It’s a familiar scene: You’re in the grocery store when you spot some free samples. You immediately make a beeline for the sample stall, curious to see what’s on offer. The next thing you know, you’ve filled your cart with the trial product.

Research shows that offering free samples can immediately boost sales. It can also increase customer satisfaction and, in turn, their likelihood to repurchase.

The same principle applies to your online store visitors. Even though your eCommerce store is digital, you can still take advantage of other forms of free samples.

Giveaways and contests (the free samples of eCommerce) pique the interest of your online visitors. Incorporating them into your marketing strategy can be a smart way to generate more sales for your store.

Do giveaways increase sales? Here are some statistics about giveaway performance

While giving something away for free may seem counterintuitive, there are many benefits to running contests and giveaways as part of your eCommerce marketing strategy.

Contests and giveaways are strategic promotional tactics that can help your eCommerce store reach new customers and reengage existing ones.

Encouraging people to share your giveaway or contest is a simple, yet powerful way to extend the reach of your campaign. The more people share your giveaway, the more people will see it.

When executed successfully, these contests and giveaways can also drive brand awareness, increase customer loyalty, and expand your store’s bottom line. Some of the benefits of running eCommerce contests and giveaways include:

• Drive brand awareness – By encouraging sharing, contests and giveaways are a great way to get even more eyes on your store and products.
• Increase customer loyalty – Gamification makes shopping with your brand fun and encourages customer loyalty.
• Grow your social media following – A study by Tailwind found that companies running Instagram contests grow their followers 79% faster than those who don’t.
• Generate more leads – With one in three entrants opting in to receive more information from brands, contests and giveaways can be a great lead magnet for your eCommerce store.
• Boost sales conversions – Contests and giveaways can be a strategic way to boost sales for your eCommerce store by enticing consumers to try something out and drawing them into the brand.
• Cost-effective marketing – Giveaways and contests don’t have to be expensive. Think about the prize value compared to forecasted conversions; you give a little to gain a lot.

Whether your goal is to increase awareness or drive sales, the right kind of eCommerce contest could help you reach that goal.

What are some online giveaway ideas?

When it comes to hosting an eCommerce contest or giveaway, you have the freedom to be as creative as you like.

Choosing the right type of contest depends on three key elements:

• The intended goal of your contest or giveaway
• Audience behavior and interests
• The selected prize for the giveaway

For example, if your goal is to increase your social media following, your target audience is millennials, and the prize is a $100 gift card, a social media giveaway on TikTok would be a favorable option.

Below, we’re sharing some of our favorite eCommerce contest and giveaway ideas to help you get started with running your own giveaway campaign.

Social media giveaways and contests

Social media apps are a great place to host a giveaway or contest. If one of your goals is to raise brand awareness, then a social media giveaway may be the right choice for you.

Choose the right platform based on where your target audience is most likely to be. Then, have fun planning your giveaway.

Social media giveaways can be as simple as asking entrants to follow your brand page and tag a friend in the comments, or it could involve asking them to share their own photos to enter the contest. Whatever you do, be sure to read up on and follow the promotional guidelines of your chosen social media platform.

You could even collaborate with another brand like Nutribullet did in this Instagram contest. Doing so will expand your reach by allowing you to tap into your brand partner’s social media network.

Lead generation sweepstakes

A sweepstake is a contest where winners are selected at random. This type of contest is conducive to lead generation, as the rules for entry can be as simple as entering an email address for the chance to win a prize.

If you decide to run a sweepstake to boost lead generation, consider setting up a contest landing page where you tell entrants the details of the sweepstake: what prizes are available, how to enter, and when a winner will be drawn.

Once you’ve captured their email addresses and contact information, you can employ ongoing marketing to keep them engaged and guide them along the purchase path.

Gamification contests

Next time you plan to host an eCommerce contest, think about how you could make it more appealing through gamification.

Gamification inspires customers to take action through a sense of reward and achievement. It draws on our emotions, which then impacts our levels of satisfaction and brand love.

One brand that does gamification well is the fast-food giant, McDonald’s. Their Monopoly contest encourages people to collect “game pieces” in return for the chance to win prizes with a range of value. Some of the prizes offered in the past have included free food, cars, and a $1 million prize.

For your eCommerce store, you could create a virtual game that customers can take part in online. Remember, the more appealing the prize is, the more likely people are to participate.

Referral contests

We’ve spoken before about the value of an eCommerce referral program. In a similar vein, referral contests can also be a powerful tool for amplifying the performance of your eCommerce store.

Referral contests are straightforward: customers can refer a friend to gain an extra entry in your contest. Rewarding contest entrants with bonus entries further incentivizes customers to participate in your giveaway by increasing their chances of winning.

For instance, you can give users a second entry when they mention your giveaway on Twitter, and a third one when they share a unique referral code to get their friends to enter the contest. You could up the stakes even more by creating a leaderboard to build the sense of competition.

Seasonal giveaways

Even if your product doesn’t change with the season, you can take advantage of key holidays to boost sales and drive traffic to your online store.

Black Friday, Christmas, and Valentine’s Day are just a few of the holiday periods you can leverage with seasonal giveaways. Rather than just offering a seasonal discount like most eCommerce stores, develop a well-thought-out seasonal giveaway or contest to stand out from other online retailers.

One giveaway idea you could run during a festive period is a 12-day Christmas giveaway. This could comprise a series of small daily offerings, all of which lead up to one grand prize on day 12 of the giveaway. This will not only boost sales over Christmas, but also increase customer retention by encouraging them to reengage with your contest constantly.

How to run your own giveaways and contests

Now that you have a good idea of the eCommerce contests you can run, it’s time to map out the strategy for hosting a successful giveaway.

Here’s our step-by-step guide to running your own eCommerce giveaways and contests:

1) Set a clear goal

We cannot stress enough how important it is for your contest to be goal-led. As soon as you start thinking about your eCommerce contest idea, first consider what you want to achieve with the contest.

Once you’ve settled on a clear goal, establish the key performance indicators (KPIs) you’ll measure. For example, if your goal is to increase sales, your KPI will be to measure the number of orders received.

2) Offer an enticing prize

The prize you offer needs to be appealing enough to make people want to participate.

When deciding on a prize, consider what would interest your audience the most. Analyze existing customer behavior and look at what they’re already telling you.

At the same time, you need to make sure the prize is financially viable for your brand. To do this, you need to determine if the cost of the prize will be redeemed in forecasted conversions, leads, or new customer acquisitions. According to Hubspot, the average value of a contest prize is $369.

Tip: Make your prize something that you can encourage the winner to create UGC out of. It should introduce your winner and their fans to your brand.

3) Build out your promotional strategy

To make your eCommerce contest or giveaway a success, you need to have a solid marketing strategy in place.

Whenever you host a giveaway event, you should have a checklist of marketing activities to perform before, during, and after the contest campaign.

Add a contest landing page and pop-ups

Before the contest takes place, you need to create a contest landing page. This page should be the go-to place to tell your audience everything they need to know about the contest.

Make sure it contains enough information to generate interest while focusing predominantly on encouraging buy-in. Tell people how they can take part, and make it as easy as possible for people to enter your contest from this page.

You could add a countdown bar to your landing page or as a pop-up box on your eCommerce store to build excitement in the lead up to the contest going live.

Promote your contest on social media

Besides updating your own website, you should also plan out your social media activity. Create a series of pre-launch posts to drive interest and let customers know about your upcoming contest.

As part of your social media marketing, you could collaborate with popular influencers to promote your campaign once it’s live. This will further extend the reach of your campaign, increasing its chances of virality.

Make your giveaway shareable

If going viral is one of your goals, work a viral loop into your marketing strategy by making your contest shareable. A viral loop is a referral marketing tactic that will drive continuous referrals to your contest.

Tap into email marketing

Don’t forget the power of email marketing. Create a series of contest-related emails comprised of pre-launch teaser emails, an announcement email, contest reminders, and post-campaign emails including a winners spotlight and suggested next steps. You might also offer an exclusive coupon code for contest participants who didn’t win this time around.

Marketing checklist

Before launching your eCommerce giveaway, implement the following steps to help set your contest up for success:

• Create contest landing page
• Add a contest countdown to your website
• Send out pre-launch teaser emails to your existing audience
• Announce your upcoming contest on social media

These activities will help increase awareness for your upcoming giveaway, making sure people know what it is, when it’s happening and how to get involved.

4) Launch your giveaway

With your contest marketing strategy in place, you should now be ready to launch your eCommerce giveaway or contest.

Keep the noise alive once your contest has launched by continuing to promote online. Again, make sure you post about it on social media and through email marketing. As previously mentioned, you could also work with influencers to promote your contest, or host a live shopping stream as part of your promotional activity.

When the contest is over, spotlight your giveaway winners as a way to celebrate their success and make them feel like valued members of your community. With their permission, you can post about your winners on social media, or create a “past winners” page on your website as a way to celebrate previous winners and generate social proof for future giveaways.

Post-giveaway, you should also send out emails to everyone who participated thanking them for taking part and encouraging them to stick around. This email could include an exclusive offer and direct them to where they can shop the prizes on your website. Offering free gifts or coupon codes to those who didn’t win can further boost eCommerce sales after the giveaway has ended.

5) Measure performance

Last, but not least, is to measure the performance of your eCommerce contest or giveaway. Remember to check how your contest performed using the KPIs you chose to measure when first establishing your contest objective.

Measuring the contest’s performance will gain you a deeper understanding of what did or didn’t work well so you can improve your future contests. If you’re part of a marketing team, gathering performance statistics will also help you obtain buy-in from stakeholders or senior management for future contests by demonstrating their effectiveness.

eCommerce contest and giveaway apps

You can approach hosting eCommerce contests and giveaways in several ways. You can manage them manually by, for example, running a social media giveaway, monitoring entries, and announcing a winner. However, this approach can be time-consuming.

Luckily, there’s a wide selection of eCommerce giveaway apps you can use to run your next contest with ease.

Rafflecopter is an easy-to-use platform for running giveaways that can be seamlessly embedded into your website.

If you’re looking for something more intuitive, ShortStack offers a variety of landing page contests, social media contests, and games.

Similar to ShortStack, Wishpond is an all-in-one platform with various solutions to take care of all your marketing growth needs. Wishpond offers 12 types of social media contests, including photo contests, referral contests, sweepstakes, and leaderboard contests.

When it comes to finding an eCommerce contest app for your online store, you won’t be short of options. Do your research and choose an app based on your specific eCommerce contest idea and requirements.

Wrapping up – Use eCommerce giveaways and contests to leave an impression

Running an eCommerce giveaway or contest can be a powerful way to build followers, generate leads, and boost conversions for your online store.

Before running a contest, you first need to determine your contest goals, focusing on who it’s for, what you want to achieve, and how you’re going to measure the performance. From there, you can choose the perfect contest format to attract, engage, and convert your ideal leads into customers.

Remember, contests are meant to be fun. So, make sure you have some fun while planning your giveaway strategy. The more appealing your contest is, the more likely it is to go viral.

This is a guest post from the Linnworks team.

Takeaways from Linn Academy 2021 Keynote with Linnworks CEO Callum Campbell

We’re living in the middle of the effortless economy, and convenience is king.

The retailers who come out on top are the ones who understand their customers (including how they discover and buy products) and set up their back-office operations to facilitate convenience for the best customer experience.

Since the COVID-19 pandemic, changes have occurred at an unprecedented pace. Brands have had to rewire their operations over the last 18 months while operating at full capacity, with no idea of what was around the corner.

While some of the initial chaos has subsided, the greater commerce acceleration is still settling in. The decisions businesses make in the next 12 months will determine how successful they’ll be over the next decade.

In this article, we’re taking a closer look at some of the biggest shifts we’re seeing.

The great commerce acceleration is here

The eCommerce industry is experiencing a massive change which started as a result of the pandemic and has led to global supply chain challenges of unprecedented levels including skyrocketing container prices, product shortages, and shipping delays. It’s in a watershed moment, which can be unsettling for organizations.

However, it’s in moments like these where the biggest opportunities exist.

Commerce is accelerating on all fronts: the market, the enterprise, and the ecosystem.

1) Market acceleration

The rise of the effortless economy is changing the way consumers (and the market as a whole) access products. Everything revolves around customer experience and convenience.

While you used to have to drive to a brick-and-mortar store, where you could only buy what was in stock there, today, you can browse a nearly endless selection of products on your smart device and have something delivered the same day — often without even visiting more than one website.

This is commerce as you go, and we’re seeing an acceleration of the market in this direction, from Amazon to social commerce.

In fact, in a recent study Linnworks conducted earlier this year, 76% of respondents said convenience was now their top priority when selecting a retailer.

2) Enterprise acceleration

Another shift we’ve observed is the acceleration of the enterprise. In an effort to stay relevant, the enterprise has to transform in response to what’s going on in the market layer. This means a deeper investment into digital channels.

The pandemic and the second-order effects due to global supply chain challenges and new consumer expectations have created a heightened sense of urgency among brands and retailers. They’re moving fast to invest in this new infrastructure so they can stay connected with their customers, remain relevant, and not miss out on revenue opportunities. After all, whoever is closest to the customer wins.

This means investing in two key areas;

Multi-channel distribution

This starts by establishing total commerce control, which means having a clear picture of your entire inventory and order management pipeline regardless of which warehouse a product may be housed in, how long it has been in stock, and whether it was sold on your website, Amazon, Walmart, etc. This enables you to provide a more seamless and convenient customer experience.

Brand building

Brands are now an eCommerce businesses best competitive weapon against generic alternatives and cheaper options. Building a reliable brand means building a loyal customer base, which provides more business resilience. Brands can also earn a higher margin when they cut out the middleman and sell directly to consumers, and they are able to gather more first-party customer data, which reduces customer acquisition costs and makes them less reliant on third-party marketplaces and paid ads.

3) Ecosystem acceleration

The third trend we’ve noticed is the acceleration of the ecosystem in the form of huge investments into the technology and service providers that support the market and enterprise.

This is particularly true when it comes to anything tied to personalization (i.e., first-party data collecting) or reducing friction at checkout. So, we’ve seen an explosion in buy now, pay later payment apps as well as technology designed for multi-channel selling or optimizing product/customer data.

A total commerce approach drives growth

All of these factors converge to what Linnworks coined as Total Commerce. Total Commerce is all about empowering merchants to sell wherever their customers are and giving the business a seamless way to connect orders and inventory in every sales environment.

This means Linnworks Total Commerce is at the center of your business, enabling multi-channel distribution at scale, so that you not only have a single source of truth for inventory, shipping, and order management across all of the channels you sell on but you also have access to more first-party data about your customers.

Conclusion

The greatest stories of the 2020s will belong to those retailers who don’t give in to fear, and instead embrace the changing market, enterprise, and ecosystem dynamics, including:

• Embracing the effortless economy
• Investing in total commerce to provide a seamless customer experience
• Reducing customer acquisition costs with first-party data
• Personalizing the buying experience
• Reducing friction at checkout

Watch the session on the great commerce acceleration.

Rewarding customers for their loyalty is a smart way to increase customer lifetime value for your eCommerce brand.

Customer lifetime value (CLV) is the total worth of a particular customer over the entire period of their relationship with your brand. The idea behind CLV is simple: the better your customer retention, the greater your profits will be.

Prioritizing customer loyalty to increase your CLV can also help offset customer acquisition costs. After all, retaining existing customers is generally much easier than constantly investing in new customer acquisition.

If you’re wondering how you can boost customer lifetime value for your eCommerce brand, let us introduce you to eCommerce referral programs.

An eCommerce referral program is your answer to turning customer acquisition into valuable customer retention. So, let’s dive into eCommerce referral programs: what they are, why they work, and how to launch your own successful referral program.

What are eCommerce referral programs?

Based on an incentive structure, an eCommerce referral program rewards your existing customers for telling other people about your products. This is often done by giving customers their own unique referral code or link to share.

The rewards offered in your referral program could include:

• Free products
• Store points/credit
• Exclusive access to products
• Loyalty member perks and benefits (e.g., exclusive events, early sale access, special coupon codes)

Setting up a referral program for your online shop can be a cost-effective way to increase customer acquisition for less. You can set up your referral program, develop an attractive referral marketing strategy, and watch as your current customers bring you new followers.

Note that referral programs differ from affiliate programs. With affiliate programs, anyone, including people who aren’t customers, can reap rewards for telling people about your products or services. On the other hand, referral programs are open only to existing customers.

Why do referral programs work?

Referral programs work on the same premise as word-of-mouth marketing, whereby people are likely to trust recommendations from friends and family.

For years, word-of-mouth referrals have reigned supreme. Word-of-mouth marketing carries the most weight out of any other form of brand advertising, making it one of the most valuable methods of customer acquisition.

Research by Nielsen also found that 83% of consumers will believe a recommendation from friends and family, further advocating for the power of recommendation-based programs.

Much like word-of-mouth recommendations, referral programs are based on social proof and trust, two factors that work hand-in-hand to boost the credibility of your brand.

To expand the social proof capabilities of your referral program, make sure you specifically reward customers for sharing their referral code via social media.

As for trust, by encouraging existing customers to share your brand with people they know, your referral program will help build the trustworthiness of your online store.

eCommerce referral programs can also combat problems affecting customer loyalty. For example, if your eCommerce brand exists in a competitive niche, rewarding customer loyalty through an attractive referral program can help your brand stand strong against competitors.

Implementing a referral program can make your customers feel valued, and thus inspire them to take positive action.

Successful eCommerce referral program examples

To help you understand what comprises a successful eCommerce referral program, let’s take a look at some examples.

These DTC eCommerce brands have successfully integrated referral rewards programs into their overall brand marketing strategy. As a result, they managed to turn existing customers into loyal brand advocates.

Use these examples as inspiration for launching your own eCommerce referral program.

1) Bombas – Comfortable socks and enticing rewards

Bombas is an apparel brand selling comfort-focused socks. They pride themselves on their 100% happiness guarantee and are committed to doing everything they can to support and lift up their customers.

One way they do this is through an enticing referral program. Through Bombas’ referral program, customers can offer their friends 25% off their first purchase and, in return, will receive $20 in store credit.

2) Saje – Refer a friend to give wellness and get wellness

Saje is a wellness eCommerce brand offering plant-based essential oils and other natural products. As part of their commitment to wellness, Saje has a refer-a-friend program (removed from their website) that rewards customers for recommending Saje to their friends. As part of this program, new customers receive $10 off their first order. Once they’ve placed an order, the referrer then receives $10 off their next order.

3) SimpliSafe – Alarmingly good referral program

In the home security niche, SimpliSafe does things differently by steering clear of cash incentives.

Instead, as part of their eCommerce referral program, SimpliSafe offers existing customers three free months of alarm monitoring after they encourage friends to choose the 24/7 professional monitoring when purchasing a new alarm system. New customers who visit via the refer-a-friend program also get 30% off their first purchase to further encourage them to buy.

Types of referral program rewards

Not all referral programs follow the same formula. When designing your program rewards, you can get creative.

Before you decide what types of rewards to offer, though, you first need to consider what rewards your customers would like to receive. After all, if your customers aren’t wowed by your referral program, they won’t feel incentivized to join.

To help you decide which referral strategy is best for your eCommerce store, it can be helpful to ask yourself the following three questions:

• What will be our parameters for rewards?
• What rewards will we offer to the referrer?
• What rewards will we offer to the referred customer?

Once you’ve mapped out your answers to each of these questions, you can start to build an attractive eCommerce referral rewards program for your customers.

Rewards criteria and parameters

The most popular parameter for any referral program is to offer the referring customer a reward each time a referred customer makes their first purchase. This is usually monitored by giving the referring customer a unique link or code they can then share with friends and family.

However, you might want to develop more sophisticated rules for your program. For instance, you could implement a rule wherein the referral reward is only accessible once the new referred customer meets a minimum spend threshold. Brilliant Earth, for example, offers loyal customers the opportunity to earn $100 in store credit when the person they refer spends $1,000 or more.

Alternatively, you could leverage the power of scarcity marketing by adding a time limit to store coupons. Outdoor Voices’ referral program (removed from their website) rewards existing customers with $20 in store credit each time they refer a new customer. However, this referral credit expires if it’s not redeemed within two weeks. Tapping into scarcity can be a great way to encourage repurchases.

Rewards for referrer

A successful eCommerce referral program is dependent upon knowledge of two things: what rewards are attractive to your customers, and what’s profitable for your store.

Referral rewards programs can take many forms, but the bottom line remains the same — your eCommerce referral program has to be enticing enough that your customers want to share it and reap the rewards.

The types of rewards you can offer customers include:

1. Cash incentives
2. Store credit
3. Discounts
4. Free shipping
5. Early access to new goods
6. Extended warranties
7. Free account upgrade
8. Loyalty tier upgrades

When deciding which rewards to include in your loyalty program, think about which incentives your customers will find the most valuable. This will differ depending on the type of products you sell or the type of customers who are most likely to buy from your brand.

1) Cash incentives

Example messaging: Refer a friend and get $20 cash back when they spend $100.

Receiving money in return for doing something easy can be motivating for a lot of people. But if you do offer cash incentives to customers who promote your products, make sure you can afford it.

Cash incentives tend to work best for premium eCommerce stores that sell high-ticket items or products with higher margins. The reward could be offered as cash back each time a customer refers a friend to make a purchase, or as a monetary voucher they can redeem for future purchases. The redeemable monetary voucher is the most likely option to encourage customers to shop with you again.

2) Store credit

Example messaging: Get $5 in store credit when you recommend us to your friends and family.

Store credit is similar to a cash incentive. It helps increase the likelihood of one-time customers becoming repeat buyers by incentivizing them to shop with you again. In turn, this can ramp up customer loyalty.

The more people your customers refer, the more store credit they can accumulate for future orders. This is great for encouraging customers to choose you over competitors the next time they want to make a purchase.

3) Discounts

Example messaging: Give your friends 20% off their first order and get 10% off your next order.

Discounts don’t have to be reserved for key gifting periods alone. You could build discount offers into your eCommerce referral program.

The bigger the discount percentage, the more appealing it will be to your customers. But, just like with cash incentives, you need to make sure the discount is still profitable for your business.

This is where you can get strategic and decide whether offering a cash incentive or discount reward would be better for your business. For example, offering $10 off a $100 product might not seem as appealing as offering 10% off that product. Choose your offer and your wording carefully when setting up an eCommerce referral program.

4) Free shipping

Example messaging: Get free shipping off your next order when you refer a friend.

75% of online shoppers expect free shipping on orders under $50. If your online store doesn’t already offer free shipping, it may be worth building this into your eCommerce referral program.

Offering free shipping as part of your referral program could encourage your existing customers to refer your products to even more of their friends. Free shipping can be a key driver for encouraging customers to reorder from you in the future as well. This helps give your brand a competitive edge over other online retailers.

5) Early access to new goods

Example messaging: Recommend a friend and get exclusive early bird access to our new product.

Exclusive offers are one of the most effective ways to drive conversions for a select group of consumers. You could integrate exclusivity into your eCommerce referral program by providing customers early access to new goods in return for referring their friends to your store.

A consumer shopping survey by Kelton Global and SheerID found that exclusive offers can help eCommerce stores acquire and nurture high-value customers, who are more likely to make repeat purchases. 82% of these shoppers said an exclusive offer would increase how often they shopped with a brand.

6) Extended or free warranties

Example messaging: Refer 3 friends to unlock 3 months free warranty.

Online retailers offering tech products should consider offering extended warranties as part of their eCommerce referral program to increase customer loyalty.

One of the biggest barriers to customers purchasing warranties for their products is the cost. Working free or extended warranties into eCommerce referral programs could motivate customers to pay to protect their purchases. It can also encourage long-term loyalty and profitability, especially if customers decide to keep their warranty after the free trial period expires.

7) Free account upgrade

Example messaging: Refer 3 friends and we’ll upgrade your account to premium status for 1 full year

Another option to incentivize customers is to offer a free account upgrade in return for recommending your products to their friends and family.

Many online retailers include account upgrade options. One popular upgrade is unlimited next-day delivery in return for a fixed annual fee. For example, you could offer customers free, unlimited next-day delivery for $10 per year.

Then, as part of your referral program, you can give customers access to this premium account level for free when they refer a friend.

8) Loyalty tier upgrades

Example messaging: Refer a friend to receive 10x loyalty points and access exclusive member rewards.

One lucrative idea that many online retailers are tapping into is tiered loyalty programs.

In these types of programs, customers can earn points each time they refer a friend. Each point earned will help them climb the ladder, moving through different tiers of the loyalty program and receiving bigger and better rewards along the way.

This is a great way to reward customers continually for their loyalty through gamification. Customers will feel incentivized to keep shopping with your brand in order to increase their loyalty level and access the next tier of member-exclusive perks. This could include free birthday gifts, exclusive events, entry into sweepstakes, exclusive discount code, and more.

Rewards for the new, referred customer

Along with rewarding your customers for recommending your brand, you also want to consider offering incentives to the people being referred to your online store. Rewarding new referrals will encourage them to shop with your brand.

When mapping out your referral program, think about what you can do to make it easier for new customers to buy. Giving new customers a bonus when they receive a referral can prod them to make their first purchase.

You have a few routes to go down when choosing a reward to offer to new, referred customers. You could offer a free gift with their first purchase, give store credit off their next purchase, or offer a shared discount for both the referrer and the referred customer, to name a few.

How to launch your own eCommerce referral program

Now that you understand why your online store needs a referral program and what that could look like, it’s time to learn how to launch your own eCommerce referral program.

To help you get started, we’re sharing three additional steps you need to take to spread the word about your referral program:

1. Create a landing page that converts
2. Set up email campaigns
3. Build your referral program offer into your checkout flow

1) Create a landing page that converts

Once you’ve built your referral program, you need to work on how you present it to your customers. The most important aspect of this presentation is creating a dedicated landing page for your referral program.

The landing page provides a dedicated place to display everything your customers and store visitors need to know about your referral program. The content you share on your referral program landing page serves to wow your customers and get them to convert.

When shaping your landing page, keep your messaging concise, yet compelling. You also want the copy to be infused with emotion. Focus on selling the benefits of your referral program, not the features. Using bullet points can also make it easier for customers to scan the landing page quickly and get all the information they need.

Don’t forget to add a short form where customers can enter their details to join the referral program. Customers who complete this form should then be redirected to a thank you page that includes their referral code or link.

To help kickstart the program, add social media referral links to your thank you page so people can quickly share their code and start earning their first referrals.

Include a link to this landing page on your website as well so it’s easy for customers to find. You may also want to add a pop-up box promoting your loyalty program, or include links to your program’s landing page on social media, in email marketing, and as part of your paid marketing campaigns.

2) Set up email campaigns

Another way to introduce your existing customers to your referral program is to produce a series of emails, otherwise known as a drip campaign.

The aim of this series is to showcase the benefits of the program and encourage customers to sign up.

To maximize the effectiveness of this email series, you should segment your email subscriber list so that only repeat customers receive these communications. For example, you could create a rule that only sends the program emails to customers who have shopped with you two or more times in the last six months.

By strategically picking and choosing who receives these emails, you’ll automatically increase the expected performance of your referral program.

3) Build your referral program offer into your checkout flow

Finally, you should build your referral program offer into the customer checkout flow to encourage uptake.

Store visitors who’ve reached the checkout stage have already shown a high level of interest in your brand. This makes it even easier to sell other products or services to them during the checkout process.

Add your referral program into the checkout flow by presenting it as a post-purchase offer. This means that before customers reach the thank you page for completing their order, they’ll first be notified about the opportunity to join your referral program. This could be in the form of a pop-up box, an upsell box within the checkout page, or a dedicated page in between the checkout page and the thank you page.

Promoting your referral program at this stage will help you tap into customers who are currently engaged with your brand. When incorporating your referral program offer into your checkout flow, make it quick and easy for customers to sign up.

Tools to launch your referral program

Last, but not least, launching a successful referral program requires the tools. Choose the referral program software that best suits your brand and audience needs.

To help you decide which referral program is best for your eCommerce store, we’ve analyzed a selection of referral program tools. We’re sharing a few of our favorite ones below.

Swagbucks

Swagbucks is a popular choice for eCommerce owners to reward loyal customers. With Swagbucks, you can list your business on their rewards platform to showcase rewards and prizes for people who shop with your store.

Currently, Swagbucks has 7,000 participating stores actively sharing rewards and offers for shoppers. Customers can then shop brands through Swagbucks and earn rewards as they buy. From free gift cards to cashback and exclusive discounts, customers are rewarded every time they shop with a Swagbucks store.

It’s a great way for eCommerce businesses to launch a rewards program if they don’t have the time, budget, or resources to set up their own.

Influitive

Influitive is a customer rewards program that helps turn customers into loyal brand advocates through gamification, engagement, and rewards.

With Influitive, you can build a fully customizable and trackable referral landing page that converts. You can even tailor your referral campaigns to different audiences, creating a personalized offer that’s even more likely to boost sign-ups.

Yotpo

Yotpo is an advanced, all-in-one solution that offers various tools to help eCommerce owners reward customer loyalty.

As part of the Yotpo package, you can craft branded loyalty programs designed to encourage customer behaviors that drive measurable increases in LTV. Yotpo offers multiple campaign choices, so you can choose a referral program structure that best suits your store and audience. These options include points, products, store credit, and discounts.

You can also include tiered incentives, where customers earn better rewards every time they refer someone new. You can then monitor and evaluate the performance of your referral program within Yotpo’s comprehensive analytics dashboard.

LoyaltyLion

LoyaltyLion’s referral program software allows eCommerce owners to build long-term relationships with their customers and enhance the growth of their eCommerce store.

LoyaltyLion uses data-driven insights to help online retailers create a loyalty program that’s as unique as their brand. Retailers using LoyaltyLion can A/B test their referral program to see what works best for their customers and accelerate performance.

Wrapping up — Launching an eCommerce referral program

eCommerce referral programs present a lucrative opportunity for online retailers to increase repeat purchases, drive customer loyalty, and maximize their CLV.

If you want to boost customer loyalty for your store, launching a referral program is a powerful way to drive engagement and create those all-important customer relationships.

Pacers Running is an iconic running shoe retailer that celebrates the journey and accomplishments of runners. They build communities by putting on best-in-class experiences for runners and delighting their customers with white glove service.

They utilize MyFBAPrep to handle their Shopify fulfillment and Amazon FBA prep, so we spoke with Pacers Running President Chris Farley to hear about how they transformed their logistics into a competitive advantage.

Building a brand

“We need multiple touchpoints with consumers, to tell them about our events and really get them out and running, walking, and being active.” — Chris Farley, Pacers Running President

Pacers Running has more than just customers — they have fans. That isn’t surprising given their dedication to the customer experience. In addition to building a movement around running and being active, they tailor their buyer experience to inspire their customers.

According to Chris, they find their Shopify channel the most exciting because they have the most control over the customer experience and are able to “dynamically communicate with these customers who go to our website, inspire them to run, talk about the next great race, and tell them stories about running.”

“If you go to runpacers.com, powered by Shopify, a lot of those shoes are shipped by our friends at MyFBAPrep.” — Chris Farley, Pacers Running President

However, selling thousands of shoes a month isn’t without its challenges. So, Pacers Running worked in partnership with MyFBAPrep to find unique solutions and face these challenges head-on.

Finding an authentic partner

“I’m working with people at MyFBAPrep who are invested in our success.” — Chris Farley, Pacers Running President

Beyond viewing our sellers simply as customers, the MyFBAPrep team strives to be partners with everyone we work with. For eCommerce merchants, it’s especially important to find a reliable logistics partner who can strengthen any weak links.

“Consumer behaviors will never be the same. So, it was important for us to have a partner who would execute flawlessly on large-scale fulfillment logistics, which is not something that’s ever going to be our core competency.” — Chris Farley, Pacers Running President

Another component of being a real partner is how we work to solve merchant problems, find the best solutions, and brainstorm together.

“If you want a real partner to help you problem-solve, MyFBAPrep is a good solution.” — Chris Farley, Pacers Running President

This problem-solving approach developed a unique system for Pacers Running that works well for their needs. It’s a lens we bring to all of our sellers as we aim to be reliable and problem-solving fulfillment and logistics partners.

Forging their own path

“The advantage of MyFBAPrep is the flexibility I have in working with them to make my own path and figure out what this looks like together. There is no one size fits all.” — Chris Farley, Pacers Running President

Prior to working with MyFBAPrep, Pacers Running had a third-party warehouse and planned to use a different 3PL to handle their DTC fulfillment. When we first began working together, they wanted MyFBAPrep exclusively for FBA prep.

“We had a design that was completely different from where we are today. I started working with them in January [2021] and our design was going to be using another contractor to help us do the direct-to-consumer shoes. It didn’t work out. So, we had to scrap everything, and together, we came up with a new plan … It wasn’t just, ‘This is what we do, so we’re going to fit you into that mold.’ The attitude was, ‘Let’s learn about what your needs are, who you are, who your company is, what your goals are, and let’s go.’ That’s been a game changer for us.” — Chris Farley, Pacers Running President

When something didn’t work out, MyFBAPrep and Pacers Running sprung into action to fix the issue, with great results. We were able to find unique solutions that addressed their concerns and met their buyers’ expectations, to turn logistics into their competitive advantage.

According to Chris, “I trust it’s a significant savings and I know we couldn’t do it ourselves. And they’re a real partner.”

Taking on logistics challenges and turning them into a competitive advantage

“DTC, storing pairs, and preparing shoes for FBA have all been a huge advantage for us.” — Chris Farley, Pacers Running President

MyFBAPrep was able to help Pacers Running in three key ways:

1. Tackling the unique logistical challenge of shipping shoes one at a time, at scale
2. Warehousing and storing shoes to give them an edge during supply chain issues
3. Prepping items for Amazon FBA with rapid turnaround times

1) Shipping shoes at scale

“Shipping shoes one at a time is not sexy or attractive for vendors, 3PLs, or anyone. And it’s really difficult at the scale we wanted. What we’re talking about is hard … and I like having partners who are willing to take on that challenge as well.” — Chris Farley, Pacers Running President

MyFBAPrep was able to create a custom racking solution tailored to handle a large number of SKUs with low quantities of each, such as a wide range of shows with multiple sizes, and a few pairs in each size. We paired this solution with innovative software that tracks every last pair of shoes throughout the entire prep and fulfillment process.

2) Warehousing shoes to mitigate supply chain challenges

“Having a partner who could warehouse shoes became a huge advantage for us. The flexibility, different plans, and different storage options we had with MyFBAPrep was vital as we faced supply chain headwinds coupled with phenomenal growth in our channel. We need to warehouse a lot of shoes as supply chains get tighter and tougher and tougher, so being able to have a partner who understood that business and worked on the fly to sideline and store these shoes effectively and cost efficiently — and be able to ultimately turn them into sales on whatever channel we needed them for — was huge. So, we really loaded up on inventory, and having that flexibility gave us a competitive advantage.” — Chris Farley, Pacers Running President

The team at MyFBAPrep always keeps an open line of communication with our merchants, so we knew about the goals of Pacers Running and that they were having supply chain issues. Understanding this meant that we were able to pivot into FBA, DTC, and storage solutions to help them beef up their logistics resilience.

By using simple software for team communication, we were able to give Chris real-time information about their shipments, while also getting updates about any changes on their end. This helped us handle their warehousing and fulfillment in a way that enabled uninterrupted sales, despite supply chain issues.

3) Fast and efficient FBA prep

“They prepare a lot of our shoes for FBA, and it’s pretty much on autopilot. I kind of take it for granted that it gets done quickly.” — Chris Farley, Pacers Running President

Initially, we had a different system in place that wouldn’t be conducive to footwear. Then, as Chris notes, “the [MyFBAPrep] team pivoted and came up with a new system that has been effective for our business.” This flexibility has helped us find the best prep process for different product lines, categories, and unique SKUs for all of our clients.

The MyFBAPrep team developed a custom prep process that reduced the number of touches per product and was applicable to all product mixes, especially shoes. We tracked our prep product by the hour, allowing us to make tiny adjustments for massive compound improvements. All of these efforts working together enabled us to get Pacers Running inventory through our system and into FBA in one to three days.

Meeting the consumer expectation for speed

“If we can’t get [shoes] out through your distribution channels and onto our consumers’ feet, we’re wasting money.” — Chris Farley, Pacers Running President

Before the pandemic, consumer expectations for increasingly fast delivery times were already rising. Chris notes, “We have to deliver on that expectation in a cost-effective and efficient way.”

At MyFBAPrep, we continue to build our warehouse network to enable the sellers who work with us to meet those expectations with network breadth, process efficiency, and creative problem-solving. We approach each issue uniquely, understanding no two merchants are alike.

Today, Pacers Running is able to deliver their direct-to-consumer orders within one to three days using MyFBAPrep’s network.

“MyFBAPrep saved us time and money, because now we’re able to react quickly, get product out, and now we have an ecosystem that scales.” — Chris Farley, Pacers Running President

The MyFBAPrep advantage

“If you want to surprise and delight your consumer, you look for a partner like MyFBAPrep.” — Chris Farley, Pacers Running President

MyFBAPrep has helped Pacers Running use logistics to give them the upper hand. Together, we’ve built a partnership and system that works for a unique business model and continuously delights their customers.

According to Chris, MyFBAPrep is an “extension of this white glove experience that we want to provide.” Experience it for yourself at Pacers Running.

“It’s really a relationship thing … we’ve been very fortunate in our business as it’s grown to have a partner that can grow and scale along with us.” — Chris Farley, Pacers Running President

At the end of the day, MyFBAPrep empowers our merchant partners to build stand-out experiences for their buyers with seamless multi-channel prep and fulfillment. We’re able to do this at scale with more than 50 warehouses worldwide, including across the USA and in Canada, the UK, and Germany. Thanks to decades of experience in logistics, the team is able to build, train, and grow our network to provide seamless and flexible eCommerce solutions.

If your business also wants to provide a high-end customer experience with every interaction, get in touch today!

Biggar and Leith is a wine, spirits, and fancy goods company that sells popular brands like the Hotel Starlino aperitivos and Casa Firelli hot sauce. Their dedication to craftsmanship and eye for excellence helped them curate such successful and well-loved brands.

Casa Firelli sells a rich, rounded Italian hot sauce that gives a delicious kick to any dish. Their hot sauce is crafted in Parma with balsamic vinegar from Modena, chilis from Calabria, and roasted red peppers from Tuscany. Their quality ingredients and unique family recipe make their products a hit on any pizza, pasta, sandwich, eggs, or even in a cocktail.

This versatile hot sauce is a hit with foodies, and as the company grew, they needed to tap into outsourced logistics services like prep and fulfillment to meet higher demand. We spoke with Casa Firelli Sales Director Matt Herman to learn why they chose MyFBAPrep and how they use MyFBAPrep services and expertise to grow their business.

From daily drives to USPS, to headache-free ops

“MyFBAPrep was the most professional.” – Matt Herman, Casa Firelli Sales Director

Before MyFBAPrep, the Firelli team handled pack and prep out of a storage unit and drove to USPS every day. They knew their manual processes wouldn’t hold up as they grew, and they needed to outsource to increase efficiency.

They considered other warehouses around the U.S., but selected MyFBAPrep ultimately because they were the most professional, with all of the locations and services required.

Today, Casa Firelli and other Biggar and Leith teams use MyFBAPrep to handle all of their eCommerce orders, whether it’s direct-to-consumer (D2C) prep and fulfillment with their Shopify store, or FBA prep and delivery into the Amazon FBA network.

Investing in D2C

“We wanted to provide our products where people want to buy them. We’re seeing some good growth now, but initially, we invested a lot more in D2C than we got out of it — so we’re glad the prices you charge are fair.” – Matt Herman, Casa Firelli Sales Director

Casa Firelli pays close attention to what their consumers want, and they noticed buyers were increasingly looking to purchase directly from brands rather than marketplaces.

Armed with this knowledge, they decided to invest in their own D2C website. This introduced numerous benefits for both the brand and their buyers:

1. Casa Firelli could own the customer relationship, including all marketing and communications. This makes their business and revenue more resilient.
2. They created a sales channel that wasn’t subject to shifting marketplace SLAs, or always at the mercy of marketplace rules. This maintains consistent sales within their control.
3. They were able to tailor the purchasing journey on their website, providing a better, more branded buyer experience.
4. They optimized their website for upsells (e.g., with bundles) and eliminated competition from the equation (whereas marketplaces are optimized for purchase, be it from you or a competitor).

Tip: Are you looking to start selling D2C? Most merchants find their biggest barrier to entry is customer acquisition, as websites (unlike marketplaces) don’t come with existing audiences. Check out our article on D2C customer acquisition to learn about the components of a robust acquisition strategy and nine channels to start with.

White glove MyFBAPrep experience

“We’ve gotten offers from other prep companies as we’ve grown, and I’ve just told them no…I like working with MyFBAPrep.” – Matt Herman, Casa Firelli Sales Director

At MyFBAPrep, customer service isn’t simply another item to cross off our to-do list. Our customers are at the heart of everything we do, which means we take the time to learn about each of our sellers’ businesses to find the best setup and help them grow.

Thanks to this, Matt has already recommended MyFBAPrep to some of his entrepreneur friends who started their own snack brands, and even their broker!

Tapping into MyFBAPrep’s expertise on demand

“We use MyFBAPrep to fulfill all of our eCommerce orders, whether it’s pack/prep/ship on Shopify or a product we’re selling on Amazon. And we also use the team for helpful advice from time to time.” – Matt Herman, Casa Firelli Sales Director

The MyFBAPrep team has decades of experience as eCommerce sellers, consultants and advisors. When you work with us, you get your very own personal strategy team at your fingertips.

In true partnership fashion, the MyFBAPrep team was there to answer all of Matt’s questions about logistics, different sales channels, and anything else. Matt notes that Tom, a MyFBAPrep co-founder with extensive eCommerce experience, is “super easy to get a hold of whenever I need him.”

Are you looking to tap into expert advice from the MyFBAPrep team? We’re just an email away. Sign up for an account today!

Shopify, BigCommerce, and WooCommerce are some of the most well-known eCommerce platforms. Each has a rabidly loyal following — and yet, if you’re building an eCommerce site, they may not be a good fit.

To help you out, we’ve created a quick comparison of these three platforms. Here’s how they stack up against each other and what to be aware of as you evaluate your options.

Shopify

Over 1.7 million businesses use Shopify, a subscription-based platform. Some of its highest-profile users include Kylie Cosmetics, Gymshark, Pepsi, and Fitbit.

Its greatest selling point is that it’s an all-in-one solution. You don’t need to host your own site or be a developer to get started. Shopify offers tons of ready-made themes and drag-and-drop modules to choose from, making it easy to get your shop up and running.

Shopify’s plans range from $29 to $299 per month, depending on the features, number of users, and other capabilities required. It additionally offers Shopify Lite ($9 a month) if you’re looking to do something simple like add a buy button to an existing site, as well as Shopify Plus (starting at $2,000 a month) if you’re part of an enterprise company that needs a robust solution.

All in all, Shopify excels in simplicity. That said, the biggest complaint is that it requires third-party apps to support features like product reviews, contact forms, and more. So, although you benefit from being able to choose which apps to install, you’ll likely pay more than the base subscription cost to maintain your site.

Shopify pros

• Easy to use – There are thousands of templates (by both Shopify and third-party creators) you can launch right away in addition to drag-and-drop modules.
• No dev knowledge required – When using Shopify, you don’t have to worry about hosting, security, or technical maintenance. Shopify also provides a clear process for listing your products and organizing your site so you don’t necessarily need a developer to get started.
• App store – Shopify has more than 4,200 apps and plugins available to automate, simplify, and expand your store. Many of them are plug-and-play, letting you get by without constantly involving a developer.
• Lots of payment options – Shopify supports several payment processing options, though Shopify Payments (essentially, Stripe) is the preferred solution if you want to sidestep transaction fees.
• 24/7 support – Shopify support is available around the clock via email, phone, Twitter, and live chat.

Shopify cons

• Limited customization – Simplicity comes at the cost of customizability. You can’t adjust every component of your Shopify site like you could with WooCommerce because of how templates and codes are set up.
• Fees – You’ll need to pay a monthly subscription fee to use Shopify, plus transaction fees of up to 2% per sale unless you use Shopify Payments.
• Relies on apps – More than 80% of Shopify users incorporate third-party apps to beef up their sites, so fees and maintenance work may rack up the more you scale or customize your site.
• Difficult to scale internationally – If you intend to sell internationally, you’ll have to use third-party apps to accept multi-currency.

BigCommerce

BigCommerce is a smaller, yet mighty platform that records around 60,000 customers, including Skullcandy, Bliss, and Ben & Jerry’s. Although its market share is a mere 1.69%, it was met with lots of fanfire when it went public in 2020.

For comparison, Shopify has been a Wall Street favorite since 2015. It’s 20 times bigger than BigCommerce and growing at a fast clip. But BigCommerce has managed to woo many sellers with its zero-transaction fees and scalability. It also has the second-mover advantage. For example, having heard complaints about Shopify’s over-reliance on third-party apps, BigCommerce has integrated many popular eCommerce features into its core platform.

BigCommerce monthly packages range from $29.95 to $299.95 a month. Similar to Shopify Plus, BigCommerce additionally offers an enterprise package that’s custom priced.

BigCommerce pros

• Zero transaction fees – You don’t have to pay a transaction fee, even if you use a third-party payment gateway. Additionally, there are no limits on the number of user seats, product listings, or file storage either.
• Built-in functionalities – BigCommerce plans include SEO tools, ratings and reviews, email marketing tools, and more, which would typically require a plugin if using Shopify or WooCommerce.
• Deep, expansive integrations – BigCommerce’s Channel Manager allows you to promote your products across social channels like Instagram, Pinterest, and Facebook. You can manage these channels centrally from BigCommerce. Or, if you’re looking to expand to other marketplaces and/or automate multi-channel tasks, you can work with one of BigCommerce’s integration partners.
• 24/7 customer service – Technical support is available via phone, chat, and ticket. BigCommerce offers advice around marketing basics and SEO as well, if needed.

BigCommerce cons

• Fewer templates – BigCommerce has fewer store themes than Shopify. Some sellers complain there isn’t a lot of variation between themes, due to the fact that BigCommerce relies heavily on one source (PixelUnion) for its templates. Moreover, premium themes can be pricey.
• Order limits – If you exceed a certain amount of annual sales, you’ll be forced to pay for a more expensive plan. BigCommerce’s most basic plan allows up to $50,000 in online sales, while its pro plan supports up to $400,000. After that, you pay fees for every additional $200,000 in sales, unless you sign up for a custom enterprise plan.
• Learning curve – BigCommerce offers powerful, scalable features, but they require more training than Shopify, according to users.
• Harder to customize – Theme customization can be hard to navigate, and there are times when you may want to tap a developer for help.

WooCommerce

WooCommerce is the dominant eCommerce platform of the lot (and in the world), maintaining 39.48% of market share. It powers more than 4.4 million sites worldwide and has more than 1,400 eCommerce plugins.

The biggest perk of WooCommerce is that it’s free and fully customizable. It’s an open source platform built for WordPress that you can tailor to your specific needs. You only ever have to pay for the plugins or professional services you want, rather than a recurring subscription.

The downside is that you need technical knowledge to make the most of WooCommerce. At a minimum, you need to be able to set up your own domain, host your site, maintain the back end, install plugins, and develop the interface (or hire someone who can do it all for you).

Alternatively, WordPress offers its own subscriptions that include hosting and access to WooCommerce. Its eCommerce plan goes for $45 a month and includes payment gateways, premium store designs, and 24/7 support.

WooCommerce pros

• Flexibility – You have control over every bit of your site, thereby more control over any costs associated with it as well.
• Freeware – WooCommerce is free to get started. That said, you’ll likely want to take advantage of plugins to offer things like product comparisons, gift wrapping options, and pre-orders on your site. Each of these extensions comes with its own price tag.
• Great for content marketing – WordPress is the most popular content management system (CMS) in the world, powering 42% of all sites on the internet. And since WooCommerce is built on WordPress, sellers have the advantage of being able to create blogs or new web pages with WordPress’ easy-to-use blogging tools
• Large community – Because WooCommerce is open source, tons of users and developers are familiar with how it works. Many developers will even sell or give away themes and advice, making it easier for you to find support outside of WordPress Support if needed.

WooCommerce cons

• Learning curve – WooCommerce is not a plug-and-play solution. It requires a lot of up-front setup, and while it can be easy to use in the long run, you’ll need to tap someone with the technical know-how to set up the design, payments, products, and more.
• Relies on plugins – You’ll need to pay for plugins if you want more payment options, SEO tools, or other functionalities. While the average user requires 20 to 30 plugins, some WordPress users report needing as many as 50 for their site.
• Maintenance – Even after you’ve created your site, you’ll need to maintain your own backups, hosting, and security, unless you purchase a WordPress eCommerce plan that takes care of these for you.
• Limited customer support – Because WooCommerce is a free tool, support is shared among millions of businesses. However, there are many online forums you can visit to consult third-party WooCommerce developers or site owners.

How to decide which is best for you

In general, Shopify is best for SMBs and some large businesses looking for a simple solution.

BigCommerce, on the other hand, is fast becoming the top pick for really large businesses that are looking to scale. It’s better poised to handle large-scale omni-channel growth due to its built-in omni-channel tools and a robust API that allows for greater customization.

WooCommerce is best for companies that sell internationally or have complex websites that require tons of customization. It’s the most flexible solution of the bunch, but also the most complicated to set up and maintain. If you already use WordPress and have developmental resources at your disposal, WooCommerce could be a good choice.

Wrapping up — Choose your eCommerce platform wisely

Your eCommerce platform is the foundation of your site, so do your due diligence and critically evaluate all your options. Request demos if available, and gather a list of your wants versus must-haves. Keep an eye on the pros and cons of each, then pick whichever satisfies your criteria both now and in the long term.

Could live shopping be the future of retail?

For years now, the rise of eCommerce has generated conversations about the “death of the high street.” Online shopping is ingrained into our daily lives thanks to the convenience of being able to buy at the click of a button.

Yet, the in-store experience of browsing products in person and speaking to salespeople for more information is something eCommerce businesses have struggled to compete with — until now.

Live shopping is the latest eCommerce trend for acquiring, engaging, and converting new customers. It turns online shopping into an interactive, engaging experience by combining the technological capabilities of eCommerce with the entertainment value of social media and the nostalgia of at-home shopping models.

With more than 55% of shoppers using online video when shopping in-store, it’s no surprise live shopping is taking the eCommerce industry by storm.

So, what is live shopping, and how can it boost conversions for your online store?

What is live shopping?

Live shopping, also known as livestream shopping, has digitized the home shopping experience through the use of social media, apps, broadcasting software, and websites.

Using teleshopping (think QVC or the Home Shopping Network) as a model, live shopping modernizes this concept by adding digital, social, and engagement elements. It combines the broadcast aspect of teleshopping with the eCommerce function of online stores and the communal aspect of social media.

Alibaba launched the first live shopping channel, called Taobao Live, for the Chinese market in 2016. Its premise was simple: to evoke the teleshopping experience of the 1990s and early 2000s with livestream broadcasts that let people simultaneously watch and shop online product presentations.

Nowadays, we can see many retailers and eCommerce platforms leveraging live shopping for their consumers. According to Coresight, live shopping generated $60 billion in global sales in 2019. By 2022, Chinese sales are expected to reach $423 billion.

As interest in live shopping grows, we’ve seen the addition of new features such as chat function, live Q&As, reviews, and influencer marketing. These app additions intend to improve the customer experience and thus increase the popularity of live shopping.

Apparel and fashion items are the most common to be featured in live shopping with a 35.6% share, according to McKinsey. The category is followed by beauty products (7.6%), fresh food (7.4%), consumer electronics (4.6%), and then furnishing and home decor (nearly 3.6%).

We expect these numbers to go up as consumers continually seek new experiences with the brands they follow.

Any eCommerce owner who wants to boost conversions should take advantage of live shopping to enhance their buyer experience and build closer relationships with their buyers.

What are the benefits of live shopping?

Live shopping apps can help eCommerce retailers and marketplaces increase the value of online shopping for their consumers.

The benefits of live shopping include:

• Accelerate conversions with immersive shopping
• Provide the emotional experience of retail therapy
• Offer real-time feedback and support
• Improve brand appeal and build customer rapport

To help you understand what this could mean for your online store, let’s explore each of these benefits in more detail.

Accelerate conversions with immersive shopping

Live shopping can accelerate conversions by offering greater immersion.

With the addition of live interaction through Q&As, reviews, and chat, live shopping creates a sensory experience for online shoppers that can’t be achieved when simply browsing online marketplaces.

Types of immersive experiences you can incorporate through livestream shopping apps include product tutorials and demonstrations, interviews with industry/product experts and trusted influencers, or “behind the scenes” videos that offer a sneak peek of the product.

Interactive in-event elements such as games, quizzes, and prize draws can also help keep viewers entertained.

Keeping live shopping viewers engaged can help move them along the customer buyer journey, guiding them from the awareness stage through to purchase. Companies using livestream shopping have reported conversion rates of up to 30%, which is 10 times higher than traditional eCommerce.

Provide the emotional experience of retail therapy

Live shopping adds an emotional aspect to online shopping.

Emotion often plays a huge role in our shopping behaviors. In fact, one survey found that 40% of shoppers use retail therapy as a way to destress. People shopping in-store are also more likely to impulse shop and add more items to their cart compared to when shopping online.

By offering online shoppers a direct line of communication with their favorite brands, live shopping helps bring the emotional experience of in-store shopping to the eCommerce world.

Being able to recognize and use emotional data could be one of the most important opportunities for companies, according to Deloitte. The emotional connection between a brand and a consumer is what drives brand loyalty and advocacy. Sixty percent of long-term customers use emotional language to describe their connection to their favourite brands. This shows how emotion can nurture brand loyalty and help transform one-time shoppers into lifetime customers.

Offer real-time feedback and support

Livestream shopping encourages buyers to make a purchase by giving them real-time information and interaction such as reviews, product recommendations, and the opportunity to ask questions. This real-time feedback loop helps keep customers engaged for minutes or even hours, which, in turn, increases the likelihood of them buying.

Before making a purchase, shoppers will typically go through a research phase where they weigh their shopping options and consume information to help them make a purchase decision. Hosting a live shopping event that features product demos and gives viewers the chance to chat with retail advisors in real time could help sway on-the-fence customers.

Improve brand appeal and build customer rapport

Live shopping events are an effective tool for generating brand awareness and prompting trials.

Engaging influencers or industry experts as co-hosts or guests on live shopping events can add authenticity and credibility to your livestream shopping. This relationship will also allow you to connect with people who follow and trust these influencers or experts. This expands your reach outside of your usual network of consumers and can increase your brand appeal.

Get to know your customers and use this information to feed your live shopping topics. You can then build rapport with your customers by opening up a direct line of communication and offering them an experience that meets their needs and interests.

Winning the trust of your ideal customer can, ultimately, drive more conversions for your online store, making it a win-win situation.

Who uses live shopping?

While Taobao Live by Alibaba may have been the first live shopping platform, they aren’t the only retailer riding the trend; many retail giants, individual sellers, and online marketplaces have also recognized the capabilities of live video shopping.

Luo Zhenyu, a famous TV host in China, used various livestreaming platforms to auction off his personal book collection during a live shopping event that was almost three hours long.

In 2020, Walmart and TikTok partnered on a pilot test of a live shopping event using TikTok’s new shoppable product feature. This event, hosted by Walmart, would allow TikTok users to shop Walmart’s fashion lines without having to leave the TikTok app. It also made use of popular TikTok creators to produce an interactive and social experience for viewers.

Popular teleshopping company QVC has also launched its own live shopping app within its website. Online shoppers can visit the QVC Live Stream online to shop items on-air, much like their traditional TV broadcast.

From small retailers to large household names and designer brands, retailers around the world are embracing live shopping.

How to add live shopping to your sales toolkit

If you’re interested in incorporating live shopping into your online sales toolkit, you need to familiarize yourself with the live shopping process. This will result in a seamless and successful transition to the live shopping experience.

Livestream shopping options

First, choose the best livestream shopping app or platform to meet your needs. When doing this, consider if it’s an app your audience is familiar with and is willing to use.

You should also review the app pricing structure and whether they charge a commission on sales or have minimum entry requirements for new sellers. Run a comparison of the apps you’re interested in before making a final decision.

Live shopping events on social media

Twitter announced they’ve added livestream shopping to their platform in November 2021. The social media site has an easy-to-use UI and different ways to engage shoppers, such as a hashtag prompt to join the conversation, shoppable banner, and shop tab beneath the livestream broadcast.

Social media giant Facebook offers a live shopping feature to online retailers that want to connect with their audience and sell to them in real time through the Facebook Page live video feature.

Before selling products live on Facebook, retailers will need to set up:

• An eCommerce Facebook page
• A Facebook Shop
• Live shopping in the Facebook Commerce Manager

If your customers tend to hang out on Instagram, you can also use Instagram Live Shopping to sell your products on an Instagram Live broadcast. To showcase their range of growing eCommerce tools, Instagram hosted a successful “10 Days of Live Shopping” event in conjunction with various celebrities and major brands.

Live shopping for marketplace retailers

If you sell products on Amazon, you can tap into Amazon Live, Amazon’s own live shopping platform. Using the Amazon Live Creator app, you can host livestream events to help online shoppers discover your brand, see your products in action, and shop with you online.

Walmart Marketplace has partnered with Talkshoplive to expand their live shopping offerings. In 2021, they embedded a video player on the Walmart.com website where customers could purchase products shown in the video. In 2022, they’ve announced eight new livestream shopping events to look forward to.

eCommerce platform Wish has released their own video feature called Wish Clips, which allows sellers to share shoppable videos 5 to 30 seconds long. Shoppers can click on products within the video to learn more, and merchants can see performance metrics from within their Wish dashboard.

These tools provide an excellent way to amplify your product reach on competitive marketplaces, especially during popular seasons and important shopping days such as Prime Day or Black Friday.

Livestream shopping platforms

Outside of social media and digital marketplaces, online retailers can use independent livestream shopping platforms to host their own live shopping events. These apps can seamlessly integrate with your existing eCommerce store and offer easy, real-time checkout flows so viewers can shop with your brand without leaving the stream.

Shopify sellers have access to a number of livestream shopping app integrations that can transform traditional eCommerce stores into interactive experiences that better connect with customers and increase conversion rates.

The live shopping app Hero allows sellers to switch between one-to-many video and one-to-one chat to offer customers personalized support. Meanwhile, Livescale offers gamification and interactive content to drive engagement and encourage impulse purchases.

Other live shopping platforms include Flux Panda and Maestro. Do your research and choose an app that offers the right features for your audience and live shopping event type.

Wrapping up – Use live shopping to boost conversions

No matter the size of your eCommerce store, you can leverage livestream videos to engage your ideal customer and boost conversion rates.

Shopify and Amazon sellers have the benefit of seamlessly integrated livestream shopping platforms, making it even easier for them to provide online customers an interactive shopping experience.

At MyFBAPrep, we can make your livestream shopping experience even smoother by handling your D2C fulfillment and warehousing needs. This way, you can maximize your conversion rates through livestream shopping while we handle the influx of new orders for your Amazon or Shopify store. You bring in the customers, and we handle the logistics — it’s that simple.

Customer lifetime value can make or break your eCommerce business. Simply put, you spend a certain amount of money on customer acquisition, and must earn that back (and then some) throughout the customer’s relationship with your brand.

In this article, we’ll talk about benefits you can provide to attract and encourage fiercely loyal, long-time customers.

What are some benefits of loyalty programs?

It may seem counterintuitive for merchants to “give away” free perks when they could re-invest the savings back into their business instead. However, loyalty programs are an investment into the long-term health of your business, buyer experience, brand relationships, and customer retention.

Here are just a few benefits of customer loyalty programs backed by the numbers:

• 75% of customers would switch to a brand with a better loyalty program, according to KPMG.
• 52% of customers will prioritize shopping with brands they have points and rewards with, according to LoyaltyLion.
• Increasing retention by 5% can increase profits 125% according to Salesforce.
• Customers who sign up for a loyalty program are 47% more likely to make a second purchase with that brand than customers who didn’t, according to LoyaltyLion.

Beyond the statistics, customer loyalty programs do so much more for your brand (and your bottom line).

Attract new customers

Great loyalty programs attract new customers and convince shoppers who are on the fence to convert. You can optimize the perks based on what best captures new customers, what your target audience values the most, and what behavior you want to encourage in your customer base.

Increase average cart volumes

You can tie larger cart volumes to more rewards, encouraging shoppers to order more to unlock perks like free shipping, bonus points, or a free gift for loyalty members.

You can even encourage shoppers to add new items you’d like them to try. For example, offer a free surprise gift when someone purchases a certain product bundle.

Capture customer information

Having a direct line to your customers is a necessity with modern privacy protocols. No one likes it when an ad interrupts a video, or disguises itself as a social post from a friend or family member.

However, loyalty programs get your customers to opt in to communications and willingly give you their information to contact them. That earns your brand more of a welcomed status versus that of an invasive interruption.

Lower marketing costs

Customer loyalty programs boost retention and serve as an additional conversion driver, which helps lower your overall marketing costs. You can even plan out your rewards in advance to boost your ROI.

For example, if you sell custom vitamins, you might offer one batch free during the birthday month of your loyalty program members. You can plan your delivery in advance and use standard shipping instead of express to ensure it arrives on someone’s birthday.

Stop competing on price

A loyalty program gives you a competitive advantage and differentiates you from your competitors. That means you can stop focusing on price, and instead highlight the benefits of your loyalty program.

Build brand advocates

A great loyalty program rewards your biggest fans and turns them into brand advocates. By showing your appreciation and giving back to your best customers, you produce an excellent customer experience that makes them feel valued.

3 Loyalty program structures

Loyalty programs come in different structures, ranging from a point system where customers can claim rewards, to straight cash. Here are a few of the most common.

Point system

This type of loyalty program rewards customers with points based on how much they spend. The points can then be used either to redeem rewards or be exchanged for store credit for a discount on their next purchase.

The point system is great for rewarding larger cart values, and providing special offers like “double points on all Black Friday purchases,” for example.

Membership fees

Some loyalty programs give complete access to rewards under a regular membership fee. Although this isn’t as common, it works well for brands who want to turn their loyalty program into an additional revenue stream. For example, membership shopping unlocks access to products for members who pay a fee.

Tiered rewards

Some loyalty programs offer tiered rewards based on a customer’s purchase history and volume. For example, you could have an entry-level reward for first-time customers that unlocks a free gift with their next purchase (a great way to get them to order again and try a new product).

Tiered rewards programs are excellent for encouraging a specific action or result. If you want to focus on boosting cart values, you can offer rewards the more people spend. If you want to focus on retention, you can offer more rewards the longer someone is part of the loyalty program (provided they make at least one purchase per year, or whatever parameters make sense for your brand). If you want more referrals, you can offer a 20% discount for every successful referral, or free two-day delivery on the first order of a referred customer.

How to encourage and reward customer loyalty

Now that we’ve covered the basics of loyalty programs, let’s discuss what kind of loyalty rewards keep customers coming back.

1) Discounts

Provide a discount for customers in your loyalty program, such as 10% off all purchases, and 20% off during their birthday month. You could also offer tiered discounts based on product types, like a larger discount on perishables.

2) Free gifts

You can offer a free gift for multiple criteria, such as: every other purchase, to encourage your customers to shop more often; on a minimum order, to help raise your cart values; or for every purchase of a certain item, to entice customers to try new items.

Free gifts are a great way to surprise and delight your customers, while giving out extra stock or introducing new items.

3) Free shipping

90% of consumers say free shipping is their top incentive to shop online more, according to Invesp. Free shipping also results in larger cart volumes, and 61% of consumers are somewhat likely to cancel their orders due to lack of free shipping.

This benefit is an excellent way to give your shoppers what they want as a reward for their loyalty.

4) Early access

Provide early access to sales and products for your loyalty club members. This promotes an excellent VIP experience, and helps ensure customers snag the deals and items they want as an additional benefit.

5) Exclusive sales and events

Taking the early access concept a step further, you could host private sales and events for your loyalty club members. These would be accessible by invite only, giving shoppers more incentive to make a purchase to avoid missing out.

6) Subscriptions

Offer your loyalty customers the option to subscribe to recurring replenishment or automated purchases. These are excellent because they’re convenient and can be fun (throw in some free stickers).

7) Birthday treats

Show your customers you remember them on their special day with birthday treats. You could provide a birthday discount, gift, or additional points to apply to purchases.

8) Charitable donations

Give your customers a choice in how their purchases make an impact. One of your loyalty rewards can be selecting a charity of their choice to donate a percentage of their purchases.

Wrapping up — Leverage customer loyalty programs to create brand advocates and extend CLV

Brand loyalty is on the rise, and now is the best time to offer your customers what they want with a loyalty program. The longer your buyers stay loyal to you, the higher your customer lifetime value becomes. How pleased your customers are, and how long they stick with you, ultimately depends on your efforts.

The eCommerce industry is growing a stunning 43.7% year after year, which makes it one of the most exciting to be in … but also one of the most volatile. The more pressure and demand you place on the supply chains of a single industry, the more likely things are to break. We’ve seen it happen with the backups in the Port of LA that happened in Q1 and Q4 of 2021.

This won’t improve overnight, so to protect your eCommerce business, you need to be ready for:

• Disruptions to the supply chain
• Warehouse outages and lack of space
• Shipping carrier oversights
• Big-ticket events like the holidays

All of the points above compound in big ways almost every peak season, so don’t let them prevent you from selling or scaling.

Building resilience into your eCommerce operations and logistics helps prepare you for the unexpected, and keeps you flexible and profitable. This puts you in a strong position against thousands of competitors who aren’t putting the same effort into their processes.

This article will help you reinforce your eCommerce logistics so you can stay productive despite any supply chain surprises.

The importance of resilient eCommerce logistics

Resilient logistics allows you to generate profit under different supply and demand circumstances by:

• Balancing resources based on demand
• Being able to reduce overhead or expand operations flexibly
• Overcome and eventually leverage global supply chain challenges
• Quickly adapt your business model to a shifting industry

A number of factors threaten the supply chain, and there are many indications that the world as we knew it is not coming back any time soon.

Instead of waiting for things to “go back to normal,” smart eCommerce merchants should optimize their businesses to continue generating profits despite uncertainty and change. Eventually, this will help you turn uncertainty into action and opportunity.

5 Ways to build a resilient eCommerce business

You can build resilience into your logistics and operations strategy through a few smart steps.

1) Start selling omni-channel

The future of eCommerce is omni-channel. Selling on multiple marketplaces diversifies your income and revenue streams, which makes your entire business more resilient. It ensures you stay afloat even if one of the bigger marketplaces you sell on suddenly changes their policies and makes it more difficult to operate on their platform.

Multi-channel selling also strengthens brand recognition as you establish a presence across the sales and shopping channels your consumers frequent. The best place to acquire customers is your own direct-to-consumer website so you create a direct line to your customers, but being present on markets like Amazon also aids brand recall.

Finally, omni-channel selling improves your buyer experience. Being available wherever consumers want to shop makes your brand the most convenient and accessible for them, whether they have a giftcard they want to spend on Target, or a Prime account on Amazon.

2) Invest in a flexible fulfillment partner

Fulfillment is its own business model that most eCommerce business owners never signed up for. However, reliable fulfillment is a necessity for a successful business. How quickly and efficiently you deliver items determines how much you can sell, the types of reviews you get, whether or not you meet sales channel SLAs, and your buyer experience.

If you don’t want to lease warehouses, hire staff, or rent packaging equipment, find a flexible fulfillment partner who can grow and scale with your business. This partner should be able to fulfill across all your sales channels so you don’t have to deal with multiple fulfillment processes wherever you sell.

What to look for in a fulfillment partner

Here are a few things to look for in a fulfillment partner:

• Multi-channel: They can fulfill across all your sales channels to serve your customer base with a single network and inventory pool. You should be able to send your items into one fulfillment network and receive full coverage.
• Full list of services: They have all the eCommerce services you need and can stay flexible alongside your business. For example, adjusting to offer bundling and cold storage if you suddenly want to start an ice cream subscription box.
• Vast warehouse network: They have multiple warehouses so you can place your inventory as close as possible to your buyers. This shortens the travel time for your goods and results in faster, more affordable deliveries.
• Reliable service: You need a partner who can deliver items efficiently and on time. This improves your buyer experience and ensures you meet SLAs.
• Transparent pricing: Complex pricing structures are obsolete, and eCommerce merchants shouldn’t put up with hidden fees and confusing pricing that clouds their expense and revenue estimates.
• Fast shipping: Two-day shipping (or faster) is the new normal for consumers. eCommerce must be just as convenient, if not more so, than buying retail, with fast delivery and easy returns.

For example, MyFBAPrep has 50+ warehouses internationally, a giant list of comprehensive eCommerce services for Amazon, DTC, and other marketplace sellers. Merchants can use as much or as little warehousing space and facilities as they need. This enables the sellers who work with us to adjust their fulfillment volume quickly based on their needs.

3) Diversify your fulfillment

Although we just covered choosing a reliable fulfillment partner, it’s never wise to put all your eggs in one basket, whether it concerns manufacturers or 3PLs. To build resilient logistics, you need to diversify your fulfillment. This might mean relying largely on an outsourced fulfillment partner while maintaining some in-house logistics, or utilizing marketplace fulfillment options with a multi-channel 3PL as a backup.

For example, you can use Fulfillment by Amazon (FBA) for your Amazon orders, Walmart Fulfillment Services (WFS) for your Walmart orders, MyFBAPrep for DTC orders and as a backup for Walmart and Amazon, and a small in-house operation as a backup for your DTC orders. If anything happens to FBA, the MyFBAPrep network will kick in and deliver via FBM instead.

Protect yourself from surprise storage limitations, price increases, and network outages by layering your fulfillment and spreading out your inventory risk. This also gives you the added benefit of avoiding stockouts, because if you sell out of inventory in FBA, you can continue to accept orders and fulfill them via FBM and MyFBAPrep.

4) Ensure smart connectivity between your systems

All your systems need to connect and communicate with each other in real time. When someone buys a bundle from your Shopify store, your inventory pool should reflect it and pass those changes on to your available items on Amazon, Etsy, and anywhere else you sell.

Growing merchants may have only a small handful of sales channels and fulfillment options. For example, if you sell on Amazon, using FBA and Amazon Seller Central to oversee your inventory is a no-brainer. However, as you grow, you need to balance your inventory and business everywhere you sell, all the ways you fulfill, and everywhere your inventory is tracked.

For example, think of the following business growth:

• Small seller, starting out with some test items = Sells on Amazon with FBA
• Growing seller, expanding to Walmart with their best sellers = Sells on Amazon with FBA, and on Walmart with WFS.
• Established brand, building its own website = Sells on Amazon with FBA, on Walmart with WFS, and on Shopify with MyFBAPrep.

The above seller went from one dashboard to monitor their inventory, to at least six. All of those endpoints for data need to be accurate and up to date at all times to avoid, for example, confirming a sale of items you don’t have on your DTC website that were already sold on Amazon a few minutes ago.

Most enterprise businesses build their own tooling in the back end using an ERP (enterprise resource planning) tool. However, growing businesses can also consider connecting their systems with SaaS tools like Pipe17 or Quivers.

5) Diversify your supply chain

Let’s address the elephant in the room: supply chain management. The best fulfillment network and operations are useless if you don’t have any product to sell. So, how do you avoid getting stuck with no inventory?

Here’s a few things you can do to diversify your supply chain:

• Start working with multiple suppliers and manufacturers from different countries and regions. This helps you maintain a stream of inventory, even if one avenue becomes blocked.
• Look for local sources you can work with on a minimal basis. They may not be the most cost efficient, but you can increase your order if you need them to cover a lost or late international supplier.
• Forecast for demand and order months in advance, instead of utilizing “just-in-time” sourcing that has quick lead times and could leave you stuck without inventory.

Tip: When the worst happens and you sell out, offer your customers alternatives or the option to backorder products once you restock. This helps maintain the relationship despite not having the items they want.

What happens when your supply chain fails?

Our best advice is to stay transparent throughout the process and keep your customers in the loop. This helps you maintain the customer relationship, saving your CLV, and also provides more clarity for your shoppers.

According to Shopify’s Future of Commerce report, 66% of consumers are already aware of supply chain delays, “and they’re looking for transparency. Forty-five percent of shoppers are actively looking to shop from businesses that clearly show anticipated delivery times.”

Wrapping up — Build your business for the future by investing in resilient logistics today

eCommerce is evolving quickly, showing no signs of slowing down, and it will continue to go through rapid periods of change for years to come. There will always be curveballs, shifting trends, and supply chain surprises.

Building an eCommerce business with a foundation of resilient logistics and operations helps ensure you’re prepared for that future, no matter what it brings. It can affect the course of your success, give you an advantage over competitors, and help you weather any storm.

If you’re an eCommerce seller, a third-party logistics partner (3PL) can be a lifesaver. 3PLs allow you to offload the time, cost, and headache of storing inventory and handling logistics on your own. In fact, 75% of retailers say the use of 3PL services has contributed to an overall reduction in logistics costs.

That said, not all providers are created equal. Unfortunately, a number of bad apples exist in the fast-growing 3PL industry.

When we start working with a new seller, we often ask them why they switched from their previous 3PL or 4PL. Often, they will volunteer a combination of reasons, but there are some common themes.

Here are the top 10 most common 3PL problems we’ve heard many times before — watch out for providers that tick these boxes.

Most common 3PL complaints we’ve heard

1. Long prep turnaround times

Before an order can be shipped to a buyer, it has to be prepped with any necessary safety stickers, protective wrapping, custom packaging, and other details as required by your brand or the channel you’re selling on.

If you’re an Amazon FBA seller, for instance, you must meet strict prep requirements, which include attaching a barcode, passing fall tests, and using the right packaging for your product category. Should you fail to meet any of these criteria, you could face fees as much as $2.20 per unit to have Amazon repackage your products properly.

Whether your 3PL is prepping your items for FBA or direct-to-consumer deliveries, orders should be turned around within 24 to 72 hours. But the reality is, some may take 10+ days just to prepare your shipment due to disorganization or inexperience.

The solution: Find a 3PL with experience in handling products like yours and managing orders for marketplace services like FBA (this shouldn’t be their first rodeo).

If you have custom requirements for how your partner should package or label your products, provide clear instructions up front.

2. Limited visibility or no inventory reports

One of the most frustrating things about working with a 3PL is the inability to keep tally of your own inventory. Some 3PLs may not have the right processes or software in place to provide real-time updates on your stock, even though it’s your money and your reputation on the line.

Behind the scenes, the warehouse floor may be a frenetic scene, with employees rushing to get orders out the door and nobody making sure clients are kept in the know.

The solution: Find a 3PL with a WMS or other online portal you can access at any time.

For instance, MyFBAPrep has Preptopia®, which offers real-time insight as to where your stock is and how your SKUs are performing.

If you have questions, Preptopia® lets you reach out to the team from within the portal, plus includes a variety of other tools to help you analyze your inventory.

3. Poor communication

Similar to the issue above, it’s not uncommon for 3PLs to keep you in the dark, even after you’ve reached out with a question.

This is typically due to the multitude of moving parts within a logistics operation. If your 3PL isn’t big or experienced enough, it’s easy for customer support to fall through the cracks.

The solution: Find a 3PL that assigns a dedicated account manager to your team. This ensures you always have someone to reach out to who’s personally responsible for communicating with your team.

The best 3PLs are also reachable through phone, chat, and/or email — not merely a ticketing system — when an emergency arises.

4. Unreported damages

This may be one of the most unnerving flaws of any 3PL. If, for some reason, your item arrives or gets damaged within the warehouse, your partner should spot this before the product is delivered to your customer.

The last thing you want is to receive customer complaints because your 3PL didn’t have the quality control processes in place for employees to identify and report issues early on.

The solution: Work with a provider that has clear internal guidelines for how to ship, handle, and inspect your items for damages. It should also be clear who’s responsible for what.

For example, if an item arrives at a 3PL’s warehouse with poor protective packaging, you should rightfully be held liable for any injuries to the product. However, if an item is damaged while in the warehouse, then your provider should assume the cost of replacement.

Additionally, it helps to work with someone who’s handled your types of products before. Some 3PLs may not support cold storage, for example, while others may specialize in specific categories or services. Find one that’s most suitable to your storage needs.

5. Inaccurate receiving

When a 3PL receives a new shipment, there are various tasks that they need to perform to make sure your wares are properly accounted for and stored in the right place. It’s possible your items may be miscounted, mis-routed, or remain unreported because of poor workflows.

If the latter occurs, you’ll likely be left wondering whether your shipment ever made it to the warehouse or not, and feeling uneasy knowing you have a lot of money tied up in your inventory.

The solution: Find a partner with software like Preptopia® that notifies you when your inventory has been received, as well as shows the exact number of units counted.

Also, ask your partner for a list of pre-receiving tasks for you to complete. This could include steps like providing the number of units per pallet and giving instructions for how to label your items so your 3PL knows exactly what to do and expect when your shipment arrives.

6. Backlogs and no SLA

When you hire a 3PL, it’s assumed they’ll meet basic requirements like delivering your orders on time or fulfilling orders accurately. If they fail to do so, it should be clear who takes responsibility and how.

That’s where service-level agreements (SLAs) come in. An SLA acts as an official contract between you and your provider, specifying the details, length, and nature of your partnership. However, some 3PLs may not openly offer an SLA, or give them with loose terms.

The solution: Contract with someone who’s transparent about pricing, services, and other important details. Your SLAs should include details like processing procedures, order fulfillment cut-off times, KPIs (for which your 3PL is held accountable), and much more.

If your partner is unwilling to discuss SLAs or adjust any terms according to your feedback, run. This doesn’t bode well for a future relationship.

7. Shipping mistakes or unfamiliarity with FBA standards

A number of order errors — wrong item, wrong quantity, or wrong address — reflect poorly on your business. Unfortunately, any of these can occur if your 3PL is disorganized or doesn’t enforce frequent quality checks.

Relatedly, orders may be delayed if your provider fails to comply with FBA standards and processing times. Amazon takes several days to process shipments before your items are available for delivery. Moreover, if Amazon spots an issue with how your inventory has been prepped, you could face additional delays and fees.

The solution: When on a discovery call, ask your provider about the quality checks they perform within the warehouse. What steps do they take to make sure your items are accurately labeled, stored, and picked?

Include terms in your SLA outlining specific performance standards, as well as what happens when a mistake occurs.

8. Containers sitting idle

Nobody wants to hear that his or her shipments are parked in a lot, waiting to be processed. Sadly, this happens from time to time when a 3PL doesn’t have strict procedures for the unloading and receiving process, or lacks enough space in the warehouse.

So, a traffic jam occurs in the parking lot, and your container winds up being one of many waiting to be unloaded.

The solution: Work with a well-reputed team that has enough manpower to deliver on their SLAs and promises. Ensure your 3PL has enough storage space to house your inventory.

If you know there’s a busy sales season approaching, talk with your partner early on to secure extra storage space and manpower, and prepare them for additional shipments and a spike in sales.

9. Geographic constraints

3PLs need to scout for warehouse space just like any other business. Some may have dozens of warehouses located throughout the U.S., while others may only have a handful in select cities.

If you’re looking for a partner with locations near your supplier (which helps reduce shipping costs and speeds up delivery), you’ll need to do your due diligence.

The solution: Look for a fulfillment partner that is transparent about their warehouse locations.

For instance, MyFBAPrep has a map of our 50+ locations directly on our site.

If you can’t easily find information like this by looking at a company’s website, schedule a discovery call and talk through any concerns or questions.

10. Inventory loss or theft

Inventory shrinkage is a significant problem at some facilities. This stems from issues like accounting errors, shipping errors, human errors, or theft. According to one report, 42.7% of shrinkage is due to employee theft, while 15.4% is due to administrative errors.

The solution: This loops back to visibility. Partner with a 3PL that has a WMS or other system to properly track and account for your wares. You should be able to see any discrepancies between your shipments (or sales) and the number of units still at the warehouse.

In addition to this, your provider should have its own internal protocols for discouraging theft and training employees on how to report theft anonymously. To prevent further inventory loss, your 3PL should reduce dock-to-stock time and take regular stock counts.

Wrapping up — Keep an eye out for these common 3PL complaints to avoid headaches

When you’re looking for a new 3PL, or evaluating your existing one, pay attention to the most common complaints above. If you speak to a customer of theirs as a referral, ask about how often they had to deal with these issues. If you’re working with a 3PL and considering a change, look at how many times you’ve encountered or voiced those complaints.

Once you find a 3PL that deals with all of those complaints effectively and preempts them, you’ll know you’ve found a reliable, trustworthy, and efficient long-term partner.