Less is More: Package Consolidation for your Ecommerce Business

What is Package Consolidation?

Package consolidation is an efficient shipping method where multiple items of a single order are packed and sent in one package. This approach is particularly beneficial for ecommerce businesses aiming to streamline their fulfillment process, reduce shipping costs, and enhance customer satisfaction.

Understanding Package Consolidation

Package consolidation involves combining multiple items from a single order into one package. This method is particularly effective for orders with multiple small items, where it can significantly reduce shipping and packaging costs. By sending fewer packages, businesses not only save on shipping fees but also contribute to a more sustainable environment by reducing packaging waste.

At its core, package consolidation is about efficiency and optimization. When customers place an order that includes multiple items, these items are grouped and shipped together in one package. This method is standard for smaller items, where the expectation is to receive everything in a single delivery. However, for larger, heavier, or more fragile items, the decision to consolidate needs careful consideration to ensure product safety and cost-effectiveness.

The Advantages for Ecommerce Businesses

Choosing package consolidation offers significant benefits. Primarily, it aligns with customer expectations for a simple and unified delivery experience. A single package means one tracking number and a singular, more enjoyable unboxing experience. Economically, consolidating packages can lead to substantial savings on shipping costs. Shipping carriers typically impose base fees for each parcel. By consolidating packages, these fees are applied once per order rather than per item, potentially saving businesses considerable amounts over time.

For example, 3PL Center has extensive experience in shipping e-bikes, a popular item that often comes with additional accessories like extra battery packs, helmets, and bike packs. By consolidating these items with the e-bikes into a single shipment, we significantly reduce packaging and shipping costs, offering substantial savings to our clients and positioning ourselves as a leader in e-bike logistics.

Ideal Scenarios for Package Consolidation

Ecommerce businesses benefit from package consolidation in many different scenarios including when shipping:

Complementary Products: When items are frequently bought together, like a camera with its case and strap, it makes sense to consolidate these into a single shipment. The fulfillment warehouse can provide kitting for these items easily.

Bundled Offers: Offering products as a bundle in your store encourages their joint purchase, making consolidation a logical step.

Free Shipping of Small Items with Larger Purchases: Including smaller items in the shipment of a larger product can often be done at no additional cost, especially if the smaller items do not significantly affect the dimensional weight.

Maximize your DIM Factor with Package Consolidation

Items that are large in size might be subject to charges based on dimensional weight, or DIM weight. This method calculates a “weight” by considering the package’s dimensions. To determine DIM weight, carriers multiply the package’s height, length, and width, and then divide the result by a DIM factor. When the calculated dimensional weight exceeds the actual weight of the package, the DIM weight is used for billing. In such cases, consolidating packages can be an effective strategy.

Take, for instance, the scenario where you’re selling e-bikes along with various accessories. Suppose the e-bike weighs 35 pounds but has a DIM weight of 40 pounds. If a customer orders an e-bike along with a helmet, battery, and bike pack, which altogether weigh 5 pounds, you could potentially include these accessories in the e-bike’s package without incurring extra shipping costs, given they fit within the original packaging dimensions.

When to Ship Separately

However, package consolidation is not always the best approach. Specific scenarios warrant separate shipments to avoid additional charges or potential damage:

Dimensional Weight Concerns: If combining items leads to a higher dimensional weight, separate shipments might be more cost-effective.

Heavy Combined Weight: Packages exceeding certain weight thresholds may incur significant surcharges. FedEx and UPS surcharges may include overweight fees and oversize fees.

Fragile Items: Delicate items might be at risk of damage if not shipped individually with appropriate protective packaging.

Box Optimization

Closely related to package consolidation is box optimization, which focuses on selecting the most appropriately sized packaging for each order. This approach minimizes wasted space and materials, further reducing shipping costs by avoiding oversized packages that can incur higher fees due to dimensional weight pricing.

Crafting Your Shipping Strategy

Developing a shipping strategy requires careful analysis and planning. Considerations include choosing the right carrier, deciding on warehouse locations for optimal delivery times, and selecting the most suitable packaging materials to protect your products while minimizing costs. Running through various shipping scenarios with tools like spreadsheets can help pinpoint the most cost-effective shipping methods, including when to consolidate and when to ship items separately.

Effective package consolidation and box optimization require a strategic approach. Factors such as item size, weight, and fragility must be considered to ensure that products are not only packed efficiently but also arrive safely at their destination. An advanced WMS can support these decisions by providing real-time data and analytics, enabling businesses to make informed choices about how to best consolidate and package their orders.

Leveraging Expertise from Your 3PL Provider for Package Consolidation

A third-party logistics (3PL) provider can be an invaluable resource in refining your shipping strategy. With expertise in logistics and access to favorable shipping rates and materials, a 3PL can provide insights and solutions tailored to your business needs, helping you navigate the complexities of ecommerce fulfillment.

3PL Center Advantage: Integrating Advanced WMS Features

In the area of ecommerce fulfillment, optimizing your shipping strategy extends beyond just consolidating packages. It involves harnessing the power of technology to ensure precision, efficiency, and transparency at every juncture. A key part in achieving this is a state-of-the-art Warehouse Management System (WMS), a hallmark of the service offerings at 3PL Center.

3PL Center’s WMS is equipped with advanced features tailored to enhance the fulfillment experience:

Box Optimization: Our WMS includes a box optimization feature that automatically selects the smallest, most cost-effective box for each order. This not only minimizes material waste but also reduces shipping costs by ensuring your products are packed in the most efficient manner possible.

Address Verification: Precision starts with accurate shipping details. Our system rigorously verifies addresses, mitigating delivery delays and eliminating unnecessary address correction fees.

Pallet Build-Out Visibility: We provide a transparent view into the composition of each pallet, including the specifics of what’s inside every box. This granular visibility assures clients and their customers about the status of their shipments, reinforcing trust and confidence in the delivery process.

Rate Shopping: Our WMS includes a rate shopping feature, ensuring that you always secure the most cost-effective shipping options available, thereby optimizing your shipping costs without compromising service quality.

Tracking: Real-time tracking capabilities keep you informed about the status of your shipments every step of the way, offering peace of mind and enabling proactive customer service.

Reporting: Access to comprehensive reports allows for data-driven decision-making, helping you to understand your logistics operations better and identify areas for improvement.

Inventory Management: Effective inventory management is crucial for order accuracy and customer satisfaction. Our system keeps a meticulous record of your inventory, ensuring that stock levels are maintained optimally to meet customer demand.

By integrating these advanced WMS capabilities, you not only streamline your fulfillment processes but also elevate the customer experience through enhanced reliability and transparency.

3PL Center: Your Partner in Ecommerce Fulfillment

At 3PL Center, we understand the intricacies of logistics and the importance of a streamlined fulfillment process. Our advanced warehouse management system (WMS) empowers our clients with comprehensive management capabilities. These include inventory tracking, reporting, and rate shopping, ensuring visibility and transparency across all logistics operations. Thanks to our high shipping volume, we can offer our customers a more favorable DIM factor, effectively reducing shipping costs for oversized items. Our strategic warehouse locations across the country facilitate 2-day shipping, making timely deliveries a standard practice for our clients. Partner with 3PL Center, and leverage our expertise and resources to enhance your shipping strategy, reduce costs, and exceed customer expectations.