[Watch Webinar] Going Hybrid: Adding a 3PL With Your Internal Fulfillment
Travis Mariea, CEO at Flxpoint, and Margaret Glavey, Solutions Partner Manager at ShipBob, discuss “going hybrid.”
This webinar will explore the process of hybrid fulfillment for merchants debating leveraging 3PLs in addition to their owned inventory or for those already leveraging 3PLs.
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Below, you will find a transcript of the webinar.
Meg from ShipBob, she’s getting us kicked off but, really, this webinar is about going hybrid. And so, going hybrid is essentially adding a 3PL to your current internal warehouse fulfillment operation and the process of adding that 3PL like ShipBob and then managing the 3PL and warehouse fulfillment logistics with a company like Flxpoint as your distributed order manager system. So, with that, Meg, I’m going to go through the presentation or, I will say, I’ll click through for you. So, I’ll try to time it with you but feel free to just let me know as we want to go to next slides.
Perfect. Thanks, Travis, I appreciate it. Hi, everyone, my name’s Margaret or Meg Glavey, I’m a solutions partner manager here at ShipBob. I work and manage our relationships with our partners who help us facilitate relationships with retailers and other marketplaces online. So, Flxpoint really nicely dovetails in some of the verticals that I manage with our partners and some of the order management logic that you’re able to implement with Flxpoint using ShipBob. Cool, yeah.
So, just high level overview of an agenda. What is a 3PL, we’re going to talk about scalability and how you can scale with ShipBob. We’re going to talk about sales channels and expansion opportunities within ShipBob and then, just to close it all off, how that all functions together and what that could mean for the going hybrid model. So, how you can leverage Flxpoint for your order management logic and then what that looks like downstream in ShipBob. Cool, next slide. Awesome, yeah.
So, what is a 3PL? So, some of you who have logged on may not know what third party logistics program is so, that’s exactly what it stands for, third party logistics. So, the idea that you’re going to outsource some of your supply chain to a third party. In this case, ShipBob, we are a warehouse management software solution. So, if you were to outsource your logistics to ShipBob, that means that we can pick, pack and send out the orders on your behalf but a 3PL solution might look different for every different company. In this case, the way that we set up is that we connect your online store through to RWMS, to our dashboard, you send us the inventory and then we ship that to the end customer. So, in the case of adding something like a Flxpoint in or additional software that can happen between the connection between your store and ShipBob’s WMS but, like I said, that can take many different forms depending on how you’ve configured your 3PL setup.
You can go next to the slide. Cool, yeah. So, when deciding that your business might be big enough to start working with a third party logistics, usually, the example that we’ll give is, let’s say, someone who is selling t-shirts online starts getting enough orders that X number of orders is suddenly too much to self-fulfill. So, if you’re fulfilling out of your basement or your garage and, suddenly, there’s such an influx of orders that you yourself can no longer manage that volume, that’s a great opportunity and great time to outsource, especially a brand that’s experiencing massive growth.
Let’s say, if they’re social media blows up or they go viral in some capacity, then that’s a great opportunity to really look into how a 3PL can help scale and manage some of that in influx of order volume, especially also expanding to international markets. So, if you’re interested, if you’re selling in the US but you’re interested in working in additional markets, whether that be EU, Australia, et cetera, then expanding to someone that has a capacity to fulfill those orders and can help you navigate those markets is really, really beneficial.
Something I also do want to call out is a time that you might be interested in outsourcing your fulfillment to a 3PL is to really take advantage of the purchasing power of larger brands who power the 3PL’s revenue. So, in the case of ShipBob, over 40% of our client base is what we consider to be mid-market. So, a brand that’s five plus GMB in revenue, that means that order volume coming in allows us to negotiate better carrier rates and so you’re able to get cheaper and faster pricing to your end customer because you’re leveraging all of ShipBob’s client base when negotiating with the carriers instead of doing that yourself. So, that can be really beneficial as well. Yup, next slide.
Cool, yeah. So, like I said, 3PLs are your key to scale. So, if any of that sounds interesting to you, so if you’re thinking, “Hey, we’re getting too big, we want better cheaper rates, we want faster shipping, we want to be able to take advantage of a larger network,” then 3PLs would be your key to expanding and scaling your business. So, in the case of ShipBob, we do have operations in the US but we also have operations in Canada, EU, UK and Australia. So, a all-in-one WMS solution that allows you to access those markets as long as you send us that inventory, that can be really helpful if you’re looking to expand internationally.
Lower upfront investment to test new markets. So, again, it’s just as simple as sending us the inventory and the dashboard does the rest. As long as your store is equipped to take orders from new markets or new spaces, then we can accept those orders and ship that out to your end customer. That includes retail distribution, dropshipping, whatever source you’re working with, we can accept those orders and that can be aggregated together. So, instead of managing multiple different solutions, then you can work with Flxpoint to implement logic to send certain orders to certain locations or to your 3PL versus your self-fulfillment option and that’s something that we’re well-equipped to handle.
Scalable packaging solutions to support sustainability. So, if you’re a sustainably minded brand, which is something that we see increasingly being at the forefront of some of the brands that we’re working with in terms of how they want to see the 3PL address sustainability, then we work with a number of sustainable packaging solutions. Also, you can reduce the overhead cost or maybe the over-ordering associated with discounts for corrugate by using a 3PL. And finally, B2B orders. So, I’m sure some of you that have logged on are curious about how we work with retailers and dropshippers. So, as some of you may know, managing relationships with retailers and dropshippers can be really complicated because they have so many requirements when it comes to compliance.
So, ShipBob, and we’ll get into this in a little bit when I talk more about B2B, but ShipBob, being someone who deals in the day-to-day with orders to those retailers that it can be really helpful to have someone manage that compliance and have that outsourced to someone else. So, you’re not the one that’s reading through the compliance guides and making sure that all of the requirements are being met for the retailer that you’re working with. Instead, you can rely on a third party to manage that for you. Next slide. Cool.
Yeah, distributed inventory closer to your customers. So, the idea of working with the 3PL’s network is really crucial to being able to offer faster and cheaper shipping. So, let’s say you own and operate one warehouse, wherever that may be in the US, that’s probably at a further point from a customer that might be on the opposite coast or might be in a different region. So, by distributing your inventory, you can take advantage of being closer to a lot of your customers which means that you can reduce the cost and the shipping time associated with getting that product to the end customer. So, whether you’re using all of ShipBob’s network or you have a piecemeal model where you have a warehouse that you’re owning and operating and functioning and sending to ship up some of your inventory, we can accommodate that.
So, we have 30 plus warehouses within the US alone. So, every region and sub-region is covered so you can really take advantage of decreased shipping costs and lower transport related costs by distributing your inventory. Next slide. And this is a high level overview of what pricing looks like with ShipBob. So, the idea that we price out by zones similar to how every major carrier in the US situates their pricing. But just understanding that, by distributing your inventory, you usually can get cheaper pricing within closer zones. So, in an ideal scenario, back from my account management days, I’d say that you want to be within zone one-three. So, that means, if you’ve got customers in Chicago, in New York and in LA, then you’re going to want to have a warehouse location in those three regions at least.
And so, always monitoring where your customers are and what your costs are and that’s something that you’re able to leverage also with a 3PL. The idea that we have a dashboard that allows you to get that high level overview of what your shipping costs are, your number of customers in each zone, that data is all yours, you own it and you can manipulate it. So, it’s just empowering you to make decisions about reducing your shipping costs and overall logistics costs. Just a overview to call back to where we have locations. Like I said, plenty of locations in the US, we also have locations in Canada, UK, EU, and Australia and we have teams that can help you expand into those markets, too. So, tax considerations, VAT, importation, et cetera, we have teams that can help you facilitate and navigate those markets. So, once your inventory’s there, it’s just as simple as getting it out to the end customer.
Cool. And something cool and I think differentiates ShipBob with that distributed inventory piece is our two-day shipping. So, we offer product badging on Shopify and we’re also a certified two-day partner with Walmart. So, if you sell on Walmart marketplace, then we’re certified two-day and you can also use two-day badging on your Shopify store. So, you can convert more shoppers by reducing cart abandonment when they see that two-day shipping offer. So, as we all know, that’s the expectation Amazon set for the customer market. Amazon has set for customers, I should say, faster shipping. So, that’s something that we have high visibility around and we offer our customers.
Cool. And then, finally, digitizing warehouse management. So, for those of you who self-fulfill and may not use a warehouse management software or they may use just a generally available WMS for self-fulfillment, I think digitizing warehouse management is a really key piece to this. So, making sure that you always have products in stock at the various warehouses that you need them in stock, the ability to split orders if orders aren’t necessarily in stock in certain warehouses, all of that order logic, I think that’s a really key piece where Flxpoint and ShipBob meet.
So, the idea that using and leveraging a tool like Flxpoint to, quote, unquote, go hybrid, meaning set order rules based on, hey, if an order’s coming in and there’s inventory in this warehouse, let’s fulfill from that warehouse or we can fulfill from the ShipBob warehouse. That’s all something that you can set up. But by having digitized warehouse management and a clear picture at all times of what your inventory is doing and how much you have in stock, you can better rely on those rules to function properly.
Cool. Sales channels and expansion opportunities, yeah. So, you can reach your customers everywhere. So, expanding new channels without the challenge of getting set up and having a separate fulfillment and logistics arm for each channel, that’s a real key differentiator with ShipBob. So, the fact that we work with Amazon, we work with Walmart and we’re facilitating orders to major retailers, whether it be retail distribution or dropshipping, you can truly reach your customers everywhere using ShipBob. And what’s great about that is, really, it’s up to you to chop and change how you want that to look. So, again, using and leveraging an order management software like a Flxpoint that allows you to send orders to certain warehouses with certain rules, then you can completely expand and scale on your terms. So, yup, next slide.
And then, yeah, final piece is the B2B commerce. So, just to call back what I said about our availability and our work that we do with B2B brands. So, beyond the D2C portion, the fact that we can connect to your Shopify store, your whole commerce store, et cetera, we also work with retailers, whether that be dropship or with retail distribution. So, we rely on some partners that help us with their EDI translation including also a Flxpoint who can help you with your order management software to ingest these types of orders. So, how wholesale B2B works at ShipBob is that we connect those orders come through, they come through to our warehouse management software and we manage all the compliance and the requirements around labeling, around picking and packing, around transportation, et cetera so you can really truly outsource that arm of your business and just add retailers at will.
So, if you are seeing a lot of success in one retailer, that usually tends to beget success in another. So, we don’t want to hinder you in that process, we want you to be able to expand as rapidly as you’d like. So, that’s something that’s available to you at ShipBob and something that’s available to you when you outsource your fulfillment. Cool. Okay, well, I think I’ve probably done enough to pitch you on ShipBob and the idea of going hybrid. It’s the, yeah, you’re all in one solution. Oops, sorry, I think I’m losing … I don’t know where I was, sorry. Yup, perfect, thanks. Yeah, so there’s the high level overview, I think it’s old hat at this point. Next slide.
And what I want to do call out from the idea of a partner ecosystem and going hybrid. So, we do work with, at this point, over 50 tech companies that can serve any purpose that you have when it comes to your fulfillment to the end customer. Whether that be packaging, whether that be order management software, whether that be customer support, et cetera, we have a pretty robust partner ecosystem that meets every need. Cool. And something I do want to call out, as we talk to more and more brands that are interested in going hybrid, we want you to be able to leverage ShipBob solutions to achieve the more accurate, efficient and affordable fulfillment. So, you can use a fully outsourced model with us. So, whether that means that you put all of your inventory into our warehouses and have that managed yourself or you use our merchant plus solution which is when we give you our WMS system to use in your own fulfillment network and your own warehouse.
So, if you own and operate a space and you want to be able to have that and keep that within your stack, great, that’s something that we can absolutely facilitate especially in tandem with Flxpoint which allows you to implement some of that order management software so you’re able to choose which orders you’d like to fulfill yourself and which ones you’d like to outsource to ShipBob. And then, if you happen to own and operate your own space, we have a WMS solution for you. Cool. And a little just about our client base. So, 70% of brands will add new sales channels in 2022. So, the fact that over two-thirds of our brands are interested in adding new sales channels and see that as something that we can help facilitate for them, I think, says it all. And then over two-thirds of our brands are already selling on two or more sales channels and we truly feel like the sky is the limit.
If you’re interested in taking on new sales channels, new retailers, we can help you with that especially if you’re looking for a set and forget it solution. You’re looking to implement logic to have this all be humming away in the background while you’re interested in growing and building your brand, that’s something that we can absolutely help facilitate. Cool. And some interesting case studies that we published on our website especially around expansion and a hybrid model. Thanks, everyone. Thanks, Travis.
Awesome. Thanks, Meg, appreciate that. Definitely some interesting stuff there and awesome to see, really, how ShipBob’s grown over the last couple years and all the offerings that you guys have rolled out and really helping brands compete with that two-day requirement that Amazon has set like you mentioned so great to see that. Awesome. So, our portion of the webinar really is just educational on the concept of hybrid and different fulfillment models and talking about, not only how Flxpoint can help in those, but just thinking about the strategies in general and where ShipBob and Flxpoint fit in.
So, obviously, if you’ve joined this webinar, you’re most likely fulfilling orders in-house from your own warehouse, maybe a brick and mortar, whatever it might be but you’re doing what we call internal fulfillment. The traditional purchasing of goods, wholesale, putting them in your own internal warehouse, maybe in a storage unit, if you’re S&B or you got your own distribution center or multiple distribution centers, if you’re larger and you’re just shipping them out with your own team, pick, pack, ship, maybe a warehouse managed system in the middle. So, that’s what we consider internal fulfillment, pretty straightforward. Hybrid fulfillment really is the concept of when you are now fulfilling both internally and from a third party, like a 3PL, like a ShipBob. And so, as you can see, there’s that splitting, there’s that routing, there’s that complexity that gets added there. There’s a lot of reasons why you might want to do it, there’s a lot of reasons why you might not want to do it and so we’re going to go through those.
But first, just from a terminology perspective, I do want to talk about how we’re looking at the market and, as we’re seeing more and more companies rise like a ShipBob that offers these great solutions for brands to do their own fulfillment but also to be a dropshipper for retailers, we’re seeing, from a retailer perspective, this concept of more and more distributed fulfillment. It might be your fulfillment from an internal warehouse, it might be fulfillment from a 3PL but the concept of distributed fulfillment is really when you have order orchestration or order routing needs, when you could fulfill one order or one item from multiple locations. This gets really sophisticated even past just a typical hybrid fulfillment where, no matter what, you know that this order’s always going to go to the one warehouse, the other warehouse, you might have some of your SKUs in, let’s say, the large heavy SKUs in your own internal warehouse and then the light parcel SKUs in ShipBob, that’s fairly simple, you can easily split that off.
Distributed fulfillment is where you might have multiple options to fulfill an order where you’ve got the exact same products across multiple locations within ShipBob, within your own internal warehouse, maybe you’re brick and mortar. If you’re a retailer, maybe you’ve got dropship partners that are also dropshipping the same items that you’ve purchased and put in your warehouse or in your 3PL. And so, when that happens, distributed fulfillment is really about the idea of looking across all of those different locations and then running through a distributed order management system like Flxpoint and making some rules really around how can one fulfill those. Whether it’s the cheapest, lowest cost, preferred solution, whatever it might be, a combination of all three of those, that’s really the distributed fulfillment terminology that you’re seeing show up more and more managed through a distributed order management system.
And so, the hybrid side of things, just to keep it simple of just the two solutions here, the internal warehouse, the 3PL. You’ve decided that I’ve got my own warehouse, I need to start looking at does a three PL make sense for me and all those reasons that Meg outlined earlier in her portion of the presentation. Really, one way to think about it though is why. Why do I want to keep one warehouse and not go fully to ShipBob or another 3PL. I think, Meg, I believe she mentioned it a day or two ago when we were getting ready, but most people actually do move most of their, if not all, of their operations over when they move to a 3PL like ShipBob. But why would you want to keep your own internal warehouse? So, there’s a couple reasons that we’ve outlined here.
So, you might be just adding a 3PL for just the regional or international shipping, as Meg has said earlier. That you’ve got your warehouse, you feel like it makes sense for you guys, you really just need the West Coast taken care of and you’re looking for a strategic partner to help out with that. Or, as Meg mentioned, there’s different implications moving internationally, you got to deal with different tax, different rules and logistics and so you’re just adding them solely for that. So, you want to keep your warehouse because you’ve got things going well there, whatever it might be, and you just want to expand internationally or regionally, that might be a hybrid scenario.
Let’s say that you’re not doing anything too crazy, you’re not trying to go outside the country but you do feel like you want to add another warehouse because you’ve taken on new specific products that you’re not set up to offer from a logistics perspective. Maybe you’re a retail grocer or a D2C brand that’s expanding out your SKUs into something that you’re not used to shipping out or storing, freezer good items or large, bulky items, whatever it might be, freight items, something that you are not used to selling. You could be used to selling your non-perishable goods if you’re a grocer and you’ve got that dialed in, you’re selling canned goods, whatever, and then you start offering freezer items and refrigerated items and you don’t have the capacity to keep that in the warehouse or send it out into a truck that can support that. That’s an option where you’re like, “Okay, I’m going to keep my own specific shipping for my non-perishables but, then, all the freezer items, all the refrigerated items, I’m going to work with a specialty 3PL to do that.” So, that’s another scenario we’ve seen.
And then there’s the opposite of that. There’s the opposite of where you’ve got this just in time kitting and bundling or a scenario where you’re basically assembling things in your own warehouse. You feel like you’ve got that dialed in, you’ve looked at our 3PLs, and maybe, Meg, we can talk about towards the end, that’s a question that pops up in my mind if you guys do any the assembly or kitting and bundling and identify if ShipBob can help there or not. But let’s say that you’ve looked across and you said, “I’ve got my secret sauce in how I put this stuff together and I want to keep that in house but I want to start actually offering finished goods as well and I want to outsource that portion because that part doesn’t really make sense for our team to spend all that time. I want to just pick, pack and shipping the finished goods, that’s easy, let’s outsource that to a 3PL but let’s keep the kitting and bundling, the assembly, the custom print on demand stuff or whatever might be that you’re doing in house, let’s keep that in-house.”
So, another hybrid scenario where that makes sense to have both. And then, yeah, the business side of things where you want to add a 3PL but you’re in a contract and you can’t really get out of your warehouse contract, you need to be there but you know you want to go long term with 3PL in the future and you’re just going to start making that move now but you’re going to keep yours in place for the time being. And then this goes with that last bullet, maybe you’re just also not sure. You’re dipping your toe in the water with a 3PL, you want to test them out, you want to make sure that two-day deliveries is happening and you’re hedging your bets. And so, you can set up a hybrid type scenario where you still have your warehouses in place, you’re not firing all your warehouse workers, you’re not getting rid of your WMS, you’re not ending your contract but you are testing out and moving to a 3PL to see for if it’s going to make sense for the long term.
So, there’s all the reasons why you might want to move to a 3PL and there’s a lot of reasons why you might want to do it in a hybrid way like I just outlined or just move fully as Meg outlined earlier. But as you do that, here are a couple things you want to be looking out for. So, the splitting of orders. Say you decide in that package goods or that non-perishable versus freezer item scenario where you’re not carrying the exact same SKUs across multiple locations, a 3PL carries one set of SKUs, your own warehouse carries the other SKUs, same thing with the kitting and bundling, there’s no product overlap as we call it here at Flxpoint. Splitting orders is fairly simple, you still do need something to sit in the middle like a Flxpoint or an order management system to split that. Even some of the more basic carts can do it if you’re just splitting off items that only exist in one location.
However, the second you have overlap and you have the same exact item, the exact same SKU located in multiple locations, you will need what we call distributed fulfillment. You’ll need a distributed order management system like Flxpoint to make that decision on where it should go and how to route it. And you should think through all those use cases, too. We actually just went through one of our lunch and learns earlier today of our routing tool or orchestration tool and talked about some really complex use cases where, some SKUs, you always prefer a certain warehouse unless it’s under this certain cost. If a different SKU might be over a certain weight, route it differently even if it’s cheaper. There’s all those little things that you might want to think through all your business use cases that you have, think about them, write them down. When you go evaluate the software or the systems you want to work with, make sure to walk through each one of those use cases.
If you can start where you just have separate items and don’t have a SKU overlap to start, maybe as you make that shift to a hybrid model, it’s not a bad idea and then slowly start thinking about how to move to a fully distributed model with overlap in your products across locations. And then, yeah, so I touched on number two here already, optimal order routing. So, thinking about those use cases, what does that mean? We see scenarios where it’s always the same algorithm, you always want to look for the cheapest and, if it’s within a certain margin of percentage of cost, move on to the next where it’s the closest or whatever it might be, it might be the same. But we see sophisticated use cases where, okay, we’ll do that unless it’s coming from California. If it’s coming from California or the order is being shipped to California, make these other considerations where, I don’t care if it’s the cheapest or the closest, it needs to go to this warehouse.
We see that with a Prop 65, it’s a chemical and it’s a compliance requirement in California where you can’t ship items that are from a California order, can’t be shipped out of the California state and so you have to ship from a different location in general. So, things like that. If you have sophisticated use cases, definitely walk through those with your whole MS or your distributed order management system solution consultant. Integrations. As you look at, ShipBob has a lot of plug and play integrations, whether they’re integrating to us or all the other partners that they mentioned, Shopify and things like that, look at what’s integrated, if it’s not integrated yet, how quickly can it get integrated and just really identify that that might be an added cost if it’s not all ready to go.
And then also understanding what does it look like, what fully passes back and forth from integration, does it support your use case, do you need custom fields of custom data being moved back and forth, country of origin and different data points like that, make sure to walk through those. When it comes to optimizing inventory available in location, ShipBob does help with that in their internal warehouses. From what I’ve heard, they do a great job with, like Meg said, putting the right inventory in the right location so that you are zone skipping or optimizing the zone shipping.
So, doing all of that in the ecosystem of ShipBob is great. If you do have now decisions to make across your internal warehouse, the ShipBob locations and then also dropshippers or brick and mortars, you will want to bring those into one system, be able to run the right reports to look at sales, understand where your customer is at and understand where they’re usually fulfilling those items from. And so, running that business intelligence on the inventory management when it’s across multiple different systems to different locations, that’s a consideration. If you haven’t done it before, then you’ll want to make sure you talk to your software provider about it and how that would look.
Transfer orders, typically easy. Once again, everything’s easy in one ecosystem, whether it’s your own internal warehouse ecosystem or your own 3PL ecosystem, everything’s under ShipBob. So, the second you go hybrid, it makes things difficult and there’s reasons to do it but, in all honesty, things are much more difficult because you’re having multiple systems talk to each other. The idea of moving things from your own warehouse into FBA or moving your things from your own warehouse into ShipBob or from ShipBob to FBA or whatever it might be, that’s the reality that we see from a lot of brands and a lot of retailers.
And so, think about that flow, hopefully use these six points here as a checklist if you do go look to go hybrid and implement this and then look for software to support it, transfer orders is something you don’t want to overlook. What does it look like if I want to just bulk move my order or, I’m sorry, my items from one warehouse to another, can you support that, is it seamless, can I track it, can I understand when it’s coming in, all of those data points are important to run your business.
And then, at the end of the day, the financial side. So, tracking and optimizing the fulfillment costs. When it’s hybrid, you’re going to have different, you’re going to have costs in one system, you’re going to have costs in another system, there’s probably pick, pack fees and things like that that might come from third party logistics companies. You’ve got your own cogs and your own overhead and warehouse team fees when it comes to your own internal warehouse. Dropshippers, a lot of times they charge a dropship fee and it might be dynamic. If you’re a retailer that’s dropshipping, you might get a fee if you only send an order for less than $50. But if it’s over $50, they don’t charge you a dropship fee. So, how do you account for that, do you have a system that treats dropshipper as a first class citizen and pulls those fees in and allows you to write workflow rules to account for that situation I just mentioned.
All those kinds of things should come into consideration. The idea is that you really do want to try to pull back a split out order across multiple locations. You send one to ShipBob, you send one to a dropshipper, you send one to your internal warehouse all from one order. If you split that out three ways, how do you get the cost back into one system to now analyze the profitability of that order and then also analyze the profitability of each individual fulfillment you sent of those three scenarios. And so, that’s what a distributed order management system should do, should help with, at least have the data there for you and should have a robust and open API if you want to make that financial decision and then analysis and something like some BI tool or your ERP.
So, that’s the last one that you’ll definitely want to consider if you want to make sure you’re optimizing your business for profitability. So, hopefully, those six really helped out with your consideration on maybe I want to start moving over to a 3PL, testing it out. I can’t fully move all of my goods over to ShipBob today, I need to split the orders and I need to have a hybrid approach, how do I actually start even evaluating if that makes sense for me and what software I need and what workflows I need to consider. So, that was really our hope with the webinar and having to open it up to questions here.
Thank you so much, Travis. Yeah, looks like we’ve got some questions in the chat. I think, Travis, you did a great job of calling out some of the key points that I brought up and I do want to briefly clarify that, when it comes to specific and case by case basis around what your fulfillment needs are, ShipBob, we probably are able to support it. So, if you need cold pack or you need certain kitting or whatever it may be, we can usually support and that rules engine and that hybrid approach of sending certain orders to certain warehouses is absolutely something we can support and knowing which order type to go to which warehouse, depending on what their value prop is is something that we can absolutely take into consideration.
So, in terms of questions, it looks like we have a question from Anthony. We deal with seasonal spikes, so my warehouse gets bogged down, can Flxpoint help with automatically sharing the load of orders between my warehouse and a 3PL?
Sure, yup, I see that one, too. Oh, yeah. So, when it comes to sharing the load of orders between my warehouse and 3PL. Yeah, I mean there’s no doubt that … In general, we’re going to route it through Flxpoint in the optimal way. If we’re talking about the scenario where you’ve got a spike, the thought there really is is it out of stock in one warehouse potentially. I don’t know, that’s almost a question I’d have to ask ShipBob real quick. You guys handle spikes so we really wouldn’t have to. As long as it’s in stock in ShipBob, we would just send those directly to you, there’s no, hey, let’s slow it down and send some others to my other warehouse. Not necessarily, right? As long as it’s in there and it’s the most optimal location to fulfill it from, we’re going to want to send all those orders to ShipBob. Is that fair, Meg?
Yeah, totally fair. So, as long as the inventory feed is set up so that you know where your inventory is compared to your warehouse and ShipBob. So, if it’s out of stock at your warehouse and we know that all the inventory is in stock in ShipBob, we can absolutely handle those fluctuations. So, concerns especially around the holidays or seasonal spikes, we have a lot of fitness and wellness products so January tends to be a really, really busy time for some of our client base so, right now, we’re dealing with spikes in that market, in that arena. So, absolutely. And the way that our WMS is set up is to automatically prioritize the closest warehouse to the end customer. So, if you have distributed across ShipBob’s network, if your end customer happens to be in California and you have inventory in a warehouse in California, we’ll ship it from the California warehouse to save you that money.
We have a good point here too which, just in general, as you evaluate software that might sit in between you and ShipBob, where the sale happens, your Shopify store or wherever and ShipBob, in those spikes, you need to make sure that the middleware, the order management system that’s in the middle can handle the order of volume from an a API perspective and can route it through and doesn’t get bogged down or slow down and it goes directly to ShipBob and there’s not any kind of throttling. So, definitely, as you evaluate software, talk about their API, talk about the throttling, talk about the order, the customers that they have right now today and what their order spikes look like.
We’ve seen brands come to us and say, “Hey, our current infrastructure can’t handle when an influencer decides to put us up on their TikTok or Instagram or wherever it might be and then we get this huge influx of orders.” So, another consideration as you look at software out there to make sure they can handle, not only from fulfillment like ShipBob can, but also from a technical API throttling perspective.
Cool, all right. See if we have any others. I don’t see any others in there. We still have a couple people hanging around. You’ve got any questions, feel free to throw them in. We’re going to jump here if we don’t see any others out there. Looks like we did have just one come in. We are a dropshipper of auto parts, looks like it got cut off halfway in the question. Angelo, it looks like half your question is there, when to increase is where it ends. Okay, let’s just assume, dropshipper of auto parts, want to increase our listings, can we use Flxpoint or ShipBob?
Yeah. So, if you’re the retail dropshipper and you have auto parts … So, it’s funny that you say this, Angelo. So, I literally just got off a customer call this morning, they work on commercial vans like HVAC and different commercial business vans where they supply them with somewhat auto parts in some cases and other equipment along the way and he is the retailer in this scenario and he works with brands. And so, they use ShipBob and they also use us, they’ve actually built their integrations but they have ShipBob and they have Flxpoint. And the way they use both of us is they will integrate all of their dropship suppliers with Flxpoint by using our no code mapping tool, our EDI specs, our API integration, maybe our Shopify to Flxpoint integration to pulling their vendor Shopify inventory directly into Flxpoint. So, they use that for their, let’s say, I think 10 to 12 vendors and then I saw he had the ShipBob source integrated as well and I asked him what he was using that for.
He said a couple reasons but the first thing he said was we had a manufacturer that had a really great set of products that just could not fulfill in time. They just could not keep up to the two to three day promise that we give to our customers and so we said, “You know what? We know we’ve got demand here, let’s just buy these wholesale and let’s put them in a third party warehouse.” He said 95% of their stuff’s dropship but they’re actually increasing more and more of the inventory they’re putting in ShipBob as they learn more on what the demand is for the certain products they know they’re going to be able to sell. And so, he used that for that reason specifically and, really, mainly.
And so, that was the main reason, they couldn’t fulfill on the SLA that they had given their customers. And the secondary reason was, once they started doing it and they vetted it and they said this is working, they just wanted more margin. And so, even if the dropshipper might be able to fulfill within the SLA of two days or three days, they went and were starting to buy wholesale for their top sellers and they were putting those in ShipBob as well to make more margin per order. So, those are the two reasons or two ways you would use both of us in that scenario. All righty. Meg, anything else from your side? I think we touched on a good bit today.
Yeah, we covered a wide, wide swath. So, thank you so much, Travis, for hosting. Thanks, everyone, for attending.