Don Chernoff established his own e-commerce business, SkyRoll, in 2001. The business sells a special type of garment bag that rolls your clothes around a tube, keeping them flat and wrinkle-free while making them easier to transport.
At first, Chernoff and his small crew were fulfilling orders out of a small office he had established in Vienna, VA. But as sales began to pick up, the task of shipping orders became too labor-intensive and time consuming.
A victim of his own success, Chernoff looked to outsource his warehousing and fulfillment operations – but what he discovered wasn’t too encouraging:
“What I found was that there are a lot of third-party logistics providers out there, but they all seem to be cut from the same cloth in that they’re all big, and they’re happy to deal with you if you’re big, but if you’re small, they don’t want to return your phone call,” he explains. “And they all have these set-up fees, and upfront fees, and minimum this and minimum that.”
Chernoff gave up on the idea for while — but later he discovered a new third-party logistics company geared for small businesses called Shipwire. For a monthly fee, Shipwire warehouses SkyRoll’s merchandise in its Chicago facility (one of six mega facilities Shipwire operates) and fulfills orders nationwide from there. Once the merchant’s manufacturer gets the shipments to the warehouse, Shipwire handles everything from order fulfillment to payments to shipping to order tracking.
One reason Chernoff was attracted to this new turnkey fulfillment and logistics service was because it came pre-integrated with PayPal, which he had already been using for payments on his existing Website. Another reason was ease of use: Shipwire lets its customers have full control over almost every aspect of their supply chain operations — such as which carrier is used, what level of service is used, whether to hold orders over a certain dollar amount, whether to add insurance and other key shipping decisions — via an intuitive Web interface. Using tools on the Website, clients customize their service to their customers all the way down to the individual shipment. To get started, all a merchant has to do is create an account on the Shipwire Website — and then get their merchandise to one or more of Shipwire’s six warehouses, including four in the U.S., one in Canada and one in the U.K.
“The key factor for me is, I don’t want to have worry about the order,” Chernoff says. “With Shipwire, when somebody places an order on the Website, I get an e-mail showing that the order has come in, and I can see that we have the item in stock and I know when it’s going to get shipped out. I don’t have to worry about the payment – because their system integrates with PayPal and I get paid immediately – and also I don’t have to worry about which shipper I’m going to use to get the best rate or fastest delivery – they handle all of that for me.”
Shipwire works with all the major carriers, including FedEx, UPS and the USPS, to secure the best rates for air and ground shipping. If a customer doesn’t specify how a package is to be shipped, Shipwire uses the most economical method based on current rates and least cost routing.
“Simplification is a big thing for me – and this makes the whole thing of running a supply chain very simple,” Chernoff says, adding that it typically only takes a day for an order to get shipped out of Shipwire’s Chicago warehouse. (He recently added a wheeled version of the SkyRoll to his product line, so he currently has two SKUs.)
Although it is designed to be an automated fulfillment and logistics service, Shipwire offers other services — such as breaking apart containers at its Los Angeles facility and spreading the merchandise across whichever centers a customer wishes; instant end-to-end insurance for orders; integration other leading shopping cart systems; address correction; returns logistics; inventory quality control; specialized labeling; and more. The service is geared for small merchants with seasonal businesses and can be quickly scaled up and down based on the merchant’s immediate needs.
All packages bear the merchant’s own shipping label – there’s nothing to alert the customer that a third party handled the order. What’s more, each customer gets an e-mail saying that their order has been shipped – and the e-mail includes a tracking number that allows the customer to track their package via the Shipwire Website.
According to owner/founder Damon Schechter, Shipwire currently has hundreds of customers and ships “tens of thousands of pieces a day – approaching hundreds of thousands of pieces at holiday time.” Currently a merchant can get 50 sq. ft. of warehouse space in a single facility, along with basic order fulfillment, starting at $30 a month.
“When we get a little bigger we might move away from PayPal and go with a Website that integrates directly with Shipwire – and at that point we’ll probably start using more of Shipwire’s value-added services,” Chernoff says.