As an e-commerce startup or small business, shipping orders to your customers is a crucial part of the process. With Amazon’s 2-day promises, customers have been trained to expect fast processing and shipping when they place an order. So, how do you, as an entrepreneur who has to wear all the hats for your business, fulfill orders in-house quickly and cost-effectively?
First, it is important to know that you may not need to ship orders yourself. Many brands utilize a 3PL (third-party logistics) company to store their inventory and pick, pack, and ship orders for them.
However, a 3PL (AKA fulfillment center) is not for everyone. For startups and small businesses, outsourcing fulfillment can be expensive. But don’t worry, we’ve built a guide on when to use a 3PL to answer that for you (including a short quiz that will tell you if a 3PL is right for you).
If you’ve determined that a 3PL is not the right fit for you right now, it is completely OK. That is why we built this step-by-step guide on how to ship products to your customers from home.
Step 1: Understand your storage needs
Fulfilling from home starts with understanding where you are going to store your inventory.
The biggest question to ask is: how much space is my inbound shipment going to take up? If you’re selling furniture, odds are you won’t have the space and should use a 3PL off the bat. But for most people, you’re selling smaller goods that can fit in your home or apartment.
Based on your MOQ, you can discuss with your supplier how many boxes or pallets (normally 40x48x48”) the shipment will consist of. This will give you an idea of how much space you will need.
This means the next most important question is: how much space do I have at home? For those in the suburbs, a basement, garage, or extra room is often sufficient. For the city-dwellers, apartments may pose a different story.
To combat space limitations in the city, you can rent a storage unit to store your excess inventory nearby. You’ll still be shipping from your apartment, but you can restock your inventory as needed from there.
Pro Tip: If your inbound shipment consists of pallets, request lift gate service so you don’t need a forklift.
Now that you know where you are going to keep your inventory, it’s time to set up your “warehouse”.
Step 2: Set up your “warehouse”
Now that you have a bunch of boxes in your living room, it is important to organize your inventory and not mix different SKUs. You’ll want to know exactly where each of those SKUs are located.
A SKU (Stock Keeping Unit) is any unique product on your site. If you sell a product in multiple styles, sizes, or colors, each of those style/size/color combinations will be its own SKU. Your selling platform will have the ability to create SKUs. We recommend using short, simple, logical names for SKUs (ex. “TEA-BOX-GRN”).
To do this, you’ll want to separate each SKU into its own bin and label each bin with the SKU using some label stickers. Depending on your # of SKUs, this may be as simple as repurposing a couple different cardboard boxes, or it could mean getting a plastic shelving unit or two from Home Depot and some corrugated pick bins.
Keep in mind that these bins are going to be your “pick bins”. We will dive into this more later on, but for now, you simply need to know that your pick bins don’t need to fit all your inventory.
You only want 1 pick bin per SKU (32 SKUS = 32 pick bins). If you sell shirts, you may only be able to fit 10 of a SKU into a pick bin. This is perfectly fine. The rest of your inventory will remain in boxes in a separate storage location wherever you have room for it.
Your final set up will look something like this (most likely on a smaller scale):
Pro tip: Position your pick bins for your top sellers closest to your packing station where you pack orders.
Your warehouse is looking clean! With your product stowed away, you’ll need to keep track of your inventory levels too.
Step 3: Inventory Management
Once you have your inventory in and your bins set up, you’ll need a way to track your inventory levels once customers place orders. It’s important to know how much inventory you have left so you know when to reorder, and what to reorder, to avoid going out of stock. Luckily, most platforms like Shopify, have built-in inventory management software.
For brands that sell on multiple channels, this can get a bit more complicated. Companies like Soapbox and ShipStation address this issue, allowing you to sync orders and inventory across multiple platforms!
Once your inventory is being tracked and ready to go, it’s time to order some packaging.
Step 4: Order Packaging
Selecting the correct packaging can make a huge difference in your margins because your order‘s weight and dimensions include the packaging used and directly impact your shipping costs.
If your packages are over 1 cubic foot (or if you primarily use UPS), you will have to take into account dimensional weight as well depending on the actual weight of your order.
With this in mind, there are a few different ways the shipping costs can be calculated for your orders. If you are using Shopify, you can either use calculated shipping rates based on the order weight and default packaging dimensions or set your own flat rates for shipping methods you create that customers can choose from.
Pro Tip: Shopify’s calculated shipping rates only take into account your default packaging for weight and dimensions, so if you have products of various sizes you may want to consider flat-rate shipping instead to avoid over or under-charging customers for shipping.
If you use a shipping software like Soapbox, you can use flat-rate shipping and the software will calculate the cheapest shipping costs automatically while selecting the best packaging size for the order.
You’ll likely want 1-3 different packaging sizes depending on your product characteristics to properly fit common order sizes. For example, if you sell your product in a 1-pack and a 3-pack, you will want 2 different mailers or boxes that fit each of those.
How to optimize your packaging
Use poly mailers or bubble mailers when possible to save weight.
Keep your orders under 1 pound if possible. USPS First Class is the most cost-effective ship method available to you right now. It is only available for packages under 16 ounces. If your order is over 1lb, it may be a tossup between USPS Priority Mail and UPS Ground.
Keep your orders under 1 cubic foot if possible.
Understand your most commonly ordered products/bundles. Your packaging should fit your products/bundles almost perfectly to save weight.
For expedited shipping, use USPS Priority Mail Flat Rate when possible. USPS will ship you them for free when you order online.
Where to buy packaging
You can order packaging from ULINE for now. They provide expedited shipping with every order which is nice. Just make sure to order in bulk as those shipping fees can make ULINE more expensive. You can always compare with Amazon or other packaging sites as well, although ULINE is usually your best bet - at least for boxes.
Pro tip: Select a flat rate box size (highlighted in red below) to avoid paying higher fees with lower order volumes.
Once you’ve ordered your packaging, you’ll have to set up your packing station.
Step 5: Set up your packing station
Your packing station is going to be ground zero for fulfilling your orders, so make sure your pick bins are close by (refer back to Step 2 if needed). Knowing how to organize shipping supplies at home will optimize your fulfillment process so you can get orders out faster. You can use any old table, but finding one with a built-in shelf (like this) can reduce clutter since you’ll need a good amount of space.
There are a few basic items every pack station needs:
Table - This is where you’ll pack orders (obviously).
Computer - You’ll be printing the labels from your PC or laptop.
Thermal Label Printer - It’s a pain to print and tape labels from a normal printer. You can get a label printer for under $100, but we recommend forking out a bit more cash for a higher quality option like Rollo.
Shipping Labels - If you have a label printer, you’ll need shipping labels! The standard dimensions are 4”x6”. Many label printing software companies will automatically print the shipping label and packing list at the same time so you don’t have to print a packing list from a normal printer.
Pro tip: Get unlimited free shipping labels by creating a UPS account and ordering online.
Laser or Inkjet Printer - While your labels will be printed using the thermal label printer, this is a great backup option if it breaks. Plus, you’ll undoubtedly be printing other documents as well. If you don’t have a printer, you can find some on Craigslist or Facebook Marketplace for ~$30.
Tape Gun & Packing Tape - If you only ship in poly mailers this may not be as crucial, but definitely spend $10 on a tape gun if you are sealing boxes.
Packaging - You’ll want a decent amount of each of your packaging types readily available to pack orders.
Here is an example of a pretty solid set up:
Alright, looks like you’re ready to start packing orders… almost! Before you start slapping labels and busting out orders, you need to understand how to print shipping labels at home so you can ship orders to your customers.
Step 6: Learn how small businesses ship orders to customers
The pick and pack process is fairly straightforward, but there are some key steps you can take to optimize your shipping process.
Pick & Pack Process
1. A customer places an order on your selling platform (ex. Shopify store).
Congratulations, you got an order!
2. You print the shipping label and packing list.
If you only sell on Shopify, for example, you can print directly from there. If you sell on multiple platforms, you can print your labels using Soapbox or ShipStation. Again, most applications will print the shipping label and packing list together on two labels for convenience.
3. You grab the correct SKUs from your pick bins and bring them to the pack table.
Remember when we said we would get back to pick bins later? Well, now is the time. If you recall, we said that you didn’t need to fit all your stock of each SKU in a flow bin. Why? Because you can only store so much stuff close to your packing station.
To be most efficient, you should have a minimum of 7-14 days worth of stock per pick bin when possible. The rest of your stock should go in the back to restock the flow bins when necessary.
This will greatly decrease the time spent walking back and forth to pick orders. If you have a small number of small products, you may be able to fit your pick bins directly on your packing station shelves.
4. You pack and seal the order.
Simply put the packing list in the package, seal it, and apply the shipping label! As your volume grows, you will want a box to hold your outbound orders.
5. You get your packages to the respective carriers.
Obviously, no one wants to drive to the post office every time they need to drop off a package. If you’re shipping via UPS or FedEx, you’re going to have to drop it off unfortunately as scheduling a pickup is going to be more expensive than you’ll want to pay. However, if you are shipping via USPS you can actually get free pickups.
Pro Tip: Schedule a free daily pickup with USPS. They will pick your packages up on their normal mail route. You don’t even have to be home. Simply talk to your mailman and leave them in a secure area outside your door if possible.
Alright, now that we know how to pack and ship e-commerce products… is there anything else?
Step 7: Go live and start shipping orders!
Finally, time to start taking orders. We wish you the best of luck with your business venture!
Small Business Shipping FAQs
How do small businesses ship products?
We detailed this process above, so definitely check it out! Essentially, you order the inventory to your home, store it, and when a customer places an order you pick, pack, and ship it!
How to weigh packages at home?
What shipping carrier should I use?
If fulfillment is overwhelming you and you're considering using a 3PL, contact our team of experts at OTW Shipping and we can walk you through anything you may need.