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Omnichannel Fulfillment

Manufacturing and the Direct-to-Consumer Revolution: Overcoming Parcel Shipping Challenges

Discover how to master parcel shipping in the DTC revolution with multi-carrier shipping software

It’s no secret that e-commerce has emerged as the preferred shopping method for consumers. We’ve witnessed the staggering growth of online shopping firsthand. In fact, experts estimate that by 2024, 21.2% of total retail sales will happen online. This trend has transformed the way consumer product brands approach shipping and distribution.

In this dynamic and volatile e-commerce landscape, manufacturers have had to adapt to changing consumer preferences. At the same time, they've had to seize new opportunities in the realm of online shopping to maintain a competitive advantage. Traditionally, manufacturers focused on fulfilling bulk orders for big-box distribution centers, but now, they have found new opportunities.

Manufacturers can opt for the Direct-to-Consumer (DTC) shipping model, where they cut out the middleman and fulfill individual orders directly to consumers. This shift over the past three years has also allowed manufacturers to become drop ship vendors: fulfilling orders for e-commerce retailers and shipping them out on their behalf, where a consumer would never know the difference. However, many are establishing themselves as e-commerce powerhouses by launching their own online stores and e-commerce platforms.

Transitioning to either DTC model is an important decision, as it often involves processing thousands of unique orders, each with its specific requirements. As manufacturers venture into this new territory, they must grapple with questions about labeling, service types, packaging, and more.

To navigate this transformation successfully, let's explore the top challenges and strategies for overcoming them. From the complexities of managing increased order volumes to the intricacies of adhering to retailer requirements, the best practices for solving these challenges contain a focus on maintaining consistent and efficient warehouse processes. Additionally, we will dive into the critical aspect of controlling shipping methods and costs, a key consideration in the DTC model.

Managing Increased Order Volume

Moving towards a DTC model results in a substantial increase in shipping volume. Instead of processing bulk orders, your supply chain is now handling thousands of individual orders daily, so it's crucial to efficiently manage this surge. Furthermore, you'll rely more on small parcel carriers rather than Less-Than-Truckload (LTL) carriers.

Warehouse Wisdom Tip: To handle this surge in volume while maintaining your warehouse's operational efficiency, implement a robust Warehouse Management System (WMS) and cutting-edge multi-carrier shipping software (MCSS) to streamline the handling of increased parcel volume. These tools are your best friends in this transition, enabling your warehouse team to seamlessly handle the influx of parcels while focusing on what matters most – efficient parcel management. [Want to learn more about how WMS & MCSS work together in your ESS?]

Adhering to Retailer Requirements

If you plan to drop ship for e-commerce businesses, you must adhere to their specific shipping and branding requirements. These requirements can vary widely, including providing real-time inventory availability, order confirmations that keep customers in the loop, compliance with label standards, and the creation of branded packing slips. Failing to meet these requirements can lead to fines, hurting your profits and your future as a dependable drop-ship vendor.

Warehouse Wisdom Tip: Ensure your warehouse is well-versed in all retailer requirements. By integrating your processes and technology, you can smoothly meet these demands. Elevate your compliance game with e-commerce retailers by leveraging supply chain technology solutions like Order Management Systems (OMS). OMS leads precise order tracking, efficient processing, and confirms that every order is fulfilled according to the retailer's demands. With OMS in your Enterprise Software Stack (ESS), you will find success in maintaining compliance, steer clear of fines, and keep your warehouse operations seamlessly connected. [Why are OMS & MCSS the most in-demand technologies for top shippers around the country? Learn more in this blog!]

Maintaining Efficient Warehouse Processes

With the increase in DTC orders, optimizing your warehouse processes is essential. Picking, packing, and labeling each order individually can be time-consuming and painstakingly slow. You may also encounter added complexities, such as unique packaging requirements that can slow down warehouse productivity.

Warehouse Wisdom Tip: To maintain consistent efficiency, integrate systems that enhance productivity without adding manual work or increasing headcount – especially with the current labor concerns and constraints. With the right tools and strategies, you can keep your warehouse operating smoothly, even as you seek to overcome these DTC challenges.

Controlling Shipping Methods and Costs

Whether you are fulfilling orders for retailers or your own website (or even both!), small parcel volume will increase, and you will transition from shipping just a handful of parcels via a national or regional carrier, to filling LTL trailers daily. Efficiently generating small parcel shipments and selecting the right carrier and service level are crucial. This is particularly true for managing shipping costs and transit times. [Learn more about understanding carrier risks and rewards in this recent blog post!]

Tip: Utilize Multi-Carrier Shipping Software to seamlessly integrate with the other systems in your ESS, optimize shipping methods, and generate carrier-compliant labels efficiently.

To address these challenges successfully, assess your current technology stack to identify areas where your small parcel operations may face limitations. Consider these essential technologies:

  • Warehouse Management Systems (WMS): Streamline day-to-day warehouse operations, track inventory, and maximize facility utilization.
  • Enterprise Resource Planning (ERP): Manage core business processes in real-time, including order tracking, cash management, and inventory control.
  • Electronic Data Interchange (EDI): Implement EDI to reduce costs effectively and improve operational performance by automating order placement and tracking.
  • Order Management System (OMS): Track and manage orders from inception to fulfillment, ensuring accuracy and efficiency.
  • Customer Relationship Management (CRM): Prioritize customer experience, improve satisfaction, and meet delivery service expectations through data-driven insights.
  • Multi-Carrier Shipping Software: Seamlessly integrate with existing systems to optimize shipping methods, reduce costs, and meet customer delivery expectations.

The Cornerstone of Modern Supply Chain Operations: MCSS

Multi-Carrier Shipping Software is the backbone that executes the seamless exchange of relevant shipping information for both cost and time efficient operations in any enterprise shipper’s warehouse. Here's how it can elevate your DTC shipping strategy while complementing other essential technologies:

Streamlined Operations

MCSS seamlessly integrates with your existing systems, including WMS, ERP, EDI, OMS, and CRM. This cooperation streamlines your warehouse operations and ensures orders move quickly and accurately. [Learn more about How it Works.]

Optimized Shipping Methods

MCSS doesn't just pick the closest inventory source; it evaluates hundreds of carriers and services (if they have that broad of a carrier and service library!) to find the best shipping method for each order. This means you can meet your commitment times while keeping costs in check. No need to sacrifice one for the other. [Explore the power of MCSS & OMS for Multi-Origin Shipping!]

Carrier-Compliant Labels

The software executes the creation of carrier-compliant labels in milliseconds [Discover why Speed Matters!], reducing the risk of compliance issues, fines, your labor force waiting for a label to print, or delivery delays. Your packages are ready for shipment without a hitch, ensuring a smooth delivery to your customers.

Enhanced Customer Experience:

Meeting delivery expectations is a priority in the DTC model. MCSS helps you achieve this by providing accurate delivery dates and real-time tracking information via the connected technologies and carriers. Your customers stay informed, leading to higher satisfaction rates and loyalty. [How much does the CX matter?]

By adding Multi-Carrier Shipping Software into your DTC strategy and leveraging a seamless connection with other essential technologies, you gain a competitive edge. Manufacturers can efficiently manage increased order volumes, adhere to retailer requirements, maintain consistent warehouse processes, and control shipping services and costs. The result? A smoother, more profitable DTC operation.

Transitioning to DTC shipping is a significant undertaking for manufacturers, and timing is critical. ProShip is here to offer guidance from our tenured shipping experts who can tailor a plan to your unique shipping needs and seamlessly integrate it into your existing enterprise technology stack. Embrace the power of ProShip’s modern multi-carrier shipping software, and transform your manufacturing and warehouse operations into a well-oiled shipping powerhouse, backed by an array of cutting-edge technologies.

Ready to explore your DTC shipping strategy further? Connect with our team or schedule a demo to ensure your success in the DTC revolution.