) launched on Faire in 2020 and saw rapid growth: its first year on Faire brought in over $250,000 in wholesale orders, and by late 2023 it had crossed $10 million in lifetime order volume on the platform. Similarly, Audrey’s Home Decor joined Faire in March 2023 and outpaced expectations: nine months in, their sales on Faire were already 10× their original first-year target. Audrey’s reported that Faire accounted for over 50% of its new customers that year, and enabled them to ship to six different countries (compared to only serving local regions before). These cases illustrate Faire’s ability to connect Sellers with a vast pool of retailers (Faire cites over 50,000 cities globally on its platform) and accelerate brand growth.

    Faire Seller Onboarding (Step-by-Step)

    1. Create Faire Account: Go to Faire.com and select “Sell on Faire”. Complete the application with your business details. There is no selection committee beyond standard vetting.

    2. Submit Product Catalog: Once approved, upload your product catalog. Sellers often fill out a template spreadsheet or use Faire’s web tools to add each SKU (title, wholesale price, retail price, description, category, etc.).

    3. Set Terms: In your shop settings, specify minimum order quantities, shipping fees (if any), and country availability. By default, Faire buyers get free first-order shipping; you can opt into Faire’s “Insider” program to subsidize all orders.

    4. Inventory & Banking: Connect your bank account for payouts. Enter SKU inventory levels. Faire immediately lists your items on the platform.

    5. Begin Receiving Orders: Faire will notify you by email when a retailer places an order. According to reports, most new Sellers receive an order within about a week of going live.

    6. Process & Ship Orders: Log into Faire to see the order. You have options to accept the order (and choose a ship date), edit it to backorder some items, or cancel if needed. Usually, you will accept and ship. Package the order, upload tracking in Faire, and mark it shipped. Seller gets paid upon shipment (or can pay a fee to get paid immediately).

    Common Pitfalls & Pro Tips for Faire Sellers

    Despite its advantages, selling on Faire may present challenges such as managing bulk orders, ensuring timely fulfillment, and maintaining accurate inventory levels to meet retailer expectations and enhance customer satisfaction.

    • Underestimating Returns: Faire’s liberal return policy can surprise new Sellers. Retailers can return unsold goods within 60 days, and Faire absorbs this cost. Pitfall: Treating every sale as final. Tip: Anticipate ~10–20% returns, price or package products accordingly, and keep some buffer stock. (Faire will even redistribute returns through its “Maker Market”).
    • Shipping Cost Mismanagement: Retailers often expect free or very low shipping, due to Faire’s programs. Tip: If shipping costs are high, consider joining Faire Insider (monthly fee) so you subsidize free shipping, or negotiate lower carrier rates via a 3PL. Understanding shipping rates is crucial, as 3PLs can help negotiate better rates and offer cost savings through consolidated shipments and expert management. For heavy or fragile items, charge a reasonable shipping fee through Faire’s checkout instead of absorbing all costs.
    • Slow Turnaround: Late shipments can frustrate retailers. Pitfall: Taking longer than promised. Tip: Set realistic lead times (e.g., “Ships in 2 days”), and ship on time or early. Many Sellers find using a 3PL (which processes orders quickly) improves speed and accuracy.
    • Inventory Errors: Overselling due to inventory lag leads to cancellations. Tip: Integrate inventory in real time (Faire’s API or 3PL integration). Maintaining order accuracy is essential to avoid cancellations and ensure retailer satisfaction. If an order comes in that you can’t fully supply, use Faire’s “Edit” feature to backorder specific items or quantities instead of canceling the entire order. That way, you still capture part of the sale.
    • Poor Packaging: Because orders ship in bulk, insufficient packaging can cause damage. Pitfall: Reusing light consumer boxes. Tip: Use sturdy cartons or pallets for bulk orders. Shipping products in bulk to retailers has unique requirements, so ensure packaging meets wholesale standards. Include a clear packing list and your invoice in each carton. Branding or thank-you notes (allowed by Faire) can impress retailers.
    • Ignoring Faire Tools: Faire offers promotions (free shipping codes, newsletter features) and integration tools. Tip: Link your ecommerce site via “Open with Faire” to drive additional sales, and respond to Faire’s periodic buying events or discount opportunities to boost visibility.
    • Not Leveraging Data: Retailers value reviews and sales rank on Faire. Pitfall: Listing products and never optimizing. Tip: Refresh products seasonally, add new SKUs often, and encourage retailers to leave reviews (Faire automatically surveys buyers). Sellers may have unique requirements for analytics and reporting to optimize their operations. Engaging in Faire’s marketing (e.g., ads, “New Maker” features) can accelerate growth.

    Faire Program Growth & Updates

    Faire has grown into a very large ecosystem. Faire reports ~700,000 retail buyers and over 100,000 independent brands active on their platform, and the business is valued at nearly $13 billion. Major publishers like Simon & Schuster have noted selling to ~5,000 stores via Faire, demonstrating its scale. Faire itself has launched new initiatives (e.g., “Faire Insider” buyer program, educational content for retailers) to increase order volume. As order volume grows, managing fluctuations in demand requires robust supply chain management to ensure efficient fulfillment and delivery. The case studies above (e.g., Audrey’s international sales expansion) reflect Faire’s broad reach: the platform serves retailers in “more than 50,000 global cities”. To support global expansion and efficient fulfillment, Faire’s platform and its partners must meet specific requirements, such as adequate warehouse space and experience with various product types. In sum, Faire’s continual fundraising and technology rollouts (API integrations, fulfillment partners, global expansion) underscore that its 3PL-friendly marketplace is active and scaling rapidly, with a focus on supply chain optimization.

    What to Look for in a Faire 3PL

    Key considerations when choosing a 3PL for Faire orders include:

    • Advanced Inventory Management Systems: Ensure the 3PL offers real-time inventory tracking to prevent stockouts and overselling.
    • Seamless Order Fulfillment: The ability to process and ship orders efficiently is crucial for maintaining retailer relationships.
    • Transparent Pricing: Look for partners with clear pricing structures to avoid hidden fees that can impact your profit margins.
    • Qualities of an Ideal Partner: Select a partner with experience in Faire fulfillment, strong technology integration, and excellent customer service to meet your business needs.
    • Value-Added Services: Consider 3PLs that provide value-added services such as kitting, custom packaging, or other specialized solutions to enhance supply chain efficiency.
    • Greater Customer Satisfaction: Choosing the right 3PL can lead to greater customer satisfaction by improving order accuracy, reducing errors, and enhancing the overall customer experience.

    The Role of Logistics in Customer Satisfaction

    Effective logistics play a pivotal role in enhancing customer satisfaction by directly impacting the overall customer experience. Efficient handling of orders, timely deliveries, and responsive support contribute to a positive experience for retailers, encouraging repeat business and fostering long-term partnerships. Additionally, efficiency in logistics operations leads to improved outcomes for both retailers and brands, supporting business growth and higher levels of customer satisfaction.

    Benefits of Working with a 3PL

    Working with a 3PL offers several advantages:

    • Scalable Solutions: A capable 3PL works closely with its clients to address various aspects of logistics and fulfillment, adapting to your business’s growth and managing increased order volumes without compromising service quality. They also work closely with shipping carriers to ensure timely deliveries and reduce delays.
    • Operational Excellence: Expertise in fulfillment operations ensures accurate order processing and efficient shipping.
    • Focus on Core Competencies: Outsourcing logistics allows you to concentrate on product development and marketing strategies.

    Responsive, Reliable Customer Support

    A customer service agent cheerfully helping a client with telephone support.

    Order fulfillment is a complex operation, involving multiple, intricate steps in the process from click to delivery. Things don’t always go as planned, but what is crucial is ensuring that your 3PL has a responsive, reliable customer support team that you can rely on to fix problems fast, with minimal disruption to your business operations.

    Experience Working with Faire Sellers

    Most traditional 3PLs may not have personnel with the experience and expertise working with Faire to troubleshoot and fix problems fast, costing you precious time and sales. It is important to identify a Faire fulfillment partner with a reliable, responsive customer support team who will be ready to dive in and solve problems quickly, so that you’re always selling and keeping your customers happy.

    Here’s what one of our customers had to say about Cahoot’s Support team:

    “Cahoot is very responsive and organized in all aspects. Everything is prepared to give anyone the best experience ever. They’re the right partner to help you accomplish your business purpose.”

    ~ Italian Food Online Store

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    So now that we’ve taken a look at the important criteria that guide your choice of a 3PL to support your Faire orders, let’s look at the options that are actually available to you, and the pros and cons of each of them.

    Top Faire 3PL Companies

    Amazon Multi-Channel Fulfillment

    Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels, such as Faire, whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels.

    Ecommerce Sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels. MCF deploys the same infrastructure and resources that power Amazon’s in-house Fulfilled By Amazon (FBA) logistics network. Sellers seeking FBA alternatives may explore other fulfillment providers.

    Pros:
  • Huge nationwide network: Amazon operates over 1,000 logistics warehouses in the US.
  • Amazon Fulfillment Centers are well-equipped to handle small and lightweight SKUs. If the majority of your product catalog falls in that category, MCF may be worth exploring.
  • Cons:
  • Despite deploying the same logistics infrastructure powering FBA, the fees for MCF can be significantly higher (the reason is obvious: Amazon would like to ensure that its own marketplace takes top priority for merchants and Sellers).
  • MCF’s pricing is not well suited for heavier, larger-sized, seasonal, or slow-moving SKUs. If your product mix falls into these categories, MCF can become prohibitively expensive.
  • ShipBob

    ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping shipping software and a large set of pre-built integrations.

    Cons:
  • Reliance on third-party integrations for order import, or else manual import.
  • Inconsistent customer support can prove to be a major issue as Nordstrom penalizes Sellers for mistakes, not the 3PL.
  • Affordable for small and lightweight products but quickly gets pricey for others: ShipBob customers have complained in the past about inefficient packaging choices, for example, using a larger-sized box than may be necessary or sending a shipment in multiple boxes when a single one can be used.
  • Cahoot: The Best Faire 3PL

    Cahoot emerges as a leading 3PL provider for Faire merchants, supporting its clients with specialized Faire fulfillment services tailored to the unique requirements of the Faire marketplace. Their advanced technology integration, real-time inventory management, and commitment to operational excellence ensure seamless and efficient Faire order fulfillment. Cahoot’s Faire fulfillment services are designed for efficiency and accuracy, helping brands meet the unique needs of the Faire marketplace. By partnering with Cahoot, ecommerce businesses can enhance customer satisfaction, streamline their fulfillment processes, and focus on scaling their operations effectively.

    Summary

    Faire’s wholesale marketplace connects independent retailers with creative brands, offering huge growth opportunities for ecommerce businesses. But with that growth comes new demands for inventory management, order fulfillment, and consistent customer satisfaction. Integrating with Faire’s platform streamlines the supply chain and improves efficiency by enabling seamless order processing, inventory synchronization, and optimized fulfillment workflows tailored to Faire’s requirements. Choosing the right 3PL for Faire orders, one that ensures advanced inventory management systems, seamless order fulfillment, and transparent pricing, can make all the difference in meeting retailer expectations and driving repeat business. Cahoot’s Faire 3PL fulfillment services combine the best of technology and human expertise to help you stand out on Faire’s platform and grow sustainably.

    Table 1. Summary of the Faire Marketplace Requirements

    Requirement
    Faire Wholesale Marketplace Details
    Access/Application
    Applications are accepted on Faire.com for brands (makers, artisans, distributors). Faire reviews new Seller applications in the order received. Once approved, Sellers set up a Faire shop by uploading their catalog. There is no listing fee to join.
    Fees & Commission
    Commission: Faire’s standard commission is 15% on reorder sales (after the first order). For a buyer’s first order from a new shop, Faire charges a higher one-time commission (typically 25%). (These fees are automatically deducted from Seller payouts.)
    Payment Terms
    Faire funds sales on net-30 terms by default. Retailers typically have 60-day credit terms with Faire, but Sellers are paid as soon as they ship goods (payout initiated upon marking the order as shipped). Sellers may pay a small fee (≈3%) to expedite payment. Faire guarantees payment to the Seller even if the buyer defaults.
    Integration/API
    Optional but recommended: Many Sellers integrate their systems or 3PL with Faire’s API. Third-party 3PLs (e.g., Cahoot) offer seamless integration, automatically syncing orders, inventory, and tracking with Faire. Otherwise, Sellers can manually manage orders via Faire’s web interface. Faire also offers a Shopify integration app for online Sellers.
    Product Requirements
    Sellers must upload product listings with high-quality images and descriptions. Faire’s listing interface guides Sellers on categories and tagging. Inventory must be updated promptly. Faire has automated “Maker Tools,” but no strict image/size rules are publicly enforced beyond general ecommerce best practices.
    Shipping Expectations
    Sellers ship accepted orders within the promised lead time (often 1–3 business days to pick/pack). Retailers expect standard ground or LTL freight shipping (Faire covers free shipping to retailers for “Insider” members, otherwise, Sellers can charge a shipping fee via Faire’s checkout). Shipping carriers commonly include UPS, FedEx, USPS, etc. (the key is reliability). Sellers must upload tracking numbers in the Faire portal for each shipment. 3PL partners typically automate this via API.
    Packing & Labels
    Each wholesale shipment should include: a packing slip (detailing SKUs and quantities), Seller’s branding (optional), and any required documentation (e.g., invoices, MSDS if applicable). Faire buyers appreciate bulk packaging (e.g., shipping cases with inner-packed units). Sellers should ensure products are well-protected for freight transit.
    Returns/Customer Service
    Faire offers free returns for retailers up to 60 days after delivery (first return window for each order). Faire handles the return logistics on behalf of Sellers (returns are either credited or redistributed via Faire’s Maker Market). Sellers generally do not pay return shipping and do not take back inventory unless Faire explicitly notifies them. Customer service (order cancellations, questions) is conducted through Faire’s platform; Faire mediates disputes, crediting Sellers or buyers as needed.
    Fulfillment SLAs
    Faire’s official SLAs encourage fast turnaround (often shipping within 1–2 days for in-stock items). 3PLs serving Faire Sellers advertise “fast & accurate” processing to meet retailer expectations. Sellers must honor lead times set on their Faire profile, or order cancellations may occur.
    Seller Support/Tools
    Faire provides a dedicated brand dashboard (orders, sales analytics, messaging). Sellers can edit orders (e.g., backorder or cancel items) as needed through the portal. Faire also offers optional services like the “Open with Faire” widget (for DTC sales) and promotions via newsletters or ads, though participation is optional.

    If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Faire order fulfillment was meant to be.

    Cahoot maintains a nearly perfect 5-star rating across review sites such as Amazon, Shopify, G2, Google, Trustpilot, and SourceForge, among others.

    If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, check out our other articles:

    1. How to Choose the Best 3PL for Your Shopify Store

    2. How to Choose the Best 3PL for Your Macy’s Orders

    3. How to Choose the Best 3PL for Target Plus

    4. How to Choose the Best 3PL for Wayfair

    5. How to Choose the Best 3PL for Nordstrom

    Frequently Asked Questions

    Why is Faire a great opportunity for wholesale ecommerce?

    Faire’s massive retailer network and curated marketplace help brands quickly scale their wholesale business and reach new markets.

    What challenges do Sellers face when fulfilling Faire orders?

    Faire Sellers must manage bulk orders, maintain accurate inventory, and ensure timely shipping to keep independent retailers happy and coming back for more.

    What should I look for in a Faire 3PL?

    Prioritize advanced inventory management systems, seamless order processing, transparent pricing (no hidden fees!), and proven experience with wholesale fulfillment.

    Why is logistics so critical for Faire?

    Retailer trust and repeat business hinge on smooth, accurate fulfillment—if orders arrive late or incomplete, retailers won’t hesitate to find a new supplier.

    How does Cahoot support Faire businesses?

    Cahoot offers Faire-specific 3PL services that ensure operational excellence, real-time inventory tracking, and seamless integration with Faire’s platform, empowering brands to keep retailers delighted and orders flowing smoothly.

    Written By:

    Indy Pereira

    Indy Pereira

    Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

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    How To Choose The Best Chewy 3PL For Your Orders

    In this article

    16 minutes

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    Chewy is a leading online pet retailer that recently launched a curated marketplace allowing select third-party brands to sell via drop-shipping. Under this program, vendors list products on Chewy.com but fulfill orders from their own warehouse or a 3PL, shipping directly to consumers. 3PLs play a crucial role in managing order fulfillment as part of the overall supply chain for Chewy Sellers, handling everything from receiving goods to delivering finished products and managing returns. Chewy partners with a commerce platform (Rithum Commerce Suite) to manage these unowned-inventory sales. In mid-2023, Chewy reported working with over 3,500 brands (110,000+ products) through this model. Enrollment is typically invitation-only: Chewy category managers reach out to qualified vendors (often pet-product manufacturers) and guide them through the Vendor Partner Portal (VPP) onboarding. Once approved, Sellers integrate via EDI/API with Chewy’s system (commonly using Rithum’s DSCO platform), which is compatible with various ecommerce and ERP platforms, to synchronize inventory, orders, shipping, and invoicing.

    Why Selling on Chewy Is Great for Ecommerce Merchants

    Chewy has emerged as a leading pet supply retailer, offering a vast platform for merchants to reach dedicated pet owners. One key benefit for merchants is the ability to connect with customers who are ready to spend money on pet food, food, and other pet products, driving increased sales and revenue. With its user-friendly interface and loyal customer base, Chewy provides an excellent opportunity for businesses to increase sales and expand into new markets. Chewy’s platform is especially effective for brands selling pet food and related food products, as customers are eager to spend money on these essentials.

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    Chewy Case Studies (Brand Success Stories)

    Although still relatively new, Chewy’s marketplace has attracted prominent pet brands. For example, BARK, Inc. announced in August 2024 that it had launched its bestselling toy collections on Chewy, expanding its product lines available to over 20 million Chewy customers. This partnership is described as the first time Chewy carries BARK toys, indicating Chewy’s effort to broaden its assortment with popular brands. Other pet companies have begun testing Chewy’s platform; for instance, BARK’s entry underscores rapid adoption by leading pet vendors. These brands have scaled their operations to handle the increased order volume generated by Chewy’s large customer base, demonstrating their ability to manage high volume efficiently. Chewy’s Pet Vet “Practice Hub” program, launched in 2021, also illustrates the company’s move to partner with third-party Sellers, though that program is targeted to veterinary clinics rather than general consumer brands. These examples suggest Chewy’s third-party channel is actively expanding, though detailed performance metrics per brand are not yet public.

    Chewy Seller Onboarding (Step-by-Step)

    1. Invitation/Account Creation: Chewy invites you via email to register on the Vendor Partner Portal. Click the link and create a VPP account.

    2. Company & Contact Info: Log in to VPP and complete the Company Information and primary contact fields. This data is often prefilled by Chewy’s merchant team, but you must review and complete any missing details.

    3. Skip Ordering (Drop-Ship): In “Ordering Information,” you would normally enter your warehouse locations and lead times, but drop-ship vendors skip this step (Chewy handles orders without requiring vendor stock in Chewy’s DCs).

    4. Banking & Tax: Provide banking details (voided check or bank letter) for payments, plus contacts for Accounts Payable and Receivable. Fill out tax forms (W-9, etc.) as prompted.

    5. Product Catalog (PAF): Download Chewy’s Product Addition Form (PAF) template from VPP. Enter your catalog data (item names, UPCs, dimensions, pricing, etc.) into the appropriate category sheet, then upload the completed PAF back to VPP.

    6. E-Sign Documents: VPP integrates with DocuSign. Review and electronically sign all required vendor agreements and compliance documents.

    7. Submit for Review: Once all forms are complete, click “Submit” in VPP. The screen will confirm receipt. Chewy’s team will then review your submission.

    8. Integration Testing: After approval, you’ll work with Chewy (via DSCO/EDI or API) to test order flow. Chewy may send sample orders and require successful acknowledgment, shipment, and invoicing.

    9. Go Live: After passing tests, Chewy grants you live selling access. Your products will appear on Chewy.com, and actual consumer orders will begin.

    Note: Throughout onboarding, focus on building a strong relationship with Chewy’s merchant team. A positive relationship helps ensure smooth onboarding, ongoing support, and long-term operational success.

    Common Pitfalls & Pro Tips for Chewy Sellers

    While Chewy offers significant advantages, merchants may encounter challenges such as strict fulfillment requirements, managing inventory across multiple channels, and ensuring timely deliveries to maintain customer satisfaction. Third-party logistics providers can help Chewy Sellers by managing the entire logistics process, including storage, fulfillment, and distribution, to streamline operations and meet Chewy’s high standards.

    • Missed Integration/EDI Errors: Failing to set up correct EDI/API connections can delay orders. Many retailers rely on robust integration to streamline order processing and maintain efficient B2B exchanges. Tip: Use a middleware or work closely with Rithum/DSCO support to ensure your EDI maps (850/856/810) meet Chewy’s specs. Test end-to-end early.
    • Packaging Slip Confusion: Including a generic pack slip can confuse Chewy’s system. Tip: Follow Chewy’s instructions: “Chewy does not use pack slips for drop-ship orders.” Instead, include only a retailer-facing packing list if needed.
    • Unsupported Addresses: Shipments to P.O. boxes or military APO/FPO addresses will be rejected. Tip: Validate all customer addresses before shipping; use commercial addresses.
    • Slow Fulfillment: Late shipments hurt your vendor rating. Tip: Chewy demands fast fulfillment (often same-day pick, 1–3 days transit for essentials such as pet food, and 1–5 days transit for non-essential, heavy, or specialized items). Keep inventory ready and use overnight/2-day carriers when needed to meet Chewy’s SLA.
    • Inventory Sync Errors: Selling out-of-stock items causes cancellations. Effective warehousing is crucial for maintaining accurate stock levels and preventing overselling. Tip: Update your inventory feed or buffer stock to maintain 98–99% in-stock rates. Have a system to quickly edit or cancel orders if you genuinely can’t supply an item.
    • Quality/Image Issues: Chewy may reject listings with poor images or missing data. Tip: Provide high-resolution product images and complete descriptions per Chewy’s photo and content guidelines (detailed in VPP playbook).
    • Communication Gaps: Delayed responses to Chewy inquiries can stall your onboarding. Tip: Monitor the VPP “Inbox” for Chewy messages and respond promptly. Build a point of contact on Chewy’s merchandising team.
    • Pricing Missteps: Avoid setting retail prices too low; Chewy expects competitive but realistic pricing. Tip: Factor in Chewy’s customer base when pricing, and negotiate any MAP policies directly with Chewy’s buyer if needed.
    • Return Confusion: Unlike consumer marketplaces, Chewy processes returns centrally. Tip: Understand that Chewy “does not take title to refunded items unless returned,” meaning they may not send items back to you. Clarify return instructions with Chewy for any returns that must be shipped back.

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    Chewy Program Growth & Updates

    Chewy’s third-party marketplace is rapidly developing. Rising customer demand has driven Chewy’s investment in expanding its fulfillment capacity, with a focus on increasing shipping capacity and improving delivery performance through automation and transportation initiatives. In 2023, Chewy extended its Rithum partnership to expand drop-ship capabilities. According to Rithum, Chewy’s partner network already included 3,500+ brands and 110,000+ products as of mid-2023. Chewy’s logistics infrastructure, including Chewy Freight Services, supports these scaling efforts and helps handle higher order volumes efficiently. Press coverage (e.g., BARK’s August 2024 announcement) and trade articles highlight new brand launches on Chewy, indicating the program is active. Chewy’s financial filings do not break out marketplace revenue, but analysts note Chewy is emphasizing third-party growth alongside its core retail business. Future validation may come from Seller testimonials or Chewy statements; for now, the launch of flagship brands on the platform is a key indicator of momentum.

    What to Look for in a Chewy 3PL

    When selecting a 3PL for Chewy orders, consider the following:

    • Seamless Integration: Ensure the 3PL can integrate smoothly with Chewy’s platform for real-time inventory management and order fulfillment.
    • Automated Fulfillment Center: Look for partners with an automated fulfillment center that uses advanced automation to handle high order volumes efficiently. Automation reduces the need for manual heavy lifts, improving safety and boosting productivity.
    • Customized Packaging and Value-Added Services: Choose a 3PL that offers value-added services such as customized packaging solutions, aligning with Chewy’s standards and enhancing the customer experience.

    The Role of Logistics in Customer Satisfaction

    Efficient logistics are crucial in maintaining customer satisfaction. Accurate order fulfillment, timely deliveries, and responsive customer service contribute to a positive customer experience, fostering loyalty and repeat business.

    Benefits of Working with a 3PL

    Partnering with a 3PL offers numerous benefits:

    • Operational Efficiency: Streamlined processes and advanced technologies improve order accuracy and reduce shipping times.
    • Cost Savings: Outsourcing fulfillment can lower fixed costs associated with maintaining your own warehouse and staff.
    • Scalability: A reliable 3PL can adapt to your business’s growth, handling increased order volumes seamlessly.
    • Comprehensive Fulfillment Package: Leveraging a complete fulfillment package from a 3PL can further streamline operations and improve scalability.

    Responsive, Reliable Customer Support

    A customer service agent cheerfully helping a client with telephone support.

    Order fulfillment is a complex operation, involving multiple, intricate steps in the process from click to delivery. Things don’t always go as planned, but what is crucial is ensuring that your 3PL has a responsive, reliable customer support team that you can rely on to fix problems fast, with minimal disruption to your business operations.

    Experience Working with Chewy Sellers

    Most traditional 3PLs may not have personnel with the experience and expertise working with Chewy to troubleshoot and fix problems fast, costing you precious time and sales. It is important to identify a Chewy fulfillment partner with a reliable, responsive customer support team who will be ready to dive in and solve problems quickly, so that you’re always selling and keeping your customers happy.

    Here’s what one of our customers had to say about Cahoot’s Support team:

    “Cahoot’s support is prompt and personal, not monolithic and apathetic as some large companies tend to be. Cahoot is not only a great 3PL provider but also a strategic partner that goes above and beyond for its clients. They are a 5-star team of people who make it their business to care about yours.”

    ~ VERSACART

    Speak to a fulfillment expert



    So now that we’ve taken a look at the important criteria that guide your choice of a 3PL to support your Chewy orders, let’s look at the options that are actually available to you, and the pros and cons of each of them.

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    Top Chewy 3PL Companies

    Amazon Multi-Channel Fulfillment

    Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels, such as Chewy, whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels.

    Ecommerce Sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels. MCF deploys the same infrastructure and resources that power Amazon’s in-house Fulfilled By Amazon (FBA) logistics network.

    Pros:
  • Huge nationwide network: Amazon operates over 1,000 logistics warehouses in the US.
  • Amazon Fulfillment Centers are well-equipped to handle small and lightweight SKUs. If the majority of your product catalog falls in that category, MCF may be worth exploring.
  • Cons:
  • Despite deploying the same logistics infrastructure powering FBA, the fees for MCF can be significantly higher (Amazon prioritizes its own marketplace).
  • MCF’s pricing is not well-suited for heavier, larger-sized, seasonal, or slow-moving SKUs. If your product mix falls into these categories, MCF can become prohibitively expensive.
  • ShipBob

    ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping software platform and a large set of pre-built integrations.

    Pros:
  • Supports EDI integration with Chewy.
  • Nationwide network of fulfillment centers.
  • Cons:
  • Inconsistent customer support can prove to be a major issue as Chewy penalizes Sellers for mistakes, not the 3PL.
  • Affordable for small and lightweight products but quickly gets pricey for others: ShipBob customers have complained in the past about inefficient packaging choices, for example, using a larger-sized box than may be necessary or sending a shipment in multiple boxes when a single one can be used.
  • Cahoot: The Best Chewy 3PL

    Selling on Chewy offers ecommerce businesses a powerful opportunity to reach millions of pet owners and expand into new markets. However, fulfilling Chewy orders comes with unique challenges, from meeting strict shipping expectations to navigating complex packaging and returns rules. Choosing the right Chewy 3PL partner is essential to ensure the channel contributes meaningful revenue growth with minimal babysitting.

    Cahoot stands out as an ideal 3PL partner for Chewy merchants. With a large network of fulfillment centers and a focus on operational and cost efficiency (e.g., placing inventory closer to customers and using intelligent cartonization to keep shipping costs as low as possible), Cahoot ensures accurate order fulfillment and timely deliveries. Their commitment to customer satisfaction makes them a top choice for ecommerce businesses aiming to scale and succeed in the pet supply market. More specifically, their specialized Chewy 3PL services and deep understanding of the pet supply retailer’s platform make them the ideal partner to support your growth and profitability.

    Summary

    Table 1. Summary of the Chewy Marketplace Requirements

    Requirement
    Chewy Marketplace Drop-Ship Program Details
    Access/Application
    Invitation-only vendor program. Sellers are typically invited by a Chewy category manager or pitching through industry contacts. Onboarding is done through the Chewy Vendor Partner Portal (VPP). There is no public signup form.
    Fees & Commission
    Chewy does not publicly disclose marketplace commission or fee rates. (Anecdotal sources report vendors often face an ~18–19% “damage/compliance/marketing” fee on purchase orders, but official terms are not published.) Vendors invoice Chewy with net payment terms.
    Payment Terms
    Vendors are paid after order fulfillment. (Unofficial reports suggest Chewy pays ~60–90 days after receipt of goods, but official payment terms are not public.) Sellers can connect via ACH/bank account.
    Integration/EDI/API
    Mandatory integration via EDI or API. Chewy uses Rithum/DSCO: purchase orders (850) must use ANSI X12 v5010; other documents (ship notices, invoices, etc.) use v4010. Sellers can also use Rithum’s DSCO V3 API to sync orders, inventory, and shipments. Excel templates exist for initial inventory uploads.
    Product Requirements
    Sellers must provide complete product data (images, descriptions, UPCs) per Chewy’s specs. Drop-ship vendors skip Chewy’s “ordering info” steps (no warehouse addresses needed). Chewy publishes a “Drop-Ship Vendor Playbook” (via VPP) detailing SLAs, photo requirements, and packaging guidelines.
    Shipping Expectations
    Vendors ship orders directly to customers using premium carriers (typically FedEx, UPS, etc.). Chewy’s customer FAQ notes it does not ship to P.O. boxes or APO/FPO addresses, so sellers must ensure valid street addresses. Chewy pays customer shipping costs; vendors include shipping costs on their invoice. Vendors must meet Chewy’s fast-fulfillment SLAs (e.g., same/next-day pick, 1–3 or 1–5 days transit depending on category) as specified in the VPP playbook.
    Packaging & Labels
    Chewy requires branded packaging but does not use a traditional pack slip for drop-ship orders. Sellers should follow Chewy’s packaging instructions (available in VPP) and can include their own invoices or return forms. It’s recommended to include a Chewy shipping label and packaging that meets Chewy’s presentation standards.
    Returns/Customer Service
    Chewy offers a very generous return policy to customers (365-day free returns/refunds, per Chewy’s FAQs). In practice, Chewy only takes ownership of returned items once they reach Chewy’s fulfillment center. For drop-ship orders, Chewy typically processes refunds without requiring returned merchandise (unless Chewy requests it). Sellers should coordinate with their Chewy rep for any required return shipments. Chewy handles all customer support; vendors have a vendor support ticket system in VPP for disputes or product issues.
    Shipping/Label Integration
    Sellers must upload tracking info (often via EDI or VPP) when orders ship. Chewy provides shipping labels via its systems or integrations. Packages must meet dimensional and weight requirements (Chewy’s FAQ states a standard weight limit for FedEx Ground is 150 lbs) and include Chewy’s order ID on the carton.
    Other Compliance
    Sellers must follow Chewy’s policies (no extraneous marketing in boxes, no price tags). Chewy may require sellers to participate in marketing programs or advertising. Detailed compliance guidelines (including packaging barcodes, polybag requirements, etc.) are available in the Vendor Playbook on VPP.

    If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Chewy order fulfillment was meant to be.

    Cahoot maintains a nearly perfect 5-star rating across review sites such as Amazon, Shopify, G2, Google, Trustpilot, and SourceForge, among others.

    If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, check out our other articles:

    1. How to Choose the Best 3PL for Your Shopify Store

    2. How to Choose the Best 3PL for Your Macy’s Orders

    3. How to Choose the Best 3PL for Target Plus

    4. How to Choose the Best 3PL for Wayfair

    5. How to Choose the Best 3PL for Nordstrom

    Frequently Asked Questions

    Why is Chewy a good platform for ecommerce retailers?

    Chewy provides access to a large, loyal audience of pet owners who value convenience and fast shipping. This opens up new revenue streams and markets for ecommerce businesses.

    What are the key challenges of fulfilling Chewy orders?

    Sellers face strict packaging and shipping SLAs, complex returns processes, and the need for accurate inventory management to maintain customer satisfaction.

    What should I look for in a 3PL for Chewy?

    Look for expert knowledge of Chewy’s systems and requirements, efficient and ultra-fast fulfillment while containing costs, and proven capabilities in real-time inventory and order accuracy.

    Why does logistics matter so much for Chewy orders?

    Chewy’s customer experience hinges on fast, accurate deliveries. Logistics is critical to boosting customer satisfaction, loyalty, and long-term sales.

    How can Cahoot help me fulfill Chewy orders?

    Cahoot offers robust Chewy 3PL services, blending cutting-edge automation and transportation initiatives with real-time order fulfillment and responsive support, ensuring that your customers (and their pets!) are always happy.

    Written By:

    Indy Pereira

    Indy Pereira

    Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

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    How AI Inventory Management Is Transforming Ecommerce Backoffice Systems

    In this article

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    Agentic AI, an emerging paradigm in artificial intelligence, emphasizes autonomy and decision-making capabilities in software systems. By enabling AI to perform tasks with minimal human intervention, agentic AI offers significant advantages in industries where efficiency, precision, and cost containment are critical. Its application in ecommerce is revolutionizing complex workflows, especially in order and inventory management, where speed and accuracy are essential for meeting customer expectations and fostering loyalty.

    Order and Inventory Management Systems serve as the back office central nervous system for ecommerce businesses, handling product stocking, shipping, tracking, returns processing, customer service activities, and master product catalog maintenance. Integrating agentic AI into these systems enhances their ability to make real-time adjustments based on market fluctuations, predict consumer demand patterns, and optimize stock levels automatically. This reduces human error, streamlines workflows, and improves operational efficiency.

    This combination of Agentic AI and Order and Inventory Management Systems marks a significant advancement beyond traditional automation. Leveraging machine learning algorithms, AI not only executes tasks but also analyzes data, predicts trends, and proactively optimizes business processes independently.

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    Introduction to AI in Inventory Management

    AI in inventory management uses artificial intelligence technologies to automate and optimize inventory processes. By analyzing historical sales data, market trends, and other factors, AI predicts future demand and helps businesses maintain optimal inventory levels. This leads to improved operational efficiency, cost reduction, and enhanced customer satisfaction.

    AI inventory management software employs machine learning and real-time data analysis to deliver valuable insights for demand forecasting, inventory tracking, and supply chain optimization. Continuous monitoring of inventory levels and data analysis enables businesses to meet customer demand while avoiding overstocking or stockouts, which optimizes cash flow.

    The adaptability provided by AI enables businesses to respond effectively to market fluctuations and changing consumer behavior. This adaptability is essential for achieving and maintaining a competitive edge today.

    Key Applications of AI

    AI transforms inventory management through several key applications. Demand forecasting uses extensive historical data to accurately predict future demand, allowing businesses to adjust inventory levels to meet customer needs without excess stock.

    Inventory optimization continuously analyzes stock levels to reduce carrying costs and minimize excess inventory, enhancing supply chain efficiency and generating significant cost savings and optimizing capital utilization.

    Supply chain optimization benefits from real-time insights provided by AI, improving coordination across the supply chain, reducing delays, and boosting overall operational efficiency.

    Additionally, AI automates routine tasks and provides actionable insights that drive business growth, enabling companies to operate more efficiently, lower costs, and improve customer satisfaction. This results in greater agility and competitiveness in the market. Let’s get a little more granular:

    1. Demand Forecasting

    Artificial Intelligence (AI) Agents are highly specialized applications built from a foundation of Large Language Models (LLM) and Natural Language Processing (NLP) capabilities (think ChatGPT or Llama by Meta AI), but instead of just returning an answer from a huge database of content built from webpages in the public domain, they can understand private, proprietary data and then “act” on the initial result to complete a workflow or achieve an outcome. The technology will transform how business operates across every sector. By integrating real-time Order and Inventory Management data with real-time news and events, AI agents predict demand with precision, enable real-time inventory tracking to enhance operational efficiency, automate customer service decisions and actions, help businesses maintain optimal inventory levels and improve inventory accuracy, remove waste from the fulfillment workflow, and finally enable a desirable returns solution. As ecommerce businesses embrace these advancements, they will not only streamline their operations but also build the agility needed to thrive in an increasingly complex and competitive industry.

    2. Proactive Customer Support

    AI agents can analyze customer data and purchase history to identify potential issues and proactively notify Sellers, (such as an order with a high likelihood of a return), and/or reach out to customers proactively to offer support and make changes to orders if needed (e.g. if an item runs small and the customer has returned similar items in a similar size). Further, they can provide automated outreach with personalized product recommendations, increasing customer satisfaction and sales.

    3. Optimize Distributed Inventory Strategies

    One of the biggest cost centers in ecommerce is shipping cost. Shipping is not free, nor has it ever been. Today’s retailers and brands are distributing inventory to 2 or more fulfillment centers to optimize delivery time and shipping cost. This is done by either opening and operating multiple warehouses, or partnering with a 3PL/4PL that can extend existing capabilities. AI agents can intelligently predict nationwide demand and create an accurate distribution plan to optimize placement and minimize the cost of transferring inventory between locations later.

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    4. Optimize Fulfillment Cost and Workflows

    Ecommerce merchants traditionally have humans use their experience to ship orders, but that approach is well known to be error-prone and contributes to higher fulfillment defect rates, and costs the company unnecessary capital to correct the mistakes (late delivery, shipped wrong item, etc.). Modern shipping software removes the human and creates the optimal shipping label that will deliver the order on time, every time. And now, combining that intelligence with AI agents, Order Management Systems (OMSs) can get even more granular and monitor weather conditions along shipping lanes, and then reroute orders to fulfillment centers that can deliver them by the promised delivery date, preventing a bad customer experience, and thus, limiting the likelihood of a return.

    5. Make Returns Profitable

    Ecommerce return rates have been steadily rising, often reaching 20–30% across the industry, and certain industries such as apparel, luxury goods, and electronics can see return rates as high as 40% or more as customers struggle to find the right fit without trying items on. It’s critical to manage returns effectively to retain as much revenue as possible and maintain a healthy bottom line. New AI-assisted returns technologies such as the Cahoot Peer-to-Peer Returns Solution are eliminating returns altogether by enabling the return to be shipped directly to the next customer, saving significant money and time for everyone.

    Final Thoughts

    Agentic AI is not just another incremental upgrade, it represents a paradigm shift in ecommerce operations. By entrusting routine yet complex back-office tasks to autonomous, data-driven agents, businesses unlock real-time responsiveness, razor-sharp forecasting accuracy, and seamless scalability. From anticipating demand surges to dynamic order routing and even transforming returns into revenue opportunities, AI-powered Order and Inventory Management Systems elevate efficiency and customer satisfaction in one fell swoop. As retail continues to evolve, companies that embrace agentic AI will gain the agility, cost savings, and strategic insights needed to stay ahead in an ever-more competitive landscape. The future of ecommerce back office systems is intelligent, proactive, and fundamentally human-centered, empowered by AI.

    Frequently Asked Questions

    What is “agentic AI”, and how does it differ from traditional AI in inventory management?

    Traditional AI in inventory systems typically automates specific tasks, like sending low-stock alerts, based on predefined rules. Agentic AI goes a step further by making autonomous decisions and executing workflows end-to-end. In ecommerce back offices, that means AI agents can not only flag a potential stockout but also reorder, reassign inventory across warehouses, and even adjust pricing without human intervention, dramatically increasing speed and reducing manual errors.

    How does AI-driven demand forecasting improve stock levels?

    By ingesting historical sales data, real-time order volumes, market trends, and external factors (e.g., news, promotions), AI agents generate highly accurate short- and long-term demand predictions. This enables systems to automatically trigger restocks or redistribute inventory to regional fulfillment centers just before demand peaks, avoiding both costly overstocks and lost sales due to stockouts.

    Can AI inventory management really reduce fulfillment costs?

    Absolutely. AI agents analyze shipping lanes, carrier rates, and warehouse proximities to recommend the most cost-efficient fulfillment routes. For example, if bad weather threatens a shipping corridor, the system can reroute orders to a nearer fulfillment node, preventing delays and penalty fees. Over time, these continuous optimizations often shave several percentage points off overall fulfillment spend.

    In what ways does AI enhance the returns process, and even make returns profitable?

    Rising return rates can erode margins. AI-powered returns solutions (like peer-to-peer routing) direct unwanted items straight to another buyer rather than back to a central warehouse, saving transport and handling costs. They can also predict which orders are likely to be returned, based on sizing data or past customer behavior, and proactively offer exchanges or upsells before the return even happens, recouping revenue that might otherwise be lost.

    How quickly can businesses see ROI after integrating AI into their OMS/IMS?

    While results vary by scale and complexity, many merchants report measurable gains—5–15% reduction in carrying costs and a 10–20% improvement in on-time fulfillment performance—within 3–6 months of deploying agentic AI modules. Faster, error-free restocking alone can pay for the technology investment, and the compounding efficiency gains across customer support, shipping, and returns accelerate ROI further over time.

    Written By:

    Manish Chowdhary

    Manish Chowdhary

    Manish Chowdhary is the founder and CEO of Cahoot, the most comprehensive post-purchase suite for ecommerce brands. A serial entrepreneur and industry thought leader, Manish has decades of experience building technologies that simplify ecommerce logistics—from order fulfillment to returns. His insights help brands stay ahead of market shifts and operational challenges.

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