E-commerce Shipping and Order Management Strategies
Jesse and Rich talk with Cody DeArmond from ShipStation, a
Learn how to:
- Import all orders from all channels to one location
- Choose the best shipping option for each package based on various automated rules
- Print labels and obtain discounts from carriers
- Build rules to ship from certain locations or Amazon FBA based on the shipping address
- Manage returns and print return labels.
Jesse: What’s going on, Richard?
Richard: I’m excited. You know me, I get excited every week
Jesse: But not just because it’s Friday, because of the podcast Friday.
Richard: Plus this is an important one.
Jesse: It is. We’ve talked about a lot of topics on the podcast here and then we’re skipping one of the really important ones. It’s really one of the last pieces of the puzzle. It’s the shipping piece.
Richard: Yeah, that means you actually sold something. You’re usually not sending one of those packages out until you got paid.
Jesse: Yeah, you’ve listened to all the podcasts and now you’re selling so much, shipping has become a problem. And so we’re here to help you.
Richard: Yeah. I’m really excited to hear from our guest today too because I got started pretty early doing eBay but it was mostly baseball cards. Everything the same shape, the same size. I got 5000 of them in one box and it’s not a lot to deal with. Same package every single time, same shape every time. I want to know more about why not USPS, why not just the post office. Everybody knows the post office, why ShipStation, what is ShipStation. I’m excited to do so.
Jesse: I hear you, Rich. I am not the guy for that though. Let’s bring on our guest Cody DeArmond from ShipStation. Cody, how are you?
Cody: Hey guys! Great. Thanks for having me.
Jesse: Absolutely. What is your title at ShipStation?
Cody: I’m the director of sales here. My team is forced enough to help get people up and running. We see businesses that are just getting started, businesses that are scaling, hit pain points, that just went on Shark Tank and got a pop of orders. They need help to get the stuff out the door so we’re here to hopefully be there. They’re experts.
Jesse: Awesome. For people that haven’t heard of it before, what is ShipStation?
Cody: ShipStation’s the most popular way for
Jesse: Very cool. And you mentioned some of the people that are shipping from different channels and I think that makes a lot of sense because when people get started, we do have a lot of people that are getting started on this show. If you’re shipping one package a day, you can probably handle that. You can go to the post office and you go pay the price and you put a label on and you go about your day. But people hit a certain point, for somebody it might be five packages a day, for some it might be ten. Or if it’s three packages from your Ecwidstore and five from Amazon and then you got Etsy and eventually you start pulling out your hair because it is painful, really. Sounds like you helped manage all that pain and bring all the shipping into one place.
Cody: Yeah, for sure. What we see today in
Jesse: Could it make shipping exciting somehow, Rich? What do you think?
Richard: Yeah. When you see a bunch of the orders go through, that’s when it becomes exciting. (laughing) A little bit back to Jesse’s, at what point do you see ShipStation being a solution? You recommend doing it the traditional USPS until they get to a certain amount, is it benefit them to start right out the gate? Where is the sweet spot for you guys?
Cody: Yeah sure. Great question. That’s what’s cool about, all we got to do is that we see people at all different stages. So for some people it’s just they started a business, they’re excited about it but they don’t know what they don’t know. Nobody going into it knows a ton about shipping unless you just had that very specific background. Some people sign up from the jump maybe before they’re even taken in orders because they like the comfort of having an expert in their hip pocket. For other people, it’s what you mentioned. They got an established business but they may be doing one label at a time where it’s still been going actually to the physical post office every day. And we’ll have the conversation of like Oh my gosh, I didn’t realize I could do it this way. You guys just save me two hours of tedious work every day. So typically one of those two tipping points. Somebody that’s either starting a business and really likes having the expertise and obviously that time savings. Or somebody that’s in a rapidly growing business and they’re looking for a way to obviously cut down a little bit on cost but more than anything streamline the process. So they’re not just spending a huge chunk of their day copying and pasting and printing out when a lot of time doing this really boring stuff that nobody wants to spend time doing.
Jesse: Yeah. I’ve cut and pasted a lot in my day and printed out labels at my computer and then I have four boxes that I’m bringing over to FedEx or USPS and I’m like Man, I wish I would have tape that label to the top of this box because I don’t know which label goes with what box. It can be painful and you’ve already gotten paid. As a merchant, you’ve already gotten the money. This is your last step to make sure you deliver the product and make sure the customers aren’t mad but it’s super important.
Richard: And at Ecwid there’s a lot of people who are just getting started, and there are also people who have scaled and have million dollar plus businesses. One of the things we love talking about on this show, I should say, is the origin story. Where people started, why they got started, how they got started. Because as you even alluded to, it’s not like not the sexiest business. How did it get started and what was the vision to grow it to all the
Cody: Yeah, sure, it’s really interesting, what you are talking about. Your started on eBay, and we are actually the same way. So to really brilliant guys here in Austin, Texas. Byron, we’re in Jason Hodges, just really really intelligent developers. They wrote a program in the 2000s, it was actually called Octane. It was a shipping solution for eBay power sellers and a lot of their clients were saying: Hey, we love this, makes it so much easier for us to ship out on eBay. But eBay’s half of my sales or I also list on Amazon or I have three of my own websites and you guys make this for that. A light bulb went off and he said: OK, we see the direction this is headed, maybe we shouldn’t just focus exclusively on eBay. So they started writing integrations. Now at this point, we connect with over 100 different places that people sell online so that’s where we came from. Built something that made the eBay power sellers lives a lot easier. And then the light bulb went on. Now we try and do the same thing for everybody regardless of where they’re selling.
Jesse: I’ve heard of ShipStation many times. I’ve been to a lot of
Cody: Yeah ,you nailed it. We wrote integrations to again pretty much anywhere. Somebody wants to sell online these days. Integration doesn’t require any technical work or anything like that. You essentially plug in your credentials in the ShipStation, that connection is made so at that point customer checks out, that order automatically shows up in ShipStation. You want to try out a new channel, you want to list somewhere new, maybe you’re spinning off a new website. It doesn’t mean you have to spend extra time logging in these different places. You’ve got it all centralized. You log in to ShipStation, see all your orders that are ready to go out the door that day regardless of where they came from. It definitely cuts down on the headache on that side of things and frees our merchants up. We typically see people driving increased sales when they start to list and vary channels, so going to freeze people up to do that.
Jesse: And I think when you think these other channels, you think of the sales. You forget about all the hassles that are going to come through with something like Oh yeah, I don’t have to log in there all the time and have to check that and click their little boxes and do that. I think it’s nice that it can go into one central location. And I think also from that central location, maybe people weren’t aware of this but the rate is not the same from all the different carriers and to be able to check that, it’s painful as well. So are you able to connect with all the different carriers like if for the U.S. they would be FedEx U.P.S. and USPS and others internationally? Does ShipStation have all those connections already ready to go and labels ready to print?
Cody: Yeah you nailed it. Kind of the same process that I just described. Connecting your channels works very similarly with carriers. We connect with more carriers than anyone in our space at this point. I’m going to close to 50 different providers. So you nailed it, in the U.S. obviously the big three, it’s going to be the post office, U.P.S., and FedEx. So if you have your own account with those, you can just plug it in the ShipStation, type in that account number and then it automatically pulls it in. What we find is that the carriers there obviously really good at getting your package to where it needs to go but it’s obvious that they are carriers first and not necessarily a software company like we are. So we’ll see a lot of people that maybe are tired of jumping back and forth between UPS world ship, and FedEx ship manager, and then go into the physical post office. They replace all of that with our one system. Growing merchants, as you mentioned, maybe they don’t have any relationships with those carriers and this is all brand new to them. In the process of trying to negotiate a rate with FedEx or UPS just seems like a really daunting task. We’re set up for that too. They can just start the account through us with some
Jesse: I’m going to throw in a little hot tip for anybody out there that’s listening. FYI, if you go walk into a FedEx Kinkos, the rate that they charge you is not the rate that other people pay. Just like there are better deals out there. Everybody has a better deal. Usually, you need to hit a certain amount of minimum. If you can get access to those rates right off the bat, that helps you, it’s this is the margin that goes directly in your pocket.
Cody: For sure. And you nailed it. We’re not a carrier, we don’t step in front of those or anything like that. We’re not collecting on that front, we’re a software or a technology company. And what some people weren’t aware of there is that having your own account with a carrier even if you’re a small business and you’re growing, that’s actually pretty important. Because as your business grows you’re going to aggregate that volume on that account. Now that account belongs to you. Right. Even if you set up FedEx or USPS through us, that account’s is yours, you just have it plugged into us. We want you to use a ShipStation for a long time and be happy with it but if you ever need to do anything outside of your provider, you want to make sure that that account belongs to you. Because your business grows, all of the orders, all the shipments that have gone through that account. That’s leverage for you to go back to the carriers and say: Hey, FedEx and UPS, I’ve got a growing business here. Cut me some slack. What can you do for me? Kind of helping compete against each other for your benefit. Because yeah you nailed it. If you’re just walking into the store, frankly you’re leaving money on the table every time you do that.
Jesse: And the carriers can do a lot for you too. You do have to hit minimums. There are certain things that other people can ship that you can’t. And there’s just a lot of things you can get from the carriers, but they don’t care unless they see you’ve spent a bunch of money with them. It is very important. That’s if you want to keep all your shipments with one carrier but maybe you just want us to spend the least amount of money on that particular shipment. And so would you have the ability to… OK, I have this shipment, it’s gonna go out, I’m in San Diego. There are different prices in different regions, from different carriers. As I’m a merchant, I see my orders. Can I choose which carrier based on the price or how would that work?
Cody: Yeah you nailed it. So many different carriers, you have plugged into ShipStation and be able to compare all of those options. Just like you mentioned. You’ve got an order, it comes in. You can hit what we call our rate calculator. It’s going to give you on one screen options for basically all your carriers. They’re in one place and so you can see. Okay, great. This option is going to get there in three days and it’s going to cost me X. I’ve got this option, maybe a little slower but cheaper. You can make those informed decisions as opposed to just taking the post office and say: Hey, can you ship this for me? You can also take that one step further. We see a lot of people as they’re getting started, if they’re less familiar, they’ll use that to compare and see what their best options are. Then once you’ve got that locked in, you shouldn’t have to spend a lot of time looking at it as the orders start to flow in the door. Figure out what that best case is for your business. Whether that’s speed, or just trying to get it there as inexpensively as possible. And then just automate that. You can build in a business role for it that says: Hey, for this product I’ve figured out that USPS Priority is my best bet. Let’s just go out and automatically ship that. Instead of just being in time making judgment calls looking at individual orders, you can log in, hit select all, click print if you want to, that part of the day is done.
Jesse: I like that. What other rules, can you set up like anything that’s overnight, goes this way or any product goes this particular ship method. How flexible are those rules?
Cody: Yeah. Sure. It’s something I nerd out on but people get really really creative with it. It could be something like you mentioned just always ship this thing this way. But what’s cool is that since we’re integrated with wherever you’re selling them into or pulling in that order data as well. So pretty much anything. If it makes sense for your business, you can automate off if that’s what shipping the customer selected at checkout. If that’s certain, SKU should go a certain way. You can even take automation rules and say if this is a
Jesse: Got it. Now I could probably nerd out on this as well. I appreciate that, and I’m gonna only ask one more
Cody: Yeah, for sure. We have some ShipStation accounts that may use a single account to run a couple of dozen different locations, so that it’s really commonplace. That’s no problem there. Just establish those locations within ShipStation. You could automatically delegate orders to specific places. You touched on the fulfillment providers, we even have some merchants that will just set it up to automatically feed. Hey, these skews automatically get fulfilled by my provider when they come in, just go ahead and automatically fire that off. They can really be hands off. I’ve got a couple of clients that really don’t touch much of their product at all. They just have this all set up, that’s going to run itself so pretty good gig there. You just get an order and it automatically gets taken care of. Yeah, we see it all across the spectrum. I would say on average we definitely have merchants that are running more than one location.
Jesse: Got it. OK. Now that’s awesome because I think that is most
Cody: Yeah. We’ll even see some people on that front that they may have the same product in stock in a couple of different locations. They may set up their account to automatically delegate that order to the location that’s closest to the recipient. Because they may be using the same service for each of those two shipments. But if I’m here in Texas and they’ve got a warehouse that’s right down the street. Shipping is going to get to me a lot faster and probably even cheaper so they may set it up that way as well. If it’s closest to this location, go ahead and automatically assign it there. You can get really
Richard: It sounds as if it’s easy once it’s all set up and it might not be too challenging to set up. But you’re reading between the lines here. They’re gonna have to come up with the fixed price for the customer that shipping is going to be. We can check and say Oh, it’s a little cheaper over here. You run it and you find out you’d rather ship it from this location and get your margin back like you guys are alluding to. But there’d be just a little bit of extra setup in the beginning right. You’d have this is what it’s gonna be charged based on these rules in your
Cody: Yeah, sure. Great question. We have a lot of conversations around. Basically, pricing strategy, when it comes to shipping in the cart. We give them the tools to make an informed decision. You could run hypothetical shipments through your account. You don’t have to wait on an order to come through and then get surprised by how much you’re going to pay for it. A lot of merchants will put this in place. They’ll start running some hypothetical orders through the system, get an idea that Hey, on average this is going to cost me five
Jesse: Love it. Good question, Rich. I forgot about that one. I’m on the always go free shipping if you can and then try to set. Don’t get crazy on shipping, it’s my philosophy on that. Just don’t try to charge to the penny, you’ll pull your hair out. Frustrating.
Richard: We’ve been trained to buy that big company for everything shipping. Price it into your product when possible.
Jesse: I liked the advice there Cody as well about for new merchants. You don’t really know what it’s going to cost. Don’t just go to FedEx and UPS and all that, just plug it into ShipStation. You can use a free trial, these different hypotheses and then maybe that will inform you what you’re shipping prices. You want to go free shipping on if you sell a 10 dollar product. Let’s not be crazy. If you sell a ten dollar product, how much does it cost you to ship, and you can decide whether to include shipping or build that into the price of the product. My recommendation.
Richard: Cody even mentioned in that earlier — try to offer it whenever possible. He said it’s all psychological and for the most part is. I’ve literally paid more for a product and got free shipping than I would have if I had just paid the least for the product and had to pay for shipping it. It happens all the time.
Jesse: I hear you. We’re just trying to help people. All right. Just trying to get free or some sort of
Cody: Yeah, sure. What we see there most frequently is that it seems like this big scary thing. A lot of the new or growing merchants that I’m working with, they maybe just forego it altogether and we really try and educate them. If you’re closing that part of your business off, you’re leaving sales on the table because international shipping really is not that much scarier than in doing domestic. The first thing that probably comes to people’s mind, is this going to cost a lot more? And what do I do with customs coming into a new business? A lot of people have no idea or no background when it comes to customs. They think it’s this really scary thing. They’re going to have to go and fill out by hand every time they want to ship something out of the country. Really not the case with tools that are out there now like ShipStation you can really just run your international shipping similar to how you do domestic. Obviously, it is going to be different services, USPS international versus just first class mail, things along those lines but set it up. Use a tool that can automate that for you. That’s what we do. We automatically generate customs forms and even electronically transmit them whenever it’s applicable automatically sign it. Anything that you find yourself just doing manually repetitively over and over, I promise there’s a way to automate it out there today. Basically, don’t be afraid because it’s not that bad. And then to find a tool that will do it for you because most of my clients that I work with that are shipping internationally, they really don’t even know much of the difference. They log in, they see, Ok, cool, I’ve got these 10, 20, 200 orders that need to go out the door here. They’re typically a mix of domestic and international. They’ll hit select all, click Create label to have all of those go out at the same time. They don’t even really have to handle them differently if they’ve set it up correctly. I promise, not that scary.
Jesse: Wow. Now good to hear. Yeah, I’m a little afraid of international shipments personally so hopefully, I can get over that fear because there are customs and there are duties. I’ve talked to customers that have bought for me internationally and I’m like Well, there might be some customs that you have to pay, I don’t know. Good luck with that. It has been my answer that’s probably not a very good answer. I’ve actually done a wide in checking out on that one because that would have made some sense. All right. Note to self for real. You can learn something new every day. I learned something new. I’m happy. All right, we talked about international. What about another thing for new merchants, returns can be a painful thing. You’re afraid of it. What assistance can you guys provide for new merchants with returns?
Cody: Sure. That’s another one. We have a lot of conversations around the same thing. It seems like this really scary thing. It just seems like sunk costs. You did all this work. You got the sale, you got it out the door and now it almost feels like a personal insult right there. They’re sending it back to you. It’s tough to take a higher view approach of it. What we really try and educate on what we ran the data on interestingly enough is that merchants that provide really goo customer experience, when it comes to the returns process actually see an uptick in sales with those same customers over one and two year period. I know especially in your growing business that every dollar definitely counts and you can definitely feel that pain if you fought really hard and got 10 orders out the door and two of them are going to come back. You feel like you’re really just taking that one on the chin. But there are a lot of different ways to go about it. And we really try and educate that. It’s really an investment in future sales, not just an expense for you that you’re going to eat. A lot of different approaches. Every business is different but we’ve got really three main ways. We see some merchants that take the Warby Parker approach and they include a prepaid return label at every box. If they want to set it up that way they can have that totally automated. They create an outgoing label and a return label just spits out with it. They put it in the box with no extra effort. Definitely, a popular approach but also not for everybody. Then in the middle ground that we see is some people, they do want to offer returns but they want to talk to the customer first. That works no problem. Make it really easy to pull up that order and create a return label. The only thing we see here is that as the business scales in that starts to become a bit of a headache. Are you adding headcount just for customer service to field these calls? What are your hours? It’s not going to be a good customer experience if they need to get in touch with you and you’re closed. We came up with what’s been one of our most popular new features over the last couple of years what we call
Jesse: You’re also saving that phone call too. I like that. I get it as a merchant. When people want to return stuff. I already spent that money and I already paid for the advertising to get that sale and now I gotta pay to ship this back to me and sell it again, man.
Cody: Really niche story there, but on that front, we heard from a lot of our clients especially in the earlier days that they kept getting a ton of customer service phone calls when the tracking email goes out. Hey, your order is shipped, here is your tracking information. We do that too automatically and customer clicks that link because the label was created but then they didn’t see any movement on it right. And people freak out. They want their stuff. They’re calling: Hey, you sent me a tracking number. It’s broken. What’s going on? Which that? I mean for a business that’s just a total waste of time. It’s not doing anything for you. You can even specify that fires off on a delay so that when they get that tracking number, there’s actually some movement on it. Just little things like that that people maybe don’t put much thought into, when they’re starting their business. Again we’re here to hopefully be the experts and educate on that a little bit because there are all these little tips and tricks that don’t seem like much when you’re going into the business. But it really starts to add up to time savings, monetary savings but then ultimately repeat sales. This is what you’re trying to get out of this. So shipping seems to be cut and dry but there are a lot of different parts of the process you can leverage to hopefully continue growing the business.
Richard:: I was gonna say that’s a great point that goes back to that psychological comment from earlier that the only ways that I’ve seen a business grow are either get more customers, get a higher average order per customer, and or get those customers to come back and buy more. I haven’t really seen another way to do that yet. Now obviously if they have a good customer experience to your point now, they’re potentially sharing it with their friends and they’re doing it. Seen some interesting stats come out lately. I don’t have them exactly off the top of my head but I’ve seen sometimes increasing the length of time for the return actually makes returns go down. If you’re saying for instance in your
Cody:: Yeah, you nailed it. And what’s really interesting there. We actually did run some stats on this. Obviously, what you said is spot on about trying to get that repeat customer, because it’s basically the most engaged prospect that you’re gonna get. Somebody that’s already decided they like you enough to buy something for me there. But what we found is that a lot of merchants were throwing away the most guaranteed piece of traffic they could get. And it’s the tracking email itself. Think about it. Last time you bought something online. How many times have you ignored that tracking? I’m going to say never because I’m going to say you’re all like me. You get that tracking. You click on it right away. You click on it four times before that box actually shows up at your door. We ran the data and everybody is the same way. Engagement on your tracking email is over 100 percent on average people are clicking at more than once before it gets there. And what we found is that merchants were getting opens on that email which is great. But then what happens is customer clicks that tracking link and then it opens up a new tab and takes them over to ups.com or takes them to FedEx.com. Which is fine, it gets the recipient their information but that didn’t really just do anything for you, the merchant. Just handed this traffic off to this old data carrier site. We actually turned that into a way to drive traffic back to your site. Customer can get the same tracking updates but it’ll take them to a page with your branding, your logo, your social media links, to your website. All of that. Again just small things like that seem like an afterthought but you really add up. You did all that work to get that engaged customer. Why would you just throw that traffic away to another company at that point? Little things like that, we try and educate them.
Jesse:: Yeah, I love it. I get it, seems like a small thing but there could be hundreds of clicks per week. Now they’re looking at some FedEx screen and just complained about their package. But if it were your site with your a little special deal or a little social media contest. Get your help your branding for free.
Cody:: Yeah. I’m not going to guarantee that this branded tracking page is going to drive your sales through the roof. But I am going to guarantee that you’re going to get more sales out of a page that’s linked to your site near social media than you are from ups.com.
Jesse:: Yeah, for sure. Sometimes it’s all just a series of little things that make the difference. That’s awesome. Cody, it seems like you’ve talked to a lot of different merchants, you’ve seen a lot of different stores. Are there any tips or advice you could have for growing merchants in any area?
Cody:: Yeah, for sure. I guess it’s don’t be afraid of what you don’t know because you don’t have to be an expert on this stuff. Your job is to be the expert on your business and your customer experience. You’ll look for tools out there that can automate all of this. My rule of thumb is that if you spend the time of your day doing anything repetitively, you probably shouldn’t be. If you’re doing something manually over and over. Whether that’s copy and paste and tracking numbers or logging into different sites, anything that takes a chunk of your day, look for a way to automate shipping or otherwise. But obviously in our world where we’re thinking around how can you streamline the process of the customer checks out to the point they get that box on their door. If you’re spending more time which pretty much means are you spending any time on that. Nobody wants to be spending time on shipping. Look for a tool that can cut that time down because you want to be spending time growing your business, getting the word out about your next product, or coming up with your next campaign. You don’t want to be spending time
Jesse:: Perfect. Rich, any last questions here?
Richard:: No, just I guess where can customers go to learn more about you?
Cody:: For sure. Make it really easy to get started. shipstation.com, all here in Austin Texas. We’ll link this up to try for you, just fix an email address. You can do everything that we talked about today. Even if you’re just getting started and you want some expertise when it comes to shipping. Start that again. Somebody from my team will give you a call. We’ll walk you through everything and teach you what we know to hopefully get you up to speed. For today we actually set it up to where somebody signs up for ShipStation, they like it, they can use code Ecwid19 at sign up, it’ll give them an extra free month. Again whether your new business is getting started or your business seeing a lot of growth and now things are just crazy. Check it out. I think we can save you some time. shipstatiom.com, try to free, we’d love to talk to you.
Jesse:: All right. And so guys that code was Ecwid19 and so for Ecwid users as well you can find ShipStation through the Ecwid app market as well. You can connect the stores and get started. Sounds great. I mean if you’re cutting, pasting, looking to save some money on shipping or a ton of other things, this seems like a perfect place to go and check it out. Cody, really appreciate you being on the show. Rich, last question?
Richard:: No. That’s it.
Jesse:: All right. Get out there and make it happen.
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