Whether selling your products directly to consumers or another business for resale, shipping is a crucial component of your supply chain logistics. Shipping is one of the highest fixed costs for most brands, so it’s vital to understand the ins and outs of wholesale shipping when expanding into retail partnerships.
From transportation methods and warehouse capabilities to technical compliance, retailer requirements, and more, here’s what ecommerce companies need to know about wholesale shipping.
Wholesale shipping—also known as business-to-business (B2B) shipping, B2B order fulfillment, or retail fulfillment—is when one business ships bulk quantities of product to another business for resale to consumers. It’s similar to commercial shipping, though commercial shipping may include bulk orders to another business that is not for resale, such as a bulk order of medical supplies to a hospital.
Typically transported via freight, given the size and weight of large B2B shipments, wholesale orders require a different shipping approach than direct-to-consumer orders.
Wholesale distribution and DTC shipping cater to different kinds of buyers with contrasting needs and expectations. This translates to different order sizes, shipping processes, transportation methods, and logistics.
In B2B fulfillment, a brand ships wholesale orders placed by another business rather than individual customers, typically in bulk quantities. Wholesale shipping can be more complex than DTC shipping because businesses need to maintain appropriate stock levels, optimize transport and labor costs, and ensure compliance with domestic and international shipping standards.
Wholesale orders come in according to set timelines. While orders aren’t as frequent, they usually recur on a contractual basis. Given the size of the orders and the complexities of wholesale inventory management, wholesale shipping is generally slow. But since delivery timelines are strict, brands fulfilling wholesale POs must optimize their sourcing and shipping to ensure they fulfill their contractual obligations on time.
In DTC sales, individual customers purchase items directly from a brand without an intermediary. Orders are sporadic, shipped individually, and order frequency is harder to pin down. Since orders are much smaller, shipping costs less, and orders can be boxed and shipped quickly. But with these benefits comes the possibility of lost items and returns that need to be individually processed.
Freight shipping is typically used to ship wholesale orders. The order is packed, shipped on pallets, and transported to the retailer via sea, air, road, or rail.
Wholesale orders are often seen as higher stakes because it takes more capital to secure large orders and pay for costly freight shipping. Given the costs of doing business and the impact of retail stock shortages, wholesale shipping requires rigid inventory management—meaning there’s less flexibility in B2B logistics.
Fulfilling wholesale orders calls for careful planning. Items may be sourced widely—some from overseas suppliers—and delayed shipments could lead to late deliveries, penalties, and damaged retail relationships.
When shipping wholesale orders, you must account for the time needed to source items, optimize travel routes, and factor in transport delays. It’s also critical to ensure compliance with national and international regulatory requirements to avoid additional fees or delays. Freight forwarding can be a useful service for ecommerce companies procuring overseas shipments.
Wholesale shipments can range in size, and loads depend on the kind of freight used. For road freight, there’s full truckload (FTL), less-than-truckload (LTL), and partial truckload (PTL). There’s also rail and air freight—with air being the fastest and most expensive transport method available and ideal for moving smaller packages. Ship freight comes in full container load (FCL) and less than container load (LCL) for a cost-effective method of moving goods internationally.
DTC ecommerce fulfillment doesn’t require the same level of logistics for each order—although fulfilling frequent, individual orders comes with its own set of challenges. Orders are smaller, bound for numerous destinations, and typically fulfilled by carriers via air or ground shipping.
Given the costs and complexities of wholesale shipping, brands shipping wholesale typically implement minimum order quantities (MOQs). This means a buyer must meet or exceed the MOQ for their order to be accepted.
By guaranteeing larger order sizes and full freight loads, wholesalers can negotiate preferential rates for shipping. This translates to savings for both buyers and sellers down the line. MOQs also help wholesalers turn a better profit and maintain cash reserves for their operations.
DTC orders, on the other hand, have none of these restrictions. Unlike wholesale orders, which are placed for commercial purposes, DTC orders are typically for personal use. But unpredictable order size and frequency are challenges for direct-to-consumer brands. Without accurate inventory management and data systems for forecasting product demand, DTC operators may face stockouts and backorders—or tie up capital on unnecessary stock instead of maximizing growth opportunities.
Since B2B goods are shipped in bulk, they have different requirements for packing and packaging. While DTC shipping is the last step before the customer unboxes their order, wholesale products are first received, processed, and then displayed by retailers.
The aesthetics of B2B packaging are less important than their functionality and durability, and the efficiency of packing operations. Typical DTC shipping supplies—like custom boxes and poly mailers—are not practical or cost-efficient for wholesale shipping. Before B2B goods are shipped, they must be accurately packed (usually intro pallets or crates), barcoded, and prepared for shipment according to retailer rulebooks.
In contrast, DTC order fulfillment focuses on creating a premium unboxing experience for the consumer. Items must be delivered in the best possible condition, with packaging that can be disposed of without hassle and attention to detail that adds to the end user's experience. Be it custom packaging, marketing inserts, stickers, or catalogs, packaging often doubles as a clever marketing tactic, helping differentiate the brand and deliver a memorable customer experience.
Investors recommend launching just one or two strategic retail partnerships until the brand has scaled to the point it’s able to manage the compounding complexities of wholesale order fulfillment. Find more data-backed insights in The New Direct-to-Consumer Playbook.
While branching into wholesale offers a significant growth opportunity for historically DTC-only brands, it also comes with new challenges.
When shipping B2B orders, brands need to customize shipments as each retail partner requires. Since there are no standard retail fulfillment requirements, brands shipping to different retail partners often must meet multiple criteria, outlined in each retailer’s supplier rulebook. These rules may include specialized barcodes for categories of goods and specific loading and unloading configurations for shipments.
It’s also essential to coordinate with each retailer's distribution network. A retailer's routing guide will outline these rules for shipping to retail stores. A routing guide may include preferred shipping carriers, delivery schedules, and technical requirements like advanced shipping notifications (ASNs) and electronic data interchange (EDI) capabilities.
When these requirements aren't met, wholesalers may face stiff penalties. And these parameters are even more stringent when working with major big-box retail chains. Target, for example, has tightened its delivery time windows, requiring suppliers to provide a single arrival date for shipments to warehouses, with no grace period for late deliveries. Those that fail to meet these delivery requirements are charged late fees.
Warehouses need different capabilities to store, pick, pack, and ship B2B and DTC orders. And their layout, technology, and internal processes should be optimized to fulfill these different types of orders.
With bulk stock and infrequent orders, B2B warehouses call for robust storage for oversized pallets, crates, and cases, as well as loading docks and forklifts to receive stock and pack orders. B2B warehouses also need large designated areas for receiving freight, packing orders, and loading them for shipment to minimize dwell time.
When fulfilling DTC orders, warehouse workers need space for picking individual items and placing them in carts, boxes, or bags. Since item picking can be a time-intensive process, most DTC warehouses are optimized for batch, zone, or wave picking. They also need designated stations where individual items are sorted into orders and then packaged.
Once packed, B2B shipments are bound for a set number of retailers. DTC is more complex, with high volumes of smaller packages en route to multiple destinations.
Both B2B and DTC warehouses must have the technology to receive and process orders from numerous locations, such as online websites or mobile applications. They need an accurate inventory management system to ensure they have enough stock on-site to fulfill orders received, and to reduce the time goods spend in storage before being shipped out.
Retail supplier standards don’t only apply to how wholesale goods are prepared for shipment and transported. They also include technical requirements and compliance documentation that differs from store to store.
Retailers often require an ASN—also known as an outbound ship notice, manifest, DESADV, or EDI 856—prior to shipment. This is an electronic packing slip generated by the supplier and submitted to the buyer that details the shipping dates, transport information, and physical characteristics of the shipment. The notice is sent to the recipient through EDI and ensures the buyer is prepared for delivery.
As an example, Walmart’s supply chain standards specify everything from ASNs and working with its EDI system—the online system that’s replaced paper-based operations—to its stringent appointment scheduling for incoming shipments, correct pallet configurations, packaging quality, barcodes, and labeling.
From technical requirements to warehouse capabilities and transportation complexities, it takes a lot of effort to ship wholesale orders efficiently. And there’s a lot at stake: Brands expanding into wholesale distribution have their revenue and reputation riding on their ability to fulfill and ship B2B orders seamlessly.
But the time you spend working on retail fulfillment compliance could be focused on growing your business instead—forging new partnerships, diversifying your offering, and searching for better suppliers. By seeking out the right partners to provide retail fulfillment services, you can simplify wholesale shipping and scale your operations—all while building your reputation as a reliable wholesale supplier.
Contact us now to learn how to optimize your B2B retail order fulfillment and wholesale shipping processes.
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