Shipwire & FBA Review: 5 things to know about ShipWire to avoid getting ripped off

By August 31, 2015Selling online
If you are selling physical products online and want to find a solution to automate your business, then you are probably familiar with fulfilment services. Fulfilment companies store and ship your inventory on your behalf so you can focus on growing your business.

Two big contestants in this area are Shipwire and Fullfillment By Amazon (FBA). I have used both services for my physical products business, and if you are considering any of them for your own business, then this article is for you. Here I detail my experience with the two so you can make the best choice.

Shipwire vs FBA receiving policy

Fulfilment centers will need to receive your inventory in a certain way in their warehouses. This preparation of your inventory needs to be taken into account when choosing a fulfilment service as they might require additional time and cost.

Shipwire requires to have all SKUs properly labeled and packed together inside the boxes. So for example if you have 10 units of 8 different SKUs, you will need to label each of the 10 units, put the 10 units inside an inner case (also labelling the SKU and units that contains), and put all inner cases inside the box. One limitation is that you need to send at least 3 units if any given SKU.

Amazon requires labelling with their special barcode stickers, and if your unit have a barcode of their own, you can either paste the barcode sticker they provide on top or cover your own barcode somehow (with a black marker for example) and paste the barcode sticker they provide anywhere you want. They do not have a limitation in the number of SKUs per box you can send, or a minimum number of units per SKU.

Shipwire vs FBA fulfilment fees

Shipwire fees and FBA fees are detailed in their respective websites and are actually very similar among them if you are a small store.

However, if you want to protect inventory loses, have a large volume of orders per month and/or sell many different products (SKUs), then there are some things you need to consider when calculating your fees. Shipwire offer discounts on pick and pack fees after a certain volume, however the storage cost is greatly increased if you have more than 50 different SKUs. Also, you will need to buy insurance for your inventory if you want to be protected against inventory loses.

On the other hand, Amazon FBA does not offer volume discount, but does not charge extra on the number of different SKUs unless you have more than 2,000,000 (yes two million different products, you read that right). You do not need separate inventory insurance as they will cover you for inventory lost.

The cheaper option for your store will therefore depend on the number of orders per month, the number of SKUs you store with them and your insurance needs.

Shipwire vs FBA inventory lost/damaged policy

Here is something I wish I knew sooner, fulfilment centers will lose or damage units of your inventory, there is no way around that. These centers process a large number of orders per month, and your inventory is stored together with thousands of other sellers. In these situation inventory loses are unavoidable.

However, you should know that Shipwire and Amazon FBA have very different policies when it comes to the inventory they loose. Shipwire will not reimburse you for the inventory they loose unless you pay inventory insurance, which is a fee calculated on how much you want to protect your inventory for and is paid on top of the storage cost. Shipwire has lost hundreds of dollars worth of my inventory, for which I was only reimbursed the product cost (of course I still lose money on inventory shipment to their warehouse, time spent dealing with support, etc.)

Amazon on the other hand, will easily reimburse you at selling price any units they have lost, no questions asked.

Furthermore, when Shipwire loses your inventory you won’t be notified about it, they will just go ahead and change your inventory levels. It is up to you to track the inventory you manage and detect any loses they have made. Amazon on the other hand sometimes informs you if loses have been detected and reimburse you automatically for them.

EDIT: Although Amazon will not always automatically give you the reimbursements you deserve, there is a new tool called AMZsuite that can automatically submit cases on your behalf and make sure you get every reimbursement. This tool saved me a ton of money in just a week (actual screenshot of what they were able to recover for me):

AMZsuite inventory salvager

Whether you use FBA or Shipwire, it is always good practice to keep track of the inventory they manage in a spreadsheet or similar and detect possible loses of inventory early.

Shipwire vs FBA support

Both Shipwire and FBA have good customer support. Personally, I found FBA easier for the fact that I can use chat instead of email or call. Furthermore, on my experience FBA have replied emails and solved issues faster than Shipwire.

Shipwire vs FBA mistakes

We are all human, and mistakes are expected to happen. Some times your customer might receive the wrong order or the order might be sent to the wrong address.

On my experience, FBA is way more reliable than Shipwire, with only one mistake among more than 500 orders sent.

Shipwire on the other hand have shown a very high number of mistakes, which have cost us time, money, and customer’s trust. They have consistently mistaken SKUs over and over (despite discussing with them on 4 different occasion the mistakes, which they promised will never happen again), and also sent inventory that did not belong to us to one of our customers (I guess someone else lost units of their inventory).

Other considerations

Other than the points above, I would like to mention particular strengths of each.

Shipwire makes it easy to distribute your inventory across the globe, being able to reduct the shipping time to customers in specific countries. Amazon does have warehouses in several countries, however you will need to register a separate merchant account with each marketplace, which makes the process quite tedious.

Amazon does have one big bonus over Shipwire, and that is the integration with their Amazon marketplace. If you sell physical products you should be in Amazon, period. Amazon is the largest marketplace for products and using their FBA will make it easy to increase the exposure of your products in their marketplace.

Conclusion

After months of using both services, I finally opted to keep using Amazon FBA and terminate Shipwire for my fulfilment needs. If you are considering using Shipwire for your business needs you should take careful consideration of my experience above to avoid getting ripped off, specially when it comes to inventory loses (make sure to get insurance if you decide to use Shipwire).

Do you have something to say about your experience with Shipwire or FBA? Share it in the comments!

 

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