Attempting to avoid a split shipment for multi-SKU orders has become a white whale for many ecommerce shippers — and with good reason. Splitting too many multi-SKU shipments can have one of the most significant negative impacts on your business's margins.
Let’s explore the top strategies to minimize single orders becoming multi-piece shipments upstream in your ecommerce supply chain and ways to manage costs downstream if splitting an order is unavoidable.
Operators focus intently on ecommerce split shipments because of their effect on bottom lines. Consistently separating multi-product orders into individual packages sent from different—or even the same— fulfillment centers leads to:
While you can take steps throughout the logistics workflow to ensure minimal shipment splits, a more practical approach is implementing measures that limit their likelihood before your customers even finalize their purchase decision.
Here are three effective strategies to consider:
When implemented correctly, inventory mirroring is one of the more effective ways to avoid shipment splits. It is the strategic practice of distributing your inventory equally across multiple fulfillment centers (FCs). For example, if you stock 100 units of a product, you might distribute 25 units each to four different FCs nationwide.
Mirroring ensures that your products ship from the hub closest to your customers. However, depending on the product range, complete catalog mirroring can increase warehousing and inventory costs.
To effectively balance the reduction of possible shipping splits and warehouse expenses, your strategy should include:
Proactively forecasting demand based on a mix of historical and geographically relevant elements is a strategy that has helped ecommerce leaders like Amazon reduce and manage instances of multi-piece orders. Using a pull-based approach, build an understanding of where your customers are and what they are purchasing so you can work backward, placing items closest to where they are most likely to end up.
For example, assume your inventory includes winter jackets and scarves. Your data will probably show customers located in the coldest states in the country are more likely to purchase these products. That means placing a higher concentration of your inventory in the Minnesota FC vs. your Miami FC minimizes the likelihood of shipment splitting and reduces time in transit.
Key elements of this strategy are:
Learn how a closed-loop parcel fulfillment process can help you reduce costs and improve shipping performance.
Consistent, centralized visibility into your inventory levels across all your FCs can facilitate better transparency in the pre-purchase stage of your customer journey, allowing you to minimize split shipments or lessen their effect on your profits.
This consumer transparency can include:
In addition to cost savings for your business, giving customers more control over their purchases enhances their overall delivery experience. According to research by SMG, 90% of satisfied customers are highly likely to repeat purchases and recommend your business.
From inventory constraints and backorders to carrier restrictions and seasonal volumes, there are a multitude of reasons why you may not be able to avoid separating a customer’s order into multiple shipments. However, there are steps you can take to manage those costs when split shipments occur.
Consolidation leverages your transportation network to combine split orders at intermediate points before final delivery. This strategy is particularly effective when regular inter-warehouse transfers, such as nightly trucks between fulfillment centers, allow you to combine order components without significantly impacting delivery timelines.
Just pay attention to:
While splits are difficult for operators to avoid altogether, you can control costs by continually improving logistics processes.
Focus on:
Using a tech partner like Shipium can simplify modernizing and optimizing your current processes. Integrating your existing ERP, OMS, WMS, and TMS systems, our Fulfillment Engine helps intelligently route your shipments, speeding up delivery times, boosting accuracy, and reducing costs by at least 12%.
Adopting the right shipping technology can impact your ability to make the rapid, nuanced decisions necessary to manage every split shipment effectively. The key is implementing solutions that can balance speed, cost, and customer promises in real time.
When selecting shipping software, evaluate its ability to:
The Shipium platform empowers ecommerce businesses to consolidate shipments intelligently, reducing instances of split shipment and ensuring the lowest parcel spend for every order fulfilled. Our end-to-end shipping platform selects the best carriers and the right FC, applying real-time decision-making that helps our customers reduce their shipping spend by 10% on average.
Book a demo today and learn how to manage split shipments more effectively with Shipium.
A split shipment occurs when a single multi-product order requires multiple packages to fulfill. Splits typically happen when inventory is available from different FCs or the complete order can't be accommodated in a single box, resulting in customers receiving their purchase in several deliveries.
Ecommerce operators sometimes resort to shipment splits to accelerate order fulfillment. Shipping in-stock items immediately from various warehouses aims to get at least part of the order to the customer quickly rather than waiting to consolidate all items into a single package.
You should avoid splitting shipments because multiple packages for a single order may cause customer confusion and frustration, potentially increasing your volume of service inquiries. Each package also adds handling and shipping fees, impacting your bottom line and eroding profit margins.