Global ecommerce: China, APAC, and opportunity

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Everyone’s talking about China. Something about messing with its currency, erratic stock markets, Donald Trump’s statements, etc, but we only care about the ecommerce, right? While the global market plays Roller Coaster Tycoon, ecommerce seems to be playing Chutes & Ladders… but without the chutes. Research suggests significant opportunities out there to reach an international audience for delicious growth. And it’s not only independent market research, there are ecommerce companies advocating for merchants to focus on a global market, especially China. So let’s see how they’re trying to get you global.

Persuasion through performance

eBay, the marketplace giant, is just one of many ecommerce related businesses pushing for merchants to go global. After launching their Global Shipping Program more than a year ago, eBay clearly began encouraging a international scope for their sellers, but they’re using their own research to persuade as well. They claim that between 2010 and 2014, sellers focused on a domestic market witnessed a sales increase of 58%, while those with at least half of their sales arriving through international buyers swam around in a 91% growth during the same period.

That’s a huge difference in performance. If we’re giving grades here, that’s an F versus an A, but, obviously, the biggest difference between domestic and international sellers was that “more than half of sales coming from international buyers” part. To any ecommerce entrepreneur, a nearly 100% increase in sales over a four year period looks enticing, but the first question is how to even begin selling at a global level. According to both eBay and Alibaba, mobile is the answer.

Mobile motivation

Chinese ecommerce king Alibaba, which launched its IPO nearly a year ago, reported that nearly 50% of its revenue in China came through mobile devices at the end of June. Most of its mobile success came through use of its apps. While many ecommerce merchants don’t build apps for their stores and tend to prefer mobile sites, it goes to show that Chinese consumers are definitely purchasing at a mobile level by investing more time into an app as opposed to an immediately accessible website.

And Alibaba’s mobile statements are reflected by research on Chinese ecommerce sales through eMarketer. According to the market research firm, ecommerce sales via tablet, smartphone, and other mobile devices in China accounted for 49.7% of total online retail sales. And they’re predicting that mobile will make up 71.5% of total ecommerce sales by 2019.

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It’s important to emphasize that this research is based in China, not the United States. Although digital buying (and digital behavior in general) is far more common in the Asia-Pacific area, eMarketer expects United States ecommerce sales to increasingly come from mobile devices, with 22% of online retail purchases coming via mobile in 2015.

Does it pay to buy and sell globally?

If you still refuse to consider selling in a global market, maybe some money people can change your mind. Online payment processing company PayPal is doing its best to get you into China, offering free overseas returns just in case the number one nation of America doesn’t quite have number one quality products. But that’s not all – to get ecommerce merchants over their fears of high cross-border shipping costs, they’ve also got some data for further seduction.

According to survey data collected by PayPal and Nielsen’s Harris Poll, much of the reason why Chinese consumers are buying from the United States is because they believe that American goods have a higher quality, a better price point, and are more authentic. The bulk of respondents purchased apparel, consumer electronics, as well as cosmetic / beauty products, and the average order value of each was $485, $1229, $512 respectively. Those are some pretty large order values, even from the largest country in the world.

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APAC’s growth track

But it would be rude to focus completely on China – there’s more to global ecommerce than just one country. It’s really the Asia Pacific market (APAC) that’s flourishing as a whole, and, according to more research by eMarketer, it will be the chief reason for global success in the coming years with an expected 25% year-over-year rise in global ecommerce sales. A combination of population, greater willingness to purchase digitally, and growing economies are helping to fuel the region’s own 35.2% year-over-year increase in ecommerce sales.

Needless to say, it’s an area worth looking into. Long story short and without all the numbers, consider selling on a global level if you want a boost in sales. And if you’re wondering how best to begin going in that direction, start with providing a seamless mobile experience. Expanding global isn’t as huge of a deal as it sounds; this isn’t some brick & mortar business opening an office in Shanghai. All you need is a functional mobile site, some solid quality products, and the courage (or money) to ship abroad.

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Product kitting with kittens

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Order fulfillment should be synonymous with efficiency, since it’s all about getting the product to the consumer as quickly and cost-effectively as possible. But, obviously, some orders have multiple components that must be bundled together if the order is going to get there promptly and cheaply. Fur-tunately, product kitting is there to collect all parts of an order to be shipped at once.

Putting it simply, kitting is the practice of assembling individual items into sets that can be shipping as a single order. They can be created on-the-spot as an order shows up, or pre-assembled for fulfillment. Kitting tragically means less boxes for cats to sit in, but it’s litter-ally necessary to avoid cat-astrophic costs in-purr-ed from having to individually ship multiple pieces of an order.

Look what the cat shipped in

Kitted orders tend to consist of items that are regularly shipped out as a set. For example, think of a Cat Pack that bundles some high-inducing cat nip, a fake mouse, and a ball of yarn into a single order, or all the pieces needed to create a cat tree. Kits can be used to sell similar items, and some businesses kit items specifically to rid themselves of hairball products that just wont sell.

Let’s say you want to get rid of your athletic cat racing gear because the cat racing scene is suddenly out of style and the cost of inventory is getting a little much. Some merchants may try clear those units by creating a spectacular Athleticat bundle that includes three cat-protein biscuits, a single athletic cat suit, and a noise-making rolly ball. Ideally, the bundle is a steal, customers give you a round of ap-paws, and they sell fast. But instead of shipping a single Athleticat bundle, now you’re really dealing with five SKUs that must be kitted together and sent to the customer as one order.

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Kitting is done in a variety of ways depending on fulfillment method. If you handle fulfillment in-house, it’s a DIY type of deal – pick and place the products together for shipping – but there’s more than one way to skin a cat when it comes to fulfillment. Regardless of what type of fulfillment you have, the first starting point is with the manufacturer, so check in with them to see if they’re willing to group product components before they’re shipped to wherever your fulfillment location is. If you’re meowtsourcing fulfillment, it follows the same line – ask if they’re OK with setting up orders into kits prior to shipping them off, or consider using one already offering the service. Both depend largely on your relationship, and it never hurts to ask “Help meow-t!” to a 3PL you’re already paying.

Letting the cat out of the box

It’s not really a secret that product kitting is such a big deal for fulfillment, especially considering its benefits are about as prolific as cat pictures on the internet (except not really). Fulfillment warehouses occasionally offer product kitting, and order management systems generally include kitting as a feature, since it’s quite useful for purr-suading business owners to try the software. But if you still need more convincing, below are some reasons why product kitting is a must for any ecomeowce meowchant:

Shipping mistakes are hisstory – the less orders, the less chances of something going wrong. It’s as simple as that – if you kit a bunch of products, you have a single order going out that reduces your risk of making a mistake in the fulfillment process. And if you’re dealing with a kitted order, it’s likely that your printed shipping labels will be updated with the products’ weights and measurements in mind. Any reduction in the time it takes to fulfill an order is a good thing.

Clawsome packaging – instead of having to pack individual products into individual shipping boxes, you’re turning multiple SKUs into one. Because of that, there are opportunities to create custom packaging that can further improve your bottom line. Consider designing shipping boxes that reduce weight or size to save even more on shipping costs. If you have a top-selling product bundle, set up a routine method of product kitting to standardize the process. The end goal of all this is to build up an efficient, cost-effective machine of fulfillment.

Furry fast assembly – at its most basic level, order kitting speeds up the fulfillment process which saves time and money. As you send out more product kits in time, the process gets more and more streamlined, and it’s less work on you or your fulfillment providers’ end (which means even more cost savings). Sorry if this is getting repetitive, but the effectiveness of product kitting is real, and it will have you smiling like a Cheshire cat.

 

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Thank mew for reading!

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Announcing Ordoro’s integration with Fulfillment By Amazon (FBA)

Ordoro is now integrated with Fulfillment By Amazon (FBA)

Merchants like to get their fulfillment done as efficiently and effectively as possible. And who’s better at that than the ecommerce giant Amazon? We’re pleased to say it’s now possible to connect an FBA account with Ordoro to better streamline orders, and sync inventory.

What exactly is FBA?

Fulfillment By Amazon is essentially an outsourced fulfillment service. Send any or all of your inventory to FBA, and they’ll keep it safe and sound by warehousing it for you. When a customer shows up to your site and purchases a product stored with FBA, we’ll instantly shoot them an alert to the warehouse, and they’ll ship the product out. We’ll also take the tracking number and send it your way to keep you in the loop.

We’ve got the hook up

Many popular ecommerce platforms are unable to directly integrate with Amazon’s FBA service, but we’ve got your VIP ticket. Ordoro is friends with all major ecommerce marketplaces and shopping carts, and we act as a middleman between your sales and fulfillment channels. So, just plug in your information, and link your Ordoro account with your sales channels and FBA account to get started.

Some ecommerce store owners appreciate variety, using hybrid models of inventory that store product in-house, and at an FBA warehouse. Some even use a handful of ecommerce platforms to sell their goods. We’re pleased to say that this integration is compatible with any inventory and shipping strategy.

Keeping you in sync

We’re all about inventory and shipping here, so you can say “Bye Bye Bye” to those fears of losing track of how much product you have. With the integration, we’ll synchronize your FBA stock levels. If you’ve got 100 units of product stored with FBA, Ordoro will show the same. And if you add 50 units, we’ll show 150. You can also configure your Ordoro rules to determine which of your products are to be shipped from FBA.

FBA is only one example of how Ordoro’s API can be used to connect to a 3PL warehouse, and the integration model can be used to link with any other 3PL fulfillment center. We’re excited for what’s to come as we continue providing top-notch inventory and shipping software that helps you focus completely on selling.

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Protect your loved orders

 

 

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Like a bad neighbor, your product’s not there

An order goes through a perilous adventure as it journeys to a customer. It travels through supplier channels, shipping carriers, and is placed in multiple hands before it arrives at its destination. Once it makes it, the package sits by a doorstep of an apartment exposed, alone, and hiding a purchased good inside. Anybody walking by surely thinks, “I could take that if I wanted to.” Just like that, an innocent product is snatched from its destiny, forced to endure a life where it doesn’t belong.

Nothing guarantees that your beloved order will make it into the warmth of a customer’s home, but there’s something called shipping insurance that helps.

Is your order in good hands?

Obviously, orders are a cost on the merchant’s end, with margins depending on a successful arrival. But there’s always a chance they either won’t get there at all, or they’ll show up beaten and bruised due to a mishandling as they hop around during the fulfillment process. Fortunately, shipping insurance exists to ensure you get your money back; it’s like life and health insurance for your goods.

Living up to its second word, shipping insurance is filled with somewhat confusing caveats and exceptions depending on a myriad of details. Fortunately, most major shipping carriers are relatively similar in terms of their coverage. Below are some general descriptions of what you can expect by provider (as of this date):

USPS

USPS separates its insurance based on how the order is shipped – whether it’s Priority Mail Express (fast) or Priority Mail (a little less fast). If the order’s value is $100 or less on your end, you’re guaranteed $100 worth of coverage when shipping through Priority Mail Express, and $50 for Priority Mail.

For orders greater than $100 that you want coverage on, USPS charges based on the value of your order. Take a look at this USPS shipping insurance chart for more information on fees by order value.

FedEx & UPS

FedEx is slightly simpler than USPS. They prefer not to tamper with insurance at all, but do offer up to $100 worth of coverage for any damaged or lost shipment (like USPS). Instead of insurance, they focus on what’s called declared liability – if the value of an order is above $100, write in on the shipping label, pay a fee, and FedEx reimburses you if something goes wrong. Their rate is 90 cents per $100, but there’s a minimum fee of $2.70.

UPS is in the same boat as FedEx – up to $100 reimbursement on shipments with no declared value. When the order value enters the triple digits, declared value determines the shipping insurance fees, and they’re exactly the same as FedEx.

Please note that the above information is broad to an extent, and each carrier has their own rules with exceptions and qualifications regarding coverage and liability. Click each subhead to view their sites for specifics.

Pieces of mind

Let’s say your darkest fears come true, and your orders are confirmed to be lost. Now it’s time to piece together all documentation on them for a claim. You will need any proof you have to justify your claim: pictures of the product before it left, where it was shipped from, it’s destination, as well as proof of insurance and order value. Occasionally, a product isn’t lost, but arrives damaged or incomplete instead. The claims process is pretty much the same. Simply provide proof of the damage or loss of contents when filing a claim. The carriers can be a little slow in getting back to you.

Although it’s typically worth the added fees, handling your shipping insurance is about as annoying as Flo from the Progressive commercials. But if you just aren’t a fan of dealing with shipping insurance at all, options like Shipsurance exist to do it for you. They’re partnered with us, and provide discounted shipping insurance coverage along with claims processing so you can focus on sexier parts of your business, rather than grinding through backoffice chores.

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Seriously, it’s true: order management systems really do help

Last week, we covered part of Software Advice’s research on how integrated order management systems can impact ecommerce performance. But that was only the first wheel of their findings; let’s tackle the rest.

The wheels on the ecommerce business go round and round

There are multiple parts to an online retailer’s business that keeps it rolling, but which is most used along with an order management system? Software Advice, a software consulting company, asked merchants which order management integrations they used – online stores (Amazon, eBay, Etsy), shopping carts (Shopify, Bigcommerce, WooCommerce), and shipping services (USPS, FedEx, etc). The options were likely ranked so closely because merchants use a variety of integrations, many of which are interconnected with one another.

Most Common Order Management System Integrations

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It makes perfect sense that online stores like Amazon or eBay would be the most utilized order management integration, since a sales channel is pretty much the starting point for wheeling and dealing in the ecommerce world. As time goes on and a business grows, a logical step towards increasing sales, expanding the business, and building the brand is opening an additional sales channel, and merchants are likely opening online stores rather than shopping carts because marketplaces typically already have the audience ready-to-go. When that sales channel is launched, it can simply link with the order management tool along with the others.

But shipping services aren’t a third wheel to an ecommerce business by any means. If you’re going to open various sales channels, you will likely need a shipping service integration to control the time spent getting orders out. They’re a close second to online shopping carts by 1%, and that’s likely because they’re nearly essential for merchants looking to reduce the administrative nightmare of sending out products. Plus, if an order management is dealing with orders, it may as well help handle shipping too.

Never asleep behind the wheel

No ecommerce merchant is going to risk being asleep behind the wheel of their inventory levels; they’re constantly monitoring how much of a product is in stock, how much money is sitting in inventory, and their ability to fulfill. As a result, an order management system that’s able to maintain high visibility of inventory throughout all your channels in a single location is pretty important.

When Software Advice’s research covered how an order management system integrated with shopping carts effected aspects, like inventory visibility, time to process and fulfill orders, the results showed significant positive impacts:

Effects of Order Management Systems Integrated with Shopping Carts

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It makes perfect sense that an order management system allows for increased visibility, especially for shopping carts, because its most basic purpose is to track all orders in one place. And that boosted visibility can feed into other benefits, like better order accuracy, and improved turnaround time in processing and delivering. At the end of the day, order management systems are able to offer the above perks due thanks to their ability to integrate with different cart providers that would otherwise be isolated from one another. If you’re on Shopify and Etsy, the two aren’t going to link together, but each’s order information can be collected in one place: the order management system.

Wheel… of… Integrations!

If an ecommerce merchant is going to invest in an order management system, they won’t be spinning a wheel and landing on one – they’ll make their choice based on compatibility with their channels. That’s why order management systems typically integrate with as many sales and supplier channels as feasible for them. The more integrations they’ve got, the more customers that can potentially use the product. Take a look below at just what integrations most major providers support:

 

 

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Vanna White did a poor job finishing this puzzle for us, but you get the point (integration with QuickBooks is also a future integration for us!). Most leading order management systems thrive off their ability to connect with a variety of marketplaces and shopping carts, and if they call themselves ‘multi-channel,’ they had better link with as many channels as possible. Because of that, the phrase “play nice” is the name of the game.

All the wheels in motion

Order management systems are simply another solution in the ecommerce ecosystem that keeps all the wheels of an ecommerce business in motion. Long story short, they exist to help a merchant better manage their online store, and they’re especially important for multi-channel retailers that need to collect information from a variety of channels. Below are four main perks to order management systems that online retailers generally experience:

Business visibility: with a comprehensive view of your orders across all your channels, it’s far easier to know exactly what’s occurring in your business, and where.

Task automation: instead of plugging in data from each channel into one place for analysis, order management systems automatically compile it in a single app.

Order accuracy: systems integrated with channels reduce the chance for a merchant to mix up an order as they operate on multiple carts and marketplaces.

Turnaround time: at the end of the day, regardless of integration, order management systems deliver time-saving benefits to merchants that speed up the daily grind of handling orders.

 

 

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Announcing Ordoro’s API

Ordoro’s public API is out and about (and has been for some time now)! All parts of an online store – from sales channels, 3PL warehouses, suppliers, to developer teams – can integrate with us to extend the functionality of Ordoro.

Ecommerce is certainly a growing market, and customers have expressed interest in integrating with the fresh sales and supplier channels that sprout up consistently. But because of time constraints on our end (we would love to integrate with everyone and anyone), it hasn’t always been possible.

Our API is a step towards fixing that. Now, customers can use it to build custom integrations that are tailored to their needs, whether they want to connect Ordoro with a specific warehouse, or mobile sales channel.

There are four key areas where we expect our API to deliver: non-hosted online stores, sales and supplier channels, and applications.

Custom-built online stores

Some merchants are very DIY type of people. Their stores are, unique and custom built, which means they don’t have access to plug and play integrations with an app like ours. Fortunately, our API sets the framework for transferring data between any store and Ordoro, in the same way we communicate with large, hosted platforms.

Sales channels

You’re probably aware, but Ordoro is integrated with all major sales channels, from marketplace to shopping carts. But other forms of selling exist out there, with many merchants landing sales through social media, brick-and-mortar locations, and POS (point-of-sale) systems. Now that we’ve got an API, it’s possible to put the pieces of each and every one of your sales channels together in our app.

Suppliers and 3PL warehouses

And it works on the other ‘s’ channels as well – Ordoro’s API can also be used to keep you in-the-loop with your supplier channels. Merchants’ fulfillment centers and warehouses are now able to integrate with us to ensure that all orders and inventory feeds are being shared and monitored, even in the back-office.

Applications

At the end of the day, our API is a toolkit for developers to build apps that simplify ecommerce back-office operations. Through that, it’s possible for other complimentary service providers to hook up with us and create stellar apps that solve merchants’ needs.

We’re looking forward to how our API will be used, and we consider it to be a stepping stone in our mission to create the #1 shipping and inventory management app in the world.

Are you a developer itching to get your hands on our API? Check out the documentation.

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The back-to-school selling (and shipping) bash

As Fall slowly approaches, businesses start seeing red and green with the holiday season on the horizon. But won’t people please think of the children?

Back-to-school season – from elementary school to college – is in full swing, and it’s certainly not a time for online retailers to take a recess before class. In fact, performance during this first two months prior to the holiday selling season is a nice report card showing what’s going well and what can be improved. But let’s look at the chalkboard for some interesting ecommerce trends from last year, and what to expect in 2015.

Take notes

The National Retail Federation (NRF) released its back to-school and back-to-college surveys with a whole lunch of information on changing purchase habits, comparisons between school and college shopping, sought after products, and seasonal ecommerce spending to name only a few. Crack open the presentation below for some of the most important insights pulled from the surveys.

Back-to-School 2015 Cheat Sheet from National Retail Federation

And if you aren’t convinced that back-to-school time is a legitimate season of ecommerce selling, eMarketer has some back-to-school retail statistics of their own for show and tell. From July to August alone, the market research firm is predicting a 14.4% growth in online retail sales that will end up accounting for 16.5% of total online retail sales for the entire year. But enough of the numbers, here’s for you visual learners:


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Back-to-shipping

With the rise of ecommerce giants like eBay and Amazon, shipping has become a point of competition for consumer attention. Along with Wal-Mart, it’s reported that Target is offering free shipping in an effort to challenge Amazon. Consumers are increasingly going online to buy, and free shipping is a strong motivation to plug in those credit card digits into your online store’s payment portal.

Offering free shipping for customers is worth a thought, and implementing it during the back-to-school season is a solid practice test to view its effectiveness for the upcoming holiday season. It certainly doesn’t have to be free shipping on everything – you can choose to offer it on specific products, as well as orders at $35 and above, or any other threshold that works with your margins. Unlike middle school, you’re free to take a calculator out and do the math to figure out which of your products is a good selection for free shipping, as well as what order price point is the best fit for it.

The first day of school

Consider the back-to-school season as the first day of school; products need to be dressed to impress. And first impressions are especially important if you’re trying to keep a new customer coming back, as you should. When they hit the buy button, they already understand your price points and know of your site, so the next step is to burn your business into their brains like a nun forcing a student to write your company name on the chalkboard 40 times. And one of the best methods of doing so is through your packaging.

Customers already know the product that’s coming to their door, but it’s important to exceed, or at least meet, expectations. Product packaging is an excellent way to ‘wow’ a customer, or at least raise an eyebrow and create some sort of memory. Unpacking a product is just as important is wrapping it up, and it can definitely add to a customers overall experience. Below are some tips for ratcheting up your product packaging depending on method of fulfillment:

In-house:

Merchants with in-house fulfillment have as many options as a multiple choice question when it comes to product marketing, because it’s DIY. Feel free to add your own personal touches to the packaging, whether that’s logo-infused tissue paper or boxes, a custom-made thank you letter, or your standard business card. Another option is to include coupons or discounts to coax a customer into returning at a later date, i.e. the holiday period. You have complete control over your shipping and fulfillment, so take a timeout and build your branding.

Just-in-time:

Just-in-time fulfillment is essentially the same as in-house, but on a stricter deadline. You aren’t sitting on inventory, and you’re ordering and shipping off products as you make sales, but it’s always critical that you be punctual and on time to your customers’ doorstep, just like class. With all the extra space, consider stocking up on all the packaging you could possibly need. Although you’re purchasing products from vendors on the fly, it’s a good idea to do the opposite in regards to your packaging supplies. The second that product hits your HQ, wrap it up nicely, add your personalization, and ship it off before you’re tardy.

Dropshipping:

A dropshipping fulfillment method depends largely on your relationship with that specific channel. Your options are limited here, as you’ve basically signed up for a no-touching policy when it comes to shipping, but the possibility to add some personalization isn’t off the table. Consider checking in and probing for an opportunity to add a personal flair to your suppliers’ fulfillment process. Just raise your hand (or your phone) and ask a question to see if your channels are willing to work something out, whether it’s throwing in some business cards, or using custom packaging.

Outsourced:

With outsourced fulfillment, it’s along the same lines as dropshippers, but with slightly more leeway. You’re paying these guys to do your homework for you, but they may enjoy the money so much that they’re willing to add a little bit of personalization into their fulfillment process for you. Communication is everything here, so establish a good relationship that pleases both of you. If they’re a bully that feels they have more sway than you, consider looking into other warehouses that are prepared to allow for that small, personal touch.

 

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Online Sales Tax Wars: The Government Strikes Back

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This weekend is sales tax free. But not-so-long ago, in a galaxy not-so-far away…

The Sales Tax Wars. For the past couple of years following the destruction of the Marketplace Fairness Act (MFA), the ecommerce alliance has flourished with all signs indicating continued growth. In 2013, the Marketplace Fairness Act – a bill aiming to require online businesses to charge sales taxes – was introduced and shut down by the House of Representatives. But the empire intends to strike back. In an act of vengeance, MFA re-emerged last March with a very similar bill called the Remote Transactions Parity Act (RTPA) arriving on the scene earlier this summer in June.

Reconstructing the Death Star

It’s no surprise that many ecommerce entrepreneurs are opposed to the MFA and RTPA; nobody enjoys taxes. In any case, the bill was revamped, and it’s fully armed and operational if it passes the Congress. So, let’s take a look at what exactly both bills entail. As with anything related to taxes, understanding them is as difficult as making the Kessel Run in 12 parsecs, but below is a concise description of what matters to most merchants.

Here are the Marketplace Fairness Act’s (MFA) basics:

  • Sellers grossing $1,000,000 in out-of-state sales per year must collect sales tax from buyers in states that impose it
  • If a merchant makes a sale in a state where they have no physical presence, it’s an out-of-state sale
  • Certain products will have specific taxes, depending on state tax code
  • Sellers will have to comply with each state’s tax code if they make a sale there

Remote Transactions Parity Act (RTPA) is very similar, but differs in the following:

  • Businesses making $10 million or less in the first year are exempt from the online sales tax
  • In the second and third year, businesses making $5 million and $1 million or less respectively are exempt
  • There is no exemption from the sales tax after four years
  • But any sellers using an electronic marketplace are entitled to no exception at any point, regardless of revenue

I would say that all taxes are evil, but only a Sith deals in absolutes. The supposed upside to both bills is that the playing field between online stores and brick & mortars (who usually must enforce a sales tax) is fairer. MFA and RTPA are also sensitive to small businesses, with the former exempting them entirely if they make less than one million. Plus, it’s more money for state governments at the end of the day. But let’s look at what the two may mean for your ecommerce store.

The Phantom Margins

While $1,000,000 may seem like a massive amount of money, it’s revenue, not profit. Many, many merchants operate on scarily slim margins, constantly weighing their costs versus the revenue from their sales. Keeping costs down suggests cutting wherever feasible, and a big area for that is through shipping.

In the event that the government passes either bill, affected merchants are likely to change their prices once the tax goes live. And seeing the final cost of a product post-sales tax has the potential to terrify consumers, launching them to abandon their carts as quickly as jumping to hyperspace. Adjusting for that reaction, merchants can try to lower the customer’s shipping costs as much as possible, and a big part of that is through low, cost-effective shipping rates. If you’d like, test drive our own shipping rate calculator through USPS to see exactly how much you could save.

Another avenue for reducing shipping costs is through packaging. All shipping services price by either weight or dimension (or both), so selecting the proper packaging is essential, whether you’re trying to use lightweight protection or compact containers. And if you would prefer that all matters related to shipping disappear entirely like Jar-Jar Binks, options like just-in-time (JIT) and outsourced warehouse fulfillment are on the table, but it’s important to weigh the pros and cons on each.

A Not-so-New Hope

The good news is that shipping and inventory management systems are out there to support a businesses’ multi-channel efforts, which are bound to be hit the hardest by any one of these bills passing. Because such tools are able to connect with most channels out there, online retailers are able to get a clearer, comprehensive view of their financial situation, and they’re better able to analyze their back-office costs. All of this adds up to calculating margins more effectively.

Even more importantly, it’s possible for multi-channel management tools to integrate with tax and accounting software to provide access to a business’ data. Linking the two helps ease up on the time consuming, mind melting chore of dealing with taxes and accounting. It’s already a highly sought after feature of many order management tools, and, if either of the two bills survive, a tax and accounting software integration is that much more important.

But keep in mind that this is just food for thought at this point. Who knows if the two bills will actually pass. There’s a good chance they’ll float around Congress for quite some time, just like the two moons on the useless desert planet of Tatooine. If you want to read more in-depth about the bills, check out this comparison of the MFA and RTPA by National Law Review. For more information on RTPA look here, and for specifics on the MFA look here.

 

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Our latest batch of feature updates

We were about to say we’ve been sweating over the small stuff lately, but frankly, some of the recent work we’ve been doing hasn’t been all that miniscule. The following updates should have a positive impact on the way you run your business, and there’s a bit for everyone, whether you’re a global shipper, or a person addicted to simplifying processes as much as possible.

Go global – Discounted international rates and eBay Global Ship

The ecommerce world is only limited to an internet connection, and international shipping is very much a reality for many merchants. We already provide some of the largest discounts on domestic shipping rates with USPS, and now those savings are international. All new sign ups have immediate access to our discounted international rates, and access will be rolled out to all existing customers from mid-August through the end of the month.

eBay’s Global Ship program gives merchants the option to send over orders to an eBay warehouse that ships them off internationally. In the past, it wasn’t an option with Ordoro, but it’s now possible. Simply place an order with eBay, and we will import it alongside eBay’s Global Ship hub address and reference number. Your shipping label will match all of that information, so send it to the warehouse, and, voila, eBay will take care of the rest.

Better in bulk – Endicia scan form and PO workflow

Scan, scan, scan, man. Easing up on the shipping grind is what we’re all about, so instead of having to scan each individual shipping label, you can print out a single, end-of-day Endicia scan form that bundles all your shipments of the day into a single barcode. The USPS can scan the code, and their systems will update the statuses of all your orders at once.

Endicia-form

 

The PO feature – where you go to purchase products from your suppliers – is now faster, more responsive, and can create PO’s in bulk. Once you get the goods from your orders, make a goods receipt, and boom, stock levels are automatically updated. PO’s are also tracked, and their statuses are updated based on every action taken, which forms an audit trail of everything that happens to them.

purchase-order

 

Autosync now has more auto and sync
Last, but not slowest, is a change in our autosync intervals. Sounds a little fancy, especially since it’s only available to enterprise customers, but all it means is that inventory and order imports will be updated every 10 minutes automatically, rather than an hour. And if 10 minutes is 9 minutes too long for you, feel free to sync everything on-demand, anytime by pressing the magical sync button.

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It’s true: order management systems do help

Order management systems are the center of the ecommerce wheel that keep all the integrations, or spokes, connected and turning. Using one can have a considerable impact on an ecommerce merchant’s operations. According to a research study performed by Software Advice, a software consulting company, there are significant benefits to using an order management system. A survey of small online retail business with revenues of $50M or less who used an order management systems revealed that:

  • 55% of merchants saw a significant reduction in order processing time
  • 60% of businesses improved in on-time delivery with integrated shipping services
  • Over 50% of the businesses reported improved inventory visibility

If anything’s certain from those tidbits alone, an order management system can positively influence a store’s efficiency and effectiveness. But let’s avoid reinventing the wheel, and briefly cover what exactly they do, and how they fit in with all the parts of an ecommerce machine.

Spokes and the hub

There are multiple services an ecommerce merchant uses – from storefront and shopping cart, to payment gateway and fulfillment. But, from start to finish, an order management system can be used to pull it all together. And that’s because it relays data to every part, keeping tabs on the product as it journeys from supplier to customer. Below is a visual from Software Advice illustrating how all the spokes of the wheel interact:

order-management-integrations

A solid order management system integrates with major marketplaces and carts like Amazon, eBay, Shopify, or Bigcommerce, allowing the merchant to connect to these channels and keep each part of the wheel automatically up-to-date on anything related to shipping and inventory, whether its stock levels, fulfillment statuses or shipping costs. And if a business does start opening additional  channels, the order management system simply adapts to support and connect to it along with the others, communicating the status of every order, quantity of product, and more.

Keeping the multi-channel wheels turning

When asked how integrating an order management system with their online stores impacted certain aspects of their business, respondents’ responses are definitely in the green:

Effects of Integrating Order Management Systems with Ecommerce Stores

order-management-systems-integration

Incorporating an order management system definitely contributes to greater operational ease. This should come as no surprise, because the very purpose of an order management system is to collect information throughout the business for the merchant to view in one unified dashboard. And having that ability greatly reduces the tedious grind of setting up and processing orders.

As an online business grows with sales flowing in like clockwork, opening new sales channels is a typical path that most ecommerce entrepreneurs take. Although expanding to more sales outlets is great, the added administrative needs can get time consuming, especially if merchants are manually plugging in their order, inventory and financial information to their original sales channel for an organized view of their business. A good order management systems tackles multi-channel needs by integrating with a variety of platforms, which is critical for reducing the challenges that come along with handling multiple avenues of selling.

Jesus take the wheel (when it comes to shipping)

When it comes to shipping, many merchants prefer someone else to take the wheel from their hands – as it can get really tedious to do on one’s own. But order management systems that include shipping services are a heavenly gift from the ecommerce gods to help out with the hell on wheels that is fulfillment. When asked how specific challenges are affected by order management systems integrated with shipping services, respondents preached the following:

Effects of Integrating Order Management Systems with Shipping Services

order-management-system-shipping

It’s clear from the chart that systems with shipping services that are integrated into order management systems are beneficial to retailers across three dimensions- higher margins, improved shipping processes and enhanced customer happiness.

Better margins because these apps let merchants compare and pick shipping rates from multiple carriers – sometimes even offering special negotiated rates from certain carriers. Improved shipping processes because they automate repetitive tasks of copying and pasting shipping addresses, and tracking numbers back and forth across disparate systems. And enhanced customer happiness because of on-time (or even before time) delivery and reduced errors on orders.

Most order management systems integrate with online stores, but they don’t necessarily come with shipping services. While it is possible to use yet another app outside of the order management system to manage shipping, that comes with the pitfalls of information being lost between two systems and multiple points of failure. Case in point is when merchants need to switch between these apps trying to figure out if they have enough inventory on hand before creating the shipping label. A good order management system will have both integrated in one unified user interface. In essence shipping services almost seem like an awkward third wheel to inventory management solutions and online stores. Nobody wants to ride a tricycle made of three integrations – store, inventory app, and shipping app – right?

Speaking of which, this is a bicycle of a topic, and this post is just the first wheel! Expect another post next week covering additional order management system research from Software Advice.

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