Choosing the Right Shopping Cart & 3PL Technologies. System Integration Strategies 3PL. An Excelsior White Paper

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1 Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 3PL An Excelsior White Paper

2 Our analysis shows significant variation in how storefront systems communicate with 3PL systems Introduction Whether you re an entrepreneur or an established business, selling consumer products across multiple online storefronts and managing the subsequent order fulfillment operations is no simple task. Dozens of shopping cart software solutions and third party logistics (3PL) fulfillment providers offer many features to choose from. This piece provides insight into the choices by analyzing published feature and integration information from 33 ecommerce storefront solutions and 30 3PL fulfillment providers. The Challenge How do you know which shopping cart and 3PL combination will work best for your business? And once you do, how do you integrate them for optimal performance, especially as your business grows? Our analysis shows significant variation in how storefront systems communicate with 3PL systems, and vice versa. Storefront and 3PL Systems Integration Background Third-party ecommerce storefront software and 3PL fulfillment providers enable your endcustomer s order-to-delivery process. Successfully integrating the two systems provides an automated, scalable, pay-as-you-go operating model that typically leads to lower per-unit costs, less time spent on operations, and best practices from specialists. Integration between these core systems typically occurs in one or more ways: alerts Batch processing by manual import/export Application programming interfaces (APIs) and Web Service calls typically bi-directional, instantaneous program-toprogram communications. Excelsior White Paper: Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 1

3 Most APIs address these key functions: 1. Order processing 2. Inventory transactions 3. Shipping and tracking details API integration leads to better operational cost, quality and time outcomes. However it also requires greater commitment of resources to set up and test and then maintain over time. API Integration Benefits Improved operational performance from automation occurs in several areas: Delivery Time and Cost: from the final click to package receipt, automated order placement will reduce the time and cost of delivering your product to your customer. When someone buys an item, the order should automatically be placed in the queue with your fulfillment provider the moment the consumer clicks buy. Customer Experience: an integrated system allows customer service touch points such as order receipt and shipping confirmation s to flow smoothly with minimal daily involvement. Combining these touch points builds buyer confidence in the brand. Critical order detail information presented with shipment status, ship date and tracking number simplifies the customer s experience and enhances your brand. Inventory Levels: mismatched inventory levels between your storefront and your warehouse can lead to over-selling or underselling your inventory. Orders made from non-shopping cart systems, such as bulk shipments, sales samples, physical retail-store orders, and wholesale/distribution channel orders can distort reported inventory levels. Accurate inventory levels without manual checks provide better alignment between marketing and sales, especially as you grow. Reporting: Integrated systems typically lead to better reporting with reduced time spent manually matching data fields in order to produce the reports needed to monitor your business. Excelsior White Paper: Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 2

4 Metrics Measurement An end-to-end order and transaction management system especially one that integrates with supplier and drop shipper systems allows you to figure out what s working well including the ability to: Correlate product delivery metrics, average order fill rates and average ship times, with customer satisfaction levels Rank suppliers and shippers based on performance and enforce service level agreements accordingly Correlate returns with fulfillment performance and manage complex return issues such as in-store returns, RMA management, return to drop-shipper, return to warehouse and restocking fees Issue low stock notifications based on realtime inventory status in order to minimize out of stock occurrences Provide real-time visibility into the order lifecycle including order confirmation, shipping, inventory & pricing changes, cancellation notification returns, and action taken Utilize order information to optimize sourcing and routing of orders to supplier, 3PL, warehouse or distribution center to minimize shipping timeframes, shipping costs and maximize fulfillment rates and cost savings Ideally, you establish customer profiles based on specific data and determine what works for whom, when and where (i.e., product, pricing, promotion, place). You can also tie ordering and inventory management to demands generated by storefront promotions. Excelsior White Paper: Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 3

5 Automated Order Processing Inventory Transactions Shipping Details Core Functionality Support Shopping Carts with APIs (%) Figure 1: Shopping Cart 3PL Solution Integration is Limited for Some Core Functions Pre- Built Integrations (via API or Apps) (10%) No Integration Information Available (37%) *3PL Fulfillment companies were selected randomly from Internet Retailer s vendor directory: internetretailer.com. Can Integrate with Shopping Cart API s, but nothing pre- built (53%) Figure 2: Few 3PL Providers Offer Pre-Built Integration but Most Offer APIs Integration Analysis Ecommerce Storefront Systems Our analysis of 33 ecommerce storefront systems ease of integration with 3PL providers is summarized in Figure 1. We find a significant lack of data communication capabilities across the key functional areas of integration, especially within inventory and shipping data fields. Integration Analysis 30 3PL Fulfillment Systems Figure 2 looks at 30 3PL fulfillment providers in the ecommerce industry* and their publicly stated integration capabilities. The majority of companies 53% claim to offer integration with ecommerce storefronts via API, while 10% have pre-built integrations through their SaaS package. More strikingly, however, 37% of 3PLs make no public mention of integration capabilities with ecommerce storefronts. Tradeoffs Many factors go into making the right choice of shopping cart and 3PL systems. Choosing any software solution always begins with a thorough evaluation of your business requirements and clear statement of business objectives. Features and functions provided by various packages and 3PL services should be mapped to business objectives and requirements. Integration should always be among these feature considerations. Prebuilt integration connectors typically provided by the vendor can minimize time spent integrating specific functions. This saves time and money. However, they can also limit the functionality either today or down the road as needs evolve. This dependence on the vendor should be evaluated against the time saved utilizing a pre-built solution. Excelsior White Paper: Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 4

6 Methodology We evaluated 30 leading shopping cart solutions and 33 randomly chosen 3PL solutions of 50 listed at Internet Retailer. Shopping Carts evaluated included: Amazon, Magento, Shopify, Volusion, Bigcommerce, Infusionsoft, Netsuite, Ultracart, Woocommerce, Yahoo, Pinnacle Cart, Go E Cart, Interspire, Limelight, Google Checkout, Ebay, Americommerce, 3D Cart, 1Shoppingcart, 2Checkout, E-junkie, MIVA, Solid Cactus, WP e-commerce, Zen Cart, Lemonstand, Business Catalyst, Opencart, Spreecommerce, Stitch Labs, Smith Cart, X-cart, FoxyCart, Corecommerce. Well written APIs combined with a skilled developer can allow you to more closely map your specific business objectives, requirements and metrics to the functionality you ll end up with. However, if you don t have access to development resources you trust either your own or the 3PL provider you select, it may be better to stick with pre-built integration solutions. Finally, choosing a solution with limited or no API access at all should be done with caution and a recognition that the solution may only be temporary relative to growth objectives. Conclusions Many factors go into choosing the right shopping cart and 3PL solutions for your company. Integration is a moving target among your list of considerations as vendors evolve their capabilities at different paces. The total cost of the solution requires understanding the off the shelf integration capabilities provided by your partners. Using APIs to support key functions will save time and money if thoughtfully aligned with business objectives and requirements. Start with a clear set of business objectives and requirements and then investigate feature differences as they stand today. Also evaluate your vendor s technical pace, ask them directly what their development roadmap looks like, and make the best decision you can with the facts at hand. Excelsior White Paper: Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 5

7 About Excelsior Integrated Excelsior Integrated expertly manages product and marketing fulfillment for consumer product businesses, retailers, travel and tourism providers, banks, colleges, manufacturers, museums, non-profits, government and other organizations nationwide. We move promotional materials and products to your field staff and customers with faster, easier and cost-effective methods. Visit us online: excelsioriorintegrated.com Phone: Excelsior White Paper: Choosing the Right Shopping Cart & 3PL Technologies System Integration Strategies 6