The world’s largest electronics show, CES 2012, is almost upon us and as always Shipwire will be in attendance. We’ve decided to share some of what we know based on past experience so that you can be better prepared and know what not to miss at this year’s expo, along with a few things that we’d like to see at this year’s CES.

Hot Trends to be on the lookout for

Fuel cells.  It seems that fuel cells are coming to power portable electronics, with companies like SiGNa set to exhibit fuel cell-based chargers for various devices. AppleInsider also recently reported that Apple has filed a patent for fuel cell tech.

Bigger, better screens. 3D TVs were the big thing last year and it looks like there will be a strong theme of screens this time around as well. New developments in OLED will see a big announcement and one maker plans to unveil the world’s largest HDTV unit based on the technology. Not only that but LG is also announcing a 4K television which will quadruple the resolution of typical 1080p display.

Ice Cream Sandwich (ICS) and new tablets. Last year, Honeycomb was released shortly after CES and was followed up by the new ICS in November. This means that there will be several new tablets released close to the $100-dollar mark. This accessibility will make tablets an even bigger trend than it already was, although as always there will only likely be a few winners.

What we’d like to see this year

More businesses focusing on selling directly to consumers.

Last year we lamented that everyone was focusing on selling to distributors. This is great, but finding a good distributor, getting their attention, and building a business relationship is harder than it looks. Distributors are attracted to products which already have success in at least one market. This is completely normal since they have their own risk tolerance and investing too much into unproven products can mean bad business (or worse) for them.  This means that if you’re selling a product without a track record, convincing distributors to partner with you may be more difficult than you expect.

The lesson is that with a new product, learning to sell direct in one market will work as an ideal proof of concept and will help you attract distributors for other markets.

Since last year we have seen many new customers – even ones that displayed at CES 2011 – join us as Shipwire customers, using fulfillment to reach their market directly.  We’re also seeing a huge increase in product crowd-sourced funding through venues like Kickstarter.  So we know that some innovative product makers are selling to consumers.

When we examined how exhibitors can be successful in finding and dealing with distributors, we found three major points that contribute to the success of the most successful retailers:

1. They sell online.  Many distributors are strong with both direct-to-consumer (B2C E-commerce) and B2B.  Many distributors have a complex chain of relationships when it comes to shipping to or on behalf of retailers. Don’t be surprised if you get asked to “drop ship” or ship to their buyers.  Like everybody in the supply chain, they are trying to simplify their supply chains as well.  Be prepared to offer them simple solutions.

2. Selling internationally. Selling in overseas markets is very important because it can help your business grow quickly, discover new customer needs, and hedge against local market downturns. It’s also a task that has many challenges so finding the right distributor is very important. The best distributors have strong overseas networks and know how to localize your product. Good overseas distribution partners are often hard to come by, so do your due diligence on them.

3. Smaller wholesale purchases, drop shipping and vendor managed inventory. To hedge against risk, the strongest distributors will only invest heavily (by buying larger quantities) in proven products. For unknown or unproven products they may ask you to drop-ship to consumers (incurring costs of holding inventory, shipping, etc.) or consign inventory to them where they will only pay for what they sell. This lets them unload their risk to you and keeps them a strong force in their market.

The truth is that each of the above three strengths can be used by any individual retailer and not just the largest, most powerful retailers. And most importantly, capitalizing on these strengths will not hurt your relationship with retailers but will actually improve it. Since distributors have large networks and the market you’re going after is smaller, there won’t be a threat of cannibalizing sales for them. This will help the distributor make the decision to purchase your product because suddenly you will be showing them something that has proven success in the market.

Our wish for CES 2012 is to see more exhibitors using fulfillment to break into new markets and sell their product directly to customers.

Parties and events:

Of course, CES is also known for big parties, ranging from celebrity events to awards ceremonies. You can see a full list of this year’s CES parties here.

CES party photo (c)Brian Solis

Read more

Ace Ventura Movie - "Special delivery" scene

During the week following Christmas and New Year, warehouses everywhere start getting returns. Returns happen!  Now is a good time to review your  returns policy and how it will impact your buyers thoughts of you, and you bottom line.

Every year we see damaged product returns.  It’s expected that some products will get damaged.  Why does it happen? What happens behind the scenes?

One of my favorite movie scenes is the opening scene of Ace Venture Pet Detective. Ace, dressed like a parcel courier, is going to steal back a dog for its owner.  Ace puts a parcel through its paces in a hilarious scene (link behind image).

Who would have thought that today we would be seeing Ace’s patentent moves being usurped by parcel carriers all over.  Phone and security camera footage is popping up everywhere.  I’ve included a few below.

How do damaged product returns work?

We all know the experience, you open a package with high expectations, you reach in and find the object of your desire has been damaged.  Deflated, you return it for a new one.  Most retailers will promptly refund or reship the good.

• Notification and buyer return - When a buyer notifies a Shipwire powered merchant about a damaged product, the merchant reports it by clicking a button on the order.  We dispatch a shipping label and issue a Return Merchandise Authorization (RMA) number so it can be tracked.
• Return and reship – The damaged product is sent back to the warehouse where it is received back into inventory as damaged.  A reshipment is typically triggered once the original is returned.  Some retailers will reship before the return is in inventory but after the RMA tracking is activated (when the buyer ships it back).
• Removed from inventory – Damaged product has a special classification in inventory.  This ensures that it won’t be confused for “good” inventory and shipped to buyers.  It also allows for easier inspection.  Many of our merchants choose to liquidate this inventory, or bulk ship it back to their manufacture inspection facility for final disposal and recycle.
• Automate Insurance claim – Shipwire Report a Problem selection initiates this process and begins tracking.  For do-it-yourself shippers, I know there are also 3rd party insurance services and consultants that can manage your shipping negotiations with carriers.

Who covers the damage?

This question comes down to when did it get damaged and which insurance was in place at that point.

Shipwire recommends and facilities a “chain of insurance” for our merchants.  Typically, goods come in to our warehouses from the manufacture (inbound), is stored at the warehouse (storage) and then shipped to fulfill buyer orders (outbound).  Insurance is available the entire lifecycle.  If a cargo container is washed overboard or product is damaged in freight then the freight insurance covers.  If a product is damaged by a forklift, then the warehouse insurance policy is looked to.  If the product is damaged between the warehouse and the buyer, the carrier insurance is looked to.

For stored goods with Shipwire, warehouse insurance can be added to your inventory globally with 1-click in Account Settings.  Carrier insurance, above our included amounts, is a setting in Shipping Preferences.

Excessive damage claims can be a sign of bad packaging design

Work with your manufacturers to design durable packaging for transport.

Well designed shipping packaging protects the products inside from falls, impacts and weight crushing.  At the same time it has to be logical and reduce your costs.  Design for “maximum shipability”.

Here are some Shipwire resources if you want to keep reading.

• Packaging design considerations
• Packaging Requirements for inbound products
• Supplier instructions for packaging and labeling

If you built your own products and have your own shipping packaging.  You probably also know how much weight can be stacked on it before it crushes…right?

But, how did it get broken?

Fedex roughs up a delivery

If a damaged product arrives on the doorstep, it is typically caused by 1 or 2 things.  Either the product was incorrectly packaged for it’s method of transit.  Or, the product packaging couldn’t live through the extent of the abuse that it was subjected to in transit.

Shipwire has evolved some pretty complex packing algorithms to aid pickers, minimize crush and ensure product fit.  Pack staff is trained and monitored to best packaging processes. We’re confident it leaves the warehouse well packaged and documented.

Packaging and crush protection is designed to handle most of the bumps and scrapes of transport. But more often than not, parcels and packages take abuse during transit.  They get cut open or broken open in customs and handed off between carriers.

Most of that isn’t video’ed; but, with cameras everywhere now, we know that …

The last few feet are often the roughest.

Fedex delivery man tosses monitor over fence

With 7 million views and counting, FedEx got a lot of bad press this December when their delivery person tossed a monitor over a fence.  I’m sure the customer shipment will be covered by insurance or Fedex.  I very much doubt that the manufacturer designed the packaging to protect the product for this delivery.  Packaging is probably designed for a fall of a few feet only.

Unpacking what is hopefully apparel

It’s not just Fedex.  UPS drivers get caught on camera too throwing deliveries to the door or delivering 20 feet to the neighbors house.  Packages get put behind brush, buried in snow, kicked, dropped or run-over in the last few feet of their trip.

Truck packing and unpacking

Driver throwing deliveries from truck

Parcel carriers get caught on video often treating parcels roughly during truck packing and unpacking. Most of the products are probably fine….most.

Expect boxes to be kicked, dropped, stacked with heavier boxes of them.  Some drivers have been caught throwing packages out the door (captions) or doing their truck “sort” with their feet (soccer style).

Most packaging is designed to handle some abuse from the carriers.  Throwing packages into and from a truck seems to be a common thread.

During “sort” or “processing”

When packages are shipped via the major carriers they are picked up from the warehouse by the carrier and delivered to a sort facility.  Packages are sorted by destination and consolidated with other packages going to the next depo.

These sort facilities are massive operations with lots of automated systems to understand where a package came from and where it is ultimately going.  It’s not uncommon for smaller parcels to get hung-up in conveyors and ripped open.

USPS shipment damaged during sort

In the warehouse

Products can get damaged in a warehouse.  Insurance is offered to cover against things like forklift damage.

Products damaged in the warehouse are set aside and don’t get shipped out. If a product arrived at a door damaged, the damage was most likely caused in transit.

Read more

You”d think shipping to a country right next door to us would be as easy as crossing the border, but many US merchants shipping to Canada for the first time end up with a less than pleasant experience. Even big merchants like Zappos have decided to discontinue their offerings to Canada after numerous unhappy Canadian customers. Ah, if only they had decided to outsource this to the pros, like Shipwire!

Top complaints from merchants about shipping to the “Great White North”:

1. Brokerage fees – sometimes comparable to the miscellaneous fees from your monthly cell phone bill, they are hard to predict.

2. Lost shipments, lack of tracking abilities – once packages reach customs, it is very difficult to get a shipment update.

3. Shipments blocked by buyer when they get VAT charge – buyers refuse to pay additional “hidden” fees to receive their package that are actually handling fees that Canada Post or Canadian Customs charges.

4. Returns are a nightmare – it’s not unlikely that the merchant would rather abandon the product to save money, time and headache.

5. Unpredictable delivery times – with limited tracking abilities, it is difficult to give buyers a time frame for when to expect their package because of the delays at customs.

The most disliked thing about shipping to Canada is that the brokerage fees and VATs are difficult to estimate. Many times the receiver may have to pay additional taxes and handling fees before the package is released from customs. You can see how shipping to individuals could pose a problem: a buyer pays for shipping as stated on the website only to find there’s an additional fee upon delivery and disputes ensue. Of course, one workaround is to have your courier bill the fees to your account so your buyer doesn’t have to pay them – if this is an available option.  But then you’re still spending more money than you have to and cutting into your margins by taking on all the customs costs.

There have been many reviews by merchants who recommend FedEx and USPS as their service of choice to handle such transactions. As a great alternative to all the hassle, Shipwire offers helpful tips and a shipping calculator so your business can be well-informed when deciding to offer shipping to your Canadian customers. Shipwire currently has two Canadian warehouse locations: Vancouver and Toronto. To help smooth out the US-to-Canada shipping process, we also have a wide variety of Canadian shipping options in addition to our platform.

How can shipping to Canada be less complicated?

Outsourcing your Canadian shipping needs to Shipwire would be the easiest bet, but for those who want to try the DIY approach, here are important things to keep in mind when using USPS:

1. Use the right Customs forms and fill them out appropriately

Use the green slip for First Class Mail, and the white one with the clear sleeve for Priority Mail. Customs does not/cannot provide tracking for packages, only packages with USPS tracking can be tracked. When filling out the customs forms, they require information on the contents, value (the price paid or winning bid); and for Priority Mail, both parties” names, addresses, phone number and/or email are needed.

2. Calculate Customs fees into your shipping costs, if any

Taxes (the most common fee), are only assessed by Canadian Customs on goods valued at $20CAD or more. A handling fee is also added when an item is taxed. The recipient then pays for both when the item is retrieved.

Duty is assessed on goods that are made or “originating” outside the US, Canada, or Mexico.

Bonus: When using USPS/Canada Post, the buyer will never get a “surprise” brokerage fee. However, using services like FedEx or UPS, which requires the use of brokers, will most likely incur those unpopular brokerage fees which may sometimes cost as much as the entire item plus shipping fees!

3. How to properly reuse boxes

Reusing old boxes is perfectly acceptable by USPS and Canada Post, Just make sure any old labels are properly removed/covered. There’s also no need to wrap your packages in brown paper, as it sometimes gets stuck in the machinery.

Still feeling adventurous? Good luck!

But remember, Shipwire’s world-class fulfillment service is just a click away so start a Free Trial.

Read more

Dolcetto @ 2011 Shipwire Holiday Dinner

One of the benefits of living in California is we”re really close to wine country. The reality is we are in the middle of wine “counties”. We”re surrounded!

To the West we have Santa Cruz, Bonny Doon put it on the map. To our South, we get Paso Robles and the surrounding wine area. To the East, go past Sacramento and you will find all the tasting rooms on Hwy 49 and Placer County. A couple hours drive North are the amazing tasting rooms of Napa County that overshadows, for no really good reason (imho), Sonoma and Mendocino County wine.

If the end of the last paragraph didn’t give me away, I”m from Mendocino County! I spent much of my high school on tractors and navigating vine rows in Ukiah and Potter Valley (Never heard of it? Most people living next door haven’t either. I worked many a “crush” and was employed for a couple small wine labels and wineries throughout the year.

For the past 10 years my family has produced an excellent limited production Sangiovese that sells out every year (limited production) under the label Pettrone Family Cellars.   Nothing big time, more of a family bonding experience for my mom and her two brothers. It’s available in California, New York and Virginia.

Pettrone Sangiovese wine has been served at Shipwire Holiday parties since there were 12 of us raising a ruckus in the back room of our friend Fabio’s place, Nob Hill Grille, and then the back room of our buddy Trip’s restaurant, Sauce. Family wine at family restaurants for the Shipwire family. It just makes sense.

Shipwire CEO Damon Schechter raising a toast at our holiday party. Thanks to all our family, friends and partners.

As Shipwire keeps on growing, our cast of characters is getting ever larger. Our employee holiday celebrations outgrew our network of restaurants. As we look to celebrate an amazing 2011 and look forward to an even more audacious 2012, it’s clear that thanks need to go out to more than our employees and customers. Shipwire is supported by a huge network of partners and developers, that introduce us to amazing customers, and hold us up as an example of great system integration to help merchants.   We have spent years evangelizing our technology and the overall outsourced shipping market. We couldn’t do this without friends in the blog and press community willing to challenge the status quo, ask questions and shout about the success of our customers.

We”ve always said we are a part of a larger story.   We’re a platform for entrepreneurs to get their dreams to market.

This year we made some wine to virtually toast our family, friends and partners. We”re shipping some bottles of Docetto 2009 to some of the press and partners that helped us get the word out this year. It’s bottled with appreciation in the family winery this fall. This wine isn’t for sale. You can’t find it in stores or on a menu. It’s as limited as limited gets. Insider only.

It’s a toast of thanks for helping us get to where we are now. And an early toast for some amazing new things we”re about to release in 2012.

Thank you for helping us make 2011 special. Together we’ve helped a lot of entrepreneurs to get their dreams to market. We look forward to 2012 with you.

Happy Holidays from our table to yours!

The Shipwire Crew

P.S. Here are a few “making of” pictures from my phone.

High tech bottling line consists of a barrel and truck. We went up market with CO2 compression to pump the wine (rather than our normal gravity line).

The crew left standing at the end. Thanks family

Nate applying labels and trying not to get glue everywhere

The product, ready for shipping

Read more

Any other time of the year you may have become a little more lax with the intensity of shipping your orders but holiday season is a whole other playing field. It’s not too early to warm up those shipping muscles, double-check those inventory lists, and streamline your order fulfillment processes — the holidays will be here before you know it!

To help you make the most of this holiday selling season, we have refreshed our list of 10 Holiday Shipping Season Tips.

1.    Hammer out the final details of your holiday campaign pushes. Make sure to include Black Friday (11/25), Cyber Monday (11/28) and Free Shipping Day (12/16) into your calendar of events to run creative promotions for. Maybe you want to do shipping promotions, discount coupons, or offer free gifts to loyal customers; give your buyers an incentive to buy from you.

2.    Offer free shipping or free upgraded shipping promotions. Shipping options are strong conversion tools. Free or discounted shipping is one of the top things buyers look for when comparing different sites for the same products. Give them peace of mind when they feel like they’re getting a great deal, and better yet, guarantee shipping to arrive before Christmas day.

3.    Test your e-commerce infrastructure. Now is a good time to test and troubleshoot your technology especially the shopping cart and order inventory management so there won’t be the need to hotfixes, apologies and emergencies during the influx of orders!

4.    Set up a timer: countdown till the holidays! Build up the suspense! Perhaps it’s a friendly reminder, or maybe it’s subtle inception to “get it now before it’s too late”. Implementing a countdown box can lead to impulse buying and increased conversions.

5.    Check your checkout and automate returns. A hassle-free shopping experience is a happy shopping experience. Provide a decent selection of shipping options so customers are not unpleasantly surprised and review your return policy to make sure everything is up-to-date, seamless and straightforward.

6.    Provide shipment ETAs and last day to ship guidelines. This way you are not bombarded with “where is it” queries and can focus on getting orders out. FedEx and USPS provide specific dates by which certain types of orders should be shipped. Keep in mind that December 20th, and 21st are peak volume days for most of the carriers, and that anything you can do to get orders in earlier on those days (or over the weekend) helps.

7.    Slip in some marketing goodies. Could you target your audience any more specifically? This would be a great opportunity to include a marketing insert, a free sample, or a discount coupon to win repeat business.

8.    Stock up on top-selling merchandise. This goes without saying. If you’re using Shipwire’s order fulfillment services, make sure to have your bestselling products out to the Shipwire warehouse locations as soon as possible to prevent unfortunate out-of-stock disappointments for your fans.

9.    Fine-tune your website. You can streamline your website with methods such as search-optimizing your products and making sure your pricing is consistent throughout site and other marketplaces where you may have them listed.

10.  Market yourself with festive cheer! Whether it’s an email newsletter with the latest promotions or ramping up your social media efforts on Facebook and Twitter, make it easy for your customers and fans to know what buzz is going on.

Read more

As the holidays approach, supply chains get tighter and minor delays can cause big stresses. One of the worst stresses for a business owner is not having inventory available for product sales. Stock outs cost money and time.

We’ve talked before about one way to work around inventory “stock outs” – Back Order Management. In this past blog post we talked about breaking down the problem set and presented ways to set up your online store when a stock-out notification was more an indicator of a slight supply chain delay (verse no longer selling the product).   Many sellers are now actively pre-selling inventory before they get it. This can be a great way to increase your sales volumes.

Keeping customers informed that the product will be slightly delayed is a continued challenge. First, you want to tell them before they buy if there will be a delay. This is important at all times; but, particularly if you are selling on a marketplace with an active feedback community. Second, you really want your customers informed of expected inventory availability so they don’t bombard your customer service teams with the same question “When will it ship.”

Some sellers like Angry Birds have taken it to an extreme and have entire web store that is dedicated to “coming soon” products – setting up buyer expectations and streamlining their order management processes by separating the issues of live inventory from pending inventory.

Shipwire just made this entire process a whole lot easier to manage.   We extended our Inventory API to add details for next “expected inventory date” if there are no products in stock. This is a pretty elegant solution to a complex problem.

• Shipwire knows what your inventory levels are and our real-time inventory API can feed this data in real-time to your favorite e-commerce systems and marketplaces.   We have had this features for a long time.
• Shipwire also knows when your next scheduled shipment is coming in to any of our warehouses (or Shipwire Anywhere locations). We know this because of the Advanced Shipping Notice (ASN) informs us what products are coming, in what quantities, to what location, and on what date. Our receiving processes are designed around this.
• Any orders that are sent by your shopping cart/marketplace to Shipwire while inventory is out of stock are automatically held as “back orders” in Shipwire.
• As inventory arrives we can apply the first received inventory to the pending backorders. We’re actually really good at this. Here is a case study of us doing this for 7K orders for TheGlif.com last holiday and getting their entire Kickstart project shipping done in 24 hours.
• This works for inventory going to Shipwire warehouses and Shipwire Anywhere locations.

The <InventoryUpdateResponse> also returns a lot of data about the history and future sales expectations (“backordered”) of this product.

Also worth mentioning here that your Shipwire Account includes the ability to set up alerts on inventory status – such as something running low.

Here is a screenshot of a recent API call where _AvailableDate_ is returned and made available to upstream systems

Read more