Dhruv Saxena is a Co-founder at ShipBob a tech-first 3PL who’s latest round of funding has valued them at over $1B. They have over 24 fulfilment centres throughout the USA, UK, and Australia, and with plans to open another 35 this year – I’m amazed, and very grateful Dhruv has time to come and chat with us!
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How ShipBob Got Its Start
Before ShipBob, Dhruv and his co-founder were running an eCommerce business for themselves.
Being engineers, they had everything automated in their business except the part around shipping. For this, they would run to the post office and wait in line to mail out their packages.
Realizing they were spending a lot more time at the post office, they tried to figure out how other brands did their logistics. Not finding a solution suited for small and medium-sized business, they decided to start ShipBob to solve their brand’s own pain point and serve other businesses as well.
Growing To What It Is Today
According to Dhruv, ShipBob’s growth is a cumulation of 2 factors:
- New merchants coming on board and joining the ShipBob platform
- Existing merchants, which actually grow much faster than an average eCommerce business might
Dhruv says when they bring merchants on board, they do what they can to help them be successful because this ultimately contributes to ShipBob’s growth.
Automating The Workload
The largest growth in eCommerce is in the small to mid-sized businesses, and logistics happens after these brands actually get formed and find an audience that they need help on the fulfilment side.
What contributed to this and the reason why logistics hasn’t been able to catch up yet in terms of automation is the quick growth of platforms like Shopify and WooCommerce that made it simple for anyone to start an online business.
This is where ShipBob found the opportunity to get started with tech-driven logistics.
What Shipping Strategy Can Help Brands Overtake The Competition?
Having time-definite shipping windows help reduce the number of abandoned carts.
Being able to tell your customers when to expect their products to be delivered can have a pretty dramatic impact on conversion.
More Than Just A Cost Center
Dhruv uses an analogy to drive home this point.
Ten years ago, you had to buy your own laptops and servers to build your own data center. Eventually, cloud providers became available and fixed cost became variable cost, making businesses more profitable.
Outsourcing fulfilment works the same way. It utilizes a pay-per-use model, and as the fulfilment provider makes changes to its software, businesses get access to free upgrades.
Make fulfilment a variable part of the business equation by outsourcing it, instead of setting aside budget for fixed costs.
How 3PLs Help In Getting Repeat Purchases
The best brands have thought through the post-purchase experience and provide their customers with the full life cycle of the package.
With ShipBob, consumers can get email or text alerts that give them the status of their package up until they receive it.
And because the unboxing experience really matters, a 3PL being able to provide relevant shipping information is an advantage.
Free Shipping
There is a correlation between free shipping and more conversions from add to cart to checkout.
Find out if your merchandise value allows you to offer free shipping and you’re making money off of that transaction from a cost of acquisition perspective.
Otherwise, offer free shipping for above a certain threshold, or for bundled items that are at a price point which allows free shipping.
What’s Next In The World Of Fulfilment?
Dhruv mentions 2 things:
- Consumers will always want their online purchases to arrive sooner, and for cheaper shipping fees or even free.
Majority of ShipBob’s strategy is focused on taking out cost from the supply chain. This will allow their merchants to offer better product price points or absorb shipping.
Another target area is faster shipping time. The company’s expansion to more locations opens up the possibility of faster and cheaper shipping.
- Customization, which reflects who you are as the brand, will continue to make consumers buy from businesses directly rather than from marketplaces.
eCommerce Book Top Tip
- High Output Management by Andrew Grove
eCommerce Traffic Top Tip
- Put focus on organic marketing such as thought pieces, posts about topics that are relevant to your customers. It may take a long time to build SEO credibility but once you have it, it will be very hard for someone else to displace you.
Tool Top Tip
Growth Top Tip
- Have a very clear sense of what your cost of acquisition is, as well as the potential lifetime value of your customer. Knowing these will make it easy for you to deploy more capital in helping you scale to a thousand orders per month.
Interview Links
Related episodes
- Growing a start up to 2,000 orders a month in 1 year with Tom Mucklow from Aurora Mornings
- Marketing Foundations: Your Team, how to work remotely successfully with Shauna Moran
- Content Marketing: Outreach and Digital PR tips with Spark Toro’s Rand Fishkin
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ShipBob is a 3PL that offers fulfillment solutions for over 5.000 fast-growing online brands. Their international fulfillment network and best-in-class tech means that, whether you store inventory in one or multiple ShipBob fulfillment locations, you have full visibility into the entire fulfillment process, plus access to data, reporting, and tools to manage your orders and inventory in real time — all from a single dashboard.
By partnering with ShipBob eCommerce MasterPlan listeners get $500 in free shipping credits at shipbob.com/masterplan
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