ShipBob or ShipMonk: In-Depth Comparison
First, do you need a 3PL?
Order fulfillment is essential to eCommerce businesses today. With customer expectations for faster, free shipping, it can be tough to satisfy them managing everything in-house. After all, you’re trying to grow your brand, you don’t have time to run a warehouse too.
Luckily, there are a few ways you can deliver a great shipping experience for your customers. Depending on your fulfillment needs, it may actually make sense for you to fulfill from home for a while to keep costs low as a small business.. Don’t worry - you don’t need to take daily trips to the post office. We’ve written up a great guide on how to optimize your in-house fulfillment process like a pro.
For most brands, the better choice is to utilize a fulfillment partner to manage your packing and shipping. You’ll have more time to focus on growing your business instead of packing orders.
Note: If you are unsure if you need a 3PL, we made a guide (and free quiz) to help you figure it out.
Who are ShipBob and ShipMonk?
There are thousands of 3PL (third-party logistics) providers out there, but two of the most-funded are ShipBob and ShipMonk. With $700 million in funding between the two over the past 8 years, they’ve grown exceptionally fast.
To get to where they are today, ShipMonk has built or acquired all of their current locations. Whereas ShipBob utilizes a mix of their own warehouses and contracts out the rest of the work to their partner warehouses in the SFN (ShipBob Fulfillment Network).
Frequently, companies that grow that quickly or contract work out (AKA a 4PL), tend to drop the ball on service and support in favor of hyper-growth to please investors. In this side-by-side comparison, we’ll provide you an in-depth (and unsponsored) review of ShipBob and ShipMonk to determine if they may be a good fit for you versus a more service-oriented 3PL like OTW Shipping.
For most brands, picking a fulfillment center comes down to pricing and service. Other than that, location is important. You will want a fulfillment center that is ideally close to your customers for faster and cheaper shipping. At the same time, many companies put too much importance on the number of locations. While 100 fulfillment centers sounds cool, smaller businesses normally need just 1, and larger brands need at most 2-4.
With only 2 locations you can reach almost 100% of the country with 2-day ground shipping. Managing and splitting inventory across multiple locations is expensive and requires high volume to justify the costs. 3PLs might not tell you this, but even though they have multiple locations, they won’t split your inventory across multiple locations until it makes sense anyways.
ShipBob: Pros and Cons
Most young brands see ShipBob as a great option. They’ve got an energetic sales team, a killer website, and intriguing rates. I mean, c’mon, free pick and pack sounds like a no-brainer. So, why doesn’t everyone simply use ShipBob?
Lots of warehouse locations, including many international locations
Solid list of integrations to other eCommerce tools
No order minimum
Simplified pick & pack pricing
No guaranteed same-day shipping can result in delayed processing of orders
No liability for incorrectly picks
Can’t view your fulfillment pricing until you sign up for an account
Lack of support under 400 orders/mo
High storage and implementation fees
B2B fulfillment gets expensive with add-ons
Do not own warehouses within the SFN
ShipMonk: Pros and Cons
ShipMonk is usually the next option as another well-backed 3PL. Their rates are straightforward, their website is clean, and it can be very inviting for a company using a fulfillment center for the first time.
Multiple warehouse locations, including a few international locations
Easy to understand pick & pack rates
Reasonable storage fees and free receiving
No guaranteed same-day shipping can result in delayed processing of orders
$250 pick & pack minimum
Relatively expensive pick & pack rates
OTW Shipping: Pros and Cons
OTW Shipping is the opposite of ShipBob and ShipMonk. We have no private equity backing and focus more on service and transparency than cool graphics and dashboards.
Great support: 3 dedicated contacts for the warehouse, account info, and technical issues
Guaranteed same-day shipping
Transparent rates, no hidden fees
Reasonable storage fees and free receiving
No international locations
Does not use FedEx
Not a good fit for apparel or cold-storage
Take your time to understand any and all fees that you could be subject to when using a 3PL.
ShipBob: Fulfillment Services
A few main things stick out for ShipBob in terms of services offered.
1. Implementation fees up to $1,000.
ShipBob does offer a Startup Growth Plan for companies shipping less than 400 orders/mo, but you do not have access to an account rep, and your support hours are limited to specific office hours so you are mostly on your own.
2. Hourly receiving fees.
While you only pay $25 for the first two hours, ShipBob charges $45/man/hr after that. It may be difficult to audit how long they actually take on your replenishments so you could have a hard time predicting how much you’ll pay. Most 3PLs will charge receiving fees per carton/pallet/container.
3. High storage fees.
If you have a large product, be prepared to fork over some cash for storage. ShipBob has some of the highest storage rates in the industry for 3PLs (up to 11.8x more expensive per square foot than OTW Shipping and 1.4x more expensive than ShipMonk).
ShipMonk: Fulfillment Services
Key points of ShipMonk’s services include:
1. $250 pick & pack minimum.
For most brands, this should not be an issue. Slow-moving startups on the other hand may find this a small obstacle to overcome.
2. Free receiving.
As long as you trust your suppliers, using ShipMonk’s free receiving program can be advantageous. We will talk more about ShipMonk’s “Verified Inventory” program later.
3. Inexpensive returns.
Regardless of volume, ShipMonk has inexpensive returns processing. If the majority of your orders have more than 3 items it becomes more expensive. For most brands, if you have a high # of returns, this can save you some money.
OTW Shipping: Fulfillment Services
Here are a few things to note for OTW Shipping’s services:
1. No implementation or account fees.
For startups and small businesses, free implementation and no account fees provides a huge advantage because you only pay for what you ship. It is important to note a pick & pack minimum may be applied on a case-by-case basis.
2. Low pick and pack fees.
Compared to ShipMonk, OTW Shipping has more affordable pick & pack fees which saves you on every order.
3. Free receiving.
Similar to ShipMonk, OTW Shipping offers free receiving options and a verified inventory program. This can save you some of the upfront receiving fees many 3PLs charge.
Every 3PL has a different model for pick & pack pricing, as well as kitting fees.
Note: If you need help comparing quotes from different 3PLs, use our free template!
Pick & Pack Fees
ShipBob uses a unique pick & pack model that wraps up your fulfillment fees for the first 4 units into shipping costs. For companies with a high # of picks per order this may be advantageous. To obtain your actual rates you have to sign up for an account which is a bit frustrating for those just looking for a quote.
ShipMonk and OTW Shipping on the other hand have a more traditional pick & pack pricing strategy. This can be more advantageous for companies with a lower # of picks, who may be scaling quickly because your rates can decrease as your volume increases.
For any of these 3PLs you should reach out to them to obtain a custom quote which might afford you some better rates.
Every client's kitting needs are different, so naturally pricing models will differ.
ShipBob actually has the easiest-to-calculate kitting pricing with every action priced out.
How to calculate: $5.00 for training and work station setup + kitting fees
Picking Fee: $0.07 per SKU
Construct my box/packaging: $0.56
Close my box/packaging: $0.04
Place item in box/packaging: $0.10
Pack item in ShipBob packaging: $0.15
Affix a pre-provided sticker/label/barcode: $0.21
Affix a ShipBob printed sticker: $0.26
Exact positioning requested for sticker/label/barcode: $0.07
Remove item from package: $0.21
Remove packaging or an insert: $0.28
Add my dunnage to the kit: $0.11
Add ShipBob paper dunnage: $0.11
Construct my box/divider insert: $0.28
Wrap my item: $0.28
Seal an item shut with tape/sticker: $0.08
Perform inspection of an item: $0.21
Change Item SKU to kit SKU: $0.02
ShipMonk utilizes a kitting structure similar to their pick & pack pricing which makes determining your final cost pretty easy, but might not take into account some real custom work you need done for kitting.
OTW Shipping: Kitting
OTW Shipping bases their kitting fees off their special project rate. While you can’t get concrete pricing without a quote, this may be for the best as most kitting projects have very unique needs. To get your custom kitting pricing, click here.
Service Level Agreements
For any fulfillment center, you should always ask them what their service level agreements are. You want to make sure you are protected if the 3PL does not follow through on their promises. Without an SLA, it is hard to know you can rely on your fulfillment partner.
While ShipBob does advertise certain SLAs, they don’t have anything that holds them to those SLAs which makes them effectively worthless. There are no reparations if your orders are not shipped on time, shipped inaccurately, or inventory is held up waiting to be received.
Moreover, they disclaim any liability for delays in shipments from warehouses in their SFN.
They do allow you to see why your orders are not meeting their SLAs, but that does not change anything for your customers or for you.
ShipMonk has somewhat better SLAs in place than ShipBob, but still not great. As a positive, ShipMonk will compensate you and make things right if they ship any orders incorrectly.
However, they do not guarantee same-day shipping so there is nothing stopping them from taking a week to ship your orders.
They do offer free receiving, but unless a full carton goes missing, they will not be liable for any shrinkage. You do have the option to enroll in a “Verified Inventory” program which will increase liability up to $250/unit missing. This sounds nice, but is only realistic for extremely high value items, as the charges are astronomical.
OTW Shipping: SLAs
OTW Shipping stands out compared to ShipMonk and ShipBob when it comes to SLAs. Any orders shipped inaccurately or after their 2pm cut-off time will be compensated completely, so you know your orders will get out on-time and with the right products.
Like ShipMonk, OTW Shipping has free receiving and a verified inventory option. However, OTW Shipping’s verified inventory program is much more economical with a one-time $0.10/unit fee for receiving.
The right fulfillment center could be completely different depending on on your product, your business, and your needs. If you need help finding a 3PL that fits you, don't hesitate to contact us. Even if we are not the right fit, we have an extensive network and can help you find a fulfillment partner that is.
ShipBob‘s pricing structure makes them a good option for companies with a high # of picks per order. Additionally, clients who do significant international shipping, can get a unified fulfillment experience across their expansive global network. Although, if you are not doing high volume, splitting inventory between multiple warehouses can actually be more expensive and complicated. With a lot of money invested into their software, you will get an easily-usable platform on your end.
At the same time, ShipBob’s lack of accountability for their SLAs and the warehouses in their SFN makes it difficult to trust them with your fulfillment. Their rates in many areas are fairly expensive compared to other 3PLs and they have lots of caveats to their fee structure that you must read carefully.
ShipMonk also has a number of international warehouses, so they can fulfill your international orders similar to ShipBob. Similar to ShipBob, they have a very user-friendly interface which can be helpful to new users.
For support, you are assigned a “Happiness Engineer”, but you have no direct connection to the warehouse, so any non-account related issues may take much longer to solve.
Service-wise, ShipMonk makes no guarantee on how long it will take to fulfill orders, so there is a question of reliability there.
OTW Shipping Review
While OTW Shipping does not have the same PE backing as ShipBob or ShipMonk, our customer-centric approach to fulfillment and industry-leading SLAs should put us towards the top of your list! From startups to global brands, you will get the same level of support.
OTW Shipping utilizes ShipEdge for their software, so you will be using a platform used by hundreds of other warehouses.
We do not have 20+ locations like ShipBob, but two locations is all you need to offer 2-3 day shipping which exceeds customer expectations.