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Thinking Outside the (Cardboard) Box to Reduce E-Commerce Packaging Waste & Excess Costs

Did you know? About 165 billion packages are shipped in the US every year, according to data from USPS, FedEx, and UPS. (LimeLoop)

The packaging required for that package volume is roughly the equivalent of 1 billion trees!

At a micro-level, the typical household throws away up to 13,000 pieces of cardboard in a single year. Additional packaging materials, such as plastic, tape, and bubble wrap, each contribute a fair amount of landfill waste, as they often cannot be or simply are not recycled. 

Shipping packaging is directly to blame for a wide range of environmental issues, such as overcrowded landfills, increasing greenhouse gas emissions, and litter pollution (both on land and in the ocean). 

As a result of this multi-pronged challenge of packaging waste, the battle to ship goods more sustainably is escalating. Nowhere is this more pronounced than in e-commerce shipping.

Let’s examine why and how online retailers can achieve greater profitability while transitioning toward a circular economy.

How does shipping packaging impact your business?

While the overall cost of packaging varies greatly by product and application, it typically accounts for 10%–30% of COGS. And if your packaging usage is excessive, you could be throwing away hundreds of thousands or even millions of dollars every year. Yet, because shipping packaging is assumed to be essential, it’s often not seen as a facet that can be optimized to achieve both greater profitability and sustainability.

Factors ranging from weight and materials to size can impact your packaging needs and costs, but fulfillment and shipping methods are also key. Here are a few examples of things that will affect your packaging needs/costs:

  • Rising packaging material costs –  One of the main reasons you may have experienced an increase in packaging costs is an increase in demand for the raw materials used to produce corrugated cardboard (and hence for the finished material itself).
  • Oversized packaging – If the dimensions of the cardboard box don’t closely match the product dimensions, your packaging is likely to be excessive. For instance, a t-shirt doesn’t need to be in a 15” x 15” box. Some e-retailers make the mistake of ordering oversized boxes under the pretext of getting a discount for bulk packaging purchases and having something that can fit most/all of their products. This can become unnecessarily expensive if your delivery carrier applies dimensional weight pricing, and it is also wasteful in terms of the excess material used.
  • Ineffective packaging materials – when your packaging is not sufficient to protect your product, you end up paying for it with higher return rates (due to damage) and customer churn. This can obviously increase your overall costs and even kill your business. Do NOT attempt to save money by reducing your protective packaging unless you are (a), confident your product can hold up in transit, or (b) using micro-fulfillment (i.e. Ohi’s instant delivery platform) to greatly reduce the last mile delivery distance.
  • Order fulfillment – If your e-commerce orders typically ship via standard ground delivery to the end customer from one or just a few traditional warehouses (whether in-house fulfillment or 3PL), your protective packaging needs are likely to be high, given that orders are traveling hundreds/thousands of miles in the back of a truck before they arrive to your customer. If on the other hand, you have your inventory forward-positioned into micro-fulfillment centers, your orders can be hand-delivered by a gig driver/rider and only need to travel a few miles to reach your customer. Many merchants on Ohi’s platform have completely eliminated the need for any cardboard or plastic protective exterior packaging, which is good for the environment and for their bottom line.

How can your e-commerce business cut down on wasteful packaging and costs?

The majority of packaging used today is still linear, meaning that the packaging for a product is created from raw materials, the product is used, and the packaging is discarded.

Renowned brands like Gucci, Nike, Puma, and Zara are starting to recognize the environmental impact of their packaging and are working to incorporate sustainability initiatives to achieve the triple bottom line by creating packaging for a circular economy. 

Consider the following strategies to optimize packaging and reduce shipping costs and waste:

1. Think outside the traditional cardboard box.

Cardboard boxes, as discussed earlier in the article, contribute to millions of tons of waste each year, and even in proposed reuse scenarios, they are often quickly discarded and dumped into landfills.

Using packaging alternatives that facilitate composting and biodegradable processes will help your brand amplify its sustainability efforts.

For instance, Puma, a leader in sportswear and shoes, launched ‘Clever Little Bag’ to replace the traditional shoebox, using 65% less cardboard. 

Source: Fuseproject

The bag and box system has no printing or tissue, assembles easily, takes up less space, weighs less in shipping (saving money and fuel on the delivery), replaces the plastic retail bag, and is completely recyclable.

There are many options available to choose from as compared to a few years ago when there were limited options and they were more expensive.

  • Easily biodegradable/compostable packaging like molded pulp packaging. 
  • Reusable packaging like eco-friendly tote bags is ideal if you use a micro-fulfillment, as you no longer need a heavy layer of protection with a greatly reduced travel distance.

2. Make your deliveries faster, more sustainable, and more cost-effective with Ohi.

Ohi deliveries were shown to be 22x more eco-friendly than next-day air and 5x more eco-friendly than 3-5 day ground.

Here’s how Ohi’s instant delivery platform is eco-friendly as well as business-friendly:

  • Ohi’s e-commerce fulfillment platform generates the least carbon emissions because products are shipped from micro-fulfillment centers that are located very close (often just a few city blocks) to your end customers. 
  • We use foot couriers and bike, e-bike, and scooter couriers in densely populated urban areas (instead of vans/trucks), which results in faster deliveries (due to the ability to avoid traffic) and less overall fuel consumption.
  • Ohi promotes the use of eco-friendly reusable totes for 2-hour and same-day deliveries whenever possible, as opposed to expensive/wasteful conventional packaging. Excess packaging is not needed for Ohi deliveries, because the risk of damage in transit has been virtually eliminated.
  • While Ohi’s model is sustainable, there is still a residual carbon footprint that remains from areas of the business that still require fuel or carbon consumption (e.g. middle mile line hauls).. So, we’ve partnered with EcoCart to calculate and offset the remaining carbon footprint, allowing us to offer our customers carbon-neutral e-commerce fulfillment. 

Ohi helped a leading kombucha brand, Health-Ade, increase its customer lifetime value (CLV) by 49% while greatly reducing their packaging waste and shipping damages.

Adopting a more sustainable approach to your e-commerce business doesn’t have to mean a loss of profits. By implementing sustainable solutions and strategies at each step of your post-purchase experience, you can provide a better customer experience, contribute to a circular economy, and even reduce your overall shipping costs. 


About Ohi

At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

Checklist: How to Create the Ultimate E-Commerce “Post-Purchase Experience”

DOWNLOAD FREE

Increasing retention rates by just 5% can increase profits more than 25% in some markets. (source: Frederick Reichheld of Bain & Company)

In e-commerce, optimizing the “post-purchase experience” – or what happens after checkout – is critical to turning first-time customers to repeat buyers, growing order frequency and AOV, and subsequently reducing operating costs.

Download our checklist to understand best practices relating to:

  • How to set up post-sale communication/engagement
  • How to create a delightful delivery experience 
  • How to offer a high-end customer service and support 
  • How to win customers with gifts and incentives

Ohi Accelerates Expansion with Launch of Ultrafast Delivery in Four New Markets

microfulfillment

Company Grows Its Network of Micro-Fulfillment Centers to Serve Seattle, Philadelphia, Dallas and Austin

NEW YORK–Ohi, the next-generation instant commerce platform that enables brands to meet their customers’ expectations of superfast delivery in under two hours, today announced that it has expanded into four new markets: Seattle, Philadelphia, Dallas and Austin. The company has identified significant demand for ultrafast, hyperlocal delivery of its brand partners’ products in these cities and has grown its network of micro-fulfillment centers to offer quick, convenient delivery options to customers in these areas.

“We’re committed to helping power our brand partners’ growth by providing an excellent, on-brand instant commerce experience that includes quick and convenient delivery options,” said Ben Jones, Founder and CEO of Ohi. “To help our partners reach and convert new customers, and drive loyalty and engagement among their existing customers, we’ve expanded our instant commerce platform into four new markets where our technology has identified exceptional demand for instant commerce.”

With its recent expansion, Ohi now offers instant commerce services in 12 major US metro areas. The company’s inventory and order management platform provides SKU-level demand intelligence that allows its brand partners to optimally position inventory closer to their end customers. Ohi is committed to providing carbon-neutral delivery and its micro-fulfillment centers ensure that e-commerce orders travel only a short distance to arrive at consumers’ doorsteps. Ohi further minimizes its carbon footprint by using reusable, sustainable packaging and bike, e-bike, scooter and foot couriers whenever possible. The company also offers a carbon-neutral e-commerce fulfillment option to its merchant partners and their customers.

“Ohi’s asset-light platform enables us to expand into new markets with minimal overhead costs,” added Jones. “This is just the start of our aggressive expansion strategy that will enable us to provide an instant-commerce experience that covers close to 45% of an e-commerce company’s overall demand by the end of the second quarter.”

Ohi’s instant commerce platform allows brands to offer best-in-class post-purchase experiences while retaining complete control of their brand story, data and customer relationships. For more information, visit Ohi.com.

About Ohi

Ohi is the leading instant commerce solution for direct-to-consumer and enterprise brands looking to grow their business by enabling powerful post-purchase experiences. Leveraging its proprietary, data-driven inventory management technology and robust micro-warehouse platform to forward position inventory within city centers, Ohi enables brands to offer a premium, environmentally responsible, instant or scheduled delivery experience to their customers.

Contacts

MEDIA:
Michael McMullan/Danielle Poggi
Berns Communications Group
mmcmullan@bcg-pr.com/dpoggi@bcg-pr.com

How to Choose the Right E-commerce Fulfillment Partner

e-commerce fulfillment partner

Order fulfillment can make or break your e-commerce business. It sounds cliche, but a reliable e-commerce fulfillment partner will help your brand delight customers and grow your business. In contrast, a poor e-commerce fulfillment service will cause you to lose your customers and leave your brand reputation in tatters, no matter how awesome your product is. 

So, how do you choose the right e-commerce fulfillment partners? What are the best criteria? 

Before we delve into the essentials to help you make the right choice, here’s a brief introduction to help you understand e-commerce order fulfillment services a bit better. 

What are e-commerce fulfillment services?

Think of an e-commerce fulfillment service as a command center for your e-commerce business that deals with the post-checkout process of delivering online orders to the customer.

However, e-commerce fulfillment is much more than placing a parcel on a customer’s welcome mat. Fulfillment includes receiving and storing inventory, processing orders, picking items, packing boxes, and shipping the items to the customer’s destination, along with the requisite communication to both internal parties and the end customer.

Who would need e-commerce fulfillment partners? 

  • Businesses that run on a direct-to-consumer model and have no high street store or storage facilities
  • Companies that have simply outgrown in-house fulfillment capabilities to the point they can no longer dispatch orders at scale
  • Omni-channel businesses that are looking to add an e-commerce channel 

Typically, most fulfillment services run on large warehouses on the outskirts of cities, but modern-day fulfillment solutions make use of multiple small-scale warehouses called micro-fulfillment centers. These micro-fulfillment centers are set up in metro areas and rely on automation to cater to customers’ needs and fulfill the goals of faster and more sustainable delivery across different geographic locations. 

Difference between e-commerce fulfillment services and traditional 3PLs

Although traditional 3PLs share some overlap with e-commerce fulfillment services, most 3PL companies focus on just providing basic functions of logistics, i.e., pick and pack, warehousing, distribution, etc.) whereas full-service fulfillment centers offer more comprehensive services, including customer support and returns. 

  • Delivery speed – given their model, traditional 3PLs lack the means to enable instant delivery for brands; they can cut down the wait time to two days or one day (next-day delivery), at best. However, cutting down on delivery time is costly for them. But this is where modern e-commerce fulfillment services like Ohi shine; Ohi, for example, is able to provide deliveries same-day and often in under two hours.
  • Cost – 3PLs often charge based on weight, time, and distance, whereas modern e-commerce solutions like Ohi charge a flat fee. Instant commerce solutions often forward-position inventory in micro-fulfillment centers around the country, significantly reducing the transportation and delivery required on a per-order basis, even if the number of dedicated deliveries increases significantly. 
  • Sustainability – another key difference is proximity to end customers, which allows these modern e-commerce fulfillment services to use eco-friendly transportation (walkers, bicycle messengers, and electric vehicles) and reduce the need for wasteful cardboard packaging. In contrast, this is far from possible with a traditional 3PL.

While there are a few patent differences, 3PLs and instant commerce providers like Ohi tend to serve different needs. Because providing two-hour or same-day delivery coverage throughout the nation (including in rural areas) is impractical and unrealistic for any fulfillment service, many merchants leverage modern e-commerce fulfillment providers like Ohi alongside their 3PL in synergy, to offer an incredible instant commerce experience (where available) and reasonably fast delivery elsewhere in the country.

How to choose the right e-commerce fulfillment partner?

According to an eMarketer report:

“The biggest challenges facing retailers today include transportation, scalability, inventory management, order processing speed and accuracy, and profitability.”

You need a fulfillment partner that can reliably provide services to reach and exceed KPIs in all five of the areas above. This guide will walk you through key factors to keep in mind as you go fulfillment hunting for the right e-commerce fulfillment service.

1. Delivery speed

If your customers are like most shoppers today, they expect fast delivery (and will expect it to get faster and faster).

According to PWC’s recent global consumer insights survey, fast delivery is shoppers’ #1 overall consideration when buying online (ranked top three by 41% of respondents).

With the emergence of same-day and two-hours or less delivery options, the benefit or strength of two-day delivery as a competitive advantage has started to wane. This is because these options are no longer considered fast enough by modern shoppers. Therefore, growth-mindset e-commerce retailers are increasingly pivoting to instant delivery, as this is a proven strategy to improve their customer experience and help enhance customer acquisition and retention.

With instant delivery fast becoming the expectation, longer delivery times may propel your customers to shop from your competitors, hurting your business.

2. Warehouse locations

Nowadays, consumers increasingly are not satisfied with two-day delivery. And it’s near impossible to meet the delivery speed needs of today’s customers with outdated fulfillment models that solely rely on gigantic warehouses based in the middle of nowhere, where land is cheap. While this may seem attractive on the surface, consider what that fulfillment approach means for your last mile delivery experience and delivery speed.

If speed is what you’re after, you need to look for a micro-fulfillment-based solution that utilizes small warehouses (or micro-fulfillment centers) in densely populated urban areas, to shorten the time/distance to the end customer. By keeping your inventory hyperlocal to customers, the last mile delivery experience can be extra quick, since a delivery courier can then deliver one order at a time (point-to-point) instead of hundreds of orders by the truckload.

3. Scalability

A good potential partner should be just as focused on your company’s continued growth as you are. Furthermore, they should be flexible and prepared to acclimate and grow with you as your business grows. You should see evidence that they have the capacity (or are actively adding the capacity) to meet your growing order volume in a way that maintains a high standard of operational excellence and your all-important customer experience.

In summary, make sure you team up with an e-commerce fulfillment provider who is flexible, adaptive, scalable, and capable of tackling unprecedented situations and volume spikes.

4. Data tracking

The only way to scale your business is to have complete visibility into your metrics to maximize your efforts on areas of growth and create solutions for bottlenecks discovered. In addition, as a critical component of brand differentiation, e-commerce businesses must be able to provide excellent customer service, which is dependent on having accurate and timely data at their fingertips.

Choose a fulfillment provider that provides these critical data tracking capabilities in as near real-time as possible:

  • Inventory levels for your products (as well as forecasted ordering schedules)
  • Real-time customer order tracking for all your deliveries
  • Real-time inventory order tracking so you know your products are available
  • Analytics for better insights into product purchase trends

5. Order fulfillment technology and integrations

Technology is critical when it comes to selecting the best e-commerce fulfillment provider. The two most important aspects of this are how your online store communicates with the fulfillment services and how they help you with data leveraging.

With the right technology, you can send product orders from your e-commerce platform to your fulfillment provider for distribution without needing additional insight from you or your team. Furthermore, the software automatically updates order statuses and inventory levels in the warehouse and your company’s website. These should be simple, automated processes designed to streamline your operations and ensure that your online store functions reliably.

Look for a fulfillment service that offers these features:

  • State-of-the-art software
  • Automated fulfillment processes and accurate reporting
  • Integrations with the top e-commerce platforms on the market, i.e., Shopify, Magento, etc. 

6. Returns management

92% of consumers in a survey said they would buy again if the product return process was easy, whereas 79% of consumers expect free return shipping. (source)

E-commerce fulfillment entails more than just delivering packages to customers. Many providers also help merchants with receiving returns and processing refunds, referred to as reverse logistics. An experienced third-party logistics provider understands how to manage returned products efficiently. They can assist a retailer in developing a return policy that keeps profit margins way above the red line.

7. Costs

It is reasonable to expect some initial costs associated with offloading your order fulfillment needs to an e-commerce fulfillment service provider. However, when you do so, you will most likely later save a considerable amount on labor, overhead, packing supplies, and other variable expenses down the road. Furthermore, if you choose a modern e-commerce fulfillment solution, such as one that practices micro-fulfillment with fewer overhead costs, like Ohi, you can often benefit from transparent and low flat-rate pricing, as inventory is forward-positioned and last mile delivery is greatly simplified.

It’s important to understand that cost is often overemphasized as a criterion when looking at e-commerce fulfillment providers. By enabling fast delivery, retailers often see outsized ROI via gains in conversion rates and customer loyalty metrics like repeat purchase rates and customer lifetime value, which more than justify the initial cost of enabling these fulfillment services.

‘Modern problems require modern solutions.’ 

Outdated traditional e-commerce fulfillment solutions might still dominate the e-commerce landscape today but will increasingly fail to meet the needs of modern customers who want instant delivery. Look beyond a single 3PL partner approach and consider using a mix of fulfillment partners that together address your customers’ needs.


At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

Oh, Hi Seattle

Seattle MFC Announcement

We’re happy to announce that two-hour, same-day, and next-day delivery is now live in Seattle.

The home of grunge, coffee culture, and the famous gum wall is now a member of the Ohi instant commerce family!

If you have any questions or would like more information, please reach out to your account manager or contact us here.

2-Hour Delivery Is the Future of DTC Sales — How Ohi Enables Instant Commerce 

two-hour-delivery

Key Takeaways

  • Too many DTC sellers focus on the pre-purchase experience with slick apps and marketing. Neglecting the post-purchase experience is a missed opportunity to drive repeat purchases. 
  • By using powerful AI software, Ohi predicts where a purchase will take place and positions products nearby so delivery is shockingly quick and flexible.
  • E-commerce shipping and packaging are very harmful to the environment — Ohi’s core principle of sustainability means more packages delivered from hyperlocal micro-warehouses in reusable totes, instead of planes, trucks and wasteful cardboard.

Let’s face it, Amazon has set the standard — consumers expect to receive purchases in two days — longer shipping times are no longer acceptable.

That’s a tall order for many DTC Shopify merchants, which are still bogged down by long shipping times. The result: Amazon continues to dominate. 

But it doesn’t have to be that way. 

Instant delivery is possible for DTC e-commerce companies. It goes without saying that it will impress the heck out of your customers who will be sure to come back for more. 

On an episode of the eCommerce Fastlane podcast, Ohi Founder and CEO Benjamin Jones talked about how faster delivery is integral to the future of DTC e-commerce and how Ohi is making it possible — and sustainable — for a range of merchants.

The secret weapon powering instant e-commerce 

We’ve crunched the numbers. Brands that partner with Ohi realize significant ROI via improved customer satisfaction, an average increase in conversion of 28%, and increases of up to 120% in repeat purchase rates. Consumers who order with Ohi have up to 35% higher LTV for brands than those who choose a UPS/FedEx shipping option.

How is this possible? 

The “secret” is micro-warehousing. Traditional warehouses are a relic of old-world logistics. They’re very large and due to their size, they’re often located in the middle of nowhere. This is inefficient in so many ways, and it also presents a challenge for quick shipping times. 

Micro-warehousing is a different approach. Mico-warehouses are smaller than traditional warehouses, which means they don’t need to be housed too far from major commercial areas. 

In fact, micro-warehouses take advantage of unused retail spaces and old commercial spaces, repurposing them into small distribution hubs. This means products can be warehoused directly in the cities where orders are placed, allowing for fulfillment to happen in a matter of hours, rather than a few days. 

The ROI of instant delivery (sub 2-hour) has become hard to ignore.

And, even better, fulfillment isn’t dependent on UPS or FedEx — Ohi works with pools of local drivers that can fulfill these orders, taking advantage of the existing local courier system

Before we get into the markets that benefit most from instant e-commerce, let’s look at some of the things that position Ohi to deliver two-hour delivery windows — and to do so in a way that doesn’t harm the planet. 

Predicting future orders with AI

Our micro-warehousing is also backed by vital technology to make sure products are in the right places at the right times. How do we do that? With the power of AI-based optimization. 

Our AI will predict where demand is and where orders will be placed before they happen, allowing us to allocate inventory around our network of micro-warehouses. This tech, combined with our network of last-mile providers, is what gets your product to your customers in two hours.

Instant e-commerce doesn’t have to kill the planet

Making things better for consumers and businesses is critical — but not if it comes at the expense of sustainability, a core principle of Ohi.

The fact is that e-commerce hurts the environment. From trucks and planes to cardboard and packaging material, the industry comes with a lot of unsustainable baggage.

Ohi promises carbon-neutral delivery in three main ways:

  1. Inventory is kept hyperlocal — Since Ohi uses micro-fulfillment centers (MFCs), deliveries only travel a short distance to get to their destination.
  2. Eco-friendly transportation — Ohi uses bike/e-bike/scooter couriers and foot couriers to further minimize our carbon footprint in urban areas.
  3. Minimal/re‑usable packaging — Shorter travel distances enable a reduction in wasteful (and expensive) packaging. Ohi encourages the use of eco-friendly reusable totes for two-hour and same-day orders.
  4. Carbon offsetting — Through our partnership with EcoCart, we take the residual carbon footprint (after the above measures) and offset it, resulting in carbon-neutral ecommerce fulfillment.

Markets that flourish with instant delivery

At Ohi, we work with a range of consumer packaged goods. Things like food and beverages, alcohol, pet food and supplies, baby supplies, and health products — these are items the consumer wants and needs quickly. And that’s perfect for instant delivery. 

How does it work? Ohi integrates right into your Shopify and will display a widget to your customer if two-hour delivery is available based on your customer’s location. If it’s not available, we won’t offer it. It’s that simple. 

Merchants often wonder about charging more for fast delivery. Again, Amazon has set consumer expectations high, which is why we believe offering instant delivery for free is essential. To enable this, we provide flat-rate pricing to help make merchant costs more predictable. 

Instant, free delivery can add millions of dollars of extra revenue every year — and we want to make it as easy as possible for you to add to your bottom line!


👉 This is based on an episode of the eCommerce Fastlane podcast featuring Ben Jones of Ohi.


👉 At Ohi, we’ve flipped the script for e-commerce fulfillment, transforming it from what is traditionally seen as a cost center into a growth engine. Brands join the Ohi platform to deliver powerfully fast, brand-focused, and memorable post-purchase experiences that enable them to grow. Want to learn more about how Ohi enables instant commerce? Get in touch today.

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