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Top 7 Ecommerce Return Strategies and Overcoming Reverse Logistics Challenges

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8 minutes

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Returns are an inevitable part of ecommerce. The average ecommerce return rate varies across different product categories, with some sectors like fashion experiencing return rates as high as 30%. While they offer customers the flexibility to shop with confidence, they also present significant challenges for retailers. Let’s delve into what ecommerce returns entail, the hurdles they introduce, and effective strategies to manage them.

What Are Ecommerce Returns and Return Policy?

Ecommerce returns, also known as customer returns, refer to the process where customers send back products they’ve purchased online to the retailer or manufacturer. This can occur for various reasons, such as receiving defective items, incorrect sizes, or simply a change of mind. The process of handling these returns, known as reverse logistics, involves the movement of goods from the customer back to the Seller, encompassing activities like transportation, inspection, refurbishment, and restocking.

The Impact of Ecommerce Returns on Customer Satisfaction and Repeat Business

Ecommerce returns can significantly influence customer satisfaction. When online shoppers find it easy to return products that do not meet their expectations, their overall shopping experience improves. As many as 84% of online shoppers review a retailer’s return policy before making a purchase. A clear and generous return policy not only enhances customer satisfaction but also fosters customer loyalty and encourages repeat business. Conversely, a complicated or restrictive return policy can lead to frustration and a loss of trust in the retailer. Therefore, ecommerce businesses must prioritize creating a customer-friendly returns process to maintain a positive customer experience.

Challenges in Ecommerce Returns and Customer Satisfaction

Managing ecommerce returns is fraught with challenges that can impact a retailer’s profitability and customer satisfaction:

  1. High Return Rates: Online purchases, especially in categories like fashion, often see return rates as high as 30%, significantly higher than brick-and-mortar stores. This surge is partly fueled by practices like ‘wardrobing‘ and ‘bracketing‘, where customers buy multiple sizes or styles with the intention of returning unwanted items.
  2. Operational Costs: Processing returns involves costs related to shipping orders back to Sellers, inspection, repackaging, restocking, and reselling, reshipping to new customers. These expenses quickly erode most profit margins, making efficient reverse logistics crucial.
  3. Inventory Management: Returned products re-entering the supply chain can disrupt inventory levels, leading to challenges in demand forecasting and storage.
  4. Environmental Impact: The logistics of returns contribute to higher carbon emissions, and improperly managed returns can result in waste, raising sustainability concerns.

Creating an Effective Ecommerce Return Policy

Crafting an effective ecommerce return policy requires careful consideration of several key factors. First and foremost, the policy should be clear and easy to understand, with prominent links available on the website and mobile app (if applicable). It should outline the conditions, procedures, and timeframes for returns, as well as any associated costs or fees. Flexibility is also key; allowing customers to easily initiate returns and exchanges can significantly enhance their experience which promotes trust in the brand and increases the likelihood of reengagement in the future. Additionally, communicating the return policy clearly at the time of purchase helps set customer expectations and avoid misunderstandings. By focusing on these elements, ecommerce businesses can create a return policy that supports customer satisfaction and loyalty.

Strategies for Reducing Ecommerce Return Rates

Ecommerce businesses can employ several strategies to reduce return rates effectively. One of the most impactful approaches is to provide detailed and accurate product descriptions, including high-quality images and videos. This helps customers make informed purchasing decisions, reducing the likelihood of returns due to product mismatch. Offering free return shipping can also encourage customers to make purchases with confidence, knowing they can return items without additional costs. Additionally, leveraging data analytics to identify patterns and trends in returns allows businesses to make targeted improvements to their products and services. By implementing these strategies, ecommerce businesses can minimize return rates and enhance customer satisfaction.

The Cost of Ecommerce Returns

Ecommerce returns can be a significant financial burden for online retailers, with the average cost of processing a return estimated to be around 20-30% of the item’s original value. These costs include shipping, restocking, and customer service expenses. Returns can also disrupt inventory management, as returned products may need to be restocked or resold. To mitigate these costs, ecommerce businesses can offer store credit or exchanges instead of refunds, encouraging customers to make additional purchases. Utilizing data analytics to identify and address the root causes of returns can also help reduce return rates and associated costs. By adopting these strategies, online retailers can better manage the financial impact of ecommerce returns.

Mitigating Return Fraud in Ecommerce

Return fraud poses a significant challenge for ecommerce businesses, with estimates suggesting that up to 10% of returns are fraudulent. To combat this issue, ecommerce businesses can implement several strategies. Utilizing data analytics to identify patterns and trends in returns can help flag suspicious activity. Requiring customers to provide proof of purchase or identification when initiating a return adds an extra layer of security. Additionally, employing technology such as RFID tags or serial numbers to track products and verify their authenticity can further reduce the risk of return fraud. By taking these steps, ecommerce businesses can protect their bottom line and ensure a more secure returns process.

Top 7 Reverse Logistics Strategies for Ecommerce

To navigate these challenges, retailers can implement the following strategies:

  1. Develop a Customer-Centric Returns Policy
  • Description: Craft a clear, transparent, and flexible returns policy that outlines the conditions and process for returns.
  • Importance: A customer-friendly policy engenders trust and encourages repeat business. When customers know they can return products hassle-free, they’re more likely to make a purchase.
  • Risks of Neglect: A confusing or rigid returns policy can deter potential buyers and harm the brand’s reputation.
  1. Leverage Technology for Returns Management
  • Description: Utilize software solutions to automate and track the returns process, providing real-time data and analytics. Keeping customers informed about their return’s status throughout the process can enhance customer satisfaction and loyalty.
  • Importance: Technology streamlines operations, reduces errors, and offers insights into return patterns, helping to identify and address root causes.
  • Risks of Neglect: Without automation, the returns process can become inefficient, leading to delays and increased operational costs.
  1. Implement Quality Control Measures
  • Description: Conduct thorough inspections before shipping to ensure products meet quality standards, reducing the likelihood of returns due to defects.
  • Importance: High-quality products lead to higher customer satisfaction and fewer returns.
  • Risks of Neglect: Poor quality control can result in a higher volume of returns, increased costs, and damage to brand reputation.
  1. Offer Accurate Product Descriptions and Images
  • Description: Provide detailed and accurate product information, including high-quality images, to set correct customer expectations.
  • Importance: Clear product representation helps customers make informed decisions, reducing returns due to unmet expectations.
  • Risks of Neglect: Misleading or inadequate product information can lead to dissatisfaction and increased return rates.
  1. Analyze Return Data
  • Description: Regularly review return data to identify trends and common reasons for returns.
  • Importance: Understanding why products are returned enables retailers to make necessary adjustments, whether in product design, description, or quality.
  • Risks of Neglect: Ignoring return data prevents the identification of systemic issues, leading to recurring problems and customer dissatisfaction.
  1. Optimize Packaging
  • Description: Use packaging that protects products during transit and is easy for customers to reuse if they need to make a return.
  • Importance: Proper packaging minimizes damage during shipping and simplifies the returns process for customers.
  • Risks of Neglect: Inadequate packaging can lead to product damage, increased returns, and higher costs.
  1. Educate Customers
  • Description: Provide guidance on product usage, sizing charts, and care instructions to help customers make informed purchases.
  • Importance: Educated customers are less likely to make returns due to misunderstandings or incorrect usage.
  • Risks of Neglect: Lack of customer education can lead to misuse, dissatisfaction, and increased return rates.

Conclusion

Online shopping returns are a complex but manageable aspect of online retail. By implementing customer-centric policies, leveraging technology, ensuring product quality, providing accurate information, analyzing return data, optimizing packaging, and educating customers, retailers can effectively navigate the challenges of reverse logistics. These strategies not only reduce operational costs but also increase the likelihood of establishing a customer relationship and loyalty, leading to long-term success.

Frequently Asked Questions

Why are ecommerce return rates so high?

Ecommerce return rates are higher than in-store purchases because customers can’t physically inspect items before buying. Factors like incorrect sizing, unmet expectations, and bracketing (ordering multiple sizes or styles) contribute to high return rates.

How can businesses reduce return rates?

Businesses can minimize returns by offering accurate product descriptions, high-quality images, and clear sizing guides. Investing in quality control, analyzing return data, and providing excellent customer education also play key roles.

What are the biggest challenges in managing ecommerce returns?

The main challenges include high processing costs, inventory disruptions, potential fraud, and environmental impact. A well-structured reverse logistics strategy helps mitigate these issues.

How can retailers prevent return fraud?

Retailers can combat return fraud by using data analytics to detect suspicious activity, requiring proof of purchase, tracking serial numbers, and implementing stricter return policies for high-risk items.

What role does packaging play in reducing returns?

Secure, well-designed packaging prevents damage during transit and makes it easier for customers to return items if necessary. Sustainable, reusable packaging also improves cost efficiency and reduces waste.

Written By:


Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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Best Shipping Software: A Complete Guide to Features, Benefits, and Choosing the Right Solution

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10 minutes

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Efficiency in ecommerce shipping operations can make or break a business. With today’s customer expectations, businesses must ensure fast, reliable, and cost-effective deliveries. This is where shipping software can help. But with so many options available, how do you determine the best shipping software for your business?

In this guide, we’ll break down what shipping software is, what differentiates them from one another, the essential features to look for, the benefits of using one, the pros and cons to consider before making a selection, and how to choose shipping software tailored to your business needs.

What Is Shipping Software?

Shipping management software is a digital solution designed to streamline and optimize shipment management, from order fulfillment to delivery. It integrates with carriers, ecommerce platforms, and order and inventory management systems to automate shipping label creation and printing, rate comparison, tracking, and returns, ensuring that businesses can handle shipping operations efficiently and cost-effectively.

Whether you run an online store, a warehouse, or a fulfillment center, shipping management software helps you manage high-volume shipments with ease while reducing errors, improving delivery times, and ensuring a positive customer experience.

What Differentiates One Shipping Software from Another?

Not all shipping software is created equal. Some are built specifically for small businesses, while others are designed for enterprise-level logistics. Here’s what sets them apart:

  1. Integration Capabilities – Some software solutions work best with specific platforms like Shopify, WooCommerce, or Amazon, while others offer multi-channel integrations for businesses operating across multiple platforms.
  2. Carrier Support – Certain software tools partner with a select few carriers, while others provide multi-carrier support for hundreds of carriers worldwide. Considering multi-carrier shipping software allows small and medium-sized businesses to compete against larger players by making rate shopping and delivery speed analysis across different providers accessible.
  3. Automation Features – Some shipping solutions focus on automated workflows, helping businesses print labels in bulk, send automated tracking updates, and apply custom shipping rules based on order details.
  4. Scalability – Enterprise-level solutions offer advanced analytics, AI-driven decision-making, and warehouse management features, whereas smaller solutions might focus on cost-effectiveness and simplicity.
  5. Customization & User Experience – Some businesses require highly customizable workflows, while others prefer an easy-to-use interface with plug-and-play features.

Choosing the right software depends on the unique needs of your business, including your order volume, shipping destinations, preferred carriers, and technology stack.

Key Features of the Best Shipping Software

To determine which shipping software is best for your business, start by evaluating various shipping software options tailored to your specific needs. Look for the following must-have features:

1. Multi-Carrier Rate Shopping

Shipping costs can vary significantly across carriers. The best software allows you to compare rates in real-time, ensuring you get the most cost-effective option without compromising delivery speed.

2. Automation & Bulk Processing

Manually processing hundreds or thousands of orders is time-consuming and a poor use of resources. Look for software that offers bulk label creation and printing, automatic carrier selection, and preset shipping rules to streamline your operations.

3. Order Management & Tracking

The ability to sync orders from multiple sales channels and track shipments in real time is essential. Many shipping platforms offer customer-facing tracking tools and automated email or SMS updates. Additionally, these platforms often support international shipping, enabling businesses to expand their market reach by managing logistics, calculating tax and duty costs, and preparing necessary customs documentation.

4. Address Validation & Error Reduction

Incorrect addresses lead to failed deliveries and costly reshipments and/or cancelled orders. Advanced software provides address validation to minimize errors and prevent shipping delays.

5. International Shipping & Returns Management

A smooth returns process is critical for customer satisfaction. Top shipping software includes automated return labels, customer-friendly return portals, and tracking capabilities for returned goods.

6. Shipping Analytics & Reporting

Understanding your shipping costs and performance is crucial. The best tools provide detailed analytics, cost breakdowns, and carrier performance reports to help optimize logistics decisions.

7. Integration with Ecommerce & Accounting or ERP Systems

For seamless operations, your shipping software should integrate with your ecommerce platform (e.g., Shopify, Adobe Commerce, Pulse Commerce, WooCommerce), marketplace (e.g., Amazon, eBay, TikTok Shop), and accounting or ERP systems to ensure smooth order fulfillment.

8. Custom Branding & Shipping Labels

Businesses looking for brand recognition should look for software that allows customized packing slips, branded tracking pages, and personalized notifications to engage the shopping audience.

Benefits of Using Shipping Software

1. Cost Savings on Shipping Rates

By accessing discounted carrier rates and comparing many options for each shipment, businesses can significantly reduce shipping costs, resulting in higher profit margins. Additionally, evaluating free shipping software versus paid options can help small businesses understand long-term cost implications and potential hidden costs, ensuring they choose the best solution to drive revenue effectively.

2. Improved Efficiency & Time Savings

Automating tedious tasks like label generation, tracking, and bulk processing helps businesses save hours of manual work, allowing them to focus on growth and customer service.

3. Enhanced Customer Experience

Providing customers with accurate tracking, estimated delivery dates, and easy return options improves satisfaction and fosters brand loyalty.

4. Reduced Human Errors

Mistakes in shipping can be costly. Features like address verification, automation, and real-time tracking help minimize human errors that lead to delivery failures.

5. Scalability for Business Growth

As businesses grow, handling increasing order volumes manually becomes impossible. Shipping software scales with demand, ensuring smooth operations as your company expands.

Ecommerce Store Integration and Automation

Importance of Seamless Integration with ecommerce Platforms

Seamless integration between your shipping software and ecommerce platform is not just a luxury—it’s a necessity. When your shipping software integrates effortlessly with platforms like Shopify, WooCommerce, and BigCommerce, it transforms your shipping workflow into a well-oiled machine. Technology integrations allow you to automate shipping workflows, print shipping labels, and track shipments directly from your ecommerce platform, significantly reducing the risk of manual errors. The result? A streamlined shipping process that saves you time and makes your customers happy. By eliminating the need for manual data entry and reducing the chances of errors, you can focus more on growing your business and less on the nitty-gritty of shipping logistics.

Automating Shipping Workflows for Enhanced Efficiency

Automation is the cornerstone of efficient shipping management. With the right shipping software, you can automate a myriad of tasks, from printing shipping labels to sending tracking updates and updating order statuses. Imagine setting up shipping rules based on weight, dimensions, and destination, ensuring that each order is shipped using the most cost-effective and timely method every time. Why re-enter the same shipment weights and dimensions for the same products over and over again? Solutions like Cahoot remember the data you entered the first time and use it to automatically rate shop and create a label using the same data in perpetuity. This level of automation not only supercharges productivity and reduces manual errors but also boosts productivity. By automating your shipping workflows, you can handle higher order volumes with ease, reduce shipping costs, and provide a seamless experience for your customers. In essence, automation transforms your shipping process from a potential bottleneck into a competitive advantage.

Carrier Rates and Discounts

Understanding and Negotiating Carrier Rates for Better Deals

Shipping costs can significantly impact your bottom line, making it crucial to understand and negotiate carrier rates effectively. Shipping software plays a pivotal role in this process by allowing you to compare rates from various carriers, negotiate discounts, and optimize your shipping costs. By analyzing your shipping data, you can identify patterns and areas where you can negotiate better rates with carriers. Additionally, many shipping software solutions provide access to discounted shipping rates, further reducing your shipping costs. This not only improves your profitability but also allows you to offer competitive shipping options to your customers. In an industry where every dollar counts, leveraging shipping software to secure the best rates can make a substantial difference to your business’s financial health.

Pros and Cons of Using Shipping Software

Pros:
  • Time Savings – Automates shipping processes, reducing manual workload.
  • Cost Efficiency – Helps secure the best shipping rates and reduces operational expenses.
  • Better Organization – Centralizes all shipping activities in one place.
  • Multi-Carrier Access – Provides flexibility to choose the best shipping provider per order.
  • Enhanced Accuracy – Reduces errors in address entry and shipping calculations.
    • Cons:
  • Learning Curve – Some advanced shipping solutions require training and onboarding.
  • Software Costs – While many platforms offer cost savings, subscription or transaction fees can add up.
  • Integration Challenges – Not all software solutions integrate seamlessly with every ecommerce or accounting/ERP system.
  • Carrier Limitations – Some platforms may not support all preferred carriers, limiting flexibility.

    • How to Choose the Best Shipping Software for Your Business

    With so many options available, choosing the right shipping software requires careful consideration. Here are a few key factors to help you decide:

    1. Business Size & Order Volume – Small businesses might need a user-friendly, budget-friendly solution, while enterprises require scalable, feature-rich software.
    2. Carrier Preferences – Ensure the software supports your preferred carriers and offers the best rates. Consider solutions that integrate with the United States Postal Service for cost-effective shipping, especially for small businesses.
    3. Automation Needs – If handling a high volume of orders, choose software with workflow automation, bulk processing, and smart routing features.
    4. Integration Requirements – Confirm compatibility with your ecommerce platform, inventory management system, and accounting or ERP software.
    5. Budget Considerations – Compare pricing structures, including monthly fees, per-label costs, and any hidden fees to ensure it fits your budget.
    6. Customer Support & Reliability – Look for solutions with strong customer support, reliability, and security features to ensure smooth operation.

    Final Thoughts

    The best shipping software is the one that fits your business’s specific needs, whether that means cost-effective shipping rates, automation, seamless integrations, or enterprise-level scalability. By carefully assessing your shipping volume, carrier preferences, and automation needs, you can select a platform that optimizes your fulfillment workflow, enhances customer experience, and maximizes profitability.

    Investing in the right shipping software is a strategic decision that can lead to significant time and cost savings, making your shipping operations smoother and more efficient. Whether you’re a growing ecommerce brand or a large-scale fulfillment center, the right software can help streamline logistics and improve bottom-line results.

    Now, it’s time to assess your shipping challenges and find the software that best supports your business goals! Reach out to learn more.

    Frequently Asked Questions

    What factors should I consider when choosing shipping software?

    Look for features such as multi-carrier rate shopping, automation capabilities, order tracking, seamless ecommerce integrations, and cost-effectiveness. Consider your business size, shipping volume, and customer needs to find the best fit.

    How does shipping software help reduce costs?

    Shipping software compares carrier rates in real-time, provides bulk shipping discounts, and automates workflows to reduce manual labor. Some platforms also offer negotiated rates that can significantly cut down shipping expenses.

    Is free shipping software a good option for small businesses?

    Free shipping software can be a great starting point for small businesses, but they may have limitations in features, integrations, or carrier options. Evaluate long-term scalability and hidden costs before deciding.

    Can shipping software handle international shipping?

    Yes, many shipping solutions offer international shipping support, including customs documentation, duty calculations, and multi-carrier options. Ensure the software integrates with global carriers for seamless cross-border logistics.

    What are the biggest challenges when implementing shipping software?

    Common challenges include software integration with existing systems, learning curves for employees, upfront costs, and carrier limitations. Choosing a user-friendly solution with strong customer support can ease the transition.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

    Cahoot P2P Returns Logo

    Up to 64% Lower Returns Processing Cost

    Space is Limited
    Peer to Peer Returns Savings Comparison

    Ecommerce Shipping Software: Top Benefits of Using Shipping Software in 2025

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    12 minutes

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    Ecommerce shipping software automates crucial shipping tasks for online retailers, promoting efficiency and reducing costs. In this article, we’ll review the top 8 ecommerce shipping software solutions for 2025 and explore how they can improve your shipping process and customer satisfaction.

    Key Takeaways

    • Ecommerce shipping software automates the order fulfillment process, improving efficiency and reducing costs for online retailers.
    • Key features to consider when selecting shipping software include integration capabilities, multi-carrier support, real-time tracking, and automated label creation and printing.
    • Effective shipping solutions not only enhance customer satisfaction through timely deliveries and streamlined returns management but also provide valuable analytics for optimizing shipping operations.

    Why Use Ecommerce Shipping Software?

    Ecommerce shipping software automates and manages the order fulfillment process, making it indispensable for online retailers. These solutions streamline operations involved in freight delivery, such as searching for carriers, printing shipping labels, comparing shipping rates, and tracking shipments.

    The right shipping software not only improves efficiency but also reduces costs, providing transparency in shipping expenses and ensuring reliable delivery.

    Key Features to Look For

    When evaluating ecommerce shipping software, consider the following key features:

    1. Integration capabilities: Seamless connections with various ecommerce platforms and sales channels ensure smooth data flow and reduce manual data entry and errors stemming from obsolete data.
    2. Multi-carrier support: This allows businesses to choose from a variety of shipping carriers and services, providing flexibility and adaptability to different needs.
    3. Real-time tracking: Offers updates and notifications regarding shipment status, providing transparency for both retailers and customers.
    4. Automated label creation and printing: Streamlines shipping workflows and allows for customization options that align with brand identity.

    By focusing on these features, you can select the best ecommerce shipping software for your business needs.

    The ideal shipping software should offer a clean and user-friendly interface that allows businesses to choose shipping software to manage shipping tasks with just a few clicks. Some platforms even provide a free plan, making them accessible to businesses of all sizes. These features ensure that the software is not only effective but also easy to implement and use, contributing to overall operational efficiency.

    Benefits for Online Retailers

    Ecommerce shipping software offers significant benefits for online retailers. One of the primary advantages is cost efficiency. By optimizing carrier selection, these solutions help reduce shipping expenses, positively impacting profit margins. Streamlined shipping workflows speed up the packing and dispatching process, saving time and reducing errors. This automation is particularly beneficial for small businesses, enabling them to meet growing customer demands while maintaining efficiency.

    In addition to reducing costs, shipping software can provide exclusive shipping discounts and instant savings to reduce shipping costs, further enhancing profitability. These platforms often integrate with multiple carriers, offering discounted shipping rates that are not available through direct negotiations.

    Ecommerce shipping solutions improve operational efficiency and offer better shipping options. These boost customer satisfaction and retention, contributing to a more successful online store.

    How to Choose the Right Shipping Software for Your Business

    Choosing the right ecommerce shipping solution involves understanding your business model and specific needs. Key considerations include integration capabilities, scalability, and cost.

    You’ll want to select software that meets your operational requirements and promotes peak efficiency, ultimately boosting customer satisfaction by meeting the expectations set during checkout.

    Assessing Your Shipping Volume

    Matching your shipping software’s capabilities with your shipping volume is essential for managing fluctuations during peak seasons or as your business scales. Many shipping solutions offer tiered pricing based on volume, significantly affecting overall shipping expenses. For businesses with high order volumes, features like bulk label printing can simplify the shipping process and save significant amounts of time.

    As sales volume increases, inefficiencies in manual shipping processes become more pronounced, making it necessary to use advanced tools for processing hundreds or thousands of orders a day. Choosing software that can scale with your shipping volume ensures that you can handle seasonal spikes or consistent growth without compromising efficiency.

    Evaluating Integration Capabilities

    Integration with ecommerce platforms and carriers is crucial for smooth data flow and reducing manual data entry that leads to expensive errors. Solutions that support comprehensive carrier integrations, for example, provide flexibility that allows businesses to access multiple delivery options, compare real-time shipping rates, and create the best service level agreements for shipments. Choosing shipping software that easily connects with other applications can streamline processes and improve overall performance.

    Comparing Costs and Discounts

    When selecting shipping software, it’s essential to compare costs and look for exclusive shipping discounts. Real-time carrier rates allow businesses to quickly compare shipping costs from different providers, ensuring the best deal for each shipment. Platforms like Cahoot and Easyship provide access to pre-negotiated shipping rates, enabling cost savings for users that are unattainable otherwise. Detailed reports on Shipment Insights (claims, damages, and carrier performance) can help businesses identify cost-saving opportunities and make data-driven decisions to optimize their shipping strategy.

    Enhancing Customer Experience with Shipping Software

    Improving customer satisfaction through timely deliveries is a key advantage of utilizing ecommerce shipping software. These platforms enhance the delivery experience by providing timely updates on shipping statuses and reducing inquiry volumes.

    Features like real-time tracking and streamlined returns management play a significant role in boosting customer satisfaction and retention.

    Real-Time Tracking and Notifications

    Real-time tracking features in shipping software enable customers to monitor their package status throughout the delivery process. This transparency is central to reducing customer anxiety and improving overall satisfaction. Automated notifications provide timely updates about order status, ensuring that customers are always informed about their shipments.

    Effective shipping software should offer branded tracking communications, enhancing the customer experience by aligning with the business’s brand identity, while offering the ability to promote other offerings along with discounts for future purchases. Real-time updates also help streamline order imports and inventory management, ensuring that businesses can meet customer expectations with greater accuracy and efficiency.

    Streamlined Returns Management

    Streamlined returns management is another critical feature of effective shipping software. An integrated returns portal allows businesses to manage return requests efficiently, ensuring prompt customer refunds and improving the overall customer experience. Shipping software should include automation functionalities like a self-serve return portal, return tracking updates, and refund automation to enhance efficiency and customer retention.

    Efficient returns management not only simplifies the process for customers but also aids merchants in recovering value from returned goods. By offering features such as branded tracking pages and the capability for customers to generate return labels quickly, shipping software can make the returns process less cumbersome and more user-friendly. Modern ecommerce shipping software offers peer-to-peer returns to save merchants nearly 70% of the reverse logistics costs while supporting sustainability.

    International Shipping Considerations

    Navigating the complexities of international shipping requires robust ecommerce shipping solutions that support global carrier integration and customs generation. Effective international shipping strategies are essential for online retailers looking to expand their market reach and improve their global delivery experience.

    Automating Customs and Duties

    Automating customs documentation and duties calculation is vital for efficient international shipping. Manually configuring customs forms can be time-consuming and error-prone, but shipping software that automates these tasks helps streamline workflows and reduce shipping expenses. The automation of HS Codes, Declared Value, Manufacturer Name, Country of Origin, and Brief Description of the shipment contents, as well as support for DDU and DDP (Delivered Duty Unpaid or Paid) is priceless feature for managing the complexities of international shipments, ensuring compliance with various regulations and minimizing customs delays.

    Managing Cross-Border Logistics

    Managing cross-border logistics effectively is essential for maintaining customer satisfaction and operational efficiency in international ecommerce. Handling non-delivery reports promptly and efficiently ensures that customers remain informed, fostering loyalty and repeat business. Best practices in managing logistics can streamline operations and reduce instances of non-delivery, contributing to a more favorable delivery experience.

    Implementing strategies for managing cross-border logistics, such as integrating with global carrier networks and automating customs processes, can significantly enhance the efficiency of international shipping. These practices help businesses navigate the complexities of international shipping, ensuring timely deliveries and improving overall customer satisfaction.

    Leveraging Analytics and Reporting

    Leveraging analytics and reporting features in shipping software is essential for optimizing shipping operations and enhancing decision-making. These tools provide comprehensive insights into carrier performance, SLA breaches, in-transit orders, and other operational concerns, enabling businesses to make data-driven decisions that improve efficiency and service levels.

    Tracking Carrier Performance

    Monitoring carrier performance through analytics allows businesses to assess delivery timeliness and identify any breaches of service level agreements. Analytics tools can help quantify carrier reliability by tracking key performance indicators, such as delivery quality and timeliness. This information will help Sellers make informed decisions about carrier selection and optimizing shipping strategies.

    By effectively utilizing analytics to monitor carrier performance, businesses can continually improve their shipping operations, leading to better service levels and enhanced customer satisfaction.

    Tools that provide transparent rate comparisons and non-delivery reports can further aid in refining shipping strategies and ensuring reliable deliveries.

    Inventory Synchronization and Demand Forecasting

    Effective inventory synchronization ensures that stock levels match demand, preventing stockouts and overstock situations. Advanced shipping management solutions include demand forecasting and inventory synchronization features, enabling businesses to predict future inventory needs based on historical sales data and market trends. These capabilities help improve order fulfillment times and customer satisfaction by ensuring that sufficient inventory is available to meet customer demands.

    Integrating inventory synchronization and demand forecasting into shipping software can significantly enhance operational efficiency. Aligning inventory levels with demand helps businesses optimize their supply chain, reduce costs, and improve the overall customer experience.

    Security and Compliance in Shipping Software

    Ensuring security and compliance in shipping software is crucial for protecting sensitive information and maintaining customer trust. Handling international trade regulations and necessary documentation efficiently is essential for smooth shipping operations and adherence to legal standards.

    Data Encryption and Protection

    Shipping software should use robust data encryption methods to protect sensitive information, such as customer names, addresses, email addresses, phone numbers, and payment details. Effective encryption techniques secure customer data, especially during data transfer and storage. Implementing encryption for both data at rest and data in transit helps secure customer information from unauthorized access, making it unreadable even if intercepted.

    By ensuring that customer data is protected through advanced encryption methods, businesses can maintain trust and comply with data protection regulations. These security measures are essential for safeguarding sensitive information and preventing data breaches.

    Cahoot Ecommerce Shipping Software Solution

    As we’ve highlighted, selecting the right ecommerce shipping software can help streamline shipping operations and improve overall efficiency. These platforms are known for their robust features, ease of use, and ability to integrate with multiple carriers and ecommerce platforms.

    Cahoot stands out in the ecommerce shipping software market with the most advanced automation and cost-saving features available. It is designed to promote exceptional shipping efficiency through automatic rate shopping and label generation, processing shipping tasks significantly faster than competitors like ShipStation by over twentyfold. Cahoot uses customer information and available resources to automatically select the most cost-effective shipping label for every order, ensuring timely and cost-effective deliveries.

    One of Cahoot’s key strengths is its ability to integrate seamlessly with many ecommerce platforms and carriers, providing a smooth shipping experience for users. The software’s intelligent cartonization features optimize packing to minimize shipping costs and reduce waste. Additionally, Cahoot offers access to a large network of over 100 warehouses across the U.S., enabling any ecommerce business to become a multi-warehouse operation virtually overnight with zero capital expenditure.

    Cahoot also enhances accuracy and prevents expensive shipping mistakes by automatically validating customer addresses and providing alternatives when errors are detected, ensuring that orders are delivered to the correct locations the first time. This level of automation not only reduces shipping costs but also saves time, allowing merchants to quickly and efficiently fulfill orders with minimal manual input. It takes the thinking out of shipping label creation.

    Two testimonial statements from very happy Cahoot.ai customers praising the ecommerce shipping software

    Summary

    In conclusion, ecommerce shipping software is at the center of successful shipping operations, helping companies to reduce costs and improve customer satisfaction. The top solutions offer a range of features that cater to different business needs, from automation and ample integration options to real-time tracking and compliance management. By choosing the right shipping software, businesses can optimize their shipping strategy, streamline workflows, and stay ahead of the competition.

    Frequently Asked Questions

    What is ecommerce shipping software?

    Ecommerce shipping software automates and manages the order fulfillment workflow, including tasks like label printing, inventory tracking, and carrier integration. This streamlines efficiency and enhances customer satisfaction.

    How does shipping software help reduce costs?

    Shipping software effectively reduces costs by optimizing carrier choices and granting access to discounted rates, while also automating processes to save time and minimize errors. This can lead to significant savings for businesses.

    Why is real-time tracking important in shipping software?

    Real-time tracking offers customers immediate updates on their shipments, improving visibility and alleviating concerns regarding delivery times. The resulting customer trust and satisfaction leads to stronger relationships and higher lifetime customer value.

    What features should I look for in shipping software?

    When choosing shipping software, prioritize features such as integration capabilities, multi-carrier support, real-time tracking, automated label printing, and a user-friendly interface for optimal efficiency. This will enhance your shipping experience and streamline operations.

    How can shipping software improve customer satisfaction?

    Shipping software enhances customer satisfaction by delivering timely updates on shipment statuses, streamlining returns management, and ensuring prompt deliveries. This transparency and efficiency significantly boost the overall customer experience.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Amazon Shipping Software: Boost Amazon Sales & Cut Costs with Smart Shipping Automation

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    10 minutes

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    What is Amazon Shipping Software?

    Efficient ecommerce order fulfillment and shipping is the backbone of success for Amazon Sellers. Amazon shipping software is a specialized tool designed to streamline Amazon order fulfillment while meeting strict performance metrics. The software assists Amazon Sellers in optimizing their operations, improving visibility, and streamlining logistics for better sales performance. Whether fulfilling standard Seller-fulfilled orders (FBM) or shipping in the Seller Fulfilled Prime (SFP) program, having the right software ensures seamless integration, cost savings, and customer satisfaction.

    Modern shipping software integrates with multiple sales channels, (including Amazon Seller accounts), optimizes carrier selection, automates label generation, and ensures compliance with Amazon’s strict delivery expectations. It eliminates manual work, reducing errors and improving fulfillment speed—critical in today’s fast-paced ecommerce environment.

    The Importance of Sales Channel Integrations: Selling Beyond Amazon

    While Amazon is a dominant force in ecommerce, many Sellers operate across multiple platforms, in addition to their Amazon account, to maximize sales opportunities. Effective shipping software must support:

    • Amazon (Marketplace & Seller Fulfilled Prime)
    • Walmart
    • Shopify
    • eBay
    • Etsy
    • Other marketplaces and ecommerce platforms

    Seamless integration ensures all orders—regardless of the platform—are processed from a single dashboard. Without proper integration, businesses face inventory mismatches, fulfillment delays, and operational inefficiencies. The right software centralizes data, syncing inventory and tracking across platforms and marketplaces, reducing manual updates, preventing overselling, and improving customer experience.

    The Benefits of Multi-Channel Shipping Software

    1. Centralized Order Management

    Processing orders from multiple platforms in one place saves time and prevents fulfillment errors. A unified dashboard allows Sellers to efficiently manage shipping for Amazon, Shopify, Walmart, and beyond.

    2. Cost Optimization Through Rate Shopping

    Smart shipping software automatically compares carrier rates in real-time, helping businesses save money by ensuring they always get the lowest-cost shipping label without compromising delivery speed.

    3. Carrier Diversification and Flexibility

    Relying on a single carrier can be risky. Multi-carrier support lets Sellers choose from multiple shipping providers based on price, service level, and delivery region, reducing costs and improving reliability.

    4. Automated Shipping Label Creation

    Generating shipping labels manually is time-consuming and error-prone. Automated label creation and printing speeds up fulfillment, ensuring orders ship faster, more accurately, and at lower labor costs.

    5. Reliable Tracking Customer Experience

    A robust shipping solution provides efficient order tracking and management for shipping orders, offering real-time tracking updates and notifications that reduce customer inquiries and increases satisfaction by offering complete visibility into shipments.

    How to Choose the Right Amazon Shipping Software

    Choosing the right Amazon shipping software can be a daunting task, especially with the numerous options available in the market. However, by considering a few key factors, you can make an informed decision that meets your ecommerce business needs. Here are some tips to help you choose the right Amazon shipping software:

    1. Determine Your Shipping Needs: Consider the type of products you sell, the frequency of your shipments, and the destinations you ship to. This will help you identify the features you need in a shipping software.
    2. Check Compatibility with Amazon Seller Central: Ensure that the shipping software integrates seamlessly with your Amazon Seller Central account. This will enable you to manage your orders, inventory, and shipping processes efficiently.
    3. Evaluate Shipping Rates and Services: Compare the shipping rates and services offered by different software providers. Look for software that offers discounted rates, flexible shipping options, and reliable shipping carriers.
    4. Assess Inventory Management Capabilities: If you have a large inventory, look for software that offers robust inventory management features. This will help you track your stock levels, automate purchase orders, and optimize your inventory management processes.
    5. Consider Scalability and Flexibility: Choose software that can grow with your ecommerce business. Look for software that offers flexible plans, scalable infrastructure, and customizable features.
    6. Read Reviews and Ask for Referrals: Research the software provider’s reputation by reading reviews and asking for referrals from other ecommerce Sellers. This will give you an idea of the software’s performance, customer support, and overall user experience.

    By considering these factors, you can choose the right Amazon shipping software that meets your ecommerce business needs and helps you streamline your shipping workflow.

    Amazon’s Performance Metrics for Standard and Seller Fulfilled Prime (SFP) Orders

    Amazon holds Sellers to strict performance standards, especially for those participating in Seller Fulfilled Prime (SFP). To meet Amazon’s strict performance standards, Sellers must ensure their shipping processes are efficient and reliable. Here are the key requirements:

    Standard Amazon Orders

    To maintain good standing, Sellers must:

    • Maintain an On-Time Delivery Rate of 90% or higher
    • Late Shipment Rate must not exceed 4%
    • Keep the Pre-fulfillment Cancellation Rate below 2.5%
    • Provide Valid Tracking for 95%+ of orders
    • Ensure Order Defect Rates (negative feedback, A-to-Z claims, chargebacks) remain under 1%

    Seller Fulfilled Prime (SFP) Orders

    For Sellers enrolled in Seller Fulfilled Prime, the requirements are even stricter:

    • Maintain an On-Time Delivery Rate of 93.5% or higher
    • Provide Valid Tracking for 99%+ of orders
    • Keep the Pre-fulfillment Cancellation Rate ≤ 0.5%
    • 1-day Page Views >30%, 2-day Page Views >70% for standard-size products
    • 1-day Page Views >10%, 2-day Page Views >45% for oversize products
    • 2-day Page Views >15% for extra large products (there is no 1-day requirement for this size tier)
    • Same-day handling for Prime orders (orders must ship out the same day if received before the cut-off time)
    • Weekend fulfillment capability to match Amazon’s weekend delivery expectation
    • Strict delivery speed adherence—late deliveries can result in suspension from SFP
    • Sellers must provide free returns for all eligible items weighing less than 50 lb, for any reason

    Meeting these requirements requires exceptional shipping efficiency, which is where next-generation shipping software comes into play.

    What is Amazon Buy Shipping API? Benefits & Limitations

    Amazon provides the Buy Shipping API to Sellers, either when buying postage directly through Seller Central, or as a tool for Sellers looking to ensure compliance with its stringent shipping standards.

    Benefits of Amazon Buy Shipping API:

    • Guaranteed Valid Tracking: Ensures every order includes a valid tracking number.
    • Seller Protection: Orders shipped through Buy Shipping are eligible for Amazon’s Seller protection against A-to-Z claims.
    • Automatic Performance Tracking: Amazon monitors compliance and reduces the risk of penalties.
    • Multi-Carrier Rate Shopping: Sellers can compare rates across Amazon’s partnered carriers and select the best shipping option.
    • Late Delivery Exceptions: Orders that are delivered late can be exempted from performance metrics as long as they were shipped on time.

    Limitations of Amazon Buy Shipping API:

    • Limited Carrier Choices: Not all carriers are available through Amazon’s Buy Shipping service, which can prevent access to better rates elsewhere.
    • Support for 1 Carrier Account Each: Sellers that have multiple carrier rate cards from the same carrier for different size, weight, and/or shipping zone products cannot rate shop across them; Seller Central only supports the use of 1 negotiated account per carrier.
    • Potentially Higher Costs: Rates may not always be the lowest available, making third-party rate shopping essential.

    While Buy Shipping API has some nice benefits, merchants looking to maximize cost savings and flexibility often pair it with an advanced shipping platform that optimizes fulfillment and reverse logistics beyond Amazon’s system.

    Happy Cahoot client who now spends Sundays with family instead of creating shipping labels for Monday's shipments

    Why Cahoot is the Best Software for Shipping Amazon Orders (Including Seller Fulfilled Prime)

    Not all shipping software is created equal. Cahoot is purpose-built to meet Amazon’s demanding requirements, ensuring seamless SFP compliance and cost-optimized standard fulfillment.

    1. Purpose-Built for Seller Fulfilled Prime (SFP)

    Unlike generic shipping solutions, Cahoot was designed from the ground up to handle Seller Fulfilled Prime orders. With automated compliance to Amazon’s performance requirements, weekend fulfillment support, and same-day shipping automation, Cahoot ensures Sellers maintain their Prime eligibility without penalty risks.

    2. Automated Rate Shopping for Maximum Savings

    Cahoot intelligently compares real-time shipping rates for all the carriers and services you support and creates the cheapest labels that will deliver on time, ensuring all orders always ship at the lowest cost without compromising delivery speed.

    3. Multi-Channel Fulfillment Beyond Amazon

    Cahoot seamlessly integrates with Walmart, Shopify, eBay, TikTok Shop, and more, providing a centralized dashboard for fulfilling orders across all platforms.

    4. Intelligent Order Routing for Faster Fulfillment

    Cahoot’s advanced AI-driven order routing automatically assigns orders to the nearest warehouse with stock availability, minimizing transit time and reducing shipping costs.

    5. Bulk Label Printing and 1-Click Shipping

    With Cahoot, Shipping Labels are created autonomously, no human, so Sellers can print labels for thousands of orders in minutes, eliminating repetitive manual work and improving warehouse efficiency.

    6. Effortless Weekend and Same-Day Fulfillment

    By automating fulfillment workflows and ensuring weekend processing capabilities, Cahoot helps Sellers stay compliant with Amazon’s Prime-level shipping expectations.

    The Future of Amazon Fulfillment is Here

    Shipping on Amazon has never been more complex, and Sellers who rely on outdated tools risk falling behind. Cahoot’s next-generation shipping software ensures merchants can meet Amazon’s performance metrics, reduce shipping costs, and streamline multi-channel fulfillment—all from a single platform.

    For businesses looking to scale efficiently, grow into or maintain Seller Fulfilled Prime eligibility, and optimize fulfillment operations, Cahoot provides a game-changing advantage.

    Are you ready to take your Amazon fulfillment to the next level? It’s time to ditch legacy shipping tools and embrace automation, intelligence, and efficiency with Cahoot.

    Frequently Asked Questions

    What is a shipping solution?

    Shipping solutions are a combination of services, strategies, and tools aimed at managing and streamlining the process of sending products from one location to another.

    What’s the difference between Cahoot’s network and Cahoot’s shipping software?

    Cahoot’s platform is a peer-to-peer order fulfillment services network where top-rated merchants share warehouse space and fulfillment services with one another. Cahoot’s shipping software is next-generation ecommerce shipping software that can support any size merchant, including high-volume merchants shipping millions of parcels per year. Merchants can use either or both. Our fastest-growing clients use both.

    What are the carriers for ecommerce shipping?

    The most common national carriers are UPS, USPS, and FedEx, while popular regional carriers include OnTrac, Courier Express, and PITT OHIO, among others. Amazon Shipping will soon be matching the last mile delivery reach of the national carriers. For international shipments, DHL Express and GlobalPost are most common, however, UPS, USPS, FedEx and many other carriers also support international deliveries.

    How to ship items you sell online?

    To ship products from your house, you can use a shipping carrier like USPS, FedEx, or UPS. First, package your product securely and weigh it to determine the shipping cost. Then, create a shipping label online and schedule a pickup or drop off at a carrier location. You can also purchase shipping and dropoff packages at the same time at any post office, The UPS Store, and/or FedEx Office location.

    How can I reduce shipping costs?

    To reduce shipping costs, optimize packaging for weight and size, utilize flat-rate shipping options for heavy items, explore discounted shipping rates, offer local delivery or pickup, and consider prepaid shipping. Many platforms like Cahoot and ShipStation offer discounted shipping rates through their carrier relationships that can save many thousands of dollars.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Best Ecommerce Shipping Solutions for 2025: Streamline Your Delivery Process

    In this article

    18 minutes

    Join 26,741 eCommerce Leaders Today

    Looking for the top ecommerce shipping solutions to improve your business? This guide highlights the best options for 2025 to streamline delivery, cut costs, and boost customer satisfaction. Pay special attention to those that are future proof.

    Key Takeaways

    • Ecommerce shipping solutions are critical for optimizing delivery processes and enhancing customer satisfaction, emphasizing the need for efficient strategies amidst industry competition.
    • Key features for effective shipping solutions include integration capabilities, multi-carrier support, automation, and cost optimization, which are essential for improving operational efficiency.
    • Future trends in ecommerce shipping focus on sustainability and technology, with advancements such as AI and machine learning optimizing logistics and enhancing eco-friendly practices.

    Understanding Ecommerce Shipping Solutions

    Ecommerce shipping solutions manage the entire fulfillment workflow: delivering products from the point of order completion to the customer’s doorstep, making them essential for business success. These solutions are not just about moving packages from point A to point B; they are about optimizing every step of the shipping process to ensure efficiency and customer satisfaction. Therefore, shipping solutions play a critical role in differentiating your business and keeping customers happy.

    Online businesses face unique challenges in shipping, such as managing costs while meeting customer expectations for timely delivery. An effective shipping strategy must include key components like carrier selection, tracking methods, and cost management to navigate these challenges successfully. The shipping process directly impacts customer experience, with efficient packaging and timely delivery being crucial for customer satisfaction and retention.

    Looking ahead, future trends in ecommerce shipping are focused on technological advancements and sustainable practices. These aim to improve efficiency and meet the evolving demands of customers, making it more important than ever to stay ahead of the curve.

    Key Features to Look for in Ecommerce Shipping Solutions

    Identifying the right ecommerce shipping solution begins with understanding its integration capabilities with existing sales channels and business software.

    Factors to consider when selecting shipping solutions include:

    • Integration capabilities
    • Scalability
    • Automation
    • Flexibility
    • Cost optimization

    These features are crucial for ensuring efficient operations and meeting customer expectations. Prioritizing these features helps businesses optimize shipping processes and enhance overall performance. Key features to consider in ecommerce shipping solutions include integration capabilities, multi-carrier support, and automated label creation and printing.

    Integration Capabilities

    Seamless integration with your existing tech stack is a game-changer. It’s almost table stakes today, but suffice to say that robust shipping software allows for seamless integration with your channels as well as all of the different order management and fulfillment processes, improving overall efficiency. Integrating shipping software with ecommerce platforms automates tasks like order import, updating stock levels, and reducing manual data entry and errors. This creates a workflow where orders from your ecommerce platform automatically sync with your shipping software, but without overselling, ensuring a seamless customer experience.

    Cahoot, for instance, integrates with all popular marketplaces and ecommerce platforms and can connect with custom-built software via an API. This level of integration not only streamlines shipping workflows but also enhances inventory management, ensuring that your stock levels are always accurate across all sales channels.

    Multi-Carrier Support

    Having access to multiple shipping carriers is a significant advantage. It enables businesses to offer competitive rates and diverse delivery options to customers of all demographics. Shoppers today expect a variety of shipping options, including next-day delivery, flat-rate shipping, and international shipping.

    Shipping software with multi-carrier support facilitates rate comparisons, optimizing delivery times and costs. UPS, USPS, DHL Express, and Canada Post, for example, offer pre-negotiated rates that can provide cost savings to customers during checkout. This flexibility ensures that you can meet customer expectations without breaking the bank, especially when using the best shipping software, and efficient and reliable shipping services that deliver on time.

    Automated Label Creation and Printing

    Automated label creation and printing solutions significantly expedite the preparation of packages, enhancing operational efficiency while ensuring the optimal label is used for the specific shipping circumstance. Autonomous label creation reduces manual work, minimizes errors, accelerates fulfillment, and creates the cheapest shipping label using real-time carrier rate shopping, which is particularly beneficial as shipping volume increases.

    Shipping platforms should feature batch shipping label creation and printing capabilities to prepare all necessary labels for the day’s shipments autonomously with just a few clicks to dramatically speed up order fulfillment and reduce the risk of errors.

    Choosing the Right Shipping Solution for Your Business

    Selecting the right shipping solution is crucial for ecommerce businesses to improve efficiency and meet their specific logistics needs. An ecommerce fulfillment warehouse plays a key role in managing order processing and shipping, making it essential to choose a solution that complements your fulfillment strategy.

    Deciding on shipping rates and methods is a critical first step before shipping ecommerce orders. Next-generation shipping software must simplify operational complexities, drive efficiencies, and generate meaningful cost savings. Legacy shipping software can create more problems for Sellers as it is not equipped to handle the complexities of distributed fulfillment.

    Understanding your shipping volume, managing costs, and ensuring international compliance are key factors in this decision-making process. Let’s explore these in more detail.

    Assessing Your Shipping Volume

    Understanding your shipping volume is essential for choosing a solution that can grow with your operational needs. It needs to accommodate seasonal spikes and consistent growth.

    Recognizing and preparing for shipping volume fluctuations can help ensure that the selected solution meets both current and future business demands. This preparation is vital for maintaining efficiency and customer satisfaction during peak times.

    Cost Management and Discounted Rates

    Cost management is a cornerstone of any effective shipping strategy. Negotiating shipping contracts for bulk shipments often leads to favorable rates and significant savings. Analyzing shipping costs as a percentage of sales can highlight the impact of shipping on overall profitability.

    Data analysis can uncover specific shipping routes and methods that lead to higher costs, allowing businesses to adjust their strategies for savings. Using shipping software can enhance carrier rate negotiations and streamline shipping processes, making cost management more efficient.

    International Shipping Compliance

    Compliance with international regulations is crucial to avoid delays in package delivery. Customers are responsible for additional customs fees at delivery, which can cause friction if not handled properly.

    Accurate completion of customs forms is necessary to prevent packages from being held up. These forms can be obtained online or at local post office/shipping retail locations. Ensuring compliance can help businesses avoid potential fines and restrictions on future shipments.

    Top Ecommerce Shipping Solutions in 2025

    Next-generation shipping software showing global efficient order routing

    Several top-tier ecommerce shipping solutions have emerged as leaders in 2025, each offering unique features and benefits. These include Cahoot, ShipStation, and Easyship. Each of these solutions provides distinct advantages that can help streamline your shipping workflow and wow your customers.

    Exploring these options helps you find the best fit for your business needs and budget:

    Cahoot

    Cahoot is a next-generation, humanless ecommerce shipping software designed for high-volume merchants, but is so easy to use that businesses of any size can take advantage of the future proof technology. Because 97%+ of shipping labels are rate shopped and pre-created before you show up to the warehouse with coffee in-hand, it allows users to bulk-print labels with just one click, enabling immediate shipping. This feature streamlines order fulfillment by eliminating the need for manual rate comparisons and speeding up the shipping process by as much as 21X or more.

    Cahoot integrates with all popular marketplaces, ecommerce platforms, and carriers, and can connect with custom-built software via an API. It notifies Sellers whenever a problem occurs with carriers delivering packages, allowing for proactive resolution and a better customer experience than competitive solutions.

    ShipStation

    ShipStation supports multi-carrier shipping, allowing businesses to compare rates and choose the best option for each shipment. It incorporates automation rules to efficiently manage shipping tasks, significantly reducing manual intervention and errors. And it has more integrations available than just about any other solution, including very niche and long-tail platforms.

    Through branded tracking pages, ShipStation enhances the customer experience by allowing businesses to maintain their branding throughout the delivery process. This feature ensures that customers have a consistent brand experience from purchase to delivery.

    Easyship

    Easyship is a cloud-based shipping solution that offers discounted shipping rates, customer tracking, seamless integration, and dynamic rates at checkout. These discounted shipping rates can significantly reduce costs for businesses.

    The dynamic rates at checkout improve conversion rates by providing customers with real-time shipping costs. Additionally, Easyship’s comprehensive tracking features allow customers to monitor their shipments effectively, enhancing the overall customer experience.

    Enhancing Customer Experience with Shipping Solutions

    Delivering an exceptional customer experience is of utmost importance (no pun intended). Efficient shipping not only improves the bottom line, but it supports ongoing customer relationships, potentially increasing sales and loyalty. Shipping costs play a crucial role in ecommerce profitability, making cost reduction vital for retaining customers. An effective shipping strategy can reduce customer inquiries about order statuses, allowing support teams to focus on other issues.

    Incorporating features like real-time tracking and notifications, flexible delivery options, and branded packaging and tracking pages can elevate your shipping strategy to new heights.

    Real-Time Tracking and Notifications

    Real-time tracking is essential for keeping customers informed about their orders. Shipping solutions should provide visibility into shipment tracking, consolidating all orders in one interface for wider visibility and easier management. Automated notifications throughout the fulfillment and shipping timeline can reduce customer anxiety, improve satisfaction, and limit the customer service burden.

    Shipment notifications can be delivered via various channels, including email, SMS, and mobile app alerts, keeping customers engaged and informed. This level of transparency and meeting the customer where they are can significantly boost their confidence in your business.

    Flexible Delivery Options

    Offering flexible delivery options is crucial for today’s online shopper. According to many studies, customers prefer flexible delivery options. Providing diverse shipping methods allows customers to select options that best meet their needs, budgets, and availability.

    Having multiple delivery options can enhance customer satisfaction and minimize the likelihood of cart abandonment. This flexibility ensures that your customers can choose the delivery method that works best for them, making their shopping experience more convenient and enjoyable.

    Branded Packaging and Tracking Pages

    Branded packaging and custom tracking pages play a crucial role in shaping customer perceptions and experiences during the shipping process. Customized tracking pages can enhance the customer experience by providing a branded touchpoint during the shipping process.

    Integrating branded packaging and custom tracking pages not only elevates the customer experience but also fosters brand loyalty and reduces the likelihood of cart abandonment. This cohesive branding can make a lasting impression on your customers, encouraging repeat business and positive reviews.

    Reducing Shipping Costs with Advanced Solutions

    Shipping costs are a significant expense for ecommerce businesses, and reducing these costs can improve profitability. Key metrics to monitor include on-time delivery rates, shipping costs per shipment, and carrier performance on speed and reliability. Tracking shipping expenses over time allows businesses to identify cost trends and potential financial issues.

    Advanced solutions like rate comparison tools, volume discounts, and efficient packaging strategies can help reduce shipping costs and streamline operations.

    Rate Comparison Tools

    Shipping rates are influenced by various factors, including courier options and unique business variables. Using rate comparison tools in ecommerce shipping allows businesses to identify the best shipping rate deals available in the market.

    Cahoot, for example, automatically finds and assigns the lowest cost labels for each order, ensuring users save money on every package shipped without compromising delivery speed. Utilizing lightweight packaging like poly mailers can further reduce shipping costs as they adjust to different volumes and weights.

    Volume Discounts

    Consolidating shipping volumes helps businesses negotiate better rates with carriers. Volume discounts can significantly lower shipping expenses for ecommerce businesses. Securing volume discounts allows businesses to optimize their shipping costs and improve profit margins.

    Overall, leveraging volume discounts through an effective ecommerce shipping strategy can enhance the efficiency and cost-effectiveness of ecommerce operations.

    Efficient Packaging Strategies

    Optimizing packaging can lead to lower shipping rates and reduced operational costs. Understanding the average package weight can help in optimizing packaging to minimize shipping costs.

    Businesses should consider carrying a variety of package sizes and materials to meet diverse shipping needs efficiently. This approach not only reduces packaging costs but also ensures that products are protected during transit, reducing the risk of damage and returns.

    Streamlining Your Order Fulfillment Process

    Streamlining your order fulfillment process is necessary for improving efficiency and customer satisfaction. Fulfillment services can enhance the efficiency of order processing by managing logistics and inventory storage. Using platforms like ShipStation simplifies the management of orders and fulfillment workflow by automating order imports and logistics.

    Partnering with third-party logistics providers can significantly improve customer experience by streamlining logistics operations. Regularly monitoring shipping metrics such as delivery times and order accuracy will help you stay on top of your shipping performance and bring clarity when deciding if outsourcing fulfillment should be considered.

    Leveraging route optimization tools can significantly reduce delivery times by identifying the fastest paths for shipment.

    Batch Processing and Automation

    Implementing batch processing can significantly enhance the speed of order packing and shipping. Automated systems can cut down the time required for packing and shipping orders. Data analytics can pinpoint inefficiencies in shipping routes and processes, enabling targeted cost-reduction strategies.

    This level of automation and data-driven decision-making can make a substantial difference in your order fulfillment efficiency.

    Inventory Management Integration

    Integrating shipping solutions with inventory management software ensures that stock levels remain accurate across all sales platforms, and minimizes double data entry (or triple, or more!). Or better yet, select a solution that has inventory management capabilities built-in.

    Effective integration with ecommerce platforms can streamline the order fulfillment process, ensuring that your inventory is always up to date and that orders are processed efficiently.

    Scheduling Carrier Pickups

    Scheduling carrier pickups helps businesses manage their shipping tasks more effectively. Scheduling pickups helps businesses streamline the shipping workflow, provide predictability, and reduce time spent dropping off packages at carrier hubs. Arranging carrier pickups can eliminate the need to stand in lines, saving time and resulting in smoother operations. Some ecommerce shipping solutions such as ShipStation will allow you to schedule pickups from within their software.

    Ensuring Security and Compliance

    Ensuring security and compliance is essential for maintaining customer trust and avoiding legal issues. Ecommerce businesses must implement robust security measures to protect customer data. Ecommerce brands face increased risks just having access to this sensitive information due to multiple parties needing access to order data, making shipping insurance essential.

    International regulations, paperwork, customs forms, and duties calculations are required for shipping to ensure compliance. Regulations are increasingly mandating reduced packaging waste, pushing ecommerce brands to adopt sustainable packaging solutions.

    Shipping Insurance

    Shipping insurance is vital for protecting shipments, helping ecommerce businesses manage risks associated with theft, loss, and damage during transit. For imported inventory, marine cargo insurance provides comprehensive coverage for the full value of goods throughout their shipping journey from overseas. Consumer delivery insurance allows customers to insure their shipments during checkout, addressing concerns about theft or damage. Limited liability insurance relies on carriers’ own policies, which typically cover only minimal amounts, resulting in a riskier option for ecommerce companies. While this latter option is free up to $50 or $100 declared value, depending on the carrier used, getting claims approved is often impossible, so it’s best to protect the goods when it makes sense to do so. Using inexpensive third-party cargo insurance is recommended.

    Data Security Measures

    Shipping solutions must implement robust data security measures to protect sensitive customer information from unauthorized access. Encryption protocols are essential for protecting customer data during transactions and communications. Encrypting sensitive information, using firewalls, and maintaining antivirus protection are essential for data security in ecommerce.

    Authentication methods such as two-factor verification and IP monitoring help ensure secure online transactions. And sensitive data should be redacted from ecommerce shipping solutions after transactions are settled and no longer needed.

    Using Analytics to Optimize Shipping Operations

    Using analytics in shipping operations can significantly enhance overall efficiency by identifying areas for improvement. Regular updates and audits of ecommerce software are critical in preventing vulnerabilities from being exploited. Emerging technology in shipping includes AI and predictive analytics, which enhance demand forecasting and operational efficiency.

    AI applications in shipping help companies predict demand by analyzing historical data and live market trends. Agentic AI solutions can act on their findings independently and create Purchase Orders with vendors within established budget guidelines. By leveraging advanced analytics, businesses can make data-driven decisions that improve their shipping and procurement operations.

    Tracking Performance Metrics

    Tracking key performance metrics is essential for evaluating shipping efficiency and delighting customers. Use tools to monitor on-time delivery rates as higher percentages correlate with customer happiness.

    Average delivery time is also an important metric, helping businesses gauge their shipping efficiency against industry standards and delivery promises. Shipping software analyzes shipping data to provide insights into business performance and optimize logistical efficiency.

    Identifying Cost-Saving Opportunities

    Analytics can reveal cost drivers linked to various carriers and services, shipping supplies, and waste from inefficient shipping such as using boxes that are too large and push the shipment into more expensive dimensional weight rates. Reviewing the data enables businesses to negotiate better rates on the shipping weights, sizes, and zones they are actually using while minimizing unnecessary expenses.

    Improving Delivery Times

    Utilizing data insights can significantly enhance the optimization of delivery routes for ecommerce businesses. Advanced analytics enable companies to analyze traffic patterns, weather conditions, and delivery performance to select the most efficient routes and shipping locations to reduce transit times, fuel consumption, and operational costs. The effective application of data insights in delivery planning leads to faster delivery times, higher customer satisfaction, and improved overall efficiency.

    Summary

    Choosing the right ecommerce shipping solution involves understanding your business needs and the key features that can optimize your workflows and deliver meaningful business impact. From integration capabilities and multi-carrier support to automated label creation and printing, these features play a crucial role in enhancing operational efficiency and customer satisfaction. As ecommerce continues to evolve, adopting advanced shipping strategies and the solutions that support them will be key to maintaining a competitive edge and ensuring long-term success.

    Frequently Asked Questions

    What are the key features to look for in ecommerce shipping solutions?

    When selecting ecommerce shipping solutions, prioritize integration capabilities, multi-carrier support, automated label creation and printing, cost management, and compliance with domestic and international regulations.

    How can I reduce shipping costs for my ecommerce business?

    To effectively reduce shipping costs for your ecommerce business, optimize packaging for weight and size, utilize flat-rate shipping options for heavy items, explore discounted shipping rates, and offer local delivery or pickup. Many platforms like Cahoot, ShipStation, and Easyship offer discounted shipping rates through their carrier relationships that can save many thousands of dollars. Also, utilize rate comparison tools, secure volume discounts, and optimize your packaging strategies (shipping supplies and cartonization technology). These approaches will help you streamline expenses and enhance profitability.

    Why is real-time tracking important for ecommerce shipping?

    Real-time tracking is crucial for ecommerce shipping as it enhances customer satisfaction by keeping them informed about their order status, thereby reducing anxiety associated with uncertainty. This transparency fosters trust and loyalty towards the brand.

    What is the best online shipping service?

    The Top 3 Online Shipping Services are:

    • Cahoot
    • ShipStation
    • EasyShip

    What’s the difference between Cahoot’s network and Cahoot’s shipping software?

    Cahoot’s platform is a peer-to-peer order fulfillment services network where top-rated merchants share warehouse space and fulfillment services with one another. Cahoot’s shipping software is next-generation ecommerce shipping software that can support any size merchant, including high-volume merchants shipping millions of parcels per year. Merchants can use either or both. Our fastest-growing clients use both.

    What are the carriers for ecommerce shipping?

    The most common national carriers are UPS, USPS, and FedEx, while popular regional carriers include OnTrac, Courier Express, and PITT OHIO, among others. Amazon Shipping will soon be matching the last-mile delivery reach of the national carriers. For international shipments, DHL Express and GlobalPost are most common, however, UPS, USPS, FedEx, and many other carriers also support international deliveries.

    How to ship items you sell online?

    To ship products from your house, you can use a shipping carrier like USPS, FedEx, or UPS. First, package your product securely and weigh it to determine the shipping cost. Then, create a shipping label online and either schedule a carrier pickup or drop them off at a carrier location. You can also purchase postage and drop your packages off at the same time at any post office, The UPS Store, and/or FedEx Office location.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Save Money With Ecommerce Shipping Software: Next-Gen Solutions

    In this article

    7 minutes

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    Shipping costs are one of the biggest challenges for ecommerce businesses today, and understanding them is essential to reducing expenses and increasing profit margins. With rising carrier fees, labor expenses, and warehouse leases, every dollar saved makes a difference. Shipping costs can vary greatly depending on several factors, including package weight, dimensions, destination, and shipping method. Traditional shipping software, built for a simpler time, often fails to optimize costs effectively, leaving businesses to absorb unnecessary expenses. By gaining a clear understanding of these costs, businesses can make informed decisions that help reduce shipping expenses and improve overall efficiency.

    That’s where next-generation ecommerce shipping software comes in. Designed to reduce shipping costs at every stage, these advanced solutions automate key processes: choosing the most affordable shipping labels, optimizing package sizes to avoid dimensional weight fees, and streamlining fulfillment with minimal manual intervention. By leveraging automation and AI-driven decision-making, merchants can significantly cut costs while improving delivery efficiency.

    In this article, we’ll explore how next-gen shipping software helps save money, eliminate cost leakages, and improve warehouse efficiency, giving businesses the competitive edge they need to succeed in ecommerce today.

    Shipping Costs are One of the Biggest Challenges for Ecommerce Businesses Today

    Shipping costs can be a significant challenge for ecommerce businesses, as they can eat into profit margins and affect customer satisfaction (and revenue) if they skimp on delivery speed. To reduce shipping costs, ecommerce businesses can implement various strategies, such as negotiating with shipping carriers, using discounted shipping supplies, and optimizing packaging. By taking proactive steps to manage shipping expenses, businesses can protect their profit margins and offer competitive shipping rates to their customers.

    Calculating Shipping Costs

    Calculating shipping costs involves considering all the factors mentioned above. To calculate shipping costs, ecommerce businesses can use shipping calculators, consult with shipping carriers, or connect to carrier APIs for real-time rate shopping to determine the most cost-effective option. It’s essential to factor in all shipping fees, including fuel surcharges, handling fees, delivery area surcharges, and insurance costs, among others. By accurately calculating shipping costs, businesses can set appropriate pricing strategies and avoid unexpected expenses.

    Savings: Stay Ahead and Boost Margins Despite Rising Costs

    We’ve now identified two key things that next-generation ecommerce shipping software must do – it must simplify operations in today’s complex world, while also boosting your team’s productivity and freeing up their time.

    However, the biggest pressure merchants face today is around costs. At a time when major carriers implement annual rate increases (GRIs) and additional surcharges, along with rising worker wages and warehouse leases, Sellers need to be scrappy to save every penny to protect and increase their margins. It can make the difference between going out of business and finding success.

    Legacy software does a poor job of unlocking savings because it was built for a world where resource optimization or cost‑cutting was not needed. We believe there are three key areas of the shipping workflow where software must be able to unlock cost savings:

    • Does the software pick the cheapest shipping label every time?
    • Does the software optimize packaging and shipping costs for large, complex orders?
    • Is the software easy to use, with minimal human oversight? Can it work effectively with untrained, seasonal, or part‑time labor?

    Pick the Cheapest Label Automatically, Every Time

    Legacy Software – You’ll Never Know if You’re Saving Money

    As we’ve seen previously, legacy software requires many manual automation rules to support workflows. But why do merchants go to all this trouble? The answer is simple – to identify the cheapest shipping label on every order.

    However, the automations (mapping SKUs and customer addresses to fulfillment locations and carrier services) are simply a means to an end. There is no way to verify whether the rules ensure the cheapest option is picked every time.

    To determine that, manual and deep cost comparison analysis is required. The possibility of cost leakage is real, and in a world where customers expect free and fast shipping on every order, every last dollar matters. You need certainty and confidence in the labels your shipping software selects.

    Next‑Gen Software – Savings on Every Label

    Cahoot’s software removes the maze of complex, human‑defined automation rules. With no rules to manage, you don’t need to worry about optimizing them for maximum savings. The system intelligently factors in all parameters to make the right choice every time.

    It’s easy to overlook scenarios when defining rules manually. For example, a one-unit order might weigh less than one pound, qualifying for USPS Ground Advantage. But what if someone orders three units or six units? Cahoot’s system considers all data to make the optimal decision.

    You no longer need to perform deep investigations to confirm savings. You can rest assured you’re getting the best label every time.

    Pay the Right Shipping Fees, Even on Complex Orders

    Legacy Software – Cost Leakages From Human Error

    Legacy software leaves packaging decisions to humans, which can lead to cost leakages. Carriers charge based on dimensional weight, and oversized boxes increase costs beyond actual shipping rates.

    Without automation or guidance, package selection relies on human judgment, raising the risk of errors.

    Next‑Gen Software – Pay the Optimal Rate Every Time

    Cahoot’s Intelligent Cartonization ensures optimal box selection for even the most complex orders. You pay only the minimum required shipping rate, and errors are dramatically reduced.

    Ease of Use

    Legacy Software – Needs Staff to Babysit the Tool

    Legacy software is clunky and requires constant manual entry, workflow updates, and oversight. Changes from carriers or product catalogs break automations, demanding dedicated resources to maintain the tool.

    Many Sellers hire teams just to configure and maintain their legacy shipping software, increasing staffing costs and diverting talent from more valuable work.

    Next‑Gen Software – Anyone Can Use It

    Cahoot automates most workflows, adapts to changes automatically, and requires minimal setup. Untrained, part‑time, or seasonal staff can quickly learn and use the system, reducing staffing costs and freeing teams to focus on higher‑value tasks.

    Summary: Why Next‑Gen Shipping Software is Essential for Cost Savings

    As ecommerce businesses grow, shipping expenses rise. Legacy software leads to cost leakages, inefficient packaging, and manual labor inefficiencies, harming profit margins.

    Next‑gen shipping software reduces costs by:
    ✅ Automatically selecting the cheapest label for every order
    ✅ Optimizing packaging to avoid dimensional weight fees
    ✅ Eliminating manual labor with intelligent automation
    ✅ Enabling untrained or seasonal staff to handle fulfillment easily

    By embracing smarter shipping solutions, merchants can stop overpaying, streamline operations, and reinvest savings into growth.

    This was Part 4 of our four‑part Next‑Generation Shipping Software Guide. To learn more, check out the other parts covering the old vs. new world, simplified fulfillment, and warehouse efficiency.

    Frequently Asked Questions

    What is the best shipping software?

    It depends on your needs. Legacy solutions like ShipStation handle basic label printing but have limitations. Next‑gen software offers automation and optimized shipping with built‑in discounted rates.

    How is Cahoot able to offer discounted shipping rates for small businesses?

    Cahoot aggregates shipping volume across all users and partners with carriers and consolidators to negotiate best‑in‑class discounts, which we pass on to our users.

    What shipping carriers does Cahoot work with?

    Cahoot works with UPS, FedEx, USPS, DHL, Amazon Shipping, OSM Worldwide, OnTrac, Pitney Bowes, and regional carriers, ensuring you have access to the best shipping options.

    How do I integrate Cahoot with my ecommerce platform?

    Cahoot integrates with Shopify, WooCommerce, BigCommerce, Amazon, TikTok Shop, Rithum, and more. Native integrations let you start shipping with discounted rates quickly.

    How quickly can I save on my shipping costs?

    Once you sign up, you get instant access to pre‑negotiated shipping rates, letting you cut expenses from day one.

    Do you provide customer support in case I need help?

    Yes, Cahoot offers full customer support and an extensive self‑service help center to help with any questions or issues. Our support team is here to assist you with everything from integrating your ecommerce platforms to choosing the best shipping options and navigating packaging costs.

    Can ecommerce shipping software handle returns?

    Yes, Cahoot ecommerce shipping software can efficiently handle reverse logistics, automated return label generation, return order tracking, and inventory management. For peer‑to‑peer returns—where unused items move directly from one customer to the next—see our Peer‑to‑peer ecommerce returns solution, which cuts return costs by 64%, increases turnaround by 4×, and reduces CO₂ emissions by 54% on average.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Next-Gen Warehouse Automation Software for Ecommerce: Fulfillment Efficiency

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    Ecommerce order fulfillment is more than just packing and shipping — it’s about precision, speed, and cost efficiency. Businesses that rely on outdated legacy systems often face delays, high labor costs, and manual errors, making it difficult to meet growing customer expectations.

    Enter next‑generation warehouse automation software for ecommerce: designed to optimize every step of the fulfillment process. From intelligent order routing to real‑time tracking and automated cartonization, modern shipping software maximizes warehouse efficiency, reduces costs, and ensures seamless operations. By integrating smart automation, businesses can scale effortlessly while delivering faster and more reliable shipping experiences.

    In this article, we’ll explore how shipping software enhances warehouse efficiency, minimizes fulfillment challenges, and empowers merchants to stay ahead in a competitive market.

    Understanding Fulfillment Challenges

    Fulfillment challenges can significantly impact a business’s ability to deliver products efficiently and effectively. Understanding these challenges is crucial to implementing effective solutions.

    Manual Processes and Labor Costs

    Manual processes can be a significant drain on resources, leading to increased labor costs, reduced productivity, and a higher risk of errors. Tasks such as manual data entry are not only time‑consuming but also prone to mistakes, which can cause delays and escalate costs. This is where automation solutions, like warehouse management systems (WMS), come into play. By automating repetitive tasks, a WMS can streamline operations, reduce the need for manual labor, and minimize errors. This not only cuts down on labor costs but also frees up your team to focus on more strategic activities that drive business growth.

    Disconnected Software Programs and Missing Tracking Info

    Disconnected software programs can create a fragmented fulfillment process, leading to missing tracking information and making it difficult to monitor and manage inventory levels, shipping, and delivery. This lack of integration can result in inefficiencies and errors that disrupt the entire supply chain. Implementing a seamless integration between software programs, such as a WMS and shipping software, can significantly improve visibility and control over the fulfillment process. With integrated systems, you can ensure that all parts of your operation are synchronized, providing real‑time updates and comprehensive tracking information. This not only enhances operational efficiency but also improves customer satisfaction by ensuring timely and accurate deliveries.

    Warehouse Efficiency: Supercharge Productivity for Your Team

    We’ve now discussed how shipping software needs features that help you simplify the complex new world of ecommerce. But Sellers are not just focused on simplifying operations inside their businesses. Pressure from the outside continuously bears down on them – whether it’s rivals on online marketplaces, multiple channels to market and sell on, or demanding customers.

    Efficient shipping processes play a necessary role in enhancing productivity by automating tasks such as creating labels, tracking packages, and handling returns, ultimately leading to improved customer satisfaction.

    And all this is happening amid a competitive labor market, where staffing has become expensive and challenging. It isn’t enough for an ecommerce shipping software to reduce operational complexity. It must do so with minimal human intervention and resources, allowing you to do more with less. Crucially, the software must unlock productivity gains for today’s small teams, enabling them to focus on high‑value work.

    In the previous section, you might’ve seen that legacy software has features that can simplify operational complexity. However, those features are often painful and convoluted to implement by a small team of seasonal or part-time workers. We think there are 3 major areas where shipping software must streamline workflows efficiently:

    • Does the software have humanless, autonomous automation across shipping workflows, or does it require constant babysitting?
    • In a world with increasing basket sizes, can it unlock time savings for warehouse staff by automating packaging selection?
    • Is the product easy for seasonal or part‑time workers to use, without specialized training?

    In the coming sections, we’ll examine each of these areas, showing how legacy software drains productivity and how next‑generation shipping software reclaims time, boosts efficiency, and drives growth.

    Automated Shipping Workflows with Warehouse Management Systems

    Legacy Software – Labor Intensive and Painful

    The most important tasks in shipping software are routing orders to fulfillment locations and identifying the cheapest shipping label.

    Legacy shipping software uses manual, repetitive steps for printing labels. Typically, after logging in, you must:

    1. Open an order
    2. Fix address issues
    3. Identify which warehouse has the SKU in stock
    4. Assign a “Ship From” location based on the customer’s address
    5. Select packaging
    6. Rate‑shop across carriers and services one at a time
    7. Pick the cheapest service
    8. Print the label
    9. Repeat for the next order

    Some of these steps can be automated through crude, hard-coded automation rules but those are time-consuming to configure and can still be inaccurate. A rule is needed for almost every single workflow. Here are some reasons why this process is so elaborate and painful:

    • Automations in most legacy software require certain criteria to be defined. When orders meeting these criteria (for example, orders for a certain SKU) enter the system, the rule is triggered to execute certain actions (like assigning a certain carrier or service). But what are all these rules defined for? Their ultimate aim is to find the lowest-priced shipping label on every order. These rules simply trigger certain actions to occur, rather than rate shopping for the cheapest label by comparing carriers and services.
    • Even the simple steps need a rule. For example, if you’re delivering to a residential address, then only certain services can be used – like FedEx Home Delivery, for example. A rule needs to be written to ensure this mapping is considered by the system. All this makes it enormously difficult to cut down the number of keystrokes and clicks.
    • ShipStation’s ‘Auto-routing’ feature (still in Beta in 2025), only factors in which locations have a product and their distance from the customer before assigning orders to a fulfillment center. It still does not support the comparison of real-time shipping rates for each carrier and service to make a full and final, (accurate), decision.

    In our estimation, it would take the average human over 5 hours to print labels for 1,000 orders!

    And as we all know, a human is not a computer. When doing a repetitive task for such a long period of time, fatigue and the possibility of errors increase dramatically. It’s also worth asking – why should a human be engaged in such repetitive, low-value work all day long?

    Next‑Gen Software – Humanless and Seamless

    With next-generation shipping software, the difference is like night and day. The system intelligently compares warehouse locations, carriers, shipping services, inventory levels, and shipping supplies to instantly and automatically generate shipping labels for every single order, and integrating seamlessly with inventory management enhances efficiency and accuracy.

    Here’s the sequence of steps to accomplish the same goal using Cahoot (after logging in):

    1. Verify the address corrections made automatically by the system
    2. Prints labels in bulk

    The system automates many steps that legacy software doesn’t – it spots potential issues with addresses and makes suggestions to fix them, it only considers warehouses that have inventory available, it selects the smallest packaging that an order can fit into and ship safely, and it rate-shops that package weight and dimension across all carriers, services, and warehouses for the cheapest service.

    It’ll take the average human just 15 minutes to print labels for 1,000 orders in Cahoot, and most of that time is waiting for the printer to finish its job. We’ve made a video where you can get a glimpse of how this works, and how we stack up against the popular legacy shipping software ShipStation (if you’d like to see a little more about how Cahoot compares to ShipStation, read our comparison here!) You can sit back and relax, knowing that the optimal selection was made for every single order using technology. You can also free up your time to work on other tasks that add more value to the bottom line. If you’re finding it difficult and expensive to hire more people, you can ensure that the people you do have are focused on the problems that matter the most.

    You can see it in action, or read our ShipStation comparison to learn more.

    Making Large, Complex Orders Easy to Handle

    Legacy Software – Left to Humans and Heuristics

    Legacy shipping software is mainly focused on one portion of the fulfillment workflow – printing shipping labels. In a world of rising basket sizes, merchants have complexity in other steps of the shipping process, including shipment packaging selection. Optimizing layout and staff allocation in a distribution center can significantly enhance shipping efficiency and reduce costs.

    This is a common problem that customers of legacy software like ShipStation face. For complex orders that might require multiple boxes of various sizes, they are forced to enter the box dimensions manually each and every time based on the SKUs in the order. The customers from their community forum below are requesting a pull-down list of the common boxes they use so they can quickly make the selection rather than manually entering dims.

    The customer is also highlighting a more important issue – they can add a set of boxes as a “base” in ShipStation. This feature aims to serve as a default that can be applied to most MLMQ orders. However, unless you’re lucky that most of your MLMQ orders consist of the same unique combination of SKUs, such a feature is pointless.

    The list of automation rules that need to be written to map SKU combinations to boxes is dizzyingly long and involves having to figure out all the possible SKU permutations; impossible if your product catalog is any more than a couple dozen SKUs.

    Forum chat response asking for cartonization software recommendations
    User in forum seeking cartonization software recommendations to save time and manage dimensional weight

    As the classic saying goes, customers are great at highlighting problems, but not identifying solutions. We think this is a big pain point that next-generation software already solves.

    Next-Gen Software – Powered by Machine Learning for Warehouse Operations

    Cahoot’s next-generation shipping software solves both of these problems. We don’t think the solution is a drop-down list, because you’re just replacing keystrokes with clicks. It’s still human effort and time.

    Our software remembers the box selection you make the first time and applies it by default the next time regardless of how many SKUs and units of each are in the order. This ensures you’re freed up from repetitive manual entries and clicks.

    We don’t believe the solution to picking the optimal box for every MLMQ order is an arbitrary default or crude automation rule. The Cahoot system uses breakthrough cartonization innovation to intelligently evaluate the space utilization for a group of items across all available boxes in stock and calculates the percent fit (% fit), making sure the most optimal box is automatically selected every time.

    Efficient 3-D box packing using intelligent algorithms for optimal space utilization and cost savings

    This frees your team from data entry and guesswork, letting them focus on higher‑value tasks that grow your business.

    Optimizing Your Fulfillment Network and Carrier Management

    Optimizing your fulfillment network and carrier management is crucial to ensuring efficient and cost-effective shipping operations.

    Fulfillment Network and Carrier Performance Metrics

    Monitoring fulfillment network and carrier performance metrics is essential for optimizing shipping operations. Key metrics—on‑time delivery rates, shipping costs, and customer satisfaction—provide insights into your fulfillment efficiency. Implementing a WMS offers real‑time visibility, enabling data‑driven decisions to optimize carriers, reduce costs, and improve delivery reliability.

    By understanding challenges and optimizing your network and carriers, businesses can boost warehouse efficiency, cut costs, and elevate customer satisfaction through integrated, automated solutions.

    Summary: Why Next‑Gen Shipping Software is a Game Changer

    Traditional fulfillment systems struggle with modern ecommerce demands—high labor costs, fragmented software, and manual workflows. Next‑generation warehouse automation software transforms operations by automating workflows, optimizing packaging, and integrating sales channels.

    Features like real‑time tracking, AI‑powered cartonization, and automated carrier selection let businesses scale without bottlenecks. Investing in the right software drives down costs, increases accuracy, and delivers a seamless fulfillment experience.

    Learn more in our Next Generation Shipping Software Guide, Part 4: “Save Money With Ecommerce Shipping Software: Next‑Gen Solutions”.

    Frequently Asked Questions

    How does warehouse automation software improve ecommerce fulfillment?

    Warehouse automation software streamlines fulfillment by automating order routing, label generation, and inventory tracking. This reduces errors, speeds processing, and optimizes carrier selection for faster, more cost-effective deliveries.

    What are the key benefits of using shipping software for warehouse efficiency?

    Shipping software enhances warehouse efficiency by automating label printing, integrating with multiple carriers, optimizing order packing, and providing real‑time tracking. These features reduce labor costs, minimize delays, and improve fulfillment accuracy.

    Can warehouse automation software integrate with existing ecommerce platforms?

    Yes. Most next‑generation warehouse automation solutions integrate seamlessly with platforms like Shopify, Amazon, Walmart, and eBay—synchronizing inventory, orders, and shipping updates in real time.

    How does automated cartonization help reduce shipping costs?

    Automated cartonization uses AI to select the best box size for each order, reducing dimensional weight fees and wasted space. This optimization lowers shipping costs and improves warehouse space utilization.

    How do I choose the right warehouse automation software for my business?

    Consider integration capabilities, ease of use, automation features, and scalability. Look for solutions supporting multiple carriers, intelligent order routing, and analytics for continuous optimization.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Shipping Software for Ecommerce Fulfillment: The Next Generation of Shipping Simplified

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    Ecommerce has transformed the way people shop, but behind every seamless online purchase is a complex fulfillment operation. As consumer expectations for fast and affordable shipping continue to rise, merchants face increasing pressure to optimize their logistics. Managing inventory across multiple warehouses, coordinating with various carriers, and ensuring accurate, on‑time deliveries, all while keeping costs low, has become a daunting challenge.

    Legacy shipping software was built for a simpler time when most businesses operated from a single warehouse and fulfilled orders through a few standardized shipping methods. But today’s ecommerce landscape is far more dynamic. Merchants must navigate multi‑channel sales, distributed fulfillment networks, and ever‑changing carrier rates, all while maintaining a smooth customer experience. Unfortunately, traditional shipping software often falls short, forcing businesses to rely on manual workarounds that are inefficient, error‑prone, and costly.

    Next‑generation shipping software changes everything. By leveraging intelligent automation, real‑time decision‑making, and deep integration with fulfillment networks, modern shipping solutions eliminate the complexity of ecommerce logistics. These systems optimize order routing, reduce shipping costs, and ensure seamless fulfillment—without the need for endless configuration or constant oversight.

    In this article, we’ll explore the major ways next‑generation shipping software simplifies ecommerce fulfillment, highlighting how it outperforms legacy systems in efficiency, accuracy, and scalability. Whether you’re a growing merchant or an established seller looking to streamline your operations, the future of shipping is here—and it’s built for success.

    What is Ecommerce Shipping Software?

    Ecommerce shipping software is a specialized technology solution designed to streamline and optimize the shipping process for online businesses. Its primary purpose is to help ecommerce businesses manage their shipping operations efficiently, reduce shipping costs, and improve customer satisfaction. By integrating with ecommerce platforms, inventory management systems, and shipping carriers, ecommerce shipping software provides a seamless and automated shipping experience. This integration ensures that orders are processed quickly and accurately, inventory levels are synchronized, and customers receive their purchases on time, enhancing overall customer satisfaction.

    Benefits and Key Features

    The benefits of using ecommerce shipping software are manyfold. Firstly, it significantly reduces shipping costs by enabling businesses to compare real-time rates from multiple carriers and choose the most cost-effective option. This not only saves money but also ensures that customers receive their orders promptly. Improved customer satisfaction is another major benefit, as the software automates many aspects of the shipping process, reducing errors and delays.

    Key features of ecommerce shipping software include real-time rate comparison, which allows businesses to find the best shipping rates instantly. Automated label printing streamlines the shipping process, saving time and reducing the risk of errors. Inventory management features help keep track of stock levels across multiple warehouses, ensuring that products are always available when needed. Order tracking provides customers with real-time updates on their shipments, enhancing their shopping experience.

    Additionally, ecommerce shipping software supports international shipping, making it easier for businesses to expand their reach globally. The software often provides exclusive shipping discounts, further reducing shipping expenses. Multi-carrier support and integration with multiple sales channels ensure that businesses can manage all their shipping needs from a single platform, improving efficiency and supply chain visibility.

    Simplifying Operations: Making Today’s Complex Ecommerce Effortless

    Based on original research we’ve conducted, a merchant seeking to cover the continental U.S. (the lower 48 states) with affordable 2‑day ground shipping requires inventory to be positioned in 4 strategically located warehouses. If they’re seeking to achieve 1‑day delivery, that number rises to 9 fulfillment centers.

    Illustration of optimal warehouse distribution in the US for efficient and cost-effective 1-2 day ground shipping

    As the number of sales channels and warehouses increases, the operational complexity increases exponentially. Legacy shipping software was built for the old world, where fulfilling orders from just a single warehouse location was the norm. It was never built to handle the complexities of distributed fulfillment. Too many things at the core of the software would have to change to elegantly handle distributed fulfillment. This means merchants often try to get by with complex, convoluted workarounds that keep breaking. However, effective inventory management and synchronization can be achieved through the use of advanced fulfillment software, which streamlines operations, enhances accuracy, and addresses common challenges in the fulfillment lifecycle.

    Today’s multi‑warehouse, multi‑channel environment creates many problem areas for Sellers to manage:

    • When inventory is spread across such a large number of warehouses, which location should each order be routed to (you can’t draw a line down the middle of a map and expect to get the best shipping rate)?
    • Distributed fulfillment offers possibilities if there are problems at any one warehouse location—such as receiving orders after the cut‑off time, running out of inventory, or inclement weather. How can software make identifying such exceptions and rerouting them easier?
    • How can fulfillment be handled across multiple sales channels while ensuring a consistent, cohesive experience for customers?
    • Can the system natively integrate with best‑in‑class fulfillment networks to unify your logistics technology and operations?
    • With ecommerce growing all the time, online shoppers are sharing more sensitive data than ever. With an increased consumer demand for privacy protection, how does your shipping software keep personal information secure?

    We’ll now take a look at each of these, examining the differences in the way legacy and next‑generation ecommerce shipping software handle them.

    Automatic Order Routing and Label Generation

    Legacy Software – Crude and Primitive Routing

    Many of today’s popular legacy software have automated order routing features. However, do not be fooled—these capabilities are limited and prone to error, especially when handling diverse shipping options.

    In systems like ShipStation, a “Ship From” location can be set based on specified criteria—such as the SKU ordered or the customer’s address. However, a large number of clunky automation rules have to be written—for example, writing a rule to have all orders from West Coast customers be shipped from your California warehouse. Similar rules mapping other states to respective fulfillment locations have to be manually written. Similarly, if you have certain SKUs available only in specific locations, you need to write rules to assign orders accordingly.

    Creating such a large number of automation rules is an error‑prone, painful process for many reasons. Here are a few of them:

    • So much to configure. Merchants need to ensure they’ve captured every business process through a rule. If they forget to set up any rule (quite possible, given the high levels of operational complexity today), it can create problems and cost leakages. Even the simplest of workflows require rules to be defined. For example, imagine that you wish to use only certain carrier services to make deliveries to residential addresses. Even in that case, you need to define automation rules mapping the address type to appropriate services.
    • You’re guessing and hoping. Because your rules are manually defined by mapping SKUs or customer addresses to fulfillment locations, there could always be cases where the rules don’t make the most optimal decision. Without doing a deep, time‑consuming manual investigation, you’ll never be able to actually tell.
    • Requires constant maintenance. Rules become obsolete when carriers change or update their services. For example, when USPS introduced Ground Advantage, your rules didn’t automatically update to factor in the new service. This means you had to spend hours updating and rewriting them.

    Slow process. Sellers don’t feel comfortable beginning shipping with the software until they’re confident they’ve captured all of their processes through automation rules. This delays go‑live, ultimately increasing your time to value.

    Next‑Gen Software – Intelligent, Powerful Routing Technology

    Cahoot’s next‑generation shipping software comes with end‑to‑end intelligent automation. When you receive an order, the system intelligently compares multiple warehouse locations, inventory levels, carriers, and shipping services to pick the cheapest label that will meet the delivery SLA committed to the customer. In this way, the Cahoot shipping management software takes the thinking and error out of the rate shopping process, always providing the optimal shipping label, and improves shipping speed because it takes actual estimated real‑time delivery date into account based on ship date and day of the week.

    With our technology, you won’t face the automation problems that we’ve highlighted with legacy software. Our intelligent order routing capabilities provide Sellers with many benefits:

    • Nothing to configure – it just works. You don’t need to spend time worrying whether you’ve captured all your business workflows through automation rules. You don’t have to update rules and make sure they’re all compatible when business needs change. Cahoot factors in all variables like shipping services, warehouse locations, and inventory levels to pick the optimum fulfillment location on every order automatically.
    • Based on the lowest cost, no more guessing. There’s no need to worry about whether your automations have been configured correctly to truly pick the best location every time. You can rest assured knowing that the decision is in the hands of technology, which makes the right choice for every order.
    • No maintenance. The system automatically factors in any changes that carriers make to their services. There are no hand‑written automation rules to update or overwrite. When new services like Ground Advantage are launched, the system factors in this additional information and continues to automatically route orders correctly.
    • Ready‑to‑go. Sellers can begin shipping in days or weeks with our software, not months. There’s no need to spend time wondering whether you’ve captured workflows through elaborate automations. This means you’ll be able to go live faster and shorten your time to value.

    Multi‑Warehouse Exception Handling with Multi‑Carrier Shipping Software

    Legacy Software – Limited Rerouting Capability

    With legacy software, it’s difficult to plan for the unexpected. Let’s imagine you have 2 warehouses—one in Chicago, and the other in Southern California. Suppose a blizzard strikes the Chicago location.

    When working with legacy systems, you don’t have an easy way to temporarily suspend locations. All you’re looking for is a way to temporarily put fulfillment from your Chicago location on hold, while you wait for the weather to improve.

    In legacy systems like ShipStation, each SKU is mapped to a list of warehouses from where it can be shipped. You will need to update this mapping between SKUs and fulfillment locations to stop fulfillment from one of your warehouses. This is a painful workaround that you have to perform for a very short period of time—once the weather improves, you’ll have to repeat the process to restore the original configuration.

    All this adds to what is already a stressful time, making it difficult for your business to quickly adjust to, and recover from unexpected events. Robust shipping software solutions can help manage these exceptions more effectively, ensuring smoother operations and better customer service.

    Next Gen Software – Agile, Flexible Order Rerouting

    With Cahoot’s next‑generation shipping software, adverse events don’t have to mean disaster for your business. If one of your fulfillment locations goes down, you can quickly toggle it off. The system will automate shipping from the remaining available locations, helping you keep your customer promises and continue selling.

    There are other scenarios when you might require intelligent exception management which need not be emergencies. For example, if one of your warehouse locations needs to close for a holiday, the system can exclude that location and continue to simplify shipping for you across the other active locations.

    There are no automations to undo or rewrite. You don’t have to spend a lot of time restoring your system to its original state once the affected location is back up and running again—it’s just a simple toggle to flip on and off. This ensures that your business can continue operating smoothly during such events, and quickly recover from them with minimal impact.

    Multichannel Capabilities

    Legacy Software – Many Integrations, but of What Value?

    One advantage that legacy software has by virtue of having been around for a longer time is its long list of integrations. These tools, such as ShipStation, Shipwise (formerly DesktopShipper), and ShippingEasy all have a long list of integrations with shopping cart platforms, online marketplaces, and other tools that ecommerce Sellers use.

    However, while this is definitely a positive, we think this is a case of winning the battle but losing the war. In the above sections, you’ve seen some of the limitations of these tools (keep reading to see more deficiencies), and how they can hamper your productivity and hurt your costs on every single order. You might save a little time with out‑of‑the‑box integrations to more platforms, but does it really matter if these tools negatively impact your bottom line?

    Next‑Gen Software – All the Integrations You’re Used To

    Cahoot’s next‑generation shipping software is tightly integrated with all leading online marketplaces and shopping cart platforms, including Amazon, Walmart, Shopify, eBay, BigCommerce, WooCommerce, and Adobe Commerce (formerly Magento 2). We’re also integrated with all leading shipping carriers and ecommerce tools that Sellers use today. Our ecommerce shipping solution provides robust integrations that streamline rate shopping, label creation, and order tracking, making shipping more efficient and cost effective for businesses of all sizes.

    Graphic listing dozens of sales channel and carrier integrations for streamlined ecommerce operations

    What really matters is the depth of integration between the channel and your shipping software. A simple integration may fetch orders from Shopify or Amazon into your shipping software, but fail to sync inventory or push back tracking information. With our integrations, Cahoot automatically fetches all information required to fulfill an order from the sales channel and intelligently pushes tracking information back to the channel. We also maintain an inventory sync, ensuring that you won’t accept orders on out‑of‑stock items, preventing overselling. The system also provides you with color‑coded alerts to quickly alert you to dipping inventory levels, enabling timely, proactive replenishment rather than reacting to customer frustration on canceled orders.

    While our list of integrations might be comparatively smaller (but growing!), you won’t feel the difference—our API allows you to connect Cahoot with any other system you’re using. And as we’ve highlighted in the above sections (keep reading for more!), the system offers real cost savings and productivity gains on every single order.

    Integration With Fulfillment Networks

    Legacy Software – Cobbled Together and Disjointed

    Legacy ecommerce shipping software works well if you’re fulfilling a small number of orders from your own warehouse location. However, if you’re partnering with multiple 3PLs, have a combination of in‑house and outsourced fulfillment, or are working with order fulfillment networks, cracks start to emerge. This stems from legacy software’s lack of native integration with fulfillment networks. Selecting the right shipping solution that seamlessly connects all fulfillment nodes is crucial for efficient order fulfillment and handoff to multiple carriers.

    With tools like Flexport, you can’t expand nationwide coverage through their network while still running your own operations. For example—what if you wish to fulfill certain orders from your own warehouses if you have inventory and rates are cheaper? Flexport seeks to capture all volume even if it is inefficient to do so because they don’t integrate with all your fulfillment nodes. Many legacy software have a similar problem, where they find it difficult to manage a combination of in‑house and outsourced fulfillment. Rather than the system intelligently identifying which orders need to be outsourced, the Seller has to define this—which is time‑consuming and error‑prone.

    Other forms of chaos can emerge when you’re trying to force a legacy shipping software and 3PL vendor (like Flexe, for example) to work together. The 3PL might require you to figure out which orders you’re going to ship with them, generate a file with all that information, and send it over to them. If you’re trying to participate in a program like Seller Fulfilled Prime, you have tight cut‑off times and very little room to maneuver. Imagine scrambling in the limited time you have between the cutoff time and the carrier pickup to collate and send over the information. You have to hope and pray that you haven’t made a mistake and that you’ve sent the information in time for your 3PL to process the shipments.

    Lastly, let’s imagine a scenario where you’ve partnered with multiple 3PLs to achieve nationwide coverage. You have to either use the shipping software to print labels manually and hand that over to each of the 3PLs or share your credentials with all of them. This increases the number of parties your carrier credentials go to, increasing risk and vulnerability for your business.

    If you’re experiencing some of these frustrations and want to migrate from your existing fulfillment partner, we know that it’s easier said than done. The process can be uncertain, confusing, and stressful for your business. We’ve put together a step‑by‑step guide to help you make the switch from one fulfillment partner to another, which you can read here!

    Next‑Gen Software – Natively Integrated

    Cahoot’s shipping software is tightly integrated with our order fulfillment network (having over 100 warehouses in the US). The system is also flexible enough to accommodate any fulfillment locations you run your own operations from—making handling scenarios where there is a combination of in‑house and outsourced fulfillment easy to manage. In such cases, the system is able to intelligently and automatically identify the orders where fulfillment is cheaper through outsourcing rather than being handled at your own warehouse. This frees up your time and ensures you’re getting the best deal on every order.

    You also don’t need to spend time acting as the middleman between your shipping software and 3PL, where you drown in busy work generating files and handing them over to your fulfillment partner. With Cahoot, your fulfillment partners see all orders instantly and can print labels in one click. This agility and simplified workflow are just two of the reasons that help Sellers using our fulfillment network meet and surpass the challenging cut‑off times and demanding performance metrics that Amazon expects them to meet on Seller Fulfilled Prime.

    It’s not just SFP where requirements are challenging. On the Walmart marketplace, merchants hoping to see increased conversion and sales must offer free nationwide 2‑day delivery with over 95% of orders expected to reach customers by the promised time.

    And while you may scale to use many warehouses on the Cahoot network, none of our fulfillment partners know your carrier credentials—you share that only with us on the platform. This reduces risk and keeps your credentials safe while scaling nationwide fulfillment for you.

    Information Security and Data Protection

    Legacy Software – Poor Security and Privacy

    Legacy ecommerce shipping software provides minimal data protection measures. Everything is fine if you own your own warehouses and are using these tools to fulfill orders. However, if you’re partnering with a 3PL (and they use legacy tools to process orders), you’ve handed over all your brand and customer data to them.

    While you may sign agreements to prevent misuse, personally identifiable information about your customers (full name, address, email) and proprietary business data is openly available to your 3PL. While they may operate with good intentions, your confidential data is now at the mercy of their information security practices.

    This increases the risk and exposure for your business, with little safeguards in place to protect sensitive information.

    Next Gen Software – Robust Data Protection and Governance

    With next‑generation shipping software, we ensure that only the essential information needed for order fulfillment is transmitted to Cahoot warehouses. We hold back or redact other information—for example, even on a shipping label, your fulfillment partner sees only the first initial of the customer’s last name—making it difficult for them to reconstruct personal customer data. And no data is copy/pasteable or exportable!

    We also keep non‑essential customer, brand, and product information walled off and accessible only to you. This ensures that your data is secure and accessible to only one party—you.

    The Future of Fulfillment is Here

    Ecommerce logistics have evolved beyond the limitations of legacy shipping software. Today’s merchants need solutions that don’t just patch problems with complex rules and manual oversight but instead offer true automation, intelligence, and flexibility. The challenges of distributed fulfillment, multi‑channel sales, and increasing customer expectations demand technology that works for you—not against you.

    Cahoot’s next‑generation shipping software isn’t just an upgrade; it’s a transformation. With intelligent automation, seamless integrations, and built‑in security, our system ensures that fulfillment is fast, cost‑effective, and effortlessly scalable. From real‑time order routing to automated packaging selection, every feature is designed to help you save time, reduce costs, and focus on growing your business rather than troubleshooting logistics.

    The days of clunky, error‑prone software are over. The future belongs to merchants who embrace smarter, more efficient fulfillment—where technology does the heavy lifting, and businesses thrive. It’s time to leave behind outdated systems and step into a world where shipping works smarter, not harder.

    Are you ready to experience the future of ecommerce fulfillment? The next generation of shipping starts now. If you’d like to learn more, check out our Next Generation Shipping Software Guide, Part 3: “Next‑Gen Warehouse Automation Software for Ecommerce: Fulfillment Efficiency”.

    Frequently Asked Questions

    Who uses shipping software?

    Shipping software has features that can benefit various clients, including individual Sellers, ecommerce brands, retailers, and courier service providers. Feature‑rich software like Cahoot is autonomous and makes highly intelligent and scalable fulfillment and shipping accessible to retailers and brands of all sizes.

    What is fulfillment optimization?

    Fulfillment optimization is the process of determining the best options for sourcing and order fulfillment, which results in more efficient use of inventory and reduced costs.

    What is a shipping platform?

    A shipping platform helps you ship faster and cost‑effectively by organizing orders, offering pre‑negotiated shipping rates, enabling shipping rate comparison, and managing shipping workflow.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

    Ecommerce Shipping Challenges: The World Has Changed and Traditional Shipping Software is Not Enough

    In this article

    16 minutes

    Join 26,741 eCommerce Leaders Today

    At Cahoot, we believe today’s ecommerce industry needs next‑generation shipping software. Selecting the best shipping software is crucial for enhancing efficiency and customer satisfaction. But before we talk about this amazing technology, it’s first worth asking – why is now the time? After all, legacy shipping software has been around for years. Thousands of Sellers are already using these tools – why make the switch?

    We believe the present moment is perfect because ecommerce is dramatically different from how it looked just twenty years ago. The event that changed everything was the introduction of Amazon Prime in 2005. Just like the first iPhone revolutionized society’s experience with personal technology, Prime’s introduction transformed everything in the ecommerce industry. Sellers had to throw out old strategies and create entirely new ones to run their businesses.

    The differences are stark, but we’ve summarized them in this table:

    Parameter
    Old World (1990’s, early 2000’s)
    New World (ChatGPT – Present)
    Sales Channels
    Just one
    Many, ever‑increasing
    Competitive Pressure
    Minimal
    Intense
    Customer Expectations
    Low
    Sky high
    # Warehouses
    Just one
    Four or more
    Carrier Mix
    Sign one contract
    Rate‑shop across multiple carriers
    Order Profile
    Small and simple
    Large and complex
    Carrier GRI
    Stable for decades
    Increasing
    Warehouse Staffing
    Easier and economical
    Wages keep going up
    Warehouse Leasing
    Less competition for space
    Heavy demand for scarce space

    Let’s begin by going back to the 1990s and journey through the early 2000s to see what the ‘old world’ of ecommerce looked like, for Sellers and customers. By understanding these changes, we can see how modern shipping solutions can turn challenges into a competitive advantage.

    The ‘Old World’ of Ecommerce: Lower Complexity

    In the olden days of ecommerce, life was simpler. Fewer channels to manage, fewer customer expectations, and less technological complexity meant uncomplicated logistics and order fulfillment processes that seem almost quaint by today’s standards.

    Just One Channel to Manage

    In the old world, Amazon was not the ‘everything store’ yet. It was largely a first‑party Seller of a few products like books, CDs, and DVDs. They did not face much competition – Walmart and Target restricted themselves to physical stores while shopping cart platforms like Shopify and BigCommerce did not exist. All this meant that Sellers did not have multiple sales channels to sell and take care of customers on. There was usually just one channel – their own website. With just one channel to support, it was also possible to operate with smaller‑sized teams.

    Minimal Competitive Pressure

    In the 1990s, online marketplaces did not exist. Amazon launched its third‑party marketplace only in 2000. In this environment, customers did not have a lot of choices. Sellers had to ensure they drew customers to their website through good marketing. Once they found you, it was not easy to comparison‑shop across different listings, brands, or platforms. There was little pressure on Sellers – it was unlikely a competitor would undercut you on price or beat you on shipping speed.

    Low Customer Expectations

    Perhaps most importantly, customers had no expectation of free and fast shipping. Before Prime’s introduction in 2005, customers had never tasted that experience. They were willing to wait 7–10 days for orders and covered the cost of shipping. Even if they did not like this experience, there was no social media platform at the time where they could share their frustration.

    Single Warehouse, Single Carrier

    The combination of lower customer expectations and sales through a single channel meant that Sellers could get by with operating from a single warehouse location, or two if they really needed the space. Customers living far away were okay with waiting as long as 1–2 weeks for their orders. Because customers were willing to cover shipping costs, Sellers saw no reason to compare and find the lowest rate among multiple carriers. It was easier to just sign a contract with one carrier. Why bother with cost optimization when the customer was paying?

    Small and Simple Orders

    In the old world, lower basket sizes (units per transaction) were common because customers were yet to trust making payments over the internet. The least risky way to test ecommerce was to just buy one item. As confidence grew, so did basket sizes. Multi‑Line, Multi‑Quantity (MLMQ) orders were less frequent, reducing warehouse packing complexity.

    In summary, Sellers faced little complexity in running their businesses in the old world. They sold on a single channel, faced minimal competitive threats, and could easily satisfy customers. All of this translated into simpler operations across the shipping lifecycle.

    The ‘Old World’ of Ecommerce: Lower Costs

    We’ve taken a look at how operationally simpler it was to run an ecommerce business in the old world. But this was not the biggest advantage Sellers had – we’ll now explain how costs were lower back then.

    Shipping Costs Were Cheaper

    Carrier General Rate Increases held steady at 4.4%–4.9% through the 1990s and into the 2010s, which provided predictability and control over delivery costs.

    Labor was Cheaper

    In the old world, ecommerce did not require massive warehouse labor networks. Sellers could staff warehouses at wages that protected margins, as fewer large players competed for workers.

    Warehouse Space was Cheaper

    Warehouse demand was lower, so Sellers could find and lease space more easily and at lower rates. Fewer ecommerce operations competed for limited industrial real estate.

    Across the fulfillment workflow, Sellers had cost certainty. Carrier rates, labor wages, and warehouse leases were steady, protecting margins without constant optimization.

    Inefficiency in Operations Did Not Impact Margins

    In a world without marketplaces, customers paid shipping fees and lacked social media to complain. There was no pressure to optimize operations or cut costs – margins remained protected without innovation.

    The ‘New World’ of Ecommerce: High Operational Complexity

    Prime’s launch in 2005 changed ecommerce permanently. Today’s Sellers operate in a vastly more complex environment.

    Many Channels to Manage

    Amazon’s third‑party marketplace, Walmart, Target, Shopify, BigCommerce, and others mean Sellers must sell and support customers across multiple platforms. This requires larger teams and integrated shipping solutions.

    Intense Competitive Pressure

    Online marketplaces give customers infinite choice. Sellers face constant threats of price undercuts, faster shipping, and knock‑offs. High shipping costs further squeeze margins.

    Sky High Customer Expectations

    Customers now expect 1‑day and 2-day free shipping. Cart abandonment soars without transparent free, fast options and social media amplifies complaints.

    Multiple Warehouses, Multiple Carriers

    To meet fast, free delivery, Sellers must distribute inventory across strategically located warehouses and rate‑shop among many carriers. Multi‑carrier shipping software automates this complexity.

    Large and Complex Orders

    Higher free‑ship thresholds and multi‑item carts drive more Multi‑Line, Multi‑Quantity (MLMQ) orders, requiring more varied box sizes and longer packing times.

    Sellers today juggle multiple channels, unrelenting competition, and sky‑high expectations — reinventing every step of shipping with distributed fulfillment and intelligent software.

    Rising costs

    Complexity isn’t the only challenge — costs have also soared in the new world.

    Shipping Cost is Expensive

    Carrier GRIs jumped to 5.9% in 2022, 6.9% in 2023, and 5.9% in 2024 and 2025 — well above historical norms and inflation, leaving Sellers scrambling to adjust budgets and operations.

    Labor is Expensive

    Warehouse wages have risen as Amazon, Walmart, and Target compete for labor. In some regions, $20/hr has become the baseline, making staffing more costly for smaller Sellers.

    Warehouse Space is Expensive

    Warehouse rents soared during COVID‑19 and remain high as supply lags demand. Over 80% of U.S. warehouses were built before 2000, driving up lease rates.

    Sellers now face rising carrier rates, labor wages, and lease costs, compounding the complexity of meeting modern customer demands.

    Efficient Operations Essential for Margins and Profits

    In marketplaces, creative cost‑saving and resource pooling are essential. Sellers must optimize operations to preserve margins, stay competitive, and win.

    Why Sellers Need to Switch to Next‑Gen Ecommerce Shipping Software

    Legacy tools worked in the old world but add problems in the new one. They lack automation, cost savings, and multi‑channel flexibility, consuming time rather than simplifying workflows.

    Illustration of legacy shipping software's shortcomings for today's merchants: inefficiency, lack of accountability, poor exceptions handling, and outdated routing

    Choosing shipping software is crucial in developing an effective shipping and fulfillment strategy.

    The next generation of ecommerce shipping software must solve three key problems:

    Illustration of Cahoot's advanced shipping software features: humanless operation, cost efficiency, and future-readiness

    • Simplify the operational complexities of the new world of ecommerce
    • Drive operational efficiencies and productivity gains for your team
    • Generate meaningful cost savings across each step of the shipping and order fulfillment workflow

    In the coming sections, we’ll dive deeper into each of these aspects and explain how Cahoot’s next‑generation software is purpose‑built to address these challenges.

    Summary

    Ecommerce has come a long way. The simplicity of the past has given way to a fiercely competitive, complex environment where every decision matters. Traditional shipping software is now a relic, not a reliable tool.

    To thrive today, businesses need software that simplifies complexity, enhances efficiency, and drives down costs in ways the old world never required.

    At Cahoot, we’re actively shaping the future of ecommerce fulfillment. In today’s market, the right technology isn’t just helpful—it’s essential.

    If you’d like to learn more, check out our Next Generation Shipping Software Guide, Part 2: “Shipping Software for Ecommerce Fulfillment: The Next Generation of Shipping Simplified”.

    Frequently Asked Questions

    How can I reduce shipping costs for my ecommerce business?

    Reducing shipping costs requires a multi‑faceted approach:

    • Negotiate rates with multiple carriers rather than relying on a single provider
    • Consider using regional carriers for deliveries within specific areas
    • Optimize packaging to reduce dimensional weight charges
    • Implement zone skipping by shipping bulk orders to carrier hubs closer to final destinations
    • Use shipping software that compares rates across carriers in real time
    • Offer local pickup options for customers in your area
    • Consider flat‑rate shipping for certain product categories

    What are the most common causes of parcel delivery delays?

    Several factors commonly contribute to delivery delays:

    • Weather events and natural disasters
    • Carrier capacity constraints during peak seasons
    • Customs clearance issues for international shipments
    • Address errors or incomplete delivery information
    • Staffing shortages at carrier facilities
    • Vehicle breakdowns or logistical issues
    • High volume surges (e.g., Black Friday/Cyber Monday)
    • Last‑mile delivery complications in rural or hard‑to‑access areas

    How can I reduce the environmental impact of my ecommerce shipping?

    To make your shipping more sustainable:

    • Use right‑sized packaging to minimize waste and reduce dimensional weight
    • Choose recycled or biodegradable packaging materials
    • Offer carbon offset options at checkout
    • Consolidate orders when possible to reduce the number of shipments
    • Partner with carriers that have environmental initiatives or electric vehicle fleets
    • Implement a packaging reuse program for returns
    • Consider local fulfillment options to reduce transportation distances

    What should I do about rising return rates in ecommerce?

    To address the challenge of increasing returns:

    • Provide detailed product descriptions, measurements, and high‑quality images to set accurate expectations
    • Implement a clear, easy‑to‑understand return policy
    • Consider offering free returns as a competitive advantage
    • Use analytics to identify products with high return rates and address underlying issues
    • Implement a return merchandise authorization (RMA) system to streamline the process
    • Consider restocking fees for certain categories to discourage unnecessary returns
    • Offer virtual try‑on or AR features for appropriate products

    How can I improve last‑mile delivery efficiency?

    Improving last‑mile delivery, often the most expensive part of shipping, requires:

    • Partnering with multiple carriers to diversify delivery options
    • Implementing delivery management software to optimize routes
    • Offering alternative delivery options like BOPIS (Buy Online, Pick Up In Store)
    • Using lockers or pickup points in convenient locations
    • Providing narrow delivery windows to improve customer experience
    • Leveraging data analytics to predict delivery challenges in specific areas
    • Considering micro‑fulfillment centers in urban areas for faster delivery

    What are the best practices for international shipping in ecommerce?

    For effective international shipping:

    • Partner with carriers experienced in global logistics
    • Understand customs documentation requirements for each country
    • Use harmonized system (HS) codes correctly for all products
    • Be transparent about duties and taxes that customers may need to pay
    • Consider using a third‑party logistics provider specializing in international shipping
    • Implement reliable package tracking for international orders
    • Offer DDP (Delivered Duty Paid) options for a smoother customer experience
    • Research import restrictions for products in your target markets

    How can I manage shipping expectations during peak seasons?

    To handle peak season shipping challenges:

    • Plan ahead by increasing inventory and staffing well before peak periods
    • Communicate realistic delivery timeframes to customers
    • Consider implementing order cutoff dates for holiday deliveries
    • Diversify carrier partnerships to spread volume across multiple providers
    • Use shipping software that can automatically route orders to carriers with capacity
    • Offer incentives for early shopping to spread out order volume
    • Maintain transparent communication about potential delays
    • Consider temporary local pickup options during extremely high‑volume periods

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Top 7 Supply Chain Strategies for Making Free Shipping Profitable

    In this article

    18 minutes

    Join 26,741 eCommerce Leaders Today

    Free shipping has become an expectation in ecommerce, but for many businesses, it feels like an uphill battle against shrinking profit margins. The key to making free shipping work isn’t just about absorbing the cost, it’s about optimizing your supply chain to offset those expenses. From strategic inventory management to innovative fulfillment methods, businesses that refine their logistics can transform free shipping from a financial burden into a competitive advantage. In this guide, we’ll explore supply chain strategies that not only help sustain free shipping but also attract more customers without compromising your bottom line.

    1. Minimize Inventory Storage With Just-in-Time Procurement

    Just-in-Time inventory Stocking (JIT) is a common inventory management technique and a lean methodology to increase efficiency. A successful example is the apparel retailer Zara, with its “mind-spinningly supersonic” supply chain. Zara operates in an industry where inventory “spoils” quickly so they commit less than a quarter of a season’s line and produces about half of its line at the start of the season. The remaining? They were designed and produced during the season. Zara identifies popular styles and puts new similar designs in stores throughout the season while they’re still popular. With JIT, Zara improved its cash flow by reducing low-demand inventory while doubling down on what’s working.

    Today, online Sellers can quickly gather and process historical sales data to make better demand predictions, but they are still just guesses. And yes, some safety stock is still needed as a buffer, but Sellers don’t need to dedicate as much space for storage as they had in the past. With proper data analysis and planning for smaller but more frequent procurement cycles, merchants can derisk the capital investment and direct the savings into their customer acquisition strategy.

    Another application of JIT is cutting storage costs at 3PLs such as Fulfilled by Amazon. FBA is generally an excellent option, but only if the Seller can handle the storage costs (including peak season storage rates and aged inventory surcharges). By estimating their sales via FBA, Sellers can ship items regularly to FBA warehouses in quantities that will sell quickly. The remaining items can be stored in an inexpensive warehouse or their own facility.

    Pros:
  • Lower inventory holding costs from smaller warehouse storage space needs, and less deadstock.
  • Free up cash flow; the money not used to stockpile inventory can be reinvested elsewhere.
    • Cons:
  • Highly accurate estimation of demand is needed to minimize stockouts and lost opportunity cost.
  • Volume discounts may be forfeited when buying smaller quantities of inventory more frequently.
  • Buying inventory more frequently makes you more sensitive to price spikes; margins will slump if the price of raw materials suddenly goes up, for example.

    • 2. Buy Online Pick Up In Store (BOPIS)

    This is not strictly a solution for improving shipping costs, but it can help the customer get their order on their schedule at a lower cost to you. Buy Online Pick Up in Store (BOPIS) enables customers to pick up their items from one of your physical retail locations. The key here is to eliminate the shipping cost altogether by encouraging the customer to pick up their order.

    Customers expect free and fast shipping and in some categories such as grocery, healthcare products, and some household items, fast shipping is a priority over free shipping. You may even want to offer a discount to encourage in-store pick-up which is a win-win for both you and your customer.

    BOPIS bypasses the shipping process, cutting delivery from days to mere hours. Moreover, it can be a differentiator between you and a competitor, leading to higher top-line revenue. To minimize additional staffing needs and wait times, self-service package lockers can be used as a touchless way for customers to pick up their orders. Prepared orders are delivered to a locker inside or outside of your store that customers can open via an app or one-time password.

    Ecommerce order pickup locker for Buy Online Pick Up In Store (BOPIS) offering fast and cost-effective delivery.
    Pros:
  • Online retailers can eliminate their last-mile shipping costs (and likely also return shipping costs).
  • In-store pick-up can be used to drive more traffic to a retail location and encourage more sales.
  • The parcels are more securely delivered to the end customer without the risk of theft from the doorstep.
    • Cons:
  • Customers can get frustrated and dissatisfied if the pick-up is not convenient or involves waiting in line.
  • BOPIS needs dedicated space for customers to pick up; some investment in infrastructure may be needed.
  • BOPIS requires training and staff time to prepare orders.

    • 3. Zero Inventory Through Dropshipping

    Dropshipping is a popular order fulfillment method used by many online Sellers. Dropshipping is an ecommerce business model that allows retailers to sell products without holding onto inventory. Instead, the retailer forwards customer orders to a third-party supplier who ships the product directly to the customer for a fee. Sellers don’t stock the items in their warehouse, effectively making it a zero-inventory business. When an order for a dropship item is received, the Seller purchases the item from a wholesale supplier who ships the order directly to the customer on behalf of the Seller. Sellers don’t handle or even see the product in the whole process.

    Dropship business model

    Dropshipping has a host of advantages as the online Seller does not require capital to pre-purchase inventory, does not need a warehouse to store it, and doesn’t even need expertise in order fulfillment and operations. However, the Seller must contend with low margins and no control over fulfillment. Therefore, dropshipping should be pursued by Sellers who intend to focus on building a diverse and creative product portfolio and concentrate on marketing to drive sales and revenue growth.

    In the dropshipping model, the suppliers assume the risk of unsold inventory, though it’s minimal as they tend to have many affiliates selling their wares, and they pass the cost of logistics to the dropship Seller. Running an assetless business and maintaining low operational costs allows you to offer free shipping while concentrating on improving your sales without worrying about fulfillment.

    Another form of dropshipping is cross-docking. In this ecommerce business model, instead of the wholesaler shipping orders directly to their affiliate’s customers, they bulk ship all the days’ orders to the merchant’s warehouse, who then fulfills all the customer orders. Cross-cocking tends to be used by merchants that already have the fulfillment infrastructure and the sunk costs of operating a physical ecommerce business. However, this strategy enables them to sell an expanded product catalog with lower product pricing and logistics fees, which results in higher profitability at a lower risk profile comparable to pure-play dropshipping.

    Pros:
  • All order fulfillment operations, including shipping and returns, are handled by the supplier.
  • Less capital intensive as the Seller does not need to purchase and store inventory.
  • Operating costs are lower since there is no need for a warehouse or fulfillment infrastructure (assets).
  • It’s easy to get started.
  • Product catalog changes are easy, flexible, and scalable.
    • Cons:
  • While also listed as a Pro, having all order fulfillment operations (including shipping and returns) handled by the supplier means the Seller has much less control over business decisions.
  • The margins are very low as it is a competitive space. Since it is easier to start and run, many online Sellers enter the space with very low prices.
  • While dropshipping is generally supported by leading marketplaces such as Amazon, the lack of control over fulfillment means performance metrics are at the mercy of your third-party supplier.
  • Maintaining accurate inventory quantity availability can be challenging, so overselling could be a problem from time to time.
  • Order fulfillment quality can suffer when suppliers prioritize other projects over yours.

    • 4. Streamlining Your Supply Chain

    The supply chain, in general, is not easy to manipulate. However, it’s a good idea to step back and reassess your supply chain for opportunities to improve your cost structure and allow you to offer free shipping.

    Here are a few high-level recommendations to streamline your supply chain:

    • Optimize Sourcing: When you first open an online store, you would typically start with the easiest product sourcing options. As you scale and increase your bargaining power, though, you should look beyond the current sourcing and look for alternative suppliers that align with your selling strategy, which can be a cost leader, highly differentiated, or anywhere in between. You should also consider talking directly with manufacturers, if you’re not already (and using a broker or aggregator), and have a conversation about how you can bring your landed costs down. For example, sometimes overseas factories have preferred freight forwarders with much better ocean container rates than you might currently have available. Ask your 3PL/4PL if they can help with container shipping rates for the same reason…they can often get better rates by aggregating volume across clients.

    • Optimize Your Order Fulfillment Location: Ecommerce allows businesses to operate from anywhere they can get an internet connection. But as you scale, the inbound and outbound shipping becomes one of the most significant contributors to fulfillment costs. Moving your fulfillment location closer to the customer can save you money AND delight customers with faster shipping; middle of the country, for example (if more than one warehouse is not feasible, though Cahoot makes it easy to add warehouse locations to your existing setup to improve efficiency and reduce cost). On the other hand, being closer to vendors will help you reduce lead time and inbound costs. Both of these factors should be considered in deciding the optimal fulfillment center location. In addition, some locations also enjoy cheaper warehouse rents, cheaper labor costs, and may have government incentives. Taken together, an optimized fulfillment infrastructure can sometimes save substantial money.

    • Reduce Inventory: As an ecommerce business grows, the common reaction is to increase the size of the warehousing facility as well as the inventory on hand to meet the customer demand. But inventory is a cost trap and increasing inventory should be avoided as much as possible. Explore options such as reducing lead time from suppliers and getting rid of slow-moving inventory. Drastic measures such as liquidation and promotional sale of obsolete items should be standard practices in an industry with dynamic SKUs.

    • Consider Distributed Inventory: Distributed warehousing is a well-known solution for offering fast and free shipping. Whether leveraging a 3PL service such Amazon FBA, Multi-Channel Fulfillment (MCF), or a 3PL that has many locations, the benefits of distributing inventory to minimize final-mile shipping cost can often improve margins enough to be able to offer free shipping.

    • Multi-Channel Sales: Many studies have shown that the advantage of selling on many channels is huge. You reach more customers and the topline sales growth increases. This is not different from the conventional brand offering their product through the flagship store, departmental stores, specialty stores, or even outlets. In a similar vein, online shoppers have different channel preferences, and as such, different channels tend to command the attention and loyalty of different demographics. For example, Gen Z is more likely to shop via social channels and be drawn to influencer marketing while millennials prefer comparing different marketplaces and stores. Mix up your strategy to reach more eyeballs to grow revenue and earn the budget needed to cover free shipping.

    5. Optimize Shipment Packaging

    Packaging is an often-overlooked opportunity to optimize shipping costs. Shipping costs are dependent on the size and weight of the package, and online Sellers should look to cut down on both while choosing the optimal packaging. Shipping “air” is throwing money out the window.

    If you are using small cardboard boxes, you can cut down on weight and size both by going with poly bubble mailers (if the product can ship and deliver safely in one). Poly mailers are versatile and can accommodate different shapes and sizes of items while keeping the cubic volume and weights low. For example, a poly bubble mailer of size 7.5” x 12” can weigh just 0.5 ounces compared to 3.6 ounces for a small 6”x6”x4” box. Be mindful of only shipping small and strong items using poly mailers like books, cables, or kitchen gadgets. For apparel, some brands like Abercrombie & Fitch use un-padded poly mailers that cost and weigh even less than their bubble-padded brethren.

    Small cardboard box vs. poly bubble mailer: Reduce shipping weight and size to save money.

    Another way to cut costs is to use carrier-provided boxes or packaging. All carriers give away free packaging for specific classes of mail. If you are shipping within that service, buying a separate box and affixing the label to it may be more costly than just going with the carrier-provided packaging.

    Lastly, consolidate shipping supplies into the 20-ish sizes that are used most often and negotiate bulk discounts to help reduce your packaging costs. As a part of the exercise, take the time to optimize your packaging sizes around the frequency of multi-line/multi-quantity orders by SKU. In other words, figure out the most frequently ordered quantities for your products and purchase the packaging that is optimum for those orders. For example, you may be using the same package to ship multiple quantities of an item like soap. But if your box is designed to accommodate 5 units of soap, and your most commonly order quantity is 2 units, you should consider getting a separate smaller package and save money on the cheaper box or mailer and lower shipping cost. It increases complexity but will save money over time.

    Smart cartonization software can be worth its weight in gold and could protect most of your shipping budget by itself by helping you automatically ship in the most economical packaging, minimizing the amount of shipped “air” and extra cost associated with the larger shipment. It can also help you track packaging inventory and alert you when you’re running low.

    PRO TIP: Order packaging in bulk directly from overseas manufacturers for the most impactful savings. Buying from domestic suppliers allows you to buy Just In Time and minimize how much is spent at once, but the advantage of saving ~30 – 40% on shipping supplies may far outweigh the convenience of local sourcing in the long run.

    Small cardboard box vs. poly bubble mailer: Reduce shipping weight and size to save money.
    Pros:
  • Sellers can reduce the shipping rates as well as the cost of packaging at once.
  • Smaller packages are easier to dispose of and are more eco-friendly as they produce less waste.
    • Cons:
  • May limit negotiation power with shipping carriers because they like to approve discounts in some areas while removing them from others; optimizing for size/cost may scale back the number of sizes and weights that may qualify for the biggest discounts.
  • If you have a large product catalog, or SKU mix that is constantly changing, this will require you to assess and make changes to the packaging more frequently.

    • 6. Reuse Packaging from Inbound Orders

    There are two main benefits of reusing supplies from inbound orders. The first is reducing waste (most used shipping supplies are sent to the landfill), and the second is reducing the supplies you need to buy. Packaging supplies like boxes, mailers, and void fill may look trivial when you consider the cost of 1 unit, but en masse, the costs can really add up because they apply to every order shipped.

    If you offer fragile or sensitive items that require special packaging, chances are some materials from your inbound shipments can be reused. For example, reusing void fill materials like bubble wrap, peanuts, or crinkled paper can reduce your spending on new supplies while reducing waste. Of course, the amount that can be reused may vary from each Seller, but it’s generally a better idea to reuse before finally recycling them.

    Inbound boxes can also be reused to save money here and there, especially if you’re shipping larger items. But be aware that customers can be sensitive to what their package looks like when it’s delivered. If a reused box has old shipping labels, stickers, tape, and/or writing on them, they may have a poor experience and may not buy from you again.

    Pros:
  • Reduce expenses while reducing the overall waste produced by the business.
  • It reduces the risk of carrying additional supplies for new online Sellers in case sales are slow or erratic.
    • Cons:
  • The unboxing experience for the buyer may suffer.
  • Ecommerce Sellers should be wary of not compromising on the integrity of product safety which can be more costly to replace than the savings achieved.

    • 7. Warehouse Robots

    Autonomous mobile robotics (AMR) is an exciting innovation in warehousing operations that helps reduce the costs of the picking, packing, and sorting parts of the fulfillment workflow. The robots eliminate the cost of labor from these steps while increasing efficiency. Fulfillment is faster and there are fewer mistakes when a robot conducts an operation. Currently, order fulfillment centers that have robots working alongside humans can transport many more items at once, and in some cases, the complete rack of shelves are brought to stations manned by humans, rather than humans going to the shelves to pick products.

    Automated warehouse fulfillment using Amazon Kiva robots to optimize order picking efficiency.

    In other cases, robots speed-sort items by weight and volume to be packaged accordingly for different shipping services. This reduces human error while increasing fulfillment speed.

    Kiva Systems and 6 River Systems have been two breakthrough AMR robot developers that have helped lower costs significantly for ecommerce Sellers. Kiva specializes in moving the entire shelf of products mentioned previously and was acquired by Amazon for the exclusive use of Amazon fulfillment centers. 6 River Systems was acquired by Shopify and is best known for their collaborative mobile robot named “Chuck” that uses sensors to navigate warehouses, avoiding obstacles and slowing down around people and equipment, guiding workers through their work zones to reduce walking and increase efficiency.

    According to Amazon in 2016, Kiva robots cut the cost of warehousing by 20%, which amounts to more than $22 million dollars per warehouse per year. It is estimated that Amazon could save as much as $2.5 billion per year if the robots were deployed to all facilities.

    Using robots helps businesses cut the time required to fulfill each order. At the same time, it has allowed better utilization of space by building narrower isles and getting rid of handling mechanisms that were required before.

    For a warehouse without any robots, simple solutions such as Automated Guided Vehicles (AGV’s) can be an entry level solution. They are used extensively on factory floors and follow a predetermined path to transport materials without human intervention. This helps reduce manpower. Another solution could be Autonomous Mobile Robots (AMR’s) that can identify their environment and information on packages, where items are located on shelves, and can be used for picking, putaway, sorting, counting, and replenishment tasks, reducing human intervention even further.

    Pros:
  • It decreases fulfillment cycle times so orders ship quicker.
  • Along with the decrease in costs, automation helps increase safety in the warehouse.
  • Robots can work around the clock, increasing the productivity of a warehouse.
    • Cons:
  • Currently, the return on investment is only profitable for high-volume fulfillment operations.
  • Additional resources for implementing and maintaining the technology solutions are required.

    • Summary

    Successful ecommerce businesses don’t just offer free shipping, they master the logistics behind it. Whether through just-in-time inventory, dropshipping, or regional fulfillment centers, the right logistical decisions can make all the difference. Businesses that stay ahead in supply chain optimization will not only keep shipping costs under control but also position themselves for scalable, long-term success. The key is to continuously refine operations, embrace emerging technologies, and find efficiencies that drive long-term savings that can be reinvested into a growth strategy that includes free shipping. With the right approach, free shipping can become a sustainable and profitable part of your business.

    Download The Ultimate Guide to Profitable Free Shipping

    Frequently Asked Questions

    How to lower supply chain costs?

    Companies can reduce their supply chain costs by working with suppliers, choosing specialist logistics and warehousing firms, using technology to boost efficiency, and finding ways to reduce waste such as materials or time.

    How to reduce the cost of supply chain?

    Streamlined processes, efficient transportation, and optimized inventory management all contribute to significant cost savings. By minimizing waste and maximizing resource utilization, businesses can lower expenses and boost profitability.

    What is an efficient supply chain?

    Supply chain efficiency focuses on delivering quality products to customers at the lowest possible cost by maximizing such resources as materials and labor. Supply chain responsiveness focuses on customers’ expectations and strives to provide a quality product faster.

    What is cost control in supply chain management?

    It involves optimizing operations to deliver maximum value with minimum waste, thereby impacting the total cost of the products or services. Supply chain managers and leaders have a pivotal role in analyzing and optimizing the supply chain.

    Where can I reduce supply chain costs?

    Some examples include: avoid minimum order quantities, know your reorder point, get rid of obsolete stock, implement Just-in-Time inventory management practices, and use consignment inventory (or a drop shipping business model).

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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