Different types of stock storage
Barring exceptional products that are created upon request and shipped out immediately, your product inventory will need to be stored somewhere to await orders — and the storage model you choose will ultimately determine your options for customization.
At a basic level, an ecommerce retailer has three options for storing stock. Let’s cover them in some more detail:
Using exclusive storage space
Through renting (or purchasing) an area large enough to store your products (often a warehouse or similar building), you can keep the entire operation in-house. You can arrange the space independently or use a service such as Life Storage to make things a little easier.
With your own exclusive storage space, you have complete control over the entire packaging process, spanning everything from the moment you receive an item to the point of handing it over to the courier. There are no limitations on what you can do to prepare items for shipping, or when you can access them, or what companies you can bring in.
This is the most expensive and time-consuming option. You may struggle to keep the rates competitive if you’re not a savvy negotiator (particularly if you need enough space to accommodate a product range that can waver in size) and matters such as insurance and stock management will be yours to handle.
Using fulfillment warehouses
A fulfillment warehouse is a popular middle ground for inventory storage in today’s ecommerce world, allowing retailers to share existing space, piggybacking off the fulfillment systems of larger retailers or dedicated fulfillment companies. Common options include Amazon’s FBA (Fulfillment by Amazon) service and companies such as Shipwire.
This approach allows you to store your goods in secure locations with state-of-the-art operational systems while keeping the costs relatively low, particularly since you’re often using room that would otherwise have gone unused. Amazon’s FBA choice is particularly convenient, allowing access to Amazon’s industry-leading fulfillment network.
Image credit: Tony Webster
It requires you to compromise on the control you have over the situation. While you can still use custom packaging, it must be added before the stock enters the Amazon system — not ideal, since you might not want high-quality custom packaging subjected to lengthy storage, and it would limit the customization options you could offer customers.
Using dropshipping suppliers
Dropshipping is a popular option for budding entrepreneurs, because dropshipping suppliers handle the entire order fulfillment process for you — you’re quoted a cost for providing and shipping a particular product, then you can choose what you charge the customer, present it however you like, and accept the order to pass to the supplier.
Because you’re not actually involved in the fulfillment process, you don’t have to worry about any of the practical considerations. Once the payment has been taken and the order submitted, your part is over. Anything beyond that is a responsibility of the supplier. Through dropshipping, you can provide a highly-flexible product range, adding or removing products to suit changing trends without incurring any costs.
Your product selection is limited to stock available to anyone who wishes to sell it, so there’s zero exclusivity, and any two dropshipping stores in the same field will see significant product overlap. Your options for packaging are determined by the supplier — if they don’t offer a certain type of container or branding, there’s no way for you to provide it. And because you’re outsourcing so much of the process, your profit margins will be difficult to improve.
Standard types of shipping container
Regardless of how ecommerce stock is stored, its shipping formats don’t typically vary all that much outside of stores that provide high-cost items in limited quantities (a small florist could forgo significant packaging when delivering bouquets, for instance).
Due to a need for uniformity and product protection, the average ecommerce product will be placed into something from one of the following container categories (note that while each of these storage types has a set of standard dimensions with associated shipping rates, couriers will ship containers of custom sizes — you’ll just need to pay somewhat more to offset the inconvenience):
Envelopes (usually made from paper or thin plastic) are ideal for products that are small and not particularly fragile. There would be no point in shipping something like a phone case or a pen in a large box, because they’re fairly robust items and can be squeezed a little or thrown around without causing any damage.
Because envelopes are so cheap and space-saving, you should use them for any suitable products — bear in mind that it’s the format and weight that matter, so you can pack an envelope very tightly (with padding if necessary) without worrying about size limitations.
Any product that won’t fit an envelope or doesn’t suit the format will need a stronger and more rigid container, and the basic option for this is the classic collapsible cardboard box. Since cardboard is cheap, light, and recyclable, it’s perfect for most shipping needs. You can buy shipping-suitable cardboard boxes in various colors (with the default matte brown and a glossy white being the most common) and configurations (cardboard thickness, corrugation, etc.).
With various sizes available, you can find the right tradeoff between cutting down on shipping costs through ensuring a snug fit and protecting the order through leaving room for protective measures such as packing peanuts or sheets of bubble wrap.
For particularly fragile orders or high-cost items, you can use a rigid shipping container built from a sturdy material such as wood or plastic. Rigid containers are most commonly used for freight haulage, particularly by air or by sea where conditions are likely to be somewhat more challenging.
Given the expense involved in buying, acquiring and assembling these containers, they’re not worth investing in unless your products absolutely warrant the additional protection. If you’re simply looking to impress customers, you’re better served simply customizing an envelope or a foldable box.
How you can customize ecommerce packaging
Unlike a traditional brick-and-mortar retailer, an ecommerce seller has no way to make a physical impression before the customer receives their order. This places added pressure on the packaging, making it more important that the customer be very satisfied with it and thus be more likely to order from the retailer again.
Because of this, the biggest ecommerce retailers have increasingly found ways to provide customized (and in some cases personalized) packaging tweaks of the following types:
What you do with the external surface of your packaging isn’t limited to picking a color — you can create a complex branded design or shape to delight your customers and set your business apart. You can see great examples of how to do this with the various leading subscription-based delivery services, such as Mantry.
Image credit: Mantry
Through providing a gorgeous wooden box for its products, Mantry really catches the eye and gives itself a clear edge over its competitors. Consider the following options:
- Material. Would plastic, cardboard, or wood work best for your packaging? Perhaps even metal would be the most suitable option. If the manufacturing and shipping costs are acceptable, why not give it a try?
- Structure. Do you need a classic cuboid shape, or would be a cube (or even a pyramid) be more interesting? Go with whatever suits the product best.
- Graphics. You can print your logo on the outside, add some images, and generally get as creative as you like.
- Text. Fonts are important — find fonts that perfectly suit your brand, size them appropriately, and it’ll greatly add to the impact.
- Colors. Vibrant colors will stand out the best, but a more muted palette might be preferable. This really depends on your brand image.
Anything that you can do artistically with the outside of your packaging can also be done with the inside for a different effect — using different materials for a nice feel, for instance, or adding some nice personalized text and imagery to the underside of the lid as Graze does:
Image credit: Paul Miller
And you can even take it beyond the decoration by including additional items to make the customer experience a little bit better. Here are some things you could easily include:
- Trivial gifts. You’ll often see these with companies that sell mixed item assortments, because their varied stocks ensure that they always have something lying around to throw in without costing them much — they’ll generally be small candy items, or pens, or keyrings.
- Instruction guides. Even if the delivered item is fairly simple, it’s thoughtful to include a simple guide explaining what the product is and how it should be used.
- Welcome leaflets. This is particularly good if the buyer has never purchased anything from you before, because it lets you set a precedent for how they’ll view your brand.
- Coupons or vouchers. If someone places a one-off order because of a deal or because they simply feel like doing something new, providing a discount of some kind of can incentivize them to buy again and hopefully become a regular.
Since you’ll almost always have some free space available in your chosen shipping container (whether a box or an envelope), you’ll have plenty of opportunity to add in something simple that could have a powerful effect, and there’s minimal downside to giving it a try.
The importance of delivery options
Timely and professional delivery is important for customer experience. You might sell a great product and ship it in excellent branded packaging, but see all that effort go to waste when the courier delivers it weeks behind schedule and leaves it outside in the rain.
Thankfully, the interconnected nature of ecommerce systems makes it relatively straightforward to choose from a wide range of shipping handlers and give each buyer the option to choose whichever one they prefer, along with the type of shipping they’d prefer (free, next-day, etc.).
If you’re running a system that doesn’t support the courier you want, that’s a problem — you should consider migrating to a better platform (you can start from scratch, but there’s no shortage of small online businesses for sale that run on such systems, and it can be easier to rework and redirect an existing website). Just about any mainstream retail CMS will support any courier you can find, including DHL, UPS, FedEx, and numerous comparable companies.
Beyond that, look at the rates, consider the reviews, and provide as much choice as you can. The days of exclusive arrangements with shipping companies are over now, and you need to let your customers decide what’s most important to them — particularly since a customer will be far less likely to blame you for shipping issues if they had a choice of delivery company.
Shipping boxes are rich with possibilities
In this piece, we’re reviewed how you can store your stock, types of packaging, how you can brand your containers, and why it matters that you give your users as much freedom as possible in the process. Gathering it all up, one thing is clear — there’s a lot of room for creativity and innovation in the fulfillment chain.
While your competitors spend yet more time and money reviewing their PPC campaigns, you can focus on providing a better shipping experience and cutting down on your delivery costs by ensuring that every item is packaged as efficiently as possible. Give it some thought!
Author: Kayleigh Alexandra is a content writer for Micro Startups — a site dedicated to spreading the word about startups and small businesses of all shapes and sizes. Visit the blog for the latest micro biz news and inspiring entrepreneurial stories.