ShipBob, a leading global supply chain and fulfillment platform for SMB and Mid-Market ecommerce merchants, announced that its Inventory Placement Program (“IPP”) is now fully available in the United States to all ecommerce merchants. IPP automates and optimizes the process of distributing and rebalancing inventory across different regions of the United States through ShipBob’s AI-powered Decision Engine.
After a successful initial launch in 2023, ShipBob merchants who have taken advantage of IPP have decreased their average time-in-transit from 3.5 days to 2.8 days (from the time that a consumer placed an order to when it’s delivered).
“Expanding our warehouse network from two to four warehouses has translated into $1.5 million in freight cost savings for Our Place. It also cut our fulfilment and shipping times in half, from 5-6 days to just 2.5 days,” said Ali Shahid, COO of Our Place. “Being near our customers wasn’t just essential for delivering an exceptional customer experience; it also significantly boosted our revenue. Pre-ShipBob, the last day customers could place orders and receive them by Christmas was around the 15th or 16th of December. Now, we can extend that to the 19th or 20th, confident that even with cost-effective ground shipping, we’ll deliver the items in time for the holiday. This extension allows us to capture an additional 4 or 5 days of revenue, totaling over $2,000,000 in revenue.”
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After merchants send their inventory to any one of ShipBob’s regional hubs in the U.S., IPP manages the coordination and transferring of inventory to the ideal combination of any of ShipBob’s dozens of fulfillment centers that are near the merchant’s end customers, reducing shipping costs, transit times, and the delivery distance. This not only helps merchants exceed customer demands more efficiently and cost-effectively, but also saves them time on planning multi-location shipments and doing manual inventory velocity calculations.
Each inventory distribution plan is powered by ShipBob’s AI/ML-powered Decision Engine, ShipBob’s demand forecasting algorithms, individual SKU-level historical trends, and real-time sales data using a time-series prediction model to account for seasonality. From there, IPP determines the ideal regional distribution, even allowing merchants to customize their distribution plans and edit inventory quantities directly in their ShipBob dashboard. Then, ShipBob fulfills the order from the most optimal fulfillment center and utilizes ShipBob Logistics to handle the middle-mile, sortation, and zone skipping to get the package to the ideal last-mile carrier partner, who then delivers it to the end consumer.
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“With IPP, having inventory across five regions is not any more complex than having your inventory in one facility. IPP does all the heavy lifting of moving and replenishing inventory across the ShipBob network and reminding our merchants when to reorder the requisite SKUs from their manufacturer, who only needs to send that inventory to one location. This provides a competitive advantage to our merchants, as it’s a better end consumer experience, while saving our merchants time and money,” said Dhruv Saxena, CEO of ShipBob. “ShipBob’s white-glove IPP onboarding customizes inputs like days on hand, purchase order frequency, manufacturer lead time, regions of priority, customer geography, daily demand, real-time supply chain changes, and each merchant’s preferences to cultivate the most ideal fulfillment footprint.”
“With IPP’s strategic inventory distribution, most of our standard orders are delivered in two days. Not only has transit time dropped by a third, but at the same time we reduced fulfillment costs by over $2 per order compared to our prior fulfillment partner,” said Matt Crane, Co-Founder and Chief Science Officer at Semaine Health. “This combination has been key to profitable growth. We quadrupled our order volume in the last year, and because our fulfillment and shipping costs have gotten so much cheaper, we’ve been able to support that scale. I ran the numbers to see what it would cost to ship pallets directly to four different fulfillment centers, and it’s so much more expensive than sending it to one hub and letting ShipBob distribute it for us. The IPP model has saved us so many headaches, and now we just arrange one pickup from a manufacturer and one delivery. Not having to worry about shipments and distribution saves me hours every week.”
Lastly, with fall and winter comes harsher weather conditions. Weather-related closures and the inability for carriers to pick up, paired with potential supply chain complications like the influx of holiday sales and unplanned disruptions, further magnify the importance of mitigating risk. IPP naturally creates redundancy, so merchants will always be operational even if one region is shut down or experiencing higher congestion.
