Strategy Archives - Cahoot.ai

Tips for Combatting Higher Ground Shipping & Delivery Costs

Let me say it plainly: Ground shipping is no longer cheap. Not in 2025. The economy-tier services ecommerce brands relied on to keep costs down are rising faster than any other mode. And the kicker? You probably didn’t notice because they rose quietly. Just a few cents here, a new surcharge there. But it’s compounding…fast.

According to the latest TD Cowen/AFS Freight Index, economy ground parcel rates rose nearly 7.5% year-over-year in Q2 2025. That’s faster than air. Faster than LTL. And definitely faster than most brands can react.

Also, ground parcel rates hit 32% above the January 2018 baseline in Q2, an all-time high, even though average diesel prices fell. That tells you rate increases aren’t tied to fuel, they’re strategic margin plays.

Why is ground shipping getting more expensive?

FedEx and UPS aren’t running charities. In 2025, both carriers quietly inflated their accessorial fees, extended delivery-area surcharges (DAS), and repriced how they interpret “residential” addresses.

UPS, for example, now applies a Remote Area Surcharge to 15% more ZIP codes than in 2024. Combine that with the standard rate increases, and you’re looking at a 10–15% total effective increase for some DTC brands shipping to suburbs.

What’s driving it?

FedEx’s network restructuring under its “Network 2.0” initiative
UPS’s post-Teamsters contract cost recovery
Fewer economy packages post-COVID peak = lower density = higher per-package costs
Carriers are padding revenue per stop while demand softens

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The Hidden Cost Curve: What the Data Tells Us

The logistics world has been quietly boiling, and most ecommerce operators don’t even realize how cooked they are until the Q4 freight invoices hit like a hammer. That’s why I wanted to step back and show what’s really going on with ground shipping costs, both over time and across weight and zone variables.

When you zoom out, the real story isn’t just one rate hike or another DAS update; it’s the slow, compounding weight of cost acceleration over time. That’s why we analyzed both the long-term parcel index trend and current 2025 rate tables from UPS and FedEx to show what’s happening beneath the surface.

Ground Parcel Index Trend (2018–2025): The Slow Burn That’s Now a Blaze

First, we charted the TD Cowen/AFS Ground Parcel Index from 2018 to 2025. This isn’t just any index; it’s an aggregated pulse check on ground parcel shipping costs across major carriers (UPS, FedEx, and USPS), normalized for inflation, fuel surcharges, and accessorial fees.

If you look at the trendline, you’ll see a gentle incline in the early years. Then 2020 hits. COVID disruptions + ecommerce boom = a sharp climb in rates. What’s surprising, though, is what happened next. You might expect some post-pandemic relief. Nope. The index kept climbing. By Q2 2025, it’s at its highest level ever, driven not by pandemic chaos, but by calculated carrier pricing strategies, DIM weight enforcement, and fewer carrier incentives for SMBs.

Takeaway: If you’re budgeting based on 2022 assumptions, you’re underwater. Index data shows that ground rates have structurally shifted up, and the new normal is…not normal at all. There’s a new silent tax on every ecommerce order, especially for brands that haven’t updated their logistics strategies in years.

Chart 1: FedEx and UPS Ground Parcel Index (2018–2025).

Graph comparing FedEx and UPS parcel rates from 2018 to 2025 highlighting shipping inflation for ecommerce shippers.

Billed Weight vs. Cost-Per-Package (Multi-Zone): The Hidden Geometry of Shipping Pain

The second chart shows the cost curve for shipping a package via ground, depending on billed weight and destination zone. This was derived by synthesizing rate tables from the official 2025 UPS and FedEx rate guides you can download right now. We simulated realistic pricing across Zones 2 through 8, for packages up to 50 lbs.

What becomes clear fast is this:

Zone distance has a nonlinear impact. The same 10 lb box costs nearly 30–40% more to ship to Zone 8 than Zone 2.
Weight-based costs aren’t flat. Each extra pound adds more than just weight; it multiplies cost, especially past the 10–15 lb range where rate brackets steepen.
You’re probably getting crushed on midweight, long-zone shipments. That 18 lb box going to Zone 7 is silently eroding your margin every time you offer free shipping.

Takeaway: The average ecommerce merchant is overpaying because they’re not engineering for zone or weight efficiency. They’re just printing labels and hoping for the best. Big mistake.

Chart 2: Billed Weight vs. Cost-Per-Package by Zone (FedEx & UPS, 2025).

Multi-line chart showing how shipping cost per package increases with billed weight across zones 2 to 8 for UPS and FedEx in 2025.

Key insights include:

Zone escalation is brutal. The same 3 lb package can cost 2× as much going to Zone 8 versus Zone 2. A single-warehouse model is bleeding you dry on long-haul orders.
Billed weight ≠ actual weight. Dimensional weight pricing inflates cost, especially when packaging isn’t optimized. A 2 lb item in a 12 × 12 × 10 box can be billed at 8+ lbs.
Carrier policies diverge fast. USPS Ground Advantage offers strong pricing in Zones 2–5 for lightweight packages, while UPS’s negotiated discounts become more competitive at higher weights and volumes. FedEx Ground Economy still has a niche in deferred delivery, but fewer merchants rely on it due to limitations on delivery speed and flexibility (e.g., cannot deliver to PO Boxes).
Flat rate isn’t always flat. Priority Mail Flat Rate boxes are convenient, but often more expensive than zone-based pricing for 2–5 lb packages going to Zones 2–4.

Takeaway: Don’t just look at average shipping cost. Build a dynamic model that accounts for zone distribution, dimensional weight risk, and carrier behavior. It sounds scarier than it really is: modern technology can help. For the rest of 2025 and into 2026, optimizing for billable weight and fulfillment geography isn’t a “nice-to-have.” It’s a survival strategy.

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Practical Advice for Q3/Q4 2025 and Into 2026

So what’s the fix? Firstly, we’re seeing that brands are shifting lower-value, lightweight shipments to slower, economy service tiers, like FedEx Ground Economy or UPS Ground Saver, to soften cost spikes. But while slowing down your low-value shipments can help, it shouldn’t be the only lever you pull. You still have customer expectations to meet. Let’s dig into how you can keep up, fiercely and intelligently.

1. Shift Volume Strategically, Don’t Just Rant About Rates

The index shows that shippers are diverting lightweight parcels to slower service levels this quarter. That shift drove down cost per package but raised average billed weight, leading to surprising rate hikes in the index data.

Here’s what to test:

Pilot deferred services for small items (under 2–3 lbs) and see if the slower ETA is worth the savings.
Never just blanket shift—test geographically. Maybe shift East Coast to Ground Saver and keep West on Priority.

That data-backed nuance lets you stay lean without tanking delivery promises.

2. Audit Surcharges Like a Hunter, Because Carriers Are Hunting Yours

UPS raised its ground fuel surcharge by 15%, FedEx by 12%, even though diesel dropped by 8% YoY. That’s not cost pass-through, it’s revenue arbitrage.

And surcharges aren’t limited to fuel. UPS added fees for:

Print services
Payment processing
Paper invoices
Zone realignment errors

Every surprise fee is a profit leak if you don’t audit. Run monthly invoice audits using a service such as Refund Retriever or Cahoot’s Carrier Invoice Report to claw back charges and prevent reoccurrence. Benchmark your rates quarterly for visibility over time.

3. Optimize Packaging: Because Every Inch Costs

Don’t ignore the weight/zone multiplier. Carriers LOVE dimensional weight. As zones shift and surcharges rise, oversized packages are now a double penalty. Smart brands:

Use polybags or bubble mailers for soft goods
Right-size boxes using cartonization logic
Use postage scale logs to track size variance

It’s: smaller box → less DIM weight → fewer zones crossed → lower shipping expenses across your program.

4. Leverage USPS When It Makes Sense

With FedEx/UPS squeezing margins, USPS Ground Advantage and Media Mail suddenly look powerful again. They’re slower, yes, but for low-cost items, the trade-off can be entirely worth it.

USPS even rolled out Priority Next-Day service in over 60 markets (and growing), blurring the line between economy and faster options. That’s something to pinch-test.

Note: Priority Mail Next-Day is a separate, contract-only service for businesses with negotiated service agreements that offers next-day delivery to locations within 150 miles of participating USPS locations. Minimum volumes may apply.

5. Customer Communication = Margin Protection

Don’t hide slower service under a free shipping flag. Instead:

During checkout, call out “Delivered in 4–7 business days via Economy Ground” with real-time tracking links.
Offer delivery upgrades at purchase for fast-moving or high-value SKUs.
Use delivery expectations as a conversion tool, not a surprise to the customer.

Clear language prevents complaints, WISMO cases, and refund requests that eat margins.

6. Regional Carriers & Hybrid Last-Mile Models

Major carriers aren’t always cheaper. Some brands are partnering with regional carriers or using local couriers in high-density zones. That often cuts costs without sacrificing delivery time.

Examples I’ve seen work:

A local carrier picks up in NYC or LA, then delivers packages in bulk to FedEx/UPS/USPS for the final mile.
A hybrid mix of FedEx/UPS + USPS for rural zones.

This strategy especially helps when mode-shifting lightweight volume away from big carriers. When you’re shipping high volume and low-margin items — think apparel, small electronics, beauty, or anything lightweight — every few cents saved per shipment adds up. These hybrid models help:

Lower cost-per-package
Improve delivery coverage in tricky zones
Avoid rate hikes from major carriers

7. Explore Hybrid Fulfillment

If your 3PL is stuck in one location, you’re likely hitting long zones by default. Spreading inventory closer to customers can drastically reduce the average shipping zone and cost.

8. Re-evaluate your free shipping threshold

If your AOV is $42 and your average shipping cost is $14, you’re giving away margin with every “free” shipment.

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Final Thoughts: Deep Insights You Won’t Hear at Conferences

With national carrier surcharges climbing again, regional and hybrid carrier strategies aren’t a “nice-to-have”; they’re an edge. More brands will shift this way as delivery economics get tighter, especially for free shipping models or returns.

1. Carriers aren’t passing through costs, they’re engineering margin. Fuel surcharge hikes even as diesel drops prove the point.

2. Volume shifting is the insurer of margin in a hypercharged rate environment. But it demands smart segmentation; customers are willing to wait, until they aren’t.

3. Invoice audits deliver net margin boosts. Often reclaiming unseen dollars if you missed subtle new fees.

4. Packaging isn’t just aesthetics, it’s your Zone Minimizer 2.0. Even an inch past the threshold can break the unit cost math.

5. Communication is your invisible margin guardrail. Customers who understand delivery trade-offs don’t return orders or create customer service tickets; they convert quietly and joyfully.

Look, this isn’t a temporary blip; it’s a pricing realignment. There’s blood in the water. And those who treat it like a rounding error are the ones who’ll be squeezed hardest. With carriers shifting to aggressive surcharge strategies and volume declines ongoing, the brands that survive (and thrive) are those that pivot fast, audit hard, and control the conversation.

And you don’t need to choose between slow, cheap shipping and fast, expensive shipping. You need better shipping math. The brands winning in 2025 aren’t necessarily paying less; they’re paying smarter. Every package is a micro-optimization opportunity. And in this new era of quiet cost creep, your bottom line depends on seeing and solving for the full picture.

Frequently Asked Questions

Should I always redirect lightweight shipments to economy services?

If you’re scaling shipping and have many items under 3 lb, testing slower economy options like FedEx Ground Saver or USPS Ground Advantage is smart, especially when rate drops are significant and customer expectations can be managed.

How often should I audit shipping invoices?

Monthly or quarterly audits work best to catch fuel surcharge hikes, zone realignment fees, and other hidden charges that carriers apply mid-cycle without warning.

Are regional carriers worth the complexity?

Yes, in high-density zones they can cut costs by up to 20%, while reducing reliance on large-carrier surcharges. But you need solid tracking and exception management controls in place.

How can I package smarter to reduce DIM weight?

Use cartonization software to right-size boxes, choose bubble mailers or polybags for lightweight items, and keep a log of package size variances, especially if you’re using automated packing stations.

Will shifting ground volume hurt customer satisfaction?

Not if it’s communicated correctly. By clearly labeling delivery expectations and offering optional upgrades at checkout, most customers see slower ground as an acceptable trade-off for free or lower-cost shipping.

Written By:

Jeremy Stewart

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

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How to Choose the Best Walmart 3PL

I’ve spent the past eight years helping ecommerce businesses grow, ship faster, and adapt to Walmart’s ever-changing fulfillment demands. I work hand-in-hand with warehouse operators and 3PL partners every day. And if there’s one thing I’ve learned, it’s this: not all 3PLs are built to handle Walmart. The right Walmart 3PL should align with your business model and support your long-term goals for growth and efficiency.

So let’s break down how to choose the best Walmart 3PL, whether you’re evaluating Walmart Fulfillment Services (WFS), looking to optimize order fulfillment, or just want to avoid hidden costs that quietly eat your margins. Remember, your choice of fulfillment partner can directly impact your business’s success on the Walmart platform, affecting everything from delivery speed to customer satisfaction.

Let’s dive into what matters most when finding the best fulfillment partner for your needs.

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What Makes Walmart Fulfillment So Different?

Walmart’s ecommerce ecosystem isn’t plug-and-play like Amazon’s FBA. Their fulfillment process is strict, yet flexible, if you know what you’re doing. Sellers need to meet exact fulfillment requirements, comply with shipping speed standards, and deliver a seamless customer experience that rivals their physical stores.

That’s where a solid 3PL comes in.

But what you really need is one that understands the nuances of Walmart Marketplace, offers real-time inventory tracking, and doesn’t vanish when something goes wrong. It’s crucial to choose a 3PL that can seamlessly integrate with Walmart’s systems and your ecommerce platform for efficient operations.

WFS vs. Walmart-Compatible 3PLs

Walmart Fulfillment Services (WFS) is the default choice. It’s streamlined and deeply integrated. But WFS doesn’t work for every ecommerce seller. In these cases, outsourcing fulfillment to a third-party logistics provider (3PL) can address specific business and fulfillment needs, offering greater flexibility and control.

Why? Because you give up control—over your inventory management, your branding, and sometimes even your pricing flexibility.

A great 3PL, on the other hand, gives you:

Multi-channel fulfillment
Fulfillment solutions tailored to your unique needs, ensuring compliance and efficiency
Flexible shipping options beyond WFS’s constraints
Lower fulfillment fees (in many cases)
More control over packaging materials and branding

Many of the sellers I’ve worked with start with WFS, but graduate to a more customized 3PL when their business outgrows the box. As your business evolves, matching different fulfillment solutions to your changing needs drives optimal growth.

Key Factors to Consider

If you’re serious about choosing the right fulfillment partner, here’s what to prioritize:

Walmart compliance: Can your 3PL fulfill Walmart orders on time and according to spec?
Fulfillment operations: Do they support fast delivery, accurate order processing, and smooth returns? Look for reliable fulfillment and ensure orders are processed efficiently to meet Walmart’s strict standards.
Order tracking & shipping carriers: Does the 3PL offer real-time order tracking and integrate with major shipping carriers to provide timely updates and enhance transparency and customer satisfaction?
Cost savings: Watch out for hidden fees and opaque pricing. Ask for transparency, and consider how shipping rates and weight affect costs.
Peak season readiness: Can they scale with your volume during Q4 and beyond?
Technology stack: Are they using order management systems that give you visibility and control?

A strong 3PL partner should also provide value-added services such as custom packaging or kitting, backed by deep supply chain expertise.

I’ve seen sellers burn through 3PLs simply because they didn’t ask the right questions early on. The best ones feel more like partners than vendors, supporting your growth every step of the way.

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Inventory Management for Walmart Sellers

Inventory management is the backbone of any successful ecommerce business, and for Walmart sellers it’s even more critical. With customer expectations for fast delivery and reliable service at an all-time high, having the right products in the right place at the right time can make or break your Walmart Marketplace performance.

To stay ahead, Walmart sellers should invest in advanced technology solutions—real-time tracking and robust order management systems that integrate with your ecommerce platform and 3PL.

Outsourcing inventory management to a reliable 3PL unlocks cost savings and efficiency. A trusted partner handles everything from receipt and storage to shipping and returns, freeing your team to focus on customer engagement and growing your business.

Implement best practices like just-in-time replenishment, demand forecasting, and regular audits to fine-tune stock levels, reduce waste, and stay ready to fulfill Walmart orders at a moment’s notice.

In today’s competitive marketplace, effective inventory management is a must for Walmart sellers seeking high customer satisfaction, competitive pricing, and scalable growth.

Cahoot: A Walmart 3PL Built for Marketplace Sellers

Our network is built with Walmart sellers in mind. We help clients meet aggressive same-day shipping SLAs, reduce shipping costs, and avoid chargebacks due to fulfillment mistakes.

Here’s what sets Cahoot apart:

Walmart-optimized workflows and shipping logic
Strategically located nationwide fulfillment centers to ensure fast, accurate order processing, and support Walmart’s performance requirements.
Integrated order routing across channels
Full transparency with real-time tracking
Ability to provide temperature control for perishable goods, ensuring compliance with Walmart’s standards

We’re not just managing shipments, we’re helping brands run leaner, faster, and more profitably inside the Walmart ecosystem.

Cahoot’s fulfillment centers are designed to meet Walmart’s requirements for shipping, labeling, and inventory management. Our customer service team efficiently handles inquiries, including order tracking and returns, to enhance the overall customer experience.

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Final Thoughts

Choosing a Walmart 3PL isn’t about picking the biggest name—it’s about aligning your operations with a partner that understands Walmart’s expectations and your growth goals.

If you want a 3PL provider that actively improves your margins, Cahoot’s worth a look.

Frequently Asked Questions

What is a Walmart 3PL and how is it different from Walmart Fulfillment Services (WFS)?

A Walmart 3PL is a third-party logistics provider that helps Marketplace sellers fulfill orders outside of WFS. Unlike WFS, you retain control over inventory, branding, and pricing.

Does Walmart allow sellers to use their own fulfillment partners?

Yes. While Walmart promotes WFS, third-party sellers can use their own 3PLs as long as they meet Walmart’s fulfillment and shipping performance standards.

What are the benefits of using a Walmart 3PL over WFS?

Benefits include more flexible pricing, better control of multi-channel inventory, branded packaging, and scalable peak-season capacity.

How does a Walmart 3PL impact customer satisfaction and shipping speed?

The right 3PL boosts speed and accuracy by reducing processing delays, leading to better reviews and fewer complaints.

How can Cahoot help with Walmart fulfillment?

Cahoot offers Walmart-compliant 3PL services with fast shipping, nationwide coverage, and cost-effective rates, supporting both WFS-alternative and hybrid models.

Written By:

Jeremy Stewart

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What Is Dunnage: Types, Uses, and Benefits

Key Takeaways
Defining Dunnage
Types of Dunnage Materials
Benefits of Using Dunnage
Choosing the Right Dunnage
Regulatory Compliance & Safety Standards
Reusable Dunnage Options
Improving Shipping Efficiency with Dunnage
Tracking Dunnage Inventory
Cost-Effective Dunnage Strategies
The Future of Dunnage in Logistics
Summary
Frequently Asked Questions

Dunnage refers to materials used to protect goods during shipping by filling empty spaces and preventing movement. In this article, we will explore what dunnage is, as well as various types such as bubble wrap, wood, and foam, their uses, and the benefits of using dunnage for safe transportation.

Key Takeaways

Dunnage is essential for protecting goods during shipping, preventing damage by filling voids and absorbing shocks.
There are various types of dunnage materials, including bubble wrap, wood, and air pillows, each suited for different shipping needs.
Investing in proper dunnage not only minimizes damages and returns but can also improve shipping efficiency and compliance with regulations.

Defining Dunnage

Dunnage refers to any robust material utilized in shipping. It serves to safeguard goods from damage. Its primary role is to fill empty spaces within packaging, preventing items from shifting and sustaining damage during transport. This can include anything from preventing scratches and dents to absorbing shocks and vibrations that occur during transit. Choosing the correct amount of dunnage helps businesses significantly reduce returns caused by damages, ensuring products arrive in perfect condition.

Dunnage is not just about protecting individual products; it also plays a crucial role in the overall safety and efficiency of shipping operations. Proper dunnage and steel dunnage ensure the well-being of individuals handling the shipments and maintain the integrity of the cargo protection, including crisscrossed dunnage and floor dunnage.

Whether you’re shipping fragile items that require more material or heavy goods that need structural support, understanding the various types of dunnage materials and fragile materials available can help you make informed decisions.

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Types of Dunnage Materials

Dunnage materials come in various forms, each with unique characteristics suited for specific shipping needs. Common dunnage materials include:

Bubble wrap
Solid plastics
Air pillows
Wood
Foam
Paper-based materials

Knowing these materials helps in selecting the appropriate type of dunnage, providing optimal protection and efficiency during transit.

Bubble Wrap

Still one of the most common forms of protective dunnage, bubble wrap is a versatile packing material primarily used for shock absorption, making it ideal for protecting fragile items like glass and ceramics during shipping. It’s great for wrapping individual items, though traditional bubble wrap can generate static, so avoid it for electronics. Its popularity stems from its reliability and durability; however, it is not biodegradable, and burst bubbles can lose their protective ability over long hauls.

Even with these drawbacks, bubble wrap continues to be a preferred choice for many shippers because of its effectiveness in filling packaging gaps and protecting delicate items.

Solid Plastics

Solid plastic dunnage, often made from high-density polyethylene, is used for high-value industrial shipping due to its robustness and durability. This type of dunnage is particularly effective for protecting heavy and expensive items such as electronics, glass, and ceramics. Its moisture-blocking capabilities and ability to absorb spills further enhance its protective qualities.

Although solid plastics can be pricier, their durability makes them a valuable investment for high-value shipments.

Air Pillows

Air pillows are lightweight, air-filled plastic bags that:

Provide cushioning and protection during shipping
Serve as an efficient gap filler (especially in relatively snug boxes)
Keep items stationary
Absorb shocks during transport

Air pillows provide a cheap and reusable packaging solution, though they can lose effectiveness if they pop during transit. Their lightweight nature and low cost still make them popular for less fragile items, but they collapse under pressure, so don’t use them for heavy or sharp objects.

Wood Dunnage

Wood dunnage is commonly used for transporting large machinery and appliances. It is also suitable for electronics. It serves as a barrier between heavy goods, preventing damage and stabilizing items within shipping containers. Wooden pallets, considered a form of wood dunnage, provide a sturdy base for large, heavy products like construction materials. Wood is an affordable and ethically sourced material, making it a sustainable choice for dunnage.

For international shipments, wood must be heat-treated and stamped to meet ISPM-15 compliance, ensuring it is free from pests and contaminants.

Despite the need for treatment, wood’s reusability and structural integrity make it a reliable choice for heavy-duty dunnage applications.

Foam Dunnage

When you’re shipping fragile or high-value items, foam is your best friend. Foam dunnage is ideal for protecting delicate items such as electronics, glassware, and medical equipment during transit. Die-cut foam inserts prevent movement, absorb shock, and give off a high-end feel. It comes in two primary types: open-cell foam, which is excellent for cushioning, and closed-cell foam, which offers better moisture and chemical resistance.

Although foam dunnage can be recycled and reused, it is generally less eco-friendly compared to materials like kraft paper. Its lightweight and customizable nature still makes it suitable for various applications.

Molded Pulp or Paper Pulp Inserts

These are becoming increasingly popular as a sustainable alternative to foam. They’re sturdy, biodegradable, and great for consistent SKUs (e.g. candles, skincare jars).

Anti-Static Dunnage for Electronics

If you’re shipping semiconductors, electronics, or components, this is non-negotiable, as it prevents electrostatic discharge (ESD) damage during transport. Often made from foam or plastic treated with anti-static agents, this specialized dunnage ensures that sensitive electronic components remain safe from static electricity, which can cause significant damage if not properly managed.

Paper-Based Dunnage Materials

Paper-based dunnage, made from kraft or recycled paper, is the workhorse of eco-conscious brands. It’s versatile and recyclable, making it an eco-friendly and cost-effective cushioning material designed to fill voids in shipping boxes. Bonus: it makes unboxing feel more natural and “premium” for certain audiences.

Kraft paper is known for its strong tear resistance and cushioning capabilities, making it a popular choice for many shippers. Corrugated paper offers exceptional strength for heavy items while maintaining eco-friendly properties, addressing the growing customer demand for sustainable packaging solutions. It’s ideal for multi-unit shipments or bundled SKUs, as it prevents items from bumping into each other, and can be custom-fitted to boxes for maximum efficiency.

This type of dunnage is biodegradable and recyclable, making it a more sustainable option compared to plastic dunnage. Additionally, paper dunnage often costs less than plastic alternatives while providing comparable protection. Shredded paper, cardboard, or fill, is another paper-based option, serving as a recyclable alternative to packing peanuts and offering effective cushioning for lightweight products. Often used in boutique and gifting brands, it creates a luxurious feel, supports oddly shaped items, and keeps products stable. But beware: it can be messy and increase packaging time.

Custom Dunnage Solutions

Custom dunnage is key for shipping fragile or irregularly shaped items needing specific packaging dimensions. These tailored solutions protect valuable products by providing a perfect fit, ensuring better protection and stability during transit. Custom dunnage can be made from various materials, including foam, plastics, and metals, offering flexibility based on product needs.

Customization techniques, such as CNC cutting and molding, allow for the creation of dunnage that perfectly fits irregularly shaped products with very specific dimensions. Collaboration with dunnage providers can lead to uniquely tailored packaging solutions that enhance the protection of specific cargo.

While custom dunnage is often more expensive due to its bespoke nature, it is a worthwhile investment for businesses shipping high-value, fragile items.

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Benefits of Using Dunnage

Dunnage materials play a critical role in securing shipments and keeping items stable during transportation, thereby minimizing the risk of movement that can lead to damage. Investing in proper dunnage helps businesses prevent costly replacements due to damaged goods, ensuring shipments arrive safely and intact.

The benefits of using dunnage include damage protection, moisture protection, and shock absorption, all of which contribute to the safe delivery of products.

Damage Protection

Dunnage plays a crucial role in absorbing shocks and vibrations, significantly reducing the risk of damage to goods. Proper use of dunnage can prevent fragile items such as delicate electronics and ornate glassware from being damaged during transport. Air pillows and dunnage bags are commonly used for filling voids and absorbing shock, ensuring the protection of sensitive items.

This not only enhances shipping safety but also minimizes shipping costs by reducing the likelihood of damage.

Moisture Protection

Moisture-resistant dunnage is essential for protecting products during transit, as moisture can cause significant damage. Certain dunnage types are designed to protect cargo from environmental factors, maintaining product integrity to protect goods.

For example, airbags not only protect against physical impacts but also help create barriers, maintaining moisture barriers and preventing damage from spills or humidity.

Shock Absorption

Effective dunnage materials, such as airbags and air pillows, provide excellent shock absorption properties, protecting delicate items during transit. Dunnage plays a crucial role in reducing the risk of damage caused by impacts during handling, ensuring that goods can absorb shock and be delivered safely and without damage.

Choosing the Right Dunnage

Selecting the right dunnage involves assessing the characteristics of the cargo, such as its fragility, weight, and shape. Businesses need to consider the types of products being shipped, the shipping methods used, and the specific packing options available. For example, wood is favored for its strength and versatility but may require additional protective measures for moisture-sensitive cargo. Custom dunnage solutions can be created to meet unique needs, ensuring enhanced protection and stability for specific cargo.

Regulatory compliance is also crucial when choosing dunnage, as various cargo types may have specific safety and legal requirements. Careful evaluation of these factors enables businesses to select the right dunnage materials, offering the best protection and regulatory compliance.

Regulatory Compliance & Safety Standards

Adhering to regulatory standards ensures the safe and legal transportation of goods. For example, ISPM-15 regulations require that wood dunnage used in international shipping be heat-treated and stamped to prevent the transfer of pests. Additionally, OSHA has specific load securement expectations that must be met to ensure the safety of cargo during transit.

Eco-label certifications can also play a significant role in demonstrating a commitment to sustainability. By adhering to these standards, businesses can ensure that their shipping practices are both safe and environmentally responsible.

Reusable Dunnage Options

Reusable dunnage options are not only environmentally sustainable but can also reduce long-term costs for businesses. Examples include:

Wood dunnage, a renewable resource that can be reused multiple times.
Foam dunnage, particularly types like expanded polypropylene (EPP), which is recyclable and supports eco-friendly packaging.
Partnering with vendors who offer take-back programs or biodegradable materials to further enhance sustainability efforts.

Proper disposal or recycling of dunnage materials minimizes environmental impact. Implementing reuse practices and partnering with sustainable vendors helps businesses manage dunnage waste and packaging waste effectively, contributing to a greener shipping industry through the use of recycled materials.

Improving Shipping Efficiency with Dunnage

Dunnage streamlines the shipping process by optimizing shipping container space and reducing shipping costs. Materials like kraft paper and packing materials are cost-effective and ensure items arrive safely by minimizing in-transit movement. Air pillows provide cushioning for fragile items, further enhancing shipping efficiency. Businesses can also use dunnage to effectively ship products while maintaining safety.

Effective inventory management systems allow for real-time tracking of dunnage materials, ensuring their availability and location are continuously updated. Utilizing technology-driven solutions enhances decision-making in dunnage management by providing visibility into stock levels and usage patterns, ultimately improving overall shipping efficiency.

Tracking Dunnage Inventory

Tracking dunnage inventory is essential for maintaining adequate stock levels and avoiding supply shortages. An inventory management system allows businesses to monitor stock levels, usage rates, and reorder points, ensuring they have the necessary materials on hand when needed. Monitoring usage rates helps businesses understand how quickly dunnage is consumed, allowing for timely reorders.

Implementing best practices can enhance dunnage inventory management, including:

Conducting regular audits
Utilizing automated alerts
Maintaining accurate records
Setting reorder points based on usage rates

These practices allow businesses to effectively manage dunnage supplies and prevent waste.

Cost-Effective Dunnage Strategies

Cost-effective dunnage strategies balance quality and cost, allowing businesses to protect products during shipping without significantly raising overall shipping costs. Some cost-effective dunnage materials include kraft paper and corrugated paper, known for their protective qualities and affordability. Using lightweight dunnage materials can also reduce shipping expenses while still providing adequate protection.

To improve dunnage usage and shipping efficiency, consider the following strategies:

Choose appropriately sized packaging for products to minimize dunnage waste and shipping costs.
Utilize a digital logistics platform to optimize dunnage usage and enhance overall shipping efficiency.
Maintain accurate records of dunnage inventory.
Use data analytics to forecast future dunnage needs, allowing better planning and resource allocation to improve cost efficiency.

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The Future of Dunnage in Logistics

The future of dunnage in logistics lies in technology-driven optimization. AI-based dunnage optimization tools and 3D scanning for box size and void fill prediction are already transforming the industry. These technologies allow for more precise and efficient use of dunnage materials, reducing waste and improving protection for shipped goods.

Integrating dunnage planning into Warehouse Management Systems (WMS) or Transportation Management Systems (TMS) can further enhance shipping efficiency. As the shipping industry continues to evolve, the intelligent use of automation and optimization techniques will play a critical role in achieving faster fulfillment and reduced labor costs.

Summary

Understanding and utilizing the right dunnage materials is essential for ensuring the safe and efficient transportation of goods. From bubble wrap to custom solutions, each type of dunnage offers unique benefits and applications. By choosing the appropriate dunnage, businesses can protect their products from damage, moisture, and shocks, ultimately reducing costs and improving customer satisfaction.

As the logistics industry continues to innovate, the future of dunnage will be shaped by technological advancements and a growing emphasis on sustainability. By staying informed about the latest developments and best practices, businesses can optimize their shipping processes and contribute to a more sustainable and efficient future. So, make the smart choice, invest in proper dunnage, and watch your shipping operations thrive.

Frequently Asked Questions

What is dunnage?

Dunnage is the protective material used in shipping to fill empty spaces and prevent damage to goods by absorbing shocks and vibrations. It’s essential for keeping your items safe during transit!

What are some common types of dunnage materials?

You’ve got several options for dunnage materials, like bubble wrap, foam, wood, and air pillows. Each one helps protect your items during shipping and handling.

Why is regulatory compliance important for dunnage?

Regulatory compliance is important for dunnage because it guarantees the safe and legal transport of goods while meeting specific standards like ISPM-15 for wood materials. This not only protects your shipments but also helps avoid potential legal issues.

How can businesses track their dunnage inventory?

To effectively track dunnage inventory, businesses should utilize an inventory management system that keeps tabs on stock levels and usage rates. This way, they can always ensure they have the right materials available when needed.

What are the benefits of using reusable dunnage?

Using reusable dunnage is a smart choice because it’s environmentally friendly and can save your business money in the long run. Plus, with options like wood and foam dunnage, you’re supporting sustainability while cutting costs.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

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

Shrinkflation Is Back: What Ecommerce Retailers Need to Know in 2025

What Is Shrinkflation (and When Did It Start)?
Why Shrinkflation Isn’t Just About Product Size Anymore
Why It’s Accelerating Now (And Who’s Leading It)
Shrinking the Reverse Logistics Problem
Should You Shrink Your Returns Policy?
The Cahoot Take
So What Should Brands Be Doing Right Now?
Frequently Asked Questions

You know the feeling. You tear open your favorite snack bag, only to find it’s mostly air. You scroll Amazon for paper towels and realize the “12 = 24 rolls” trick isn’t fooling anyone anymore. That’s shrinkflation, where you’re paying the same, or more, for less.

But here’s the thing: Shrinkflation isn’t just a grocery store phenomenon. It’s creeping into ecommerce, DTC brands, and even the way retailers manage inventory, fulfillment, and returns.

So let’s unpack it. What is shrinkflation really doing to retail in 2025? And what’s your move if you’re running an ecommerce business?

What Is Shrinkflation (and When Did It Start)?

Shrinkflation has technically been around for decades. But it entered mainstream vocabulary during the post-pandemic inflation spike of 2021 – 2022, when CPG brands quietly started downsizing products without lowering prices.

Fast forward to 2025, and it’s become institutionalized. The Wall Street Journal recently reported that consumers now expect shrinkflation. It’s no longer a scandal, it’s a strategy.

What started with toilet paper and breakfast bars has extended to ecommerce packaging sizes, SKU quantities, return windows, and more.

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Why Shrinkflation Isn’t Just About Product Size Anymore

Here’s where things get interesting. In ecommerce, shrinkflation shows up in ways that are harder to see, but just as costly:

Bundles that include fewer items but still carry the same price tag.
Return policies with stricter timelines and more exclusions.
Free shipping thresholds are creeping upward, from $35 to $50, then $75.
“Deluxe” editions that used to be standard, now basic, means barebones.

This is the kind of shrinkflation that impacts not just what consumers get, but what they expect from you as a brand. And it’s often hiding in plain sight.

Why It’s Accelerating Now (And Who’s Leading It)

In Q1 and Q2 of 2025, pressure on margins is back in a big way. Tariffs on Chinese imports, consumer pullback, and warehouse vacancies are making it tougher for ecommerce brands to survive, let alone grow.

So retailers are leaning into shrinkflation not as a one-time fix, but as part of a bigger playbook:

Target quietly cut the size of its in-house tech accessories.
A major DTC pet brand reduced its “starter kit” contents by 25%.
A Shopify brand known for home goods reduced its return window from 60 to 30 days, citing “inventory health.”

They’re not advertising it. But if you read between the lines, or the reviews, you’ll spot the moves.

Shrinking the Reverse Logistics Problem

Here’s the twist nobody’s talking about: Shrinkflation isn’t just about getting more out of the sale. It’s also about cutting the cost of everything after the sale.

For example, returns.

In the past, brands could afford generous return policies because margins were fat. Not anymore.

Now we’re seeing:

Fewer pre-paid return labels.
More “final sale” language on seasonal SKUs.
Higher restocking fees or “re-inspection” charges.

Returns are one of the biggest hidden costs in ecommerce, and shrinkflation is giving brands permission to quietly shrink that part of the business, too.

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Should You Shrink Your Returns Policy?

Not automatically. If you’re building long-term customer trust, cutting corners on service can backfire.

But here’s what you should do: audit your reverse logistics. Ask questions like:

Are we taking returns on items that can’t be resold profitably?
Are our policies optimized for margin or for habit?
Are there SKUs that should be final sale or non-returnable?

If the answer is yes, make strategic adjustments. Not punitive ones.

The Cahoot Take

At Cahoot, we’re seeing more brands experiment with leaner fulfillment and returns strategies, not by squeezing customers, but by gaining more control over how returns are routed, restocked, or resold.

For example, peer-to-peer returns allow brands to keep returned items circulating closer to the next buyer, avoiding restock delays and slashing return shipping costs. That’s not shrinkflation. That’s smart fulfillment.

Shrinkflation is inevitable. But how you manage it isn’t.

So What Should Brands Be Doing Right Now?

Well, you can’t completely avoid shrinkflation in today’s market. But you can be intentional about it.

Here’s what I’m telling brands:

Be transparent where it counts. If you’re reducing bundle sizes, explain why.
Audit returns before slashing them. Customer experience still matters.
Get proactive with fulfillment efficiency before costs force your hand.
Use this moment to clean up your SKU strategy, packaging waste, and shipping bloat.

And above all, don’t assume customers aren’t paying attention. They are, especially the ones you want to keep.

Frequently Asked Questions

What is shrinkflation in ecommerce?

Shrinkflation in ecommerce refers to the practice of reducing product quantity, features, or services while keeping prices the same or increasing them, often subtly, such as smaller bundles or stricter return policies.

How is shrinkflation affecting online retail in 2025?

Retailers are downsizing offerings, tightening returns, and raising shipping thresholds to protect margins amid tariffs, inflation, and slowed consumer spending.

Are consumers aware of shrinkflation?

Yes, consumer awareness is growing. Many are actively calling it out in reviews or social media, especially when changes feel deceptive or unacknowledged.

Is shrinkflation legal?

Yes, as long as the packaging and product info are accurate. However, misleading practices can risk reputational damage and consumer trust.

How can ecommerce brands manage shrinkflation without hurting loyalty?

Be transparent, audit returns strategically, and explore fulfillment models that cut costs without compromising the customer experience, like Cahoot’s peer-to-peer network.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

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

How Can Shippers Use Rising Vacancies to Secure More Flexible, Cost-Effective Storage?

Today, those same warehouses are sitting partially empty. Sublease availability has surged past 225 million square feet, and developers have slashed new construction by 45% year-over-year. For brands and logistics teams still feeling whiplash from last year’s stockpiling wave, the current moment might look like a warning. But with the right strategy, it’s actually a window of opportunity.

The Hidden Cost of Empty Space

Leased square footage that sits idle is more than just a sunk cost; it’s a drag on cash flow, inventory turns, and operational efficiency. Many brands overcommitted during the supply chain panic and are now underutilizing expensive long-term leases. Rents, still averaging over $10 per square foot, haven’t dropped much due to lease lag. That means even as the market softens, the costs remain sticky.

If you’re a shipper sitting on more space than you need, it’s time to rethink your approach to storage. Subleasing is one option, but it isn’t always simple. Quality of sublease inventory can vary widely, and not every landlord is keen to play ball. That’s where more creative models are gaining traction.

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The Rise of Flexible Storage Models

As traditional warehousing strains under cost and commitment, brands are exploring alternatives. Multi-tenant and shared warehouse spaces are becoming more viable for those with fluctuating demand. These environments allow shippers to expand or contract their footprint in real time, without the burden of long leases.

Another emerging option is the peer-to-peer fulfillment model. Platforms like the Cahoot P2P Fulfillment Network allow merchants to monetize their unused storage and fulfillment capacity by plugging into a distributed network of sellers. That means if you’re looking to get out of a lease, you might be able to repurpose your existing warehouse space as a revenue-generating node in someone else’s ecommerce operation. Or, if you’re winding down your lease entirely, you could still ship nationally using the Cahoot network without the overhead.

Negotiating From a Position of Strength

In softening warehouse markets like the Inland Empire, Dallas-Fort Worth, and even New Jersey, shippers are finding themselves in a rare buyer’s market. With construction down and sublease listings up, there’s leverage to negotiate short-term deals, flexible expansion clauses, and even tenant improvement credits, terms that would have been laughable in 2021.

But it takes planning. The key is to assess your demand cycles and real estate needs with brutal honesty. How much space do you truly need? Can your inventory strategy adapt to decentralized fulfillment? Would modular lease structures serve your business better than fixed commitments?

These are hard questions, but answering them now can create long-term resilience.

Timing the Real Estate Reset

Right now, we’re hearing from brands that are reevaluating every fixed cost on the books, and warehousing is near the top of the list. The companies that paused, audited their operations, and leaned into flexibility early are already seeing savings compound. One brand recently cut 40% of their storage expense by transitioning part of their fulfillment to Cahoot nodes; they didn’t lose autonomy, they gained agility.

That kind of agility is becoming a competitive advantage. It’s not just about finding cheaper storage, it’s about staying nimble when the market shifts again, and it will.

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How to Capitalize Now

This isn’t about gambling on the market. It’s about hedging against the next disruption while improving today’s bottom line. Whether that means subleasing, switching to a shared facility, or plugging into a P2P network, the goal is the same: reduce fixed costs, increase flexibility, and stay ready for whatever comes next.

The warehouse vacancy surge won’t last forever. But for shippers willing to act now, it’s a rare chance to shift from reactive leasing to a proactive strategy. Just make sure your space is working for you, not against you.

Frequently Asked Questions

What is driving the spike in warehouse vacancies in 2025?

The surge is largely due to pandemic-era overbuilding, reduced demand, and companies offloading excess space they acquired during the supply chain crunch of 2021–2023.

Why are rents still high despite rising vacancies?

Many leases were signed when the market was tight and are locked in for years. Landlords are not rushing to lower rates until those contracts come up for renewal.

What is a sublease, and is it worth considering?

A sublease is when a tenant leases out unused warehouse space to another company. It can be a cost-effective short-term option, but it requires due diligence on the space condition and lease terms.

What is peer-to-peer fulfillment?

Peer-to-peer fulfillment allows businesses to fulfill orders from each other’s warehouses using a shared technology platform like Cahoot. It’s a flexible and scalable alternative to owning or leasing large fulfillment centers.

How can smaller brands benefit from the warehouse vacancy trend?

Smaller brands can take advantage of shared warehouse spaces, short-term subleases, or P2P networks to avoid committing to expensive, long-term leases while maintaining nationwide shipping capabilities.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

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

The Shipping Speed Paradox: Why DTC Brands Are Slowing Down

The Delivery Arms Race: Amazon and Walmart Go All-In

Let’s start with the big players. Amazon has spent the better part of a decade conditioning customers to expect one- or two-day delivery. In 2024, they doubled down again. More inventory was moved closer to end customers using their “regionalization” strategy, which chopped fulfillment distances in half. The result? According to Supply Chain Dive, 65% of Prime orders in Q2 2025 arrived the same day or the next day.

Walmart isn’t far behind. They’ve converted more than 4,500 stores into last-mile delivery hubs and are investing in AI-powered inventory placement. They’ve even launched parcel stations right inside their stores to boost local delivery capacity.

And yes, both are experimenting with drones. Amazon is testing lightweight drone delivery in a few southern U.S. zip codes. Walmart too. But let’s be honest: we’re still in science-project territory. Drone delivery may be flashy, but it’s barely scratching the surface of what really moves ecommerce.

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Meanwhile, DTC Brands Are Quietly Slowing Down

This part of the story isn’t getting enough airtime. While the retail giants race toward one-hour windows, thousands of independent ecommerce brands are stepping back.

Not because they want to disappoint customers, but because they can’t afford to keep up, and chasing Amazon’s logistics playbook is a losing game when you don’t have Amazon’s budget.

You know what I’m seeing? Brands freezing SKUs. Shrinking warehouse footprints. Letting go of that “2-day everywhere” promise. Not because they’re failing, but because they’re adapting.

And it’s not just a gut feel. According to July 2025 reports, Shopify store closures now outpace new installs. Many of those closures are logistics-related, brands crushed under the weight of expectations they could no longer afford to meet.

What Customers Actually Care About

Let’s cut through the noise.

A 2025 McKinsey study shows customers care about three things in this order:

Free shipping
Reliable delivery timelines
Speed (same/next day)

Sustainability? It ranked dead last.

In fact, only 26% of shoppers said they’d pay even $1–2 extra for eco-friendly delivery. And when researchers tracked actual conversions? Fewer than 10% followed through. So while “green shipping” sounds great in a press release, it’s rarely what gets the sale.

Translation: customers expect fast and free. That’s a tough combo for DTC brands with thin margins.

The Hidden Costs of Chasing Speed

The faster you ship, the more you pay. You either:

Store more inventory closer to the customer (higher storage and distribution costs), or
Ship from a central location via air (higher parcel and carrier fees), or
Overstaff fulfillment ops and erode margin at scale

Speed isn’t free, and when volume slows or inventory piles up, you’re left with expensive sunk costs.

We’re seeing the result now. DTC brands are caught in the “stockpile trap,” where inventory equals cash sitting on shelves. Remember, inventory isn’t just product; it’s tied-up working capital. If you can’t sell it fast enough to fund reorders, you’re stuck.

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The Drone Mirage

Let’s revisit the drones. They’re real. They’re operational in some pilot markets. But they’re limited to:

Small packages under 5 pounds
Favorable weather
Specific delivery zones with limited obstructions

For the average brand selling apparel, home goods, or supplements, drones don’t meaningfully move the needle yet. And they won’t for most of 2025. If you’re betting your fulfillment future on drone scalability, you’re early. Way early.

Slowing Down on Purpose Is Not the Same as Falling Behind

When growth stalls, I don’t panic. I pause. I fix what’s broken, not what’s trending.

At Cahoot, we’re seeing smart brands slow down intentionally to:

Vet new 3PLs or hybrid fulfillment solutions
Reprice SKUs based on true landed cost
Trim the fat from overbuilt operations
Reallocate dollars from speed to retention

Slowing down doesn’t mean giving up. It means strengthening the core so you can scale sustainably when the market rebounds.

The Strategic Path Forward

Here’s the real takeaway: you don’t have to match Amazon or Walmart on delivery speed to win. You just have to meet your customers’ expectations and protect your margin while doing it.

Use 2025 to:

Reaudit your shipping promises
Simplify where needed
Explore fulfillment partners that optimize speed and cost
Make sure every dollar in ops contributes to LTV, not just CTR

Because speed is sexy, but resilience is what keeps you in the game.

Frequently Asked Questions

What is the “shipping speed paradox” in ecommerce?

It refers to the trend where retail giants are racing toward faster delivery, while many DTC brands are pulling back due to cost and sustainability constraints.

Are consumers really demanding same-day delivery?

Not necessarily. Most customers prioritize free shipping over speed. Same- or next-day delivery is nice to have, not a dealbreaker for most shoppers.

Why are DTC brands slowing down their delivery promises?

Because matching Amazon-level speed is expensive and often unsustainable for smaller brands without massive logistics infrastructure.

What’s the status of drone delivery for ecommerce brands in 2025?

Still very early. Amazon and Walmart are testing drone delivery, but it remains limited to small packages and specific markets.

How can DTC brands stay competitive without fast delivery?

By offering reliable shipping timelines, clear communication, and great post-purchase experiences. Fulfillment partners like Cahoot can also help streamline speed without killing margin.

Written By:

Manish Chowdhary

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

Turn Returns Into New Revenue

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

Top 10 Ecommerce Returns Mistakes (and How to Fix Them)

1. Not Having a Clear Return Policy
2. Offering Free Returns Without Doing the Math
3. Making the Return Process a Hassle
4. Treating Returns as a Cost Instead of a Signal
5. Not Reselling What You Could
6. Refunding Too Slowly
7. Not Offering Exchanges
8. Forcing Customers to Pay for Damaged or Defective Returns
9. Ignoring International Return Complexities
10. Treating Returns Like a Backroom Issue
Final Thought
Frequently Asked Questions

Returns are no longer just a post-sale nuisance, they’re a defining part of your customer experience, your margin, and frankly, your brand. Yet so many brands treat returns like a cost center to ignore until it bites them.

I’ve been deep in the ecommerce trenches long enough to know this: if you don’t actively manage returns, they will manage you. Let’s walk through the top 10 mistakes I see over and over, and what you should do differently before your profit margins take a nosedive.

1. Not Having a Clear Return Policy

If your return policy is vague, buried, or just plain confusing, you’re not just frustrating your customers; you’re setting yourself up for chargebacks, bad reviews, and support nightmares.

Fix: Spell it out. Be upfront about what’s returnable, how long customers have, and how they initiate a return. Make it easy to find (footer link, FAQ, order confirmation email) and easy to understand (no legalese, no fine print tricks).

2. Offering Free Returns Without Doing the Math

Yes, free returns boost conversion, but they can destroy margins if you’re not careful. Too many brands offer them without understanding their actual cost per order.

Fix: Run the numbers. Factor in shipping costs, restocking labor, product condition loss, and processing time. Then decide if free returns should be conditional (only for first-time orders, only for full-price items, etc.).

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3. Making the Return Process a Hassle

Ever tried returning something and had to print three pages, repack it just right, and get to the post office before 4 pm on a Tuesday? Your customers hate that too.

Fix: Make it stupid easy. Include a prepaid return label or offer printerless returns with QR codes. Let customers initiate the return online without calling support. Track returns in the same dashboard as orders.

4. Treating Returns as a Cost Instead of a Signal

Returns are data. They tell you what’s broken, literally and figuratively, in your business—sizing problems, misleading descriptions, shipping damage, and quality issues. Most brands never read the return reasons, let alone analyze trends.

Fix: Create a monthly returns report. Track reasons by SKU, channel, and geography. Spot patterns. If one item has a 20% return rate, figure out why and fix it.

5. Not Reselling What You Could

Returned items that are perfectly good shouldn’t be collecting dust or ending up in landfills. If you’re trashing usable inventory, you’re leaving money on the table.

Fix: Set up a reverse logistics plan to restock, refurbish, or resell items via outlets, liquidation partners, or marketplaces like eBay. Every recovered dollar counts.

6. Refunding Too Slowly

Waiting 14 days after receiving a return to issue a refund might protect your cash flow, but it destroys trust. Customers start wondering if they’ve been ghosted.

Fix: Tighten up the refund cycle. Ideally, within 2–3 days of receipt. Automate confirmations and refund notices. Build goodwill by being proactive.

7. Not Offering Exchanges

Here’s the thing: Most customers returning something still want what you sell; they just want the right version of it. If you don’t offer easy exchanges, you’re turning potential revenue into refunds.

Fix: Enable smart exchanges. Let customers swap for different sizes or styles right in the return portal. Offer free exchanges even if returns aren’t free. Keep the sale.

8. Forcing Customers to Pay for Damaged or Defective Returns

This one’s brutal. Customer gets a busted item, reaches out, and you hit them with a return shipping fee? Say goodbye to that lifetime value.

Fix: Have a clear damaged/defective policy. Cover return shipping and offer replacements ASAP. Yes, it costs you in the short term, but it’s a small price for loyalty.

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9. Ignoring International Return Complexities

Cross-border returns are a whole different beast—duties, taxes, restocking in the wrong region—it gets expensive fast. Many brands just say “no international returns” and hope no one notices.

Fix: If you’re selling internationally, design a return flow that works. Use local carriers and consolidation partners. Consider refunding without return in some low-cost, high-friction cases.

10. Treating Returns Like a Backroom Issue

Returns shouldn’t be siloed to warehouse staff or an outsourced 3PL with zero feedback loops. If marketing, product, CX, and ops aren’t all looking at return trends, you’re missing out.

Fix: Returns are a team sport. Share data across departments. Let product know what breaks. Let CX see trends. Let marketing tweak messaging to reduce mismatch expectations.

Final Thought

Returns aren’t going away. In fact, they’re becoming more critical to your brand than ever. Nail the return experience and you’ll win more loyalty, reduce costs, and create the kind of customer-centric business that actually survives the shakeouts we’re seeing in 2025.

You don’t have to be perfect. But you do have to be intentional.

Frequently Asked Questions

What’s the biggest return mistake ecommerce brands make?

Not having a clear, easily accessible return policy that sets customer expectations.

How can I reduce the cost of free returns?

Limit them to certain SKUs, order types, or customers, and audit the return rates by product.

Should I allow exchanges instead of just refunds?

Yes, exchanges help preserve the sale and increase customer satisfaction.

How fast should refunds be processed?

Ideally, within 2–3 days of receiving the returned item.

What should I do with returned inventory?

If it’s resellable, restock or liquidate it through the right channels to recover margin.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

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

Why the Tariff Pause Isn’t Free Money, And What Smart Brands Should Do Instead

Why Brands Are Stockpiling (And Why That’s Risky)

Modern Retail recently highlighted how brands are tying up cash in inventory that might not sell for months. Some are maxing out warehouse capacity. Others are renting trailers just to hold product.

That’s not a strategy. That’s panic disguised as preparedness.

When you stockpile, you’re converting liquidity into risk. You’re betting on stable demand, perfect forecasting, and a logistics environment that won’t throw any curveballs. That’s a lot of assumptions.

And the math isn’t pretty:

Holding costs are rising (storage fees, insurance, shrinkage).
Demand is softening across DTC; June sales were down 25% YoY for small brands.
Interest rates remain high, so capital is expensive.

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Inventory Isn’t An Asset If It’s Not Moving

Let’s stop pretending every product sitting in a warehouse is “value.” If it’s not turning, it’s dead weight. And right now, many brands are sitting on SKUs that may not move until Q4, if at all.

Worse, some brands are prepaying for production to “lock in pricing,” leaving them vulnerable to shifts in demand, freight delays, or SKU obsolescence. Cash on shelf is not cash in hand.

I’ve personally seen brands take on more inventory than they could realistically sell in two quarters. And once your cash is tied up, options disappear. Marketing slows. Hiring freezes. And suddenly, you’re in survival mode, not growth mode.

What Smart Operators Are Doing Instead

The brands I see winning right now aren’t chasing bulk discounts; they’re chasing flexibility.

Here’s what they’re doing:

1. Hedging their sourcing

They’re not all-in on one supplier. They’re exploring Mexico, Vietnam, and even domestic production where feasible. Not because it’s cheaper (it’s often not), but because diversified sourcing creates leverage and optionality.

2. Rebalancing cash flow

Rather than drop $100K on inventory, they’re testing shorter runs. They’re working capital lines in smarter ways. And they’re getting surgical with demand planning, looking at return rates, sell-through velocity, and seasonality with fresh eyes.

3. Rethinking fulfillment

Tariffs are just one cost center. Fulfillment is another. Now’s the time to evaluate whether your fulfillment model is nimble. Can you scale up fast if demand spikes? Can you pull back quickly if it softens?

This is where Cahoot-style distributed fulfillment is a game-changer. You don’t have to commit to massive inventory deposits in one location. You flex regionally, based on demand, saving money on last-mile shipping and reducing your warehouse exposure.

The Trap Of Tariff-Driven Optimism

Every time there’s a pause, brands breathe a little easier. I get it. But temporary relief isn’t a long-term strategy. Tariffs could rise again. Port delays could return. Consumer sentiment could weaken further.

Smart founders are treating this moment like a chess move, not a victory lap. They’re asking:

Where am I most exposed?
Where am I overcommitted?
How fast can I pivot if X happens?

If you can’t answer those questions confidently, you’re not in control, you’re just hoping the next hit doesn’t land.

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Final Thought: Play For Resilience, Not Rebates

This isn’t about being pessimistic. It’s about being ready.

There’s opportunity in this pause. But it won’t come from stockpiling; it’ll come from brands who treat the next 60 days as a strategic window. Tighten up ops. Diversify your sourcing. Build fulfillment agility.

Use the pause to prep your playbook, not to pile up product.

Frequently Asked Questions

What is the risk of stockpiling inventory during a tariff pause?

It ties up cash, increases holding costs, and exposes brands to shifts in demand or logistics disruptions.

How should brands respond to tariff uncertainty?

Diversify suppliers, test shorter production runs, and maintain fulfillment flexibility.

Is now a good time to invest in bulk production?

Only if demand forecasting is strong, otherwise, it’s safer to focus on agility.

How can a fulfillment strategy reduce tariff-related risk?

A flexible, distributed model like Cahoot helps reduce shipping costs and regional storage exposure.

Will tariffs increase again in 2025 and beyond?

It’s unclear, but most experts expect volatility; brands should plan accordingly.

Written By:

Jeremy Stewart

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Why Slowing Growth Could Be Your Secret Competitive Advantage

Growth Is Down? Good. Now Let’s Talk.
The Pause Is Where The Magic Happens
What Smart Brands Are Doing During The Slowdown
Chasing Better Instead Of More
Why Now Is The Best Time To Reinvent Your Ops
What We’re Seeing At Cahoot
Final Thought: Use The Slow Season To Outsmart, Not Outspend
Frequently Asked Questions

Growth Is Down? Good. Now Let’s Talk.

This might sound strange coming from someone who spends their days helping ecommerce brands grow faster, ship smarter, and compete with giants. But here it is:

Slowing growth isn’t always bad. In fact, sometimes it’s exactly what your brand needs.

It forces you to pay attention to stuff you were too busy to look at before. Broken ops. Cost sinks. Sketchy suppliers. Shaky unit economics. When you’re growing at all costs, this stuff hides in the background. But when things slow down? It all surfaces.

Right now, according to AlixPartners, we’re seeing one of the sharpest ecommerce spending slowdowns in a decade. Consumers are pulling back. Tariffs are throwing sand in the gears. The Shopify Index shows more store closures than installs for the first time in years. And if you’re feeling the heat, you’re not alone.

But here’s the thing: this slowdown could be your wake-up call or your unfair advantage. Depending on what you do with it.

The Pause Is Where The Magic Happens

Every founder I know has sprinted through phases of insane growth where “we’ll fix that later” becomes a mantra. But later rarely comes. Until it’s forced on you.

That’s where we are now. A lot of brands are quietly hitting the wall. Not because their products are bad. But because their ops can’t keep up with their ambition.

So if growth has stalled for you, try asking:

What would I fix if I weren’t constantly chasing more?

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Start there.

What Smart Brands Are Doing During The Slowdown

Here are a few moves I’m seeing from operators who aren’t just waiting it out:

Rebuilding their supplier network; offshoring was fine when margins were fat, but now nearshoring and dual sourcing are saving cash and reducing risk
Auditing packaging, because oversized boxes are silent profit killers
Rebalancing inventory with better forecasting tools, instead of stockpiling and hoping
Training teams instead of just hiring faster, focusing on repeatability and clarity
Experimenting with fulfillment models (Cahoot-style distributed shipping, hybrid 3PL + self-fulfillment setups, or even zone-skipping trials)

In short: they’re fixing the things they ignored while things were working “well enough.”

Chasing Better Instead Of More

There’s this quiet revolution happening among founders who are done with the growth-at-all-costs treadmill. They’re not giving up on scale, they’re just being smarter about it.

It reminds me of a conversation I had recently with a brand that pulled back from seven channels to three. Their sales dipped 12% for the quarter… but margins rose 18%, CSAT jumped, and their returns dropped by a third. Turns out, doing fewer things better pays.

They told me, “We stopped chasing ‘more’, and started chasing better.”

That stuck with me.

Why Now Is The Best Time To Reinvent Your Ops

Because no one else is.

Everyone else is panicking. Slashing budgets. Blaming ads. Praying Meta’s new algo will swing things around.

If you take this pause and use it to re-architect your backend, supply chain, fulfillment, customer experience, and inventory cadence, you will exit stronger. Period.

This is where you gain margin that compounds. This is where you discover operational leverage. And this is how you get ready for volume before it returns.

What We’re Seeing At Cahoot

Some of the smartest brands we work with are using this moment to finally clean up the mess:

Testing Cahoot’s peer-to-peer fulfillment to reduce shipping zones and cost per package
Auditing their warehouse placement to lower delivery time without overspending on storage
Automating order routing and splitting to serve customers faster with less ops overhead

It’s not sexy, but it works. One brand cut its average shipping cost by 22% without changing carriers. Just smarter routing and storage.

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Final Thought: Use The Slow Season To Outsmart, Not Outspend

If growth has slowed, don’t just ride it out. Don’t just “make it through.”

Use it.

This is your shot to fix the stuff that matters. The stuff that makes growth sustainable, not scary. Because when things rebound, and they will, you’ll be ready. Faster, leaner, stronger.

Pause on purpose. The smart ones always do.

Frequently Asked Questions

What should I do if my ecommerce growth stalls?

Use the pause to fix operations, audit inventory, vet suppliers, and improve fulfillment.

Why is slowing down a good thing for DTC brands?

It creates space to optimize backend systems and improve margins.

How are brands responding to the ecommerce slowdown?

They’re rethinking their supply chains, experimenting with fulfillment, and improving forecasting.

Is this a temporary slump or a long-term shift?

It’s likely a correction, but smart brands treat it as an opportunity to get leaner and stronger.

Can Cahoot help during a growth slowdown?

Yes, by optimizing fulfillment and reducing shipping costs, Cahoot helps brands improve ops even when volume dips.

Written By:

Indy Pereira

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

Turn Returns Into New Revenue

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DTC Brands Are Dying Faster Than Ever

Ecommerce isn’t just cooling off; it’s contracting

In Q2 2025, Shopify store closures outpaced new installs for the first time ever: 1.5 closures per new store. That’s not a blip. That’s a reckoning.

Revenue for small DTC brands is down 25% year over year. The overall DTC market is down 9%. And consumer spending sentiment is the weakest it’s been since 2023. Just in April, 1% of DTC brands filed for Chapter 11. That’s a flood.

So what’s going on? Why now? And what can you actually do about it if you run a brand or support one?

The “Why” Behind the Collapse

Tariffs + Inventory = Cash Flow Crisis

Here’s the brutal math: tariffs go up; landed cost skyrockets. And a lot of brands placed orders ahead of the tariff hikes, only to watch demand dry up. Now they’re sitting on overpriced inventory they can’t move, tying up precious cash. Inventory isn’t just stuff on shelves; it’s money trapped in cardboard.

CAC Is Climbing; Retention Isn’t Saving You

Customer acquisition costs are going up, just as the effectiveness of paid channels is going down. Even retention can’t save you when consumers are delaying purchases or trading down to cheaper alternatives. Many brands already pulled future revenue forward during the 2020–2022 boom. Now, there’s nothing left to squeeze.

Post-COVID Saturation Is Real

Let’s be honest: not every brand deserves to exist. Many were spun up with plug-and-play toolkits and cheap paid ads. That worked when capital was cheap and consumers were bored. Now? The music stopped. And not everyone found a chair.

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Why Now?

A few reasons:

Macroeconomic headwinds: Tariffs, inflation, and consumer anxiety are colliding.
The era of easy VC money is over: Brands are being forced to act like real businesses.
Platform fatigue: Shopify, Amazon, and TikTok Shops are crowded and expensive to win on.

This isn’t just a cyclical dip; it’s a structural correction. We’re witnessing the clearing of an ecosystem that got way too crowded, way too fast.

Who’s Most Vulnerable?

Brands that were built on borrowed time and easy growth:

Brands with high CACs and low AOVs
Brands heavily reliant on paid social for discovery
Brands with no supply chain flexibility
Brands without real community, loyalty, or differentiation

Real examples:

Flaus canceled a $30K Hamptons pop-up.
Beau Ties of Vermont cut staff hours.
Loftie saw lamp sales drop 80%.

What You Can Do

Audit Your Cash Flow Now

Know exactly how many months of runway you have, with and without new revenue. Get real about your burn and where the landmines are.

Recalculate Your CAC & Contribution Margins

Don’t just look at blended ROAS. Look at the actual contribution margin after fulfillment, returns, payment fees, and platform costs. If you’re underwater on a hero SKU, fix it or cut it.

Diversify Fulfillment & Cut Ops Costs

With tariffs, shipping surcharges, and inflation hitting from all angles, fulfillment is your biggest lever. Use it. A partner like Cahoot can unify fulfillment across channels, reduce shipping zones, and preserve margins.

Reprioritize Community, Not Just Campaigns

Start building real relationships, not just funneling ad dollars. Brands with real communities are taking less of a hit right now. That’s not a coincidence.

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What the Future Looks Like

It’s going to get worse before it gets better.

Expect more closures, more acquisitions, and more consolidation. But also: the strongest brands, the ones with real margins, operational discipline, and customer loyalty, will finally have room to grow again.

This moment is painful, but it’s also clarifying. The ecosystem can’t support 100 brands selling the same $49 water bottle with a different logo. The brands that survive this cycle will be the ones that finally build a real business.

Frequently Asked Questions

What’s causing the DTC brand collapse in 2025?

Tariffs, inflation, rising customer acquisition costs, and oversaturation in key categories are squeezing margins and killing demand.

Why are so many Shopify stores shutting down?

Closures now outpace new installs. Many brands can’t survive rising CAC, unsold inventory, and cash flow pressure.

Are all DTC brands at risk?

Not all, but the most vulnerable are those reliant on paid acquisition, single-channel sales, or undifferentiated products.

Are Shopify brands more vulnerable than Amazon sellers?

Often, yes; Amazon sellers may have more built-in demand and streamlined fulfillment.

What categories are getting hit hardest by the economic pressures of 2025?

Home goods, wellness, and accessories have seen the sharpest demand drop.

What can DTC operators do right now?

Get ruthless on cash flow, margins, and operational flexibility. Cut burn, audit margins, diversify fulfillment, and refocus on loyalty and community. Flexible, scalable fulfillment can reduce overhead and improve margins, crucial for survival.

Citations

Tariffs Trigger the Sharpest Drop in Online Spending in Over a Decade: Read more.
Faced with economic anxiety, retailers pare expectations for the year: Read more.
Brands grapple with strained cash flow amid tariffs: Read more.
US prices for China-made goods rise faster than inflation, analysis shows, as tariffs bite: Read more.
US prices for China-made goods sold on Amazon rising faster than inflation: Read more.

Written By:

Manish Chowdhary

Turn Returns Into New Revenue

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In this article

Why is ground shipping getting more expensive?

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The Hidden Cost Curve: What the Data Tells Us

Ground Parcel Index Trend (2018–2025): The Slow Burn That’s Now a Blaze

Billed Weight vs. Cost-Per-Package (Multi-Zone): The Hidden Geometry of Shipping Pain

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Practical Advice for Q3/Q4 2025 and Into 2026

1. Shift Volume Strategically, Don’t Just Rant About Rates

2. Audit Surcharges Like a Hunter, Because Carriers Are Hunting Yours

3. Optimize Packaging: Because Every Inch Costs

4. Leverage USPS When It Makes Sense

5. Customer Communication = Margin Protection

6. Regional Carriers & Hybrid Last-Mile Models

7. Explore Hybrid Fulfillment

8. Re-evaluate your free shipping threshold

Scaling Made Easy: Calis Books’ Fulfillment Journey

Final Thoughts: Deep Insights You Won’t Hear at Conferences

Frequently Asked Questions

Should I always redirect lightweight shipments to economy services?

How often should I audit shipping invoices?

Are regional carriers worth the complexity?

How can I package smarter to reduce DIM weight?

Will shifting ground volume hurt customer satisfaction?

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In this article

Slash Your Fulfillment Costs by Up to 30%

What Makes Walmart Fulfillment So Different?

WFS vs. Walmart-Compatible 3PLs

Key Factors to Consider

Looking for a New 3PL? Start with this Free RFP Template

Inventory Management for Walmart Sellers

Cahoot: A Walmart 3PL Built for Marketplace Sellers

Scaling Made Easy: Calis Books’ Fulfillment Journey

Final Thoughts

Frequently Asked Questions

What is a Walmart 3PL and how is it different from Walmart Fulfillment Services (WFS)?

Does Walmart allow sellers to use their own fulfillment partners?

What are the benefits of using a Walmart 3PL over WFS?

How does a Walmart 3PL impact customer satisfaction and shipping speed?

How can Cahoot help with Walmart fulfillment?

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In this article

Key Takeaways

Defining Dunnage

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Types of Dunnage Materials

Bubble Wrap

Solid Plastics

Air Pillows

Wood Dunnage

Foam Dunnage

Molded Pulp or Paper Pulp Inserts

Anti-Static Dunnage for Electronics

Paper-Based Dunnage Materials

Custom Dunnage Solutions

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Benefits of Using Dunnage

Damage Protection

Moisture Protection

Shock Absorption

Choosing the Right Dunnage

Regulatory Compliance & Safety Standards

Reusable Dunnage Options

Improving Shipping Efficiency with Dunnage

Tracking Dunnage Inventory

Cost-Effective Dunnage Strategies

Scaling Made Easy: Calis Books’ Fulfillment Journey

The Future of Dunnage in Logistics

Summary

Frequently Asked Questions

What is dunnage?

What are some common types of dunnage materials?

Why is regulatory compliance important for dunnage?

How can businesses track their dunnage inventory?

What are the benefits of using reusable dunnage?

Turn Returns Into New Revenue

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