No flower wants to stay a seed, no tree wants to stay a sampling, and no ecommerce business wants to stay stagnant. Every brand wants to grow; however, overzealous or uninformed decisions in pursuit of growth can hinder a brand from doing so. Ecommerce businesses that want to grow then scale successfully and sustainably have to make strategic decisions in every aspect of their operation. Most notably, there are three areas of ecommerce business management that can be the secret sauce necessary for brand growth or the thorn in the margins that prevents it. 

What are these three ways to grow your ecommerce business without over-expanding in a way that negatively impacts your business? In short, they come down to: optimizing your internal operation, strategically splitting your inventory, and utilizing efficient, and cost-effective global tactics. For the full details on all three, let’s delve in now.

Optimize Your Internal Operation

Just as a busy restaurant would come to a grinding halt without streamlined, organized operations, a growing ecommerce business would not be able to thrive without 3PL software that makes managing so many complex layers simple. That truly is one of the secrets to growing your ecommerce business in an efficient, non stressful way. ShipMonk prioritizes this need with our own advanced 3PL software, exclusively available to our clients. What makes this 3PL software so special and so ideal for growing ecommerce businesses?

On a daily basis, brands need to have control and transparency over their order, inventory, warehouse, and shipping management. A 3PL platform that provides access to all these in one place with a user-friendly interface allows businesses to save time and headspace. Everything they need to know is at their fingertips for every faction of their operation.

Add to that, the advantage of data available through a sophisticated 3PL platform is as relevant to ecommerce business growth as a good pair of running shoes is to a track star. In other words, the old adage about people not learning from history being doomed to repeat it applies here because if you, as an ecommerce business, do not learn from your company order history then whether that past be full of positive or negative history you won’t be able to optimally grow. 

Data about orders from every season, every sale, every new product introduction, every demographic, are all incredibly important to making future decisions for your brand. How much ecommerce inventory do you need for peak season? Do you need to split your ecommerce inventory across different locations to save time and money on delivery? Are your shipping practices helping or hurting your bottom line? And so on and so on. The point is that if you hope to grow your ecommerce business, you need to make smart decisions, and the smartest decisions for a business are based on past data, which 3PL software can provide.

The trick is to not get overwhelmed going down the rabbit hole with so many amazing options at your fingertips. 3PL software like ShipMonk’s was designed to give you everything you could ever need to run your operation in one convenient place. For example, we offer +75 integrations, shopping carts, marketplaces, etc. that you can connect to your business. With that in mind, while they’re all amazing opportunities, there’s no need to do all 75, so to speak. The ecommerce industry is a competitive place full of different avenues but you have to be strategic and careful about which you use. 

Plain and simple: there’s no need to do everything. Pick integrations and shopping options based on what works best for your brand and your customers; don’t simply dedicate time, resources, and effort to these opportunities because they’re there and other companies might be using them; the latter is what you call classic over-expanding and you don’t want the daunting extra weight that puts on your workload to prevent your company growth.

Strategically Split Your Inventory

In a world of high expectations when it comes to shipping speeds, but high shipping costs depending on how much distance needs to be traversed, the idea of splitting your ecommerce inventory across the country or even world may sound like a great option. In some cases, it is! When you distribute some or all of your ecommerce inventory across multiple warehouses/fulfillment centers, you have access to benefits such as:

1.) Reduced Shipping Costs – The less a package has to travel, the fewer shipping zones must be crossed and the less shipping carrier transports need to get involved. That all equates to lower the shipping costs. These savings will be especially notable if you offer free shipping or regularly ship heavy items. 

2.) Lower Cost of Returns – Just as the cost of shipping out ecommerce inventory to customers matters, the cost of receiving returns takes a huge toll on margins. Every company has its own policies about return shipping, and not all ecommerce businesses cover it for customers. Sometimes returns aren’t even an option, and other times the cost of returns is simply the burden of the buyer. But in an increasingly competitive market, brands that don’t offer free shipping aren’t looked at as favorably. If you do take care of the shipping for your clientele, having places to send ecommerce inventory that are geographically diverse means less travel for the go-backs and that means less cost for you, or at the very least your customers if they have to pay for it.

3.) Faster Shipping – By moving inventory closer to your customers, you can reach customers quicker. That speed is only better with a 3PL like ShipMonk that can reach 96% of the US population with our popular 2-day shipping. We also have international fulfillment centers that allow global brands to ship like locals too, and our Virtual Carrier Network to ensure our clients are always getting the best shipping rates and speeds. 

4.) Back-up Plans – Supply chain disruption, peak season, unexpected surges in demand, and other complications can negatively impact your business. Having ecommerce inventory split across different locations means if one warehouse/fulfillment center unexpectedly runs out of product, another facility might be able to fill orders in the meantime, which is a way-faster solution than waiting for a reorder from a manufacturer.  

5.) Increased Capacity – There are times of year when demand increases and your ecommerce business needs to be ready. During peak sales periods, orders can be distributed over multiple warehouses so that no single warehouse gets overwhelmed.

6.) Easier Market Penetration – Let’s say your business is in New York, but you’re planning a big push into west coast markets. Partnering with a 3PL that already has fulfillment centers on that side of the US makes it so much easier! And you can take advantage of regional and local carriers to save on shipping as well.

7.) Cross-border Solutions – Shipping over borders can be slow, costly, and complex. If you work with a warehouse or fulfillment center that has facilities in the countries you’re delivering orders to it makes dealing with customs, duties, and taxes so much simpler.

Being Wary of Over-Expanding While Splitting Inventory

While there are many advantages to splitting ecommerce inventory as your company grows and scales, there are disadvantages as well. Those disadvantages can damage a growing ecommerce business if you’re not careful or if you split inventory in unstrategic, even unnecessary ways. Here are the two main issues we’re talking about:

Additional Costs – Space costs money. If you’re paying for additional space in any warehouse or fulfillment center, that impacts your overhead costs. If you have enough orders in that geographic area to justify it then that makes total sense. However, renting that costly space out for inventory that doesn’t hit a certain minimum order threshold will hurt your bottom line. In addition to those inventory holding costs, when you ship ecommerce inventory to multiple locations you’ll have increased inbound freight costs. Go even further back up on the supply chain food chain and think about the added finance of producing extra inventory for extra locations. Put all that together and if you want to grow your ecommerce business without over-expanding, you’ll want to make sure what you’ll gain doesn’t outweigh the costs. 

More Management To-Do’s – Advanced 3PLs like ShipMonk have state-of-the-art software designed to make ecommerce inventory, warehouse, shipping, and order management easy. That being said, with every new location you add to your portfolio, someone will have to keep track of ecommerce inventory for each facility and keep track of the inventory turn rates to make sure the sales are enough to justify the space vs. collecting dust on shelves.

There are so many added layers to keeping track of past that, like inbound shipments, outbound shipments, stock levels, order history data, returns, packaging, and more, which the software of an advanced fulfillment partner like ShipMonk can manage. However, again, that’s only something we’d advise if you meet a certain order threshold in any region. If you have enough orders from different regions, by all means divvy your inventory. But if that “enough” doesn’t help your margins, and splitting inventory actually hurts them, then the extra time and cost of managing the other locations will only weigh you down even more. Even if the cost of splitting inventory evens out with the cost of shipping further to reach customers, it still probably isn’t worth it because the extra management responsibilities will still be there.  

When Does Splitting Inventory Help vs. Hurt?

If you want to grow your ecommerce business without over-expanding the most important elements to consider are how widespread your customers are, your sales volume in those areas, and the physical weight of the products that make up your ecommerce inventory. If you have plenty of orders from one region where stationing your ecommerce inventory in a closer warehouse or fulfillment center makes sense, or if you sell very heavy products, splitting inventory tends to be a good idea and the cost savings can lead to awesome growth. Overwhelming costs will lead to the opposite if you split inventory when:

• There isn’t enough sales volume to justify it
• Your sales are concentrated in a small area
• You don’t have the 3PL technology on your side to make managing your distributed inventory easy
• You only use a warehouse vs. a fine-tuned fulfillment center operation

Utilize Efficient, Cost-Effective Global Tactics

Going global is the ultimate goal of many ecommerce businesses, and if you’re ready to do so then congrats! Theoretically that means your advertising, products, etc. have penetrated international markets and your sales are now starting to come from other countries. The thing is, if you are going global before you’re ready then the cost of doing business abroad could get you into trouble. Frankly, even a brand that is well-established can have trouble expanding internationally because of four common import/export pain points.

1.) Shipping Expenses that damage your margins

2.)  Shipping Delays that negatively impact customer experience 

3.) Customs, Duties, and Taxes that eat up time, profit, and resources

4.) Foreign Operational Challenges, which vary by country and could impact how you house and distribute your ecommerce inventory

The good news is that when it comes to going global you can grow your ecommerce business without over-expanding your resources by utilizing a 3PL partner with a strong global presence. ShipMonk, for example, alleviates all the above pain points through our state-of-the-art international locations. 

Take our multi-location ShipMonk Europe branch for example. While the current average transit time from the US to the European buyer is 15 calendar days for an ecommerce delivery, shipping carriers servicing ShipMonk’s Czech Republic fulfillment center reach all of continental Europe in 2 – 5 business days. Additionally, ecommerce businesses working with our Europe location can put the days of expensive transatlantic parcel costs to rest by decreasing shipping costs by 45% or more.

Those kinds of benefits allow ecommerce businesses to grow in an efficient and cost-effective way. In sum, ShipMonk’s 3PL experts alleviate pain points by: 

• Offering international brands domestic-like shipping rates and 2 – 5 day domestic delivery times, which lead to better conversion rates and customer experiences.
• Taking time-consuming customs clearances off your plate while providing exceptional margin savings and rapid shipping windows.
• Allowing expanded access to continental Europe, thus widening customer bases and the chance for your ecommerce business to thrive in new markets.

With those kinds of opportunities and advantages, any ecommerce brand would be in an amazing position to continue growing strong.

Intelligent Goals for Incredible Growth

When your ecommerce business starts expanding you see increases everywhere—ecommerce inventory, warehouse/fulfillment center space, investors, marketing, and of course orders. All those rises can be your downfall, though, if your growth hasn’t been made with strategic, shrewd choices and organized execution that takes into account the grand picture.

Your internal operation, inventory distribution, and international expansions all need to be handled with care, finesse, and the right tools and teams to successfully implement your vision for growth. ShipMonk has made a name for itself in the circle of growing ecommerce businesses by providing both the latter. So if you want to take your brand to the next level without over-expanding, the best thing you can do is enlist our 3PL order fulfillment services. They were designed by entrepreneurs for entrepreneurs for intelligent growth and sustainable scaling. Contact us today if you’re ready to level up!