Shipium Framework

Go Omni Channel Sooner Than Later | Shipium

kris@shipium.com (Kris Gösser) — Mon, 08 Sep 2025 18:12:19 GMT

Young companies rightfully prioritize growth over everything. Hard to meaningfully optimize costs and performance if there isn't a lot of volume, isn't it?

Add 4th, 5th, etc. fulfillment center

kris@shipium.com (Kris Gösser) — Thu, 01 Dec 2011 23:19:00 GMT

The final stage of operations evolution, and where this guide comes to an end, is continual expansion of your physical footprint. With enough scale, adding the fourth or more FC will prompt meaningful cost savings and improved customer experience on the margins, which will become the key areas remaining for continual margin improvement or revenue growth.

Add inventory rebalancing

kris@shipium.com (Kris Gösser) — Tue, 01 Nov 2011 22:18:00 GMT

Initial inventory placement ("first allocation") is really important. But it will never be perfect because of the dynamic nature and volatility of ecommerce. At this size, regular inventory rebalancing will be required to ensure that inventory levels are as optimized as they can be for future orders.

Optimize inventory placement

kris@shipium.com (Kris Gösser) — Sat, 01 Oct 2011 22:11:00 GMT

Hot on the heals of shipment generation and split management is optimizing inventory placement. When acquiring inventory, the initial placement (or "first allocation") of inventory can have the biggest impact on outbound shipping costs compared to any other decision in the supply chain. Don't put all the winter coats in the Miami FC, for example.

Optimize for split shipments

kris@shipium.com (Kris Gösser) — Thu, 01 Sep 2011 22:08:00 GMT

On average, ecommerce companies with multiple fulfillment nodes will see between 2%-5% of their orders be split shipments. Sometimes splits are good for customer experience and margins. Usually they are bad.

Add third fulfillment center

kris@shipium.com (Kris Gösser) — Mon, 01 Aug 2011 22:05:00 GMT

Adding a third FC is important because the ability to offer 2-day shipping (or profitable free shipping) goes from roughly 60%-80% of the population to 80%-90%. Adding that third FC to the middle part of the country is the last step before marginal returns kicks in with regards to population coverage. A fourth, fifth, etc., FC has diminishing returns where the benefit is only found with true scale (think millions of shipments per month).

Add BOPIS, Curbside, Ship-from-Store

kris@shipium.com (Kris Gösser) — Fri, 01 Jul 2011 22:02:00 GMT

Perhaps no greater ecommerce trend was accelerated during the COVID-19 pandemic than the urgent need to harmonize digital experiences with physical stores. A small subset of online-only stores, like chewy.com, thrived the past few years because of the explosion of customers forced to shop online. But the more consistent trend was consumers sticking with familiar brick-and-mortar brands or stores as dollars flooded to online purchases and those incumbent companies trying to figure out how to merge their digital storefronts with existing physical assets.

Add smart order routing across network

kris@shipium.com (Kris Gösser) — Wed, 01 Jun 2011 21:58:00 GMT

Let's reset: You now have a complex network consisting of many FCs, carriers, methods, and packaging types. At this stage, complexity is further increased with an expanding SKU portfolio and diversified channel distribution. Maybe you have physical stores now, too.

Add international shipping carriers

kris@shipium.com (Kris Gösser) — Mon, 02 May 2011 22:00:00 GMT

Expanding geographical markets is an inevitable inflection point. While the marketing half of the business might have expanded at earlier stages, we argue it is usually around this stage of the business where it makes sense for operations to optimize that expansion. For most companies, leveraging the international capabilities for the four main national carriers is likely sufficient for quite awhile, but there will come a time where adding international carriers for concentrated markets becomes critical to performance and costs.

Add regional carriers (Northeast, West, Southeast, Midwest)

kris@shipium.com (Kris Gösser) — Fri, 01 Apr 2011 21:55:00 GMT

For years, regional carriers were relegated to afterthought by ecommerce companies. Efficiency and scale provided by the four national carriers meant that most ecommerce companies wanted to secure a single contract with a national, wipe their hands, and move on.