Shopify

This post is for information only. You are responsible for reviewing and using this information appropriately. This content doesn’t contain and isn’t meant to provide legal, tax, or business advice. Requirements are updated frequently, and you should make sure to do your own research and reach out to professional legal, tax, and business advisers, as needed. To sell products using the Shopify platform, you must comply with the laws of the jurisdiction of your business and your customers, the Shopify Terms of Service, the Shopify Acceptable Use Policy, and any other applicable policies.

While the limited liability company (LLC) business structure is a common choice for small businesses, certain situations could benefit from a more specialized structure. For businesses that need very clear lines between managing partners and limited partners but want liability protection for all, the limited liability limited partnership (LLLP) structure could make sense.

But the LLLP structure is fairly niche in application, recognized only in 28 states. Read on to learn the ins and outs of this business structure. 

What is an LLLP?

The limited liability limited partnership (LLLP) is a legal entity that combines elements of a limited partnership (LP) with liability protection for all partners, regardless of their day-to-day involvement in business operations.

The LLLP business structure maintains the same two types of owners found in LPs:

• Limited partners. These partners, also known as silent partners, typically function as passive investors with a financial interest in the business, but participate in a more limited capacity in management. Limited partners contribute capital and receive returns based on their ownership share.

• General partners. General partners have the authority to manage business operations, make strategic decisions, and oversee the business’s direction.

In a traditional LP, only limited partners enjoy protection from personal liability. The LLLP eliminates this disparity, offering personal asset protection to all partners.

An LLLP also differs from a limited liability partnership (LLP), which typically serves professional services firms like law firms and medical practices. In an LLP, all partners are actively involved in management. But LLLPs offer a distinction between general and limited partner roles, while providing liability protection to both types of partners.

It’s important to note, however, that LLLPs have limited recognition—only 28 states currently allow for their formation, which can create complications for businesses operating across state lines. Currently, the LLLP structure is most commonly used in the real estate industry and among asset management companies.

Pros and cons of LLLPs

This type of limited liability partnership offers unique benefits and challenges that business owners should carefully evaluate.

Advantages of forming an LLLP

• Liability protection. The primary benefit of the LLLP lies in its comprehensive liability protection. Unlike traditional LPs, where general partners face unlimited liability, the LLLP provides limited liability protection to all partners—general and limited. 

• Tax efficiency. Similar to LPs and LLCs, LLLPs typically function as pass-through entities, meaning business income flows directly to partners, who pay tax based on their personal rate. This bypasses corporate-level taxation, or double taxation in which the business pays income tax and investors pay personal income tax on any distributions they receive. 

• Operational flexibility. Partners in LLLPs can customize management structures in the partnership agreement, which might include various profit-sharing arrangements and operational responsibilities.

Disadvantages of forming an LLLP

• State-level recognition. Only 28 states, including Florida, Texas, Pennsylvania, and Ohio, recognize the LLLP structure. This limitation can complicate business operations across state lines and may require additional legal considerations, startup paperwork, and costs for multistate businesses. 

• Complexity and startup costs. LLLPs require detailed partnership agreements, compliance with state statutes, and potentially higher legal and accounting fees. If you hire an attorney, formation costs can range from several thousand, compared with only a few hundred for a basic limited liability company (LLC). And annual compliance may require specialized accounting services costing several thousand dollars as well.

• Regulatory compliance. Regulatory compliance demands attention to state statute requirements, filing obligations, and operational procedures, where the LLLP structure is permitted. And LLLPs operating across state lines may have to comply with regulations for other entity types—such as a general partnership—in states where LLLPs are not recognized. This can lead to a complicated regulatory-compliance picture for businesses that operate outside their home state.

LLLP vs. LLC

LLCs and LLLPs are both pass-through entities that offer limited liability protection for all owners. LLCs are less complex to form and manage than LLLPs, and the structure is recognized in all 50 states.

The key distinction between LLLPs and LLCs lies in investment structure and partner roles. While LLC owners, known as members, can contribute capital and remain passive without formal distinctions, LLLPs are specifically designed for businesses that need to clearly separate active management (general partners) from passive investment (limited partners). This structure is particularly beneficial when attracting outside investors who want limited partner status, or when general partners want to maintain traditional partnership management authority without forfeiting liability protection.

The distinction between general and limited partners in an LLLP serves specific business purposes. Limited partners can invest capital while remaining completely passive, which may offer tax advantages where LLLP income is treated as investment earnings, and frees up time to focus on other ventures. General partners maintain full management authority and operation control, making decision-making for the business more streamlined than, say, a multimember-managed LLC, where all members have an equal say.

How to establish an LLLP

Establishing an LLLP requires careful planning and adherence to state requirements. Business owners should first verify that their state of formation recognizes them, because almost half of all states don’t.

The formation process generally begins with selecting an available business name that meets state naming regulations and including appropriate entity designations. Some states may require you to include “LLLP,” or “Limited Liability Limited Partnership” in the business name itself. Next, prepare and file the necessary formation documents with the appropriate state agency—usually the Secretary of State’s office. These documents typically include articles of organization or similar formation paperwork.

You will then need to draft a partnership agreement that outlines partner rights, responsibilities, profit distributions, management operations, and dissolution procedures.

If applicable, you will need to obtain any mandatory business licenses, permits, and tax identification numbers. You will also need to register for state and local (county and city) tax obligations, and establish separate business bank accounts. Consider consulting with legal and tax professionals familiar with the requirements at this stage to ensure proper formation and compliance.

You also will want to take steps to maintain your LLLP status, including submitting annual filings, paying fees and taxes, and adhering to partnership agreement terms.

This post is for information only. You are responsible for reviewing and using this information appropriately. This content doesn’t contain and isn’t meant to provide legal, tax, or business advice. Requirements are updated frequently and you should make sure to do your own research and reach out to professional legal, tax, and business advisers, as needed. To sell products using the Shopify platform, you must comply with the laws of the jurisdiction of your business and your customers, the Shopify Terms of Service, the Shopify Acceptable Use Policy, and any other applicable policies.

Imagine you want to hire a business to repaint the inside of your shop. The contractor explains what the job entails and how much it will cost. They may also give you a copy of their certificate of liability insurance, or COI. This document serves as proof they have coverage to protect you, them, and your customers in case of an accident or property damage during the project.

Here’s what you need to know about COIs.

What is a certificate of liability insurance?

A certificate of liability insurance (COI) is a standardized document that outlines your business’s general liability insurance coverage. It’s usually a one-page document that condenses crucial information about your general liability insurance policy, making it easy for potential customers, lenders, and investors to verify your business maintains active insurance coverage that meets their standards. 

The COI offers an official snapshot of your insurance policy, showing you bought liability coverage from a licensed insurance company or agent. It also determines the extent and breadth of your coverage, including coverage limits. Unlike your actual insurance policy document, which can contain dozens of pages with detailed terms and conditions, the certificate presents the most important information upfront in a clear, standardized format.

Typically, the COI is presented on an Accord 25 form, which is the industry standard in the US. This standardized form provides simplicity and consistency for certificate holders and clients who need to understand their coverage, regardless of which insurer underwrote the policy.

COIs and different types of insurance

Although the term “certificate of liability insurance” typically refers to general liability insurance, insurers also issue COIs for other types of liability insurance policies. Understanding how COIs relate to different types of insurance can help clarify their role in your broader business insurance strategy.

Each type of insurance certificate serves the same basic purpose: providing official documentation that your business has active coverage. The specific type of certificate required depends on the nature of your business, the services you provide, and the requirements set by your clients, landlords, or state regulatory bodies.

General liability insurance

General liability insurance coverage is the most common type documented by COIs. A general liability insurance policy protects against third-party claims—including those from customers, vendors, visitors, and the general public—for bodily injury, property damage, and other types of personal injury that might occur during your business operations. When someone requests a COI, they usually mean a general liability insurance certificate.

Professional liability insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance, addresses claims related to professional mistakes, negligence, and failure to deliver promised services. Many professional service providers, like consultants and real estate agents, use COIs that document E&O coverage.

Commercial auto liability insurance

Commercial auto insurance COIs prove your business vehicles carry adequate coverage for accidents or property damage. Businesses that need this type of COI might lease vehicles, offer contractor services, or enter into delivery contracts.

Workers’ compensation insurance

Workers’ compensation COIs demonstrate compliance with state requirements for employee injury coverage. Many clients and partners require a business to have COIs before they let contractors or subcontractors begin work on their premises. If a business has employees, it may need to keep this COI on file to legally operate in a given state.

Why do businesses need a certificate of liability insurance?

The primary purpose of a COI centers on risk management and relationship-building in the world of business. When you can show proof of insurance through a COI, you demonstrate financial responsibility and professional credibility to potential partners, clients, legal entities, and other stakeholders.

From a more practical standpoint, COIs attest to the legal protection that applies to multiple parties. Your clients gain confidence knowing if your business causes physical injury or property damage during a project, your liability insurance will help cover the costs. This protection extends beyond just covering immediate damages—it also provides assurance your insurance company will handle legal defense costs and settlement payments (so long as they’re within coverage limits) without directly affecting your business’s finances.

The COI clearly documents those coverage limits, as well as when the policy will begin coverage and the expiration date. This can be crucial if questions or disagreements arise about a specific incident or project.

For insurance companies, COIs help manage risk by ensuring all parties involved in a business relationship understand the extent—and most important to them, the limits—of coverage. Plus, the standardized Accord 25 format reduces confusion and helps prevent misunderstandings about what is and isn’t covered under a policy, regardless of who issued it.

Situations where COIs are needed

• Client contract requirements. Many clients, especially larger corporations, require businesses to show proof of liability coverage before entering into service agreements. 

• Commercial lease agreements. Landlords often require commercial tenants to provide COIs before signing lease agreements. 

• Professional licensing applications. Certain professions and trades require proof of liability coverage as part of the licensing process. Contractors, real estate agents, and health care providers often must demonstrate adequate insurance coverage to obtain or renew their professional licenses.

• Vendor and supplier relationships. Companies often require their vendors and suppliers to maintain specific levels of liability coverage. COIs show such requirements are met and coverage remains active throughout the business relationship.

• Public works and government contracts. Municipal and government contracts frequently mandate specific insurance requirements, including minimum coverage limits and additional insured endorsements. Endorsements can extend coverage to the requesting party and are a fairly common request.

• Subcontractor agreements. General contractors typically require subcontractors to provide COIs, proving they maintain adequate liability coverage before starting work on construction or renovation projects.

• Partnership and joint venture agreements. When businesses collaborate on projects or form partnerships, COIs demonstrate all parties have appropriate insurance protection for their shared activities.

• Bank and lending requirements. Financial institutions often require proof of liability coverage before approving certain business loans—especially for companies operating in higher-risk industries, like construction, contracting, transportation, logistics, manufacturing, hospitality, medical practices, and certain professional services that handle sensitive client data.

• Event venue requirements. Businesses that host events at third-party venues often must provide COIs showing liability coverage for potential accidents or damage incurred during an event.

• Franchise agreements. Franchisers frequently require franchisees to maintain specific types and amounts of liability coverage, documented through regular COI submissions.

How to get a certificate of liability insurance

1. Purchase an insurance policy
2. Contact your insurance company or agent
3. Review and distribute the COI

Obtaining a certificate of liability insurance is a fairly straightforward process, but understanding the steps and requirements can help ensure you get the documentation you need quickly. The process begins with having an active insurance policy in place, as insurers can only issue COIs for existing coverage.

1. Purchase an insurance policy

Before you can request any certificate, you must have an active liability insurance policy or other relevant business insurance coverage. If you don’t currently have coverage, work with an insurance company or agent to evaluate your needs, compare quotes, and purchase a policy that meets your business requirements.

When selecting coverage, consider the specific certificate requirements you’re likely to need. Many clients and landlords require minimum coverage limits, such as $1 million per occurrence and $2 million in aggregate for general liability insurance. Some contracts may specify even higher limits or require certain additional insured endorsements.

2. Contact your insurance company or agent

Once you have active coverage, you can request a COI from your insurance company or agent. Most insurers provide multiple ways to request certificates, including by phone, through online portals, by email, or via mobile apps. The request process typically requires you to provide specific information about the certificate holder, their address, project details if applicable, any required additional insured parties, and any specific policy information that should be highlighted on the COI.

3. Review and distribute the COI

Most insurance companies can provide COIs within 24 hours, and often much faster for basic requests. Once you receive the COI, review it carefully to ensure all the information is accurate, including names, addresses, policy numbers, coverage limits, and policy effective dates.

After confirming accuracy, you can distribute the COI to the requesting party. Many businesses find it helpful to maintain digital copies of their COIs for quick access when new requests arise. Some insurance companies provide online customer portals where you can access and download certificates at any time.

Other considerations when obtaining a COI

The cost of obtaining COIs varies by insurance company, but many insurers provide them at no additional charge as part of their customer service. However, some companies may charge nominal fees, particularly for rush requests or COIs containing special endorsements. If you need to provide additional insured endorsements, this could increase your premiums.

If you frequently need COIs for different projects or clients, consider discussing this with your insurance agent. Some insurers offer streamlined processes for high-volume certificate generators, including online systems that let you obtain them instantly.

If your business works with multiple clients simultaneously, consider tracking certificate expiration dates to ensure you obtain updated COIs when policies renew. Many business relationships require current certificates to be on file, and expired documentation can delay projects or contract approvals.

Working with an experienced insurance agent can simplify the COI process. Agents familiar with your industry understand common COI requirements and can help you ensure your policy includes the endorsements and limits that clients typically request. This proactive approach can prevent delays and help maintain smooth business relationships.

Product packaging is a key component of ecommerce order fulfillment. While branded boxes and creative unboxing experiences can strengthen customer loyalty, not every order benefits from bold packaging. In some cases, customers value privacy and security over presentation.

Discreet shipping provides that protection. Whether you’re shipping high-value items prone to theft, sensitive products, or even gifts, a discreet shipping process helps safeguard deliveries and maintain customer privacy. This guide covers what discreet shipping is, when to use it, which major carriers provide it, and how to implement it to improve your customer experience.

What is discreet shipping?

Discreet shipping involves shipping items without giving away important information about the package contents or the seller. The goal is to keep outside packaging plain and unremarkable so that no one—whether a delivery person, roommate, neighbor, or potential thief—can tell what’s inside.

Merchants can ship items discreetly using two types of discreet packaging: nondescript packaging and generic packaging. 

• Nondescript packaging uses plain packaging materials like unmarked boxes and envelopes. 

• Generic packaging uses generic labels and shipping company names (like the US Postal Service or Amazon Shipping branding).

Here are some examples of discreet packaging materials you can consider purchasing from packaging suppliers, online marketplaces, and shipping carriers:

• Plain boxes. Use a plain brown box to ship items of different sizes without revealing what’s inside.

• Minimal labeling. Shipping labels should include only essential details—if you need to add a return address, keep it generic—you can add a street name, but don’t mention the name of your company or other sender information. Information like “Fragile” is fine, but avoid elements that hint at the box’s contents.

• Limited or no brand packaging. Avoid using brand packaging with a company logo, name, slogan, or other branded visual elements.

• Unmarked mailers and envelopes. Plain mailers and envelopes are cost-effective and discreet options for smaller, non-fragile items.

When to use discreet shipping

Here are a few common reasons merchants use discreet shipping with their product packaging.

Shipping sensitive products

Merchants shipping sensitive items to customers can use discreet shipping strategies to protect their customers’ privacy. This can apply to a wide range of product categories, including adult products, intimate health or beauty products, and medical supplies like pharmaceuticals or medical devices. Using discreet shipping avoids embarrassing customers or revealing sensitive information to anyone who sees the package. Of course, no carrier permits using discreet shipping for illegal or prohibited items, and merchants are always responsible for complying with all carrier policies and shipping laws, such as those around age-gated products (alcohol, prescription medications, etc.), hazardous materials, customs declarations, and others. Stay current on shipping regulations and carrier policies so you’re always in compliance.

Offering theft protection

Security.org reports that $12 billion in packages were stolen in 2024. If you’re shipping luxury goods and high-value products like jewelry, designer apparel, or expensive electronics, opting for discreet shipping can reduce the risk of package theft. Consider using unmarked packaging and minimal labeling to avoid signaling to potential thieves the value of the contents.

Selling gifts

Sometimes customers want their order shipped discreetly because it’s a gift for someone. For example, a customer purchasing a sweater from an apparel brand for their spouse’s birthday could request discreet shipping to avoid giving away the surprise. If you sell items that are commonly gifted, offering discreet shipping can enhance the customer experience (especially around peak gifting seasons, like certain holidays).

Saving money

Merchants may elect to use generic packaging materials over branded packaging to save costs. While branded packaging can offer customization, fuel marketing efforts, and enhance the customer’s experience, it can also require significant funds and time to design and produce. Benefits of using an off-the-shelf solution might include lower costs, faster turnaround times (since the packaging is always readily available), and consistency (especially if you’re using a third-party shipping fulfillment service). Generic packaging may also require less space prior to its use since it’s often designed for efficiency.

Which major carriers offer discreet shipping?

The following major carriers and courier companies offer discreet shipping:

• USPS. The US Postal Service offers unbranded, generic packaging that conceals a package’s contents. Delivery to PO Boxes adds extra security and is available through services like Priority Mail Express, Retail Ground, and First-Class Mail.

• UPS and FedEx. Although the United Parcel Service and FedEx don’t offer specific discreet shipping programs, they ship in unmarked and unbranded boxes with minimal labeling, meaning merchants can use this service for discreet shipping.

• DHL. For international orders, which can be more difficult to keep discreet due to paperwork requirements, DHL provides specialized options. Its Neutral Delivery Service (NDS) conceals a shipment’s value to the recipient, while its Named Person Only service ensures packages arrive in the hands of the intended recipients.

• Amazon Logistics. When shopping on Amazon.com, users have the option of selecting “Ship in Amazon packaging” at checkout, although it’s already standard for most Amazon orders to arrive in Amazon-branded boxes or envelopes that don’t give away their contents.

How to provide discreet shipping

Here are a few tips for effectively providing discreet shipping to your customers.

Require signatures

When using discreet shipping for your orders, consider implementing proof of delivery in the form of a signature from the intended recipient. For high-value or sensitive items, customers will likely prefer to receive those items directly. Offer signature confirmation as an option at checkout and clearly note any added shipping costs with carriers (for example, signature confirmation starts around $6 per shipment with FedEx). 

Manage customer expectations

Communicate your discreet shipping policy clearly upfront to customers. Share relevant information about your discreet shipping practices to customers before they complete checkout on your website—including what discreet shipping options you offer and whether they cost more. After purchase, confirm key details (like how tracking will work and where to find the tracking number) with a post-purchase email.

Elevate the interior unboxing experience

Although discreet shipping changes the appearance of the outside of your shipments, you can still create a memorable unboxing experience for your customers with the inside of your packaging. For example, you could include packaging inserts like thank-you cards, QR codes, stickers, guides, or product samples.

If you’ve had trouble being approved for a merchant account at a bank or you’ve hit unexpected roadblocks with payment processing, you might be operating in what’s considered a high-risk industry.

That doesn’t mean your business is doing anything wrong. It only means there’s more complexity involved when it comes to issues like chargebacks, fraud prevention, or regulatory requirements.

Here’s what a high-risk merchant account is, why some companies are labeled as high-risk businesses, and what to expect if you’re looking to get approved.

What is a high-risk merchant account?

A high-risk merchant account is a special type of merchant account designed for businesses with a higher risk of issues like chargebacks for disputed transactions or fraud. If a business is deemed high risk, its bank or credit union may require it to open a high-risk merchant account. These often come with higher fees and stricter contract terms to make up for the risk involved and extra administrative expenses.

What makes a business high risk?

A business may be considered high risk by a bank or payment processor if it operates in an industry that tends to see higher levels of returns, fraud, or regulatory scrutiny. Online gambling, cannabis sales, adult entertainment, and firearm distribution are some common examples of high-risk businesses. However, you don’t have to be in a controversial industry to be considered high risk. Many ecommerce businesses that operate within the rules can still find themselves navigating stricter payment requirements, higher fees, or more rigorous underwriting processes.

For example, businesses that typically handle large transactions face higher chargeback rates. Because a single dispute can represent a major loss, payment providers may see these businesses as financially riskier to support. On the flip side, very low-value transaction values, especially in high volumes or recurring charges, can also raise red flags due to fraud screening and customer disputes.

Service-based businesses—like those offering web design, bookkeeping, or search engine optimization services—can also be considered high risk. These services are sometimes viewed as subjective or difficult to fulfill to a customer’s satisfaction, which may lead to payment disputes. The same applies to dropshipping stores or merchants selling digital products (like ebooks, software, or online courses), where delayed delivery or confusion around what’s being sold can increase refund or fraud claims.

A business’s risk level is based on factors like:

• Chargeback rates 

• Regulatory scrutiny

• Fraud potential

• Financial stability

• Industry reputation

• Typical transaction value

• Business credit history

• Age of the business

• Domestic vs. international sales

Pros and cons of high-risk merchant accounts

High-risk merchant accounts come with trade-offs, but they let businesses accept credit card payments when a traditional bank or payment processor may turn them away. Here are some of the pros and cons of a high-risk merchant account: 

Advantages

• Access to payment processing. If your business operates in a high-risk industry, these accounts make it possible to accept debit and credit card payments, as well as digital wallets. High-risk payment processing lets you reach more customers and grow faster.

• Support for global sales. Many high-risk providers are set up for international transactions, offering multicurrency support and tools to help you sell across borders.

• Stronger fraud protection. High-risk merchant accounts often come with advanced security features designed to spot suspicious activity and reduce chargebacks—helping you protect both your revenue and your reputation.

• More flexibility with sales volume. Businesses with high or fluctuating transaction volumes may find fewer limits or transaction caps with a high-risk merchant account, giving you more room to grow without hitting a trip wire that freezes the account.

• Higher chargeback threshold. Some high-risk merchant account providers are more forgiving of excessive chargebacks, which can be a game-changer if your industry tends to deal with more transaction disputes than average.

Drawbacks

• Higher fees. These accounts come with extra risk and administrative expenses for providers, and your merchant service provider will pass on some of that cost to you. Expect to pay more in setup costs, monthly fees, and per-transaction charges. 

• Reserves. Many high-risk accounts require you to keep a percentage of your sales in reserve, in case of high chargeback ratios. This feature can strain your cash flow, especially if you’re just starting out.

• Slower payouts. You might not get access to your funds as quickly as you would with standard merchant processing accounts. Settlements may take as long as three business days, making it harder to manage your cash flow.

• Stricter contracts. High-risk accounts often come with more complex terms, including longer commitments, early termination fees, or charges for rule violations.

• Perception issues. Being labeled “high risk” can carry a stigma. It may raise doubts among potential partners or lenders, even if you’re running a legitimate and well-managed business.

How to find a high-risk merchant account

Choosing the right high-risk merchant account provider can make a big difference in how smoothly your business runs.

Rather than open one of these accounts at a bank or credit union, businesses operating in high-risk industries can use a third-party company like an ISO/MSP (independent sales organization/merchant services provider). Adyen, Authorize.net, Cybersource, PaymentCloud, and Trust Payments are just a few examples of these high-risk merchant account providers. Some high-risk merchant services providers integrate with popular ecommerce platforms like Shopify as well as some accounting software to process transactions.

Here are some key factors to consider for high-risk businesses:

• Clear, upfront pricing. A high-risk merchant account should offer a smooth application process and transparent pricing on setup, monthly charges, payment processing fees, and any other costs. 

• Industry expertise. Check the merchant account provider’s website to find a list of high-risk industries they work with. A provider that understands your industry is better equipped to offer relevant solutions and help you navigate the challenges that come with your specific business model.

• Flexible contracts. Long-term contracts with steep cancellation fees can make it hard to pivot if your business needs to change. Merchant account providers with flexible terms are a better long-term partner. 

• Proven track record. Check out reviews and testimonials, especially from other high-risk businesses like yours. A strong reputation signals that the provider can deliver payment processing solutions.

• Built-in security. High-risk businesses are more vulnerable to chargebacks and fraud. Make sure the provider offers strong security features and fraud prevention tools.

• Responsive support. Reliable customer support matters, especially when payments are on the line. Look for providers that offer 24/7 help across multiple channels.

• Platform compatibility. Ensure your provider’s payment solutions integrate smoothly with your ecommerce setup and other tools you use.

• International sales. If you sell globally, check whether the provider supports multiple currencies and understands the rules for cross-border transactions.

• Read the fine print. Before signing a contract, take time to understand the full agreement, including contract length, cancellation policies, and any clauses that could affect your operations.

Whether you’re selling deep-sea fishing equipment or vegan dog treats, managing customer calls is critical for any growing business. Interactive voice response (IVR) technology offers a solution that streamlines contact center operations and improves the customer experience without dramatically increasing operational costs.

In the increasingly AI-driven ecommerce landscape, next-generation IVR systems can increase customer satisfaction by up to five times and reduce the need for human agent interactions by 10%, according to the consulting firm McKinsey. For small ecommerce businesses, an investment in IVR can be worth the price.

Here’s what IVR is, how it works for ecommerce, and which tools to consider.

What is IVR? 

Interactive voice response is an automated phone system that enables callers to interact with your business through voice commands or touch-tone keypad selection. Acting like a digital receptionist, IVR greets customers with prerecorded messages and presents menu options to direct their calls to the appropriate representative or automated service. 

IVR systems use dual-tone multifrequency technology (DTMF) to interpret caller input through the telephone keypad. More advanced IVR solutions incorporate speech recognition and natural language processing (NLP), allowing customers to speak their requests.

For ecommerce businesses, IVR often serves as the first point of contact for customer calls, offering a way to handle simple requests, such as checking an order status, without tying up live agents. 

How does IVR work?

An interactive voice response system operates through a structured call flow that guides customers through their service journey. When customers dial your support number, the software analyzes user input from either the phone keypad or voice commands and matches it to programmed options. Based on valid responses, the system may:

• Provide automated information, such as store hours and shipping updates

• Collect caller data to pass to an agent

• Route calls to the most appropriate agent or department

More advanced IVR solutions use voice recognition technology to understand user requests in their preferred language or identify callers using voice biometrics. IVR technology typically integrates with contact center software and customer relationship management (CRM) systems, giving agents access to caller information and interaction history when calls are transferred. By handling routine inquiries automatically and passing along context for more complex customer requests, IVR reduces wait times and ensures customers reach the correct department faster.

Who uses IVR?

Various industries leverage IVR technology to improve customer interactions and streamline business operations:

• Banks and financial institutions. The financial services industry uses interactive voice response systems for transferring funds, providing balance information, and directing calls.

• Health care organizations. Doctors and medical clinics use IVR for appointment scheduling and prescription refills. 

• Subscription-based businesses. Subscription-based businesses, such as cable TV or internet service, leverage IVR for account management, billing questions, and service modifications.

• Call centers. Whether for fundraising, public safety information, or tech support, call centers leverage IVR to reduce the load on human agents. 

• International or multilingual businesses. Businesses that serve multilingual customers support their diverse customer bases by offering menu options in customers’ preferred languages. 

• Online retailers. Ecommerce businesses use the technology to handle order status inquiries, process returns and exchanges, and provide shipping information. 

For Shopify merchants and ecommerce businesses, IVR systems are particularly valuable. Contact centers serving ecommerce businesses use IVR solutions to manage seasonal spikes in call volumes, ensuring prompt and consistent customer service during peak shopping periods like Black Friday or holiday seasons.

Benefits of IVR

Interactive voice response systems are beneficial for growing businesses—especially small companies looking to improve their customer experience and streamline workflows. Here are some of the key benefits: 

High-volume call management

IVR systems excel at managing high call volumes. The automated phone system can handle multiple calls simultaneously, ensuring no customer receives a busy signal during peak periods. Automatic call distribution can route calls based on the caller’s needs and agent availability, ensuring customers reach the appropriate representative for their specific issue. IVR can be especially valuable during holidays and seasonal spikes since it can scale on demand.

Automated service

IVR systems automate the handling of basic inquiries and services, such as account information access, order tracking, and simple transaction completion, so customers can get answers outside business hours without waiting for a human agent. This significantly reduces the demands on human agents, freeing them for more complex requests.

Improved customer service

IVR improves customer service beyond just 24/7 availability. Instead of customers explaining their problems multiple times to different representatives, the IVR system gathers preliminary information and directs them to agents best equipped to help. 

Cost efficiency 

IVR technology delivers significant operational cost savings by reducing the need for additional customer service representatives. The automated service handles routine tasks that would otherwise require human intervention, letting businesses serve more customers with fewer staff members.

Challenges of IVR 

Although IVR can improve customer service, it isn’t without pitfalls. Here are some of the most pressing issues: 

Impersonal communication 

One big drawback of IVR systems is the impersonal nature of automated interactions. Customers seeking immediate human help may find navigating through multiple menu options aggravating, especially when dealing with complex or emotionally charged issues. Some callers may become frustrated as soon as they encounter automation. A recent survey by Ipsos revealed that 88% of people prefer to speak with a human when faced with customer service issues.

Complex navigation 

Poorly designed IVR menus can create barriers between customers and the support they need, potentially leading to customer frustration and abandoned calls. A common gripe with IVRs is confusing menus that don’t offer the option the customer is looking for—and no clear path to speaking with a human agent. (It’s worth noting that Gartner found that 64% of consumers would prefer that companies not use automation or AI for customer support.) 

Imperfect technology

Systems that don’t recognize natural speech patterns or have limited voice command capabilities can force customers into rigid interaction patterns that feel time-consuming and unresponsive to callers’ concerns. Integration issues with other software can also lead to agents receiving incomplete information.

What to look for in an IVR system

When selecting IVR software for your business, you should expect certain standard features across most platforms, including:

• Core call handling. Call routing, customizable menu options, call queuing, and seamless transfers to live agents.

• Customer-friendly tools. Automated greetings, multilingual support, caller ID display, and touch-tone and voice recognition.

• Business integrations. CRM connectivity, call recording, and basic analytics reporting.

These foundational features ensure your system can handle routing customer interactions and integrate with your existing business operations. Beyond these standard capabilities, evaluate systems based on ease of customization, scalability options, advanced analytics, and specific integrations with existing systems.

Best IVR system providers

1. RingCentral
2. Aircall
3. Nextiva
4. 8×8
5. Vonage
6. Five9
7. Genesys

The best IVR system is the one most aligned with your company’s needs. Here are some of the top choices:

1. RingCentral

RingCentral is a flexible platform that can accommodate remote or blended teams. It combines IVR (supported by AI conversation intelligence) with video conferencing and team messaging in its base plans. Integration with tools like Salesforce and Google Workspace, in tandem with RingCentral’s mobile apps, allows complete system management from smartphones. Advanced features like an AI receptionist and AI call insights are available as add-ons for additional fees.

Pricing: RingCentral offers custom pricing; contact sales for details. 

2. Aircall

Aircall’s straightforward interface appeals to small ecommerce businesses. Its base plan includes features like click-to-call from your browser, call logging to CRMs, and integrations with WhatsApp. AI voice agents are available as an add-on feature.

Pricing: Plans start at $30 per user monthly (billed annually); advanced analytics, call sentiment analysis, and workforce management features are unlocked at the $50 per user per month Professional plan.

3. Nextiva

Nextiva differentiates itself with built-in CRM functionality and gamified call analytics, which are included in its standard plans. Nextiva’s NextOS platform provides conversation intelligence that can score calls and identify coaching opportunities for customer service agents, plus integrated surveys for immediate customer feedback collection.

Pricing: Plans start at $15 per user per month (billed annually), with features like advanced reporting and AI-powered insights available as add-ons.

4. 8×8

8×8 offers global connectivity with built-in international calling to more than 40 countries included in its base plans, targeting businesses with an overseas customer base. The platform combines contact center, business phone, and video meetings in a single solution, with quality-of-service monitoring and global redundancy. AI-powered analytics and advanced workforce optimization (including staffing forecasting, workload trackers, and skills management tools) are available as premium features.

Pricing: 8×8 offers custom pricing; contact sales for details. 

5. Vonage

Vonage’s application programming interface (API) architecture allows extensive customization and integration options for small businesses. Its platform includes built-in conversation analytics and the ability to create custom workflows in its standard plans. Advanced AI features, including real-time transcription and sentiment analysis, are available as add-on services.

Pricing: Plans start at $13.99 per month per line (billed annually). 

6. Five9 

Five9 is designed for growing businesses with high-volume contact centers. Its system includes predictive dialing (which automates outbound calls, only connects agents with answered calls, and automatically maintains compliance with telemarketing laws) and real-time adherence monitoring as standard features, making it suited for larger operations. Premium features like AI-powered agent assistance and an advanced analytics dashboard require additional licensing fees.

Pricing: Five9’s voice-only plans start at $119 per month (36-month contract). 

7. Genesys

As a part of its broader agentic AI offerings, Genesys provides enterprise-focused features, including AI-powered customer journey mapping and omnichannel capabilities. Its system offers advanced personalization that remembers customer preferences across all touchpoints and includes built-in workforce engagement tools (like staffing forecasting, time-off management, and call quality analysis). Premium AI features like predictive routing and real-time customer sentiment analysis are available through additional modules.

Pricing: Plans start at $75 per user per month (billed annually).

When an owner of a bakery prices and markets their treats, they simply sell a slice of cake, not two hours of their baking time. Most customers care more about the result than the time spent producing it.

The same often holds true when pricing and marketing your services, though it can be more challenging. Businesses offering intangible services may have pricing that feels unclear or unpredictable. However, applying a product-style pricing model can provide clarity. This approach is known as a productized service.

“Services can be kind of ephemeral,” says Chloe Sapienza, founder of Telescope, a corporate gifting service that leverages service productization. “There’s a need to understand each component piece of the service that you’re offering.”

By defining and packaging your service, you create transparency, set clear expectations, and offer a more consistent experience for your clients.

What is a productized service?

A productized service is a predefined, packaged service that’s sold like a physical good with a fixed price. Businesses build set packages with multiple components, charging an outcome-based fee instead of billing by the hour or for each element.

Companies can adopt different models for productized services. You could create bundles for one-off projects or offer a recurring service at a fixed rate—think of a gardener who comes monthly to water plants, collect fallen leaves, cut the grass, and weed the beds.

You could also create turn-key assets for clients—essentially outsourcing an entire job to you, either on a one-off or recurring basis. For example, a web development agency may charge a flat fee for an ecommerce website including a homepage, product, FAQ, About, and landing pages, rather than charging for each hour worked.

To productize corporate gifting services, Telescope offers its entire service process as one flat-rate package. The company’s website breaks down the corporate gifting process into six parts. Clients pay a fixed price for a package including project planning, ideation and design, ordering inventory, production, fulfillment, and program development. This approach has helped Telescope improve its customer experience and relationships.

“The biggest thing that I want to convey to our customers is that sense of continuity, the sense that we’ve really created an all-in package for them and we’re helping them every step of the way,” says Chloe.

Benefits of productized services 

Productizing services can make your business more efficient, profitable, and resilient. Some of the potential benefits include:

• Shorter sales cycles. Customers seeking a complete, ready-to-go service are drawn to productized offerings with clear pricing and defined scope, making the sales cycle shorter and smoother. This eliminates the hassle of clients having to hire multiple professionals for each step and negotiate rates. 

• Better client relationships. Unlike hourly rate projects, which may run over budget, productized services offer a set price with a guaranteed outcome. Results are baked into the cost, so there’s no back and forth on finances.

• Increased clarity and transparency for customers. Clearly defined services let clients know exactly what they will, and will not, receive at a fixed rate. 

• More predictable revenue. Just as clients know exactly how much they’re paying for projects, your business gains certainty on income per project.

• Improved internal efficiency. Streamlined, repeatable processes keep projects on track and reduce distractions.

Industries that use service productization

Take a standard haircut appointment—it may involve a wash, consultation, haircut, and blowout. Technically, a hairdresser could charge for these services by the hour. But by creating bundles that appeal to most of the target customers, the hairdresser can estimate revenue better while ensuring their expenses are covered.

Productized services are common in industries where numerous tasks can be bundled to present clients with a flat fee.

Here are a few industries and fields where productized services are popular:

• Specialist contractors and maintenance. From cleaning crews to HVAC repair, home-care services often create standard packages so customers understand costs upfront. 

• Creative services. Graphic design, copywriting, interior design, and video production involve numerous detailed processes. Creating packages with standard offerings makes it easy to pitch your services without creating custom quotes for each job. 

• Professional services. Accounting, web development, consulting, and software development firms may have product packages for standard services that involve little variation.

How to productize your service 

1. Set goals
2. Determine deliverables
3. Choose the right services
4. Map your service process
5. Set prices
6. Market and sell your services
7. Execute and refine

Moving toward a productized model can help your business increase service quality, attract potential clients, and better align with market demand. According to Chloe, it helped Telescope increase customer lifetime value (CLV), build client relationships, and boost profits.

“Over the first year, we increased [revenue] by 200%,” says Chloe.

These steps can point you in the right direction:

1. Set goals

Chloe recommends starting with defining what success looks like. Consider both internal factors and the customer experience. Ask yourself questions such as:

• What would make it easier for my team to execute projects?

• What customer behaviour do we want to encourage?

• How can we increase revenue?

You can use your definition of success to set measurable goals for your productization process. Chloe urges businesses to think critically about their goals, adding that you’ll use them to make key business decisions.

“Pricing becomes much clearer once you’ve outlined what the goal is,” she says.

2. Determine deliverables

Productized services are defined by what the client receives—not what the service provider does—so outline deliverables for each of your services. This step prepares you to map the service delivery process and will help you set clear expectations with clients.

Specify what is and isn’t included in each productized service. A design and branding firm might create the following deliverables for a logo design process, for example:

Deliverables

• Three preliminary logo designs, including three design directions and primary color palettes

• One finalized logo design, including a horizontal and vertical logo mark; favicon; primary and secondary color palette; and header, subheader, and body font selections

• Final files, including finalized JPGs, PNGs, and working files (PSDs) 

Not included

• Document layout

• Web design

• Additional visual asset development

Chloe recommends performing a competitive analysis to see how similar businesses define their deliverables and package their services. 

3. Choose the right services

Some services are better productization candidates than others. Consider the following factors to choose services:

• Frequency. You need to understand a process to standardize it, so focus on popular services you’ve been hired to do many times. Productizing in-demand services maximizes return on investment (ROI) on your efforts.

• Consistency. Select services that follow a repeatable process. Creating standard packages for more variable services requires more upfront work and increases the chances an unforeseen element will cost you money in the execution phase. 

• Market demand. Just like physical product development, service-based product development focuses on products with high sales potential among potential clients—also known as strong product-market fit. 

• Mission fit. Chloe recommends selecting services aligned with your interests, available resources, and business focus. “If you’re adding on new services, make sure that they complement your business model,” she says. “That they’re something you actually want to do.” 

4. Map your service process

Create a complete picture of the service delivery process. Chloe recommends getting as granular as you can.

“We started by breaking our services down into the smallest components possible to really try to understand them,” she says.

Your delivery process will depend on your service type and business model. Here’s a non-exhaustive list of tasks you might include:

• Onboarding

• Discovery and fact-finding

• Research

• Brainstorming

• Design and development 

• Internal review and revision cycles

• Presentation of findings, designs, or solutions

• Client-involved revision cycles 

• Final product delivery 

• Invoicing

Documenting each element helps you refine, price, and execute services. Once you’ve mapped your process, review for redundancies and inefficiencies.

5. Set prices

Use your process map to develop a pricing structure that reflects a service’s cost to your business. Here are two common approaches:

• Estimate time. Calculate total project time and multiply the figure by your standard hourly fee to arrive at the total labor cost for a project. Then estimate the project’s material or software expenses, apply your standard markup, and add this figure to calculate the final service price. 

• Estimate volume. In this approach, pricing is determined by adding your revenue target and expenses. Then divide the sum by the number of services you expect to be able to complete over a given period. If you offer multiple service types, scale relative prices to reflect project demands.

Compare your prices to other competitors in your industry. If your prices are significantly lower, consider raising them to avoid client skepticism. If your prices run high, consider whether a premium pricing strategy is the right fit for your business, or explore lowering your prices.

6. Market and sell your services

List your services and develop a productized service marketing strategy, pulling from product marketing and service marketing approaches as needed. Best practices include clarifying deliverables, emphasizing your team’s expertise, and focusing on building customer relationships and delivering a high-quality experience.

The right ecommerce platform can reduce your workload and boost conversion rates, so look for a platform that meets your needs. Telescope is in the process of migrating to Shopify Plus.

“We’re trying to create a unified shopping experience,” says Chloe, adding that the migration will help the company more closely mimic a traditional product shopping experience.

Although Telescope uses fixed prices, it relies on employees to calculate complex project costs. The new user interface minimizes the need for employee involvement.

“Clients will be able to view the total all-in cost on an estimate as opposed to kind of having to ask us to put that together,” she says.

7. Execute and refine

The chance to improve and perfect processes is one of the major benefits of selling productized services.

“You can repeat a process over and over, honing in on services and getting them into a fixed bubble,” says Chloe. “This makes it easier for your team to repeat them and produces a better outcome for your customer.”

As you work, pay close attention to the relationship between expectation and reality—i.e., any differences between your planned workflow and the actual service delivery process. Here are a few questions to ask yourself:

• Does our service delivery process follow the plan?

• When do we deviate from the planned process? Do these deviations add value for clients? Do they increase or decrease the demands on our business?

• Are our time estimates and expense projections accurate? Where are we over or under budget?

If your discovery process always takes twice as long as projected, for example, you might remove steps, increase the time allotted, or find efficiencies. During a website development project, for example, if you often deliver a free landing page, add it to your standardized package and charge for it up front.

Tips for productizing services

Here are three tips to help your business productize services.

Know when to say no

Productized service providers can expect requests outside of project scope, and fielding them can be tricky. Chloe recommends business owners get comfortable turning down requests.

“Initially, the only real challenge that we were faced with was having to say no to certain customers,” she says, “but if it means that you’re providing a better service overall, I think every business owner knows that that’s the winning choice.”

Chloe also points out that in some cases, accommodating an out-of-scope ask is a good business decision to learn if you adjust your service packages.

“We’ve said yes to someone to see if that was a good option for our service offering,” says Chloe. “Then it never came up again, or it ended up being incredibly inefficient for the customer and for us.”

Test your service model

Although many productized service businesses adjust service pricing and packaging over time, Chloe suggests approaching changes with caution.

“You don’t want to change pricing on a customer by surprise or have it happen frequently, especially for a service,” she says.

To protect your brand reputation, she suggests using A/B testing or a soft launch strategy to test-drive your service model. Chloe’s team used this strategy to gauge customer responses to different package configurations, allowing the company to maximize consistency after launch. 

Use the right tools

Software tools can simplify the process of selling and delivering productized services. Telescope’s Shopify Plus migration, for example, will help the company simplify sales and marketing processes and add value for clients.

“We’re building client dashboards that improve access to metrics and allow clients to allocate inventory,” says Chloe.

The right tools will depend on your industry, service model, and business needs. Start by reaching out to your ecommerce platform provider to see how it can support the productization process. Productized service businesses can also use customer relationship management (CRM) software to improve customer relationships. Project management platforms can visualize the service delivery process and monitor internal workflows.

Success in ecommerce isn’t just about having the best products or the biggest budget; it’s about knowing your competition and using that knowledge to your advantage. In a crowded digital marketplace, understanding what your rivals are doing can help you spot opportunities, avoid costly mistakes, and reach your audience more effectively.

That’s where PPC competitor analysis comes in. By analyzing your competitors’ paid search strategies, you can uncover insights into their keywords, ad copy, budget allocation, and performance. Armed with this information, you can make smarter decisions and build PPC campaigns that stand out and drive results.

What is PPC competitor analysis?

A PPC competitor analysis is a report on another business’s pay-per-click (PPC) advertising activity. It includes information on ad strategies and performance. Assembling an analysis involves researching keyword strategy, studying creative direction, and analyzing competitor advertising tactics. 

In a competitive digital landscape, ecommerce businesses are often fighting for the same customers with the same basic marketing tools. PPC advertising is a popular digital model in which businesses pay only when users click on an advertisement. Paid search advertisements—the promoted links that appear at the top of search engine results pages—are a common form of PPC ad.

Why conduct a PPC competitor analysis?

Conducting a PPC competitor analysis can reveal useful information about your competitors’ paid advertising strategies. You can’t access their specific campaign analytics, but PPC tools, advertising platforms, and ad libraries provide general information about their advertising activity. These are some of the details you can gather from a PPC competitor analysis:

• Ad spend. PPC competitor analysis tools can estimate how much competitors spend on advertising.

• Target keywords. Discover the keywords your competitors use to serve targeted ads.

• Placement strategy. Review where your competitors run PPC campaigns. Example placements include search results, social media, and display ads. 

• Ad messaging. Ad libraries make it easier to review competitor ad copy by assembling advertisements in one place. Studying messaging can help you understand how competitors are positioning their products. 

• Landing pages. Discover where your competitors direct their ad traffic. PPC competitor analysis tools display the links connected to specific ads. 

Once you understand what your competitors are up to, your team can look for market gaps—advertising opportunities that your competitors overlooked—and brainstorm ways to make your product stand out.

PPC competitor analysis tools

Advertising platforms like Google and Meta offer several native analytics tools for researching keyword strategy and reviewing ad content. Third-party software platforms can also help reveal additional information about ad performance. Here’s how some of these common tools for researching competitor PPC advertising strategies can set you up for success:

Google Ads auction insights 

Google Ads auction insights is free for businesses that advertise on Google. With this tool, account owners can compare their own ads to other advertisers competing in the same auctions—the bidding process that determines PPC ad placement. Ad auction insights provide information about how you rank compared to competitors, the share of impressions your advertisements receive, and how much your keyword strategy overlaps. 

Google Ads Transparency Center

The Google Ads Transparency Center is a searchable database of active advertisements on Google-owned advertising channels, including YouTube, paid search, and display ads. Anyone can use this free, public tool to view all of a company’s current advertisements. 

Search for a competitor by name or website to view their advertising records. Google Ads Transparency records include an image of the ad, the most recent display date, and any geographic targeting information. The image feature makes this tool especially useful for researching creative assets—it’s an easy way to review your competitors’ ad photography and copy.

Meta Ad Library 

The Meta Ad Library is similar to the Google Ads Transparency Center. It’s a free, searchable database of active advertisements on Meta-owned platforms like Facebook and Instagram. Users can search by brand name or keyword to review Meta’s ad records.

A Meta Ad Library query will return every active ad that includes your search terms and may display listings from multiple advertisers. If you search for a specific soda brand, for example, results could include that company’s advertisements, sponsored influencer posts, and any marketplace posts that reference the brand by name. Users can apply a filter to sort results by advertiser and focus on a specific competitor. Ad records include an image, a list of the display platforms, and information about how long the ad has been running. 

Third-party software platforms

Third-party tools like Ahrefs, Semrush, and Spyfu can provide detailed information about competitor PPC strategies. These platforms include paid search analysis tools ideal for identifying keywords competitors are targeting. In addition to keyword research, a dedicated PPC competitor analysis tool can return information about search traffic associated with each keyword, average ad positioning, and estimated ad spend.

How to conduct a PPC competitor analysis

1. Make a list of your competitors
2. Assess active channels and strategies
3. Research competitor keywords
4. Review creative assets
5. Gather ad performance data
6. Synthesize and analyze

A competitive PPC analysis reveals where your rivals are winning and how they’re achieving success. Learn how to conduct PPC competitor research and translate your findings into actionable insights to boost your own strategy:

1. Make a list of your competitors 

Start by identifying the competition. You may already be aware of other businesses offering a similar product, also known as your direct competitors. Monitoring these companies is important, but conducting a comprehensive competitive analysis requires considering indirect PPC competitors as well. Indirect competitors don’t sell a similar product, but might target some of the same keywords as your brand—you’re primarily competing for attention. 

How do you find these other competitors? Use a tool like Google Ads auction insights to round out your list. Search for your primary target keywords to discover other companies bidding on the same terms. 

2. Assess active channels and strategies

Gather basic information about your competitors’ PPC campaigns. Research their active channels (search engines, social media platforms, display ads), most widely used ad formats (search, display, video), and targeting strategies. Consider using a tool like Ahrefs to review competitors’ landing pages—this can help reveal the intent (conversion, lead generation, website traffic) behind the ad.

3. Research competitor keywords

Use a paid search competitor analysis tool like Semrush or Ahrefs to analyze competitors’ keywords. Identify keywords driving the most traffic to a competitor’s domain. 

In Semrush, for example, you’d enter the competitor’s URL into the search bar, then navigate to the “Paid Search” or “Advertising Research” section. There, you’ll see a list of the highest-performing keywords sorted by metrics like traffic volume, estimated cost per click (CPC), ad position, and the percentage of traffic each keyword drives to their site. From there, you can filter by search volume, keyword difficulty, and intent to narrow down the most valuable opportunities. 

In Ahrefs, a similar process applies: Enter the competitor’s domain, go to the Paid Keywords report, and analyze their top-ranking ads and the queries driving the most clicks. These insights will give you a data-backed starting point for selecting which keywords to prioritize in your PPC campaigns.

Take note of both search volume and estimated cost per click—these are indicators of keyword competition. Compare the top performers to your own keyword list to look for missed opportunities. 

4. Review creative assets

Use a database like Google Ads Transparency Center or Meta Ad Library to analyze competitor ads. These platforms display ads as a consumer would see them—reviewing content in this format can help you understand your competitor’s public-facing image. Take note of key components like the headline, imagery, and product description or tagline in each ad. Look for broad themes that hint at the company’s positioning strategy and take note of any highlighted promotional messaging, like product discounts or free shipping.

5. Gather ad performance data

Use a dedicated research tool like Semrush, Ahrefs, or Spyfu to get a sense of how competitor ads are performing. Metrics like click-through rate, impression share, cost per click, and overall traffic volume can indicate ad success. Identify top-performing ads and look for themes, as these may indicate winning strategies or reveal customer desires. Consider using competitor ad performance to determine benchmarks and goals for your own advertisements. 

6. Synthesize and analyze 

Gather the information pulled from different platforms together into a report. PPC competitor data can help your team identify patterns. Look for recurring tactics and compare competitors’ strategies to your own online marketing efforts. Search for opportunities to differentiate your company, like adjusting your brand positioning, and gaps your competitors may have overlooked, like targeting an overlooked demographic.

In 2009, UK-based retailer Tesco opened two store locations that offered no in-person shopping, existing solely to fulfil local online orders. This practice has continued to expand, with major retailers like Whole Foods Market and Walmart adopting the practice and investing in these locations. According to one market analysis report, the global dark store market is anticipated to exceed $129 billion by 2030.

Learn how dark stores work and the advantages and disadvantages for both retail businesses shifting to online-first operations and ecommerce brands building a local presence in areas with active customer bases.

What is a dark store?

A dark store, also known as a dark shop, is a physical retail location dedicated to fulfilling online orders through local delivery and pickup options without in-store shopping. Businesses either build new dark stores in strategic locations or convert existing retail stores to operate as non-customer-facing fulfillment hubs. Many types of companies use this business model to fulfill online orders, including businesses in the retail sector selling consumer goods, clothing brands, and grocery stores. There are also dark kitchens, or restaurant extensions that only prepare online orders.

A brand with a brick-and-mortar store selling footwear to customers in person and online might learn that the majority of its sales are online. It may decide to convert its retail location into a dark store, so it could provide quicker local deliveries and increase the selection it offers, since there’s more room for inventory without the need for customer-facing spaces.

How do dark stores work?

Dark stores operate using a similar process to traditional order fulfillment, which includes:

• Receiving. Dark stores receive orders from customers through their websites, apps, or other online sales channels.

• Picking. Once the dark store receives orders, employees or automation tools select the correct items and verify the quantities (also known as the order picking process). Dark stores organize their inventory strategically to save employees time during the picking process, using methods like clustering complementary inventory or holding the most popular items near the front entrance.

• Packing. Dark store employees package orders and prepare them for shipping. A grocery store that sells perishable goods and uses this business model (known as a dark supermarket) may pack items using special materials like insulated bags or coolers.

• Delivery or pickup. The final step in the dark store order fulfillment process is to distribute goods directly to customers, whether that means partnering with delivery companies, shipping to customers’ home addresses, or offering pickup at the dark store location.

Dark store delivery and pickup methods

Dark stores use one or more of these three primary distribution methods to fulfill orders and get products in the hands of customers: curbside pickup, in-store pickup, and home delivery.

Curbside pickup

One option is for customers to park in a dedicated pickup area directly outside a dark store. When a customer arrives, they can notify the dark store through the store’s website or app, or via text message. An employee at the dark store will receive a notification and bring out that customer’s order. 

To identify the correct customer for each order, dark stores can connect parking spot numbers to specific orders at check-in or confirm customer names and order numbers upon receipt. This is a convenient option for customers since they can pick up their items quickly without needing to leave their vehicles.

In-store pickup

A company could also offer in-store pickup at a designated area inside its dark store—typically near the front entrance of the store for convenience. By directing customers to a dedicated pickup area inside, merchants keep the majority of the dark store square footage dedicated to inventory and allow customers to pick up their orders without having to wander through the entire store.

Sometimes this option provides contactless pickup for customers. Instead of visiting a pickup counter with an attendant, customers can access cubbies or lockers with a code they receive after placing their order. Dark stores using only this pickup method can minimize labor and shipping costs, as it requires no employee-customer interactions.

Home delivery

The third method is home delivery, meaning dark stores facilitate the delivery of orders directly to customer residences. Dark stores typically focus on local delivery, with many offering “instant delivery” (i.e., same-hour delivery) for online purchases to customers within a specific mile radius. For example, a grocery store chain could open five dark supermarkets throughout a city, each offering instant or same-day delivery to customers within a 1.5-mile radius of each store. A limited delivery radius helps increase delivery efficiency and minimize delivery costs.

Advantages and disadvantages of dark stores

Although a wide range of retailers and ecommerce merchants can use the dark store model, the businesses that benefit most tend to be large companies with enough upfront capital to purchase and store a significant amount of inventory for sale to a major customer base in a specific area. For example, an ecommerce business selling and shipping a high volume of apparel products to customers primarily in Chicago could decide to invest in a dark store location to provide faster distribution for orders in that city.

Here are the advantages and disadvantages to consider depending on your business size and goals:

Advantages

Here are the main benefits of dark stores over traditional retail stores:

• Customer convenience. In many cases, dark stores offer a contact-free shopping experience with instant local delivery or scheduled deliveries. Dark stores offer delivery windows that customers can select—one McKinsey survey reports that nearly 70% of city-dwelling consumers placed importance on being able to schedule delivery times. For pickup options, customers can arrange pickup times and avoid waiting in checkout lines. 

• Product selection. Retail companies converting existing stores into dark stores can use space previously dedicated to customer walkways and display shelves for additional inventory, stocking more product variants than physical stores.

• Expanded operating hours. Since dark stores aren’t limited by the same operating hours as traditional retailers, they can begin the order fulfillment process at any time (facilitating faster distribution of goods than traditional stores) and offer expanded pickup hours.

• Increase local reach. Through efficient and convenient order fulfillment with a wider selection of products, dark stores can increase sales in a specific area—via same-day or even same-hour delivery within a defined radius, plus scheduled pickups for customers in the surrounding town, city, or county.

Disadvantages

There are some drawbacks to the dark store business model, including:

• High up-front investment. Whether a company is building new physical stores to operate as dark stores or renovating existing stores, the upfront expenses can become costly, considering equipment, technology, inventory, labor costs, and facility costs (like rent and utility expenses).

• Complex operations. A dark store requires a robust in-house order fulfillment process to facilitate instant deliveries and pickup options, which can involve a more complex process than an ecommerce business using shipping carriers like UPS or FedEx. Merchants who don’t want to handle the complex logistics of order fulfillment themselves can opt for a less involved process—like hiring a third-party logistics (3PL) service provider to store, pick, pack, and ship inventory for online orders.

• Limited delivery radius. Since dark stores deliver within a limited radius, merchants who want to offer delivery to customers throughout a wider area might benefit from opting for a different business model. Instead, businesses could consider a network of smaller, highly automated micro fulfillment centers (MFCs) strategically located across a larger market, either built as small standalone fulfillment centers or included within a traditional customer-facing retail environment. 

• Less personal customer experience. Dark stores can create an impersonal customer experience and may not suit luxury goods that rely on high-touch, consultative sales (like expensive jewelry).

Your business generates more data than you probably realize. From your customers’ purchase history and social media interactions to website form fills and email engagements, there’s a lot to process. With the right reporting tools in place, you can quickly make sense of—and act on—all your valuable business data.

Data reporting tools help you visualize information by creating custom reports, so it’s easier for you to monitor the key performance indicators (KPIs) most important to your business. They’re a major time-saver, too. Instead of spending hours parsing through raw data in spreadsheets, reporting tools make data analysis work for you. Let’s take a deeper look at what these reporting solutions do, how they can help your business, and how to pick the best reporting tools for your company’s needs.

What is a reporting tool?

Reporting tools are software programs that take information from data sources and create reports that are easier to understand at a glance. You don’t need to be a big brand to tap into the power of big data. Reporting tools help small, medium, and large companies alike get the most from their data.

Using reporting tools, you can automatically generate reports that put your business’s performance in perspective. This technology takes the guesswork (and a lot of the legwork) out of the reporting process, allowing you to make data-driven decisions with ease. Here are just a few of the different types of reporting tools you might benefit from:

Business intelligence (BI) tools

Business intelligence tools are like a general dashboard for your company. They aggregate diverse data sources, such as Google Workspace, customer relationship management (CRM) systems like HubSpot or Salesforce, cloud databases, web data hubs like Google Analytics, and social media platforms like Facebook. A business intelligence platform analyzes all sources, creating custom reports and easy-to-read visual charts that give you an overall view of your company. 

Corporate performance management (CPM) systems

CPM tools are similar to BI reporting tools, but they go a bit deeper than the general overview provided by BI tools and focus more on business performance. They help you define, understand, and improve your specific KPIs—such as revenue growth, conversion rates, order fulfillment time, customer satisfaction scores, and more. CPM tools present data that shows how you’re progressing toward KPI goals—and where you specifically need to focus your energies to achieve them. 

Marketing analytics software 

Marketing analytics reporting tools draw from multiple marketing channels, such as social media platforms, ecommerce platforms, email, paid advertising, your website, and more. Marketing reporting tools turn your marketing data into insightful reports that show how well you’re reaching customers.

Information technology (IT) reporting tools

IT reporting tools make sure your networking infrastructure is running smoothly. IT business tools are like looking under the hood of your company, drawing from multiple sources of data to track figures like how many people are logged into your systems.

Benefits of using reporting tools 

Reporting tools gather data from all over your business, analyze that information, and then generate reports that give you a useful visual performance overview. This helps you achieve data integration from every corner of your business.

After initial data collection, pulling information from various channels and sources into one place, these tools generate data visualizations with actionable insights. Many reporting tools use automation and artificial intelligence (AI) to generate reports quickly, giving small and medium-sized business users detailed analysis. Benefits include:

• Time saved. What used to take hours is now possible with just a few clicks, thanks to automated reporting workflows. For smaller businesses, these tools put the power of a team of data scientists at your fingertips.

• Custom reports. Every small and medium-sized business has different data reporting needs. By using reporting tools, you can customize your dashboard to the KPIs you’re tracking and get an at-a-glance view of the metrics that matter most to you.

• Timely information. By using the right reporting tools, you know you’re making decisions based on the most up-to-date, accurate data. 

• Forecasting. Advanced reporting tools use AI to perform further analysis. With AI-fueled predictive analytics on your side, you can review your customers’ buying trends over time and draw informed predictions from that data. 

• Visualization. Reporting software is an effective data visualization tool, turning raw data into easy-to-understand charts and graphs. You can even generate interactive reports for a deeper look into how your business is performing.

How to pick a reporting tool

There is no lack of project management software, reporting systems, and analytics tools to choose from, but how can you decide which one is best for your business? Here are some key strategies you can use to pick the ideal option:

Assess what fits your specific business

Take a close look at the reporting features and analytics capabilities of the tools you’re considering. Maybe you don’t need all the bells and whistles if you or your team are already pretty adept at data analysis. Maybe you’re growing rapidly and need a solution that can scale with you. Choose the reporting platform that’s right for your specific business operations (and your specific industry), including the ability to grant access to multiple users. 

Look for easy-to-use software

Not everyone has a background in analyzing data, and that’s fine. Try a few tools out and see which one you’d feel most comfortable using every day. While some reporting tools are for more advanced business users who are well-versed in data analysis, others have benefits for those not quite so tech-savvy, like predictive AI, drag-and-drop features (versus needing to know how to code to manually get the graphs you need), chart templates, and clear, easy-to-understand dashboards. 

Consider your organizational structure

If you’re a small organization or a solopreneur, you don’t need tools fit for enterprise-level companies. For smaller teams working fairly independently, look for a solution that includes self-service analytics, so you can get what you need without a steep learning curve. 

Study the key features

While the reporting tools you consider might differ in terms of how well they fit a small business or an enterprise company, the one you choose should have these key features:

• Dataset integration. Your point-of-sale data might be in one database, your marketing data might be in another. For a complete view of your performance, make sure the reporting tool you go with can connect to the data sources you use regularly.

• Ability to handle large data sets. Choose a reporting platform that can grow with you. Go with a solution that is a fit for your current business size and can easily scale.

• Flexible visual reporting options. Whether you’re a team of one or have multiple people to report to, pick a platform that features data visualization you can understand at a glance. Especially if you have C-level executives you regularly present to, having these insights in an interactive, customizable dashboard is key.

Practical reporting tools for small businesses 

Get started by exploring the features and pricing of these tools to see which one is the best fit for you:

Shopify Analytics

Shopify Analytics is a comprehensive analytics platform that allows you to quickly gauge your business’s performance and make data-driven decisions. You can monitor sales across all your channels, track your conversion rate, and see where your web traffic is coming from. You can customize your dashboard and tailor it to the KPIs most important to you, as well as compare data to see how you’re performing versus similar businesses across Shopify.

Pricing: Shopify Analytics is included with a Shopify account, which starts at $29 per month.

Zoho Analytics

Zoho Analytics is a self-service analytics platform that uses agentic AI (i.e., autonomous AI systems capable of making decisions or taking actions with minimal human input) to generate insightful visual reports from raw data. Its AI features offer forecasting and recommendations based on customer data.

Pricing: Zoho Analytics plans start at $48 per month for five users.

Looker Studio

Looker Studio, formerly known as Google Data Studio, is a basic self-service business intelligence platform that connects to Google Workspace apps like Google Sheets to generate interactive dashboards and reports. It features an easy-to-use interface and ready-made templates. Looker Studio is cloud-based, meaning you don’t need to download additional software, and you can also use it as an IT reporting tool.

Pricing: Looker Studio is free to use, but more collaborative features and Google Cloud support come with Looker Studio Pro ($9 per user per project per month).

Microsoft Power BI

Microsoft Power BI is one of the more widely used reporting tools for small businesses due to its native connectivity with Microsoft 365 and data visualization capabilities. One of the key benefits is its ability to handle large amounts of data, and it features a community of users ready to help troubleshoot issues. However, going beyond data visualization may require a bit of a learning curve for novice users.

Pricing: Power BI has a free level for basic interactive reports, but you’ll need to upgrade to share with others, with paid plans starting at $14 per user per month.

HubSpot

HubSpot is a marketing reporting tool and CRM platform. It’s a bit more robust than entry-level tools like Looker Studio or Microsoft Power BI, and it offers a way for small businesses to organize data from customer interactions in HubSpot’s Smart CRM. HubSpot features AI and automation to help with tasks like syncing customer data and customer email follow-ups.

Pricing: HubSpot has free basic marketing tools, and paid plans start at $9 per user per month.

Starting a travel business is an exciting venture, but finding the right niche and understanding the industry can be daunting. For Brett Snyder, it all started with a simple frustration: navigating the challenges of air travel. In 2006, he launched Cranky Flier, a blog sharing critiques and insights about the airline business, with a particular focus on passenger comfort. His no-nonsense approach soon gained a loyal following.]

Noticing a gap in the market, Brett founded his successful travel agency, Cranky Concierge, in 2009 to offer live support to clients navigating air travel difficulties. That business has since evolved into a full-service agency, focusing on premium leisure travel.

If you’re looking to launch a similar business, here’s how to start a travel agency in 10 steps, plus expert advice to help you get your business up and running.

How to start a travel agency 

1. Establish business goals
2. Conduct market research
3. Find your niche
4. Create a travel agency business plan
5. Choose a host agency
6. Set up your business
7. Secure funding
8. Assemble your technology stack
9. Build your website
10. Market your travel agency

Becoming a travel agent lets you earn money by helping clients plan their dream vacations or business trips. The industry is growing (with a 15.6% compound annual growth rate (CAGR) from 2025 to 2033, according to Business Research Insights), and it’s a business that can offer significant flexibility (e.g., setting your own hours, working from anywhere).

Here’s how to start your own travel agency in 10 steps. 

1. Establish business goals

To focus your efforts when starting a travel agency, first set some goals. Use the SMART goal structure to make them useful, and consider long- and short-term outcomes. You might set a three-month goal to make your first sale, a one-year goal to generate a specific amount of revenue, and a long-term goal to scale your business, for example. Or perhaps your long-term goal is to earn a comfortable living and save for retirement on a 30-hour workweek. Either way, knowing what you want out of running a travel agency will help you structure your business. You can always revisit and revise your goals as your business grows.

2. Conduct market research

Like any business venture, starting a travel agency requires an understanding of your target market. This process is known as market research, and it involves studying the consumers and companies that make up a particular market to learn about audience needs and preferences, market gaps, and what works for existing businesses in the industry. Consider travel trends, such as the popularity of specific destinations or a desire for eco-friendly travel options, as well as economic and political factors that could impact travel choices.

You can use primary and secondary research methods to gather information. Primary research involves gathering your own information through interviews, focus groups, and surveys, while secondary research involves reading reliable sources like trade journals and industry or government reports.

3. Find your niche

Honing in on a specific niche can differentiate your travel agency in a larger market and help you connect with your ideal client base. Consider your interests, industry relationships, and knowledge base to brainstorm potential niches, and cross-reference that information with your market research findings to choose the right focus for your company.

Choosing a niche and studying your target market is a bit of a chicken versus the egg situation, so you can start with a list of potential niches and research each one. You can also move back and forth between the research and niche brainstorming phases until you’ve found an area of market demand that you’re uniquely positioned to serve.

If you’re a passionate birder who’s traveled the world in pursuit of rare bird sightings, you might investigate the demand for travel advisers with expertise in bird watching. Or, if you have regional expertise, perhaps you focus on that specific area. Rock Tours, for example, provides a series of day trips around Bosnia and Herzegovina departing from the Croatian city of Dubrovnik.

Other travel company niches to consider include:

• Food tours 

• Adventure sports

• History tours

• Family-friendly vacations

• Business travel

• Destination weddings

• Ecotourism 

For Brett, the niche was not a location or activity, but a service. “The niche began as air travel assistance—specifically, it was the idea of having a real live person who could help people get out of a jam,” Brett says. “That expanded into the idea that we could help with planning, booking, and monitoring flights. And now we’ve expanded into a full-service operation with an increasing emphasis on premium leisure travel.”

Like Brett, you can expand from your niche as you go, but having a niche is a solid way to build a brand in the early stages. 

4. Create a travel agency business plan

A business plan is a strategic document that outlines what a new company will offer, how it will operate, and how it will earn money. Drafting a plan is essential for validating your business model and helping you think through your funding and financials, staffing needs, and launch timeline.

Business plans typically contain the following elements:

• Executive summary

• Business overview

• Description of products or services

• Market research findings

• Marketing plan

• Logistics and operations plan

• Financial projections

Business plans follow a consistent structure, so use a business plan template to save time and create a professional final product. A formal business plan can also help you approach potential investors or loan officers, should you choose to pursue funding.

Creating a business plan early in your planning process is essential, as it provides a foundational road map for the rest of your business development. However, keep in mind that it’s a living document, so don’t hesitate to make adjustments as you learn more about the industry, the market, and your own business needs.

5. Choose a host agency

With your business plan in place, you’ll have a clearer understanding of your needs, including the right type of host agency to support your goals. A host agency is a larger business that contracts with independent travel agents who pay a fee in exchange for the host agency’s support.

Host agencies provide business, marketing, and bookkeeping support and the chance to network with other advisers. They also allow agents to work under the host agency’s accreditation number instead of pursuing separate credentials. Their main benefit, however, is in bargaining power.

“The hard part is getting access to the contracts that help you to offer the best-in-class options,” says Brett. “That generally means associating with a larger host agency.”

Because host agencies represent a large number of travel agents, they can negotiate with suppliers to provide small business owners access to lower-cost options and better commission rates. A good host agency can connect travel advisers with airlines, travel insurance companies, tour operators, cruise lines, and hotels, helping them offer the high-value travel perks and exclusive deals that earn repeat customers

Choosing the right host agency is key, according to Brett. “If you find a good host agency, they will help you to develop your knowledge and you can get started in no time,” he says. However, it’s also a challenge to select the right host for your business. “They all have very different personalities and will charge for their services in different ways,” says Brett.

You can conduct online research, read online guides, and use your network to vet potential host agency partners. “When we first started booking, it was a contact who offered to bring us on as a sub-agent,” says Brett. “I had no idea what I was getting into. So I just kept talking to people and eventually learned the lay of the land.” 

Brett also recommends against trying to operate independently, which he describes as a Herculean effort. “If you’re talking about skipping a host agency and starting from scratch, I would think twice.”

6. Set up your business

Form and register your business and apply for the necessary accounts and licenses. If you signed up with a host agency before officially organizing your business, it may be able to guide you through the business formation process.

Here’s a list of legal and organizational tasks:

• Choose your business structure. Sole proprietorships and limited liability companies (LLCs) are two popular legal structures for independent travel agents. Cranky Concierge chose to structure its business as an LLC, which involves a slightly more complex setup and higher fees than a sole proprietorship but affords more protection for the owner’s personal assets. 

• Research business insurance. To further protect your personal assets, you may want to consider purchasing professional liability insurance coverage or a business owner’s policy. Some host agencies cover affiliated travel agents under their policies.

• Register your business. Visit your state’s Secretary of State website to review the business registration and licensing requirements for travel agencies in your jurisdiction. Depending on your products, geographical location, client locations, and business structure, you might need to register your business at the state and local levels to operate legally. This will also entail choosing a unique and memorable business name.

• Request an employer identification number (EIN). Obtaining an employer identification number (EIN) from the IRS allows your business to open a business bank account and file taxes. It’s mandatory for those with employees and business structures besides sole proprietorships, but it’s a good idea for any business to obtain one. 

• Open a business bank account. A business bank account keeps your personal and business finances separate. If you’re a sole proprietor and you want your business name to differ from your name, you’ll register for a doing business as (DBA) so you can accept payments in your business name.

• Obtain a travel agent license (if applicable). Four states—California, Florida, Hawaii, and Washington—require travel agents to get a seller of travel license. Fees vary by state.

7. Secure funding

The cost of starting a travel agency varies widely depending on the type of business, niche, location, and other factors. You need to consider business formation fees, insurance premiums, marketing expenses, and investments in software and tools.

If you don’t have the resources to bootstrap your business, there are multiple ways you can raise the funds. Tourism-related grants may also be available from state and local governments, such as through the Market New York Tourism Grant Program. 

8. Assemble your tech stack

Your chosen host agency will shape your tech stack, so you can use your technology preferences to help guide your host agency decision. “The issue with a host agency is that you end up having to use the tools they use for certain things,” says Brett. “For booking travel, I had proficiency in Sabre, so I was looking for a host that used Sabre.”

For any needs not met by your host agency, look for tools that are easy to use, have the features you need, and integrate with the rest of your technology. Your exact needs will depend on your business model.

In addition to common business software—like accounting and project management software—some travel agencies rely on niche technology. Brett’s team built their own flight-monitoring system, for example. “We have an entire system we built to help us internally track and monitor flight status and delays in real time,” he says. 

His team also uses Google Workspace, Streak customer relationship management (CRM) software, and Text Blaze, a Chrome browser extension that automates repetitive typing. “We have so many other tools we use as well, often connected through Zapier, to create a coherent process,” says Brett.

9. Build your website

Next, set up a website that promotes your business, attracts your target market, and drives sales. Using a reliable website builder like Shopify, with built-in hosting, domain registration, robust analytics, and 24/7 customer support, can speed up the process and help you easily build a high-quality site for your travel agency.

Shopify integrates with multiple event booking apps, allowing you to create a site where customers can make and reserve their travel plans.

10. Market your travel agency 

Once your site is live, it’s time to put together a marketing strategy to find clients. Brett recommends using your existing relationships to get started. “The hardest part is finding your clients, but if you want to start an agency, you’re probably already helping friends and family informally today,” he says. Build your network by asking those people to spread the word about your services.

In addition, you can start to build out a marketing plan, prioritizing a few channels. Highly visual formats like Instagram and TikTok can be a good way to connect with travel enthusiasts. If you’re looking to build a community and share your expertise, a blog can be a valuable marketing tool. “I was lucky in that I had my built-in blog audience to be able to tap into at the beginning,” Brett says. “That was important.”

Argentinian travel agency Experience Baires also markets via its blog, which answers common questions about Argentina with search engine-friendly articles like “Buenos Aires vs. Buenos Aires Province” and “What to do in Buenos Aires during a layover.”

Brett also suggests pursuing networking opportunities and connecting with other travel professionals. “Over time, I learned it was a lot of relationships that made the difference,” he says. “I was brought on to the Condé Nast Top Travel Specialists list more than a decade ago, and we met a lot of [travel companies] there who don’t like dealing with air travel. We now handle it for their clients as a partner.” 

Supply chains move, shift, and morph over time. Ideally, these changes occur to accommodate growth, but sometimes factors like natural disasters, economic downturns, or the threat of tariffs also impact supply chains.

Supply chain network design ensures that efficient supply chains are carefully configured. Businesses consider multiple factors for an ideal supply chain, from optimal locations for manufacturing to producing high-quality products at a reasonable price for consumers. Business owners and supply chain managers typically plan every facet of the supply chain design, making continuous improvements over time to accommodate shifts in consumer demand, social trends, and changes in partner relationships.

Most supply chains are designed with a few trade-offs. Designers make informed decisions around procurement, manufacturing, warehousing, and service levels, among other factors.

Read on to learn how good supply chain network design encompasses strategic planning for efficiency and proactive decision-making based on a data-driven approach.

What is supply chain network design?

Supply chain network design is a methodical, systematic approach to establishing supply chains. Rather than approaching a supply chain piecemeal, supply chain network design factors human observations of a changing economic, political, or social landscape into data-driven decisions. The practice evolved from logistics and operational strategies that managers and business owners created over the past few decades.

“Your supply chain network design begins with where you can make your product and where you’re selling your product,” says Laura Schwabe, the vice president of supply chain at SOMOS Foods. There are multiple factors that dictate supply chain procedures—such as lead times, customer satisfaction, sustainability, and cost savings—all of which can, at times, be at odds. Managers are often balancing cost with optimal network design, asking questions like, Do fast lead times override cost-efficiency?

Business owners and supply chain management teams for both brick-and-mortar and ecommerce enterprises analyze data around questions like this one to decide which factors of the supply chain best align with their businesses’ goals.

Factors in supply chain network design

Supply chain variables like data analytics around warehouse costs, fuel prices, import taxes or tariffs, labor costs, and inventory levels all factor into supply chain design. Below are common factors businesses consider when mapping out their supply chain network model:

Quality and service level

“Quality is incredibly important in all aspects of your supply chain, especially when you’re talking about food,” Laura says. She adds that service from providers like manufacturers goes hand in hand with quality. Criteria for quality and service level will vary depending on the company, but might include things like:

• Attention to detail. Manufacturing partners deliver on time and in correct quantities. 

• Control. Warehousing providers have control of incoming and outgoing inventory.

• Reliability. Logistics partners deliver on-time in-full (OTIF).

• Accuracy. Customers receive accurate deliveries, on time. 

Transportation costs

Strategic network design also requires an assessment of freight costs and associated fees. Business owners and supply chain managers might balance the quality and cost optimization of manufacturing facilities, distance between warehouses or distribution centers, transportation routes, fuel, and tolls for the most informed decision-making possible. A supply chain’s transportation costs may include:

• Transportation labor. From drivers and loaders to mechanics and engineers, you will have to pay for labor.

• All types of transportation. Modes and costs include trucking, freight, cargo, and air, including fuel.

• International fees. Factor in duties, taxes, tariffs, custom fees, and tolls when crossing international borders or state lines.

Inventory management and costs

Managing inventory levels is tricky; businesses want to be prepared for a surge in demand, yet too much inventory is expensive to warehouse, and certain products, like food and some beauty products, risk spoilage. Maintaining low inventory levels is cheaper but runs the risk of stockouts. Inventory costs that factor into supply chain network design:

• Cost of labor. You’ll need to pay the workers who load and unload shipments at the warehousing facilities.

• Rent. Unless a business owns its own warehouse, companies pay rent for inventory storage.

• Utility fees. You might pay fees for electricity, temperature control, and other utilities.

• Cost of warehouse equipment. Everything from forklifts to Internet of Things (IoT) devices like smart shelving comes at a price.

Lead times

Customers want their orders ASAP, which requires a lot of unseen work for a business to pull off successfully. Short lead times typically make customers happy and likely to return, but they can be costlier, as workers might bill for overtime, or partners charge rush fees for services. However, long lead times could convince customers to purchase elsewhere. Several factors that impact lead times include:

• The manufacturer. Manufacturing speed, quality, and location.

• Geography. The optimal location of warehouses and distribution centers means shorter transportation times.

• Warehouse costs. These can include labor, materials, rent or mortgage, and machinery upkeep.

• Procurement quality. Ordering high-quality goods and/or specific materials can take longer to source.

• Purchase processes. Purchasing raw materials and selling products to customers can be quick and streamlined or lengthy and complicated.

Regulatory compliance

Regulatory compliance factors into supply chain network design, for both domestic manufacturing and imported materials or products. Regulations affect cost, production speeds, transportation methods, and sustainability.

Regulations can also change: The FDA ban on FD&C Red No. 3 (known more commonly as “red dye number 3”) in food is a recent example of this. Every country has its own regulations pertaining to manufacturing, production, and services, and they can differ from sector to sector. In the United States, most regulation is federal, though some states have specialty compliance regulations—for example, when it comes to dairy production. 

Economy 

The general health of the economy, real or perceived, impacts supply chain network design. The economy can dictate consumer behavior, from the purchase of major assets to small frivolous expenditures. Inflation and a high cost of living, for instance, tend to impact middle-income and lower-income earners the greatest, tightening their budgets. A bull market often has the opposite effect, giving people the confidence to spend money. Bull and bear markets have a similar impact on businesses: When the economy is stable, businesses tend to move toward expansion; when the economy is fragile, businesses tend to remain at status quo or even downsize.

“We have discussions all the time about the economy—the tariffs, the appreciation of the dollar versus the peso,” Laura says, adding that SOMOS, which manufactures all its food products in Mexico, does business in both US dollars and Mexican pesos. She and her team analyze the global markets for rice, one of SOMOS’ ingredients. They might examine how the economy impacts the cost of rice in India versus the cost of rice in Thailand, for example. 

Political climate

A volatile political climate can impact international trade law and policies, inspire international sanctions and boycotts, and reduce tourism, among other radical changes that impact businesses with international supply chains. A few examples of the impact unstable political climates can have on supply chain networks include:

• Fluctuating international tariffs. When tariffs come and go unpredictably, it can make businesses hesitant to move forward with business plans that may include international trade and/or supply chain networks.

• Reduced tourism rates. When tourist numbers dwindle, businesses like restaurants and hotels may hesitate to buy products.

• Changes to immigration laws. If new immigration laws take effect that suddenly prevent or promote labor in certain sectors—for example, in the agricultural or service industries—this can imbalance supply chain labor forces.

Supply chain contingencies

Designing a resilient supply chain network includes contingency plans for catastrophes and other smaller supply chain disruptions. “Having an agile supply chain is really important to be able to deal with the external factors of tariffs, natural disasters, the port of LA going on strike,” Laura says, speaking from her firsthand experience. She adds one more example: A cyberattack recently shut down the system of one of SOMOS’ large customers.

Creating an agile supply chain means you have the ability to quickly pivot, adapt, or change course if need be. This could entail having a robust network of distributors versus a single one, or having a standard operating procedure in place for shipping via ground transportation instead of air, if necessary. Additionally, strategize for worst-case scenarios. Laura says that, in 2025, her team worked on securing alternatives in case the US placed a 25% tariff on imports coming in from Mexico. “We had multiple different strategies for how we were going to offset costs,” she says.

Environmental and social impact

Many businesses include sustainable and socially responsible goals and practices in their supply chains, often referred to as ESG (environmental, social, and governance). This could include sourcing from fair trade– or USDA Organic–certified farms, reducing carbon emissions, or using biodegradable packaging and shipping materials.

“Sustainability is a spectrum,” Laura says. “We do a lot of it, but I would say that there are brands who really focus on recyclability and carbon emissions, and if that’s a pillar to your brand, then it needs to be a pillar within your supply chain network design.” Many sustainable initiatives are costly: Laura gives SOMOS’ microwavable, BPA- and PFA-free pouches as an example. “I’d love to say our pouches are recyclable,” she says, “but it’s cost-prohibitive, and the technology of the film isn’t quite there yet.”

Customers and investors are increasingly interested in seeing their own values represented in the brands they purchase from. A business’s supply chain might be appealing to environmentally conscious customers if it encompasses:

• Clean energy manufacturing and transportation (reducing carbon emissions and minimizing its carbon footprint)

• General reduction of waste, including use of biodegradable packaging and materials

• Union-only manufacturing

• Ethical sourcing and labor practices

• Transparency and traceability of raw materials

Optimizing your supply chain network design

1. Define goals
2. Identify constraints and weaknesses
3. Collect and analyze data
4. Optimize technology that works for your business
5. Develop twin models
6. Plan for unexpected scenarios
7. Monitor and improve

Depending on your business’s size, supply chain complexity, and budget, you might hire a supply chain network design manager or team to see the process through. But whether you have a complicated global supply chain network or a fairly simple supply chain, here are steps you can take toward designing a supply chain network. 

1. Define goals

Prior to defining goals, assess your current supply chain, including shipping methods, distances between manufacturing facilities, and all associated costs. From there, define your supply chain goals and priorities, such as to minimize costs, elevate your level of service, achieve sustainable practices, etc.

SOMOS has conducted several “center of gravity analyses,” Laura says. This process takes data from a set period—six months, for example—and synthesizes inbound, warehousing, and outbound costs. She offers a hypothetical: Say you’ve been shipping everything out of one warehouse, but you suspect it might be beneficial to ship from two warehouses. A center of gravity analysis could demonstrate that, despite inbound logistics and warehousing costs increasing, you’ll ultimately save money with a second warehouse that’s closer to a critical mass of customers.

2. Identify constraints and weaknesses

Maybe you discover you don’t have reliable data on consumer trends, or you acknowledge that you’re experiencing frequent stockouts—identifying your supply chain constraints can lead to effective risk mitigation. Get granular and examine every facet of the supply chain.

Laura recalls a supply chain network recalibration SOMOS had to make with a tortilla chip manufacturer it used in Guadalajara, Mexico. “Guadalajara to the border is a bit of a long commute in a truck, and chips are incredibly lightweight—we say it’s like shipping air. It’s very expensive,” she says. “We were not able to be competitive with cost because of that supply chain design and had to discontinue the product.”

To clarify constraints and weaknesses in your supply chain, examine every aspect and think outside the box if need be. Ask yourself: Are distribution trucks half full when making deliveries and charging you full price? Are you seeing patterns of stockouts or spoiled inventory? Do the locations of your warehouse and distribution centers make geographic sense? If your warehousing processes are highly manual and costly, consider warehouse automation.

3. Collect and analyze data 

Strong, reliable data on the flow of goods, from raw material procurement to manufactured products, weak/strong selling SKUs, and other performance metrics are paramount for an efficient supply chain. Businesses typically collect data via software-as-a-service (SaaS) platforms like Blue Yonder, Coupa, Logility, and Oracle SCM Cloud. In addition to internal data analytics, data from outside sources, such as reports by partners and consultants, is also valuable to supply chain network design. Data analysis provides metrics on suppliers, manufacturers, warehousing, distribution centers, transport, inventory levels, and consumer trends.

4. Optimize technology that works for your business

Enterprise resource planning (ERP) systems and smart devices can help optimize supply chain network design, but every business has different needs. For example, SOMOS runs its business on SAP, an ERP software suite, using it for the transactional side of the business—like placing purchase orders or receiving sales orders. “A lot of the modeling and the data tracking that we do is in Excel or homegrown databases that we’ve built,” Laura says. “We do not use off-the-shelf tools necessarily. We use things that we’ve created.” Technology options include:

• ERP systems like Oracle NetSuite or SAP for larger companies, or Microsoft Dynamics 365 or Odoo for smaller businesses.

• AI, blockchain technology, robotics, automation, and smart devices can contribute to supply chain network design.

• It’s possible to create bespoke tools if off-the-shelf systems are not meeting a specific need.

5. Develop twin models

A supply chain digital twin is a virtual representation of your supply chain. You can feed a digital twin real-time data to test various supply chain scenarios—sourcing, shipping, or distances between production facilities, for example—to see how the supply chain reacts. Digital twin options include platforms like Azure Digital Twins, Coupa, Sophus X, AIMMS, and Cosmic Frog. 

6. Plan for unexpected scenarios

Businesses weave contingency plans into their supply chain to prepare for challenges like natural disasters, global pandemics, or unexpected tariffs. Laura points out that while no one can predict what will happen with the weather or the economy, it’s important to look a few years ahead for your supply chain network so that if the economy changes, you can either take advantage of it or prevent it from impacting your business. To plan for more realistic or immediate “what if” risks—for example, the likelihood of fuel prices rising—use scenario planning.

7. Monitor and improve

Supply chain network design is an ongoing process, as various factors in the equation can change on a dime. “Your supply chain design should always be ever-evolving, always looking for efficiencies and cost savings,” Laura says. She adds that while there is no need to break something that’s working, “there always can be improvements. You can always save costs, especially as you grow in your supply chain.”

Selling products internationally allows you to reach new audiences, add revenue streams, and set yourself up for long-term growth. The challenge, of course, lies in the day-to-day intricacies of managing your brand in diverse markets around the world.

Learn about the common challenges of a global branding strategy and how to develop a plan that sets your team up for success. Plus, get expert tips from Kristen Pumphrey, the co-owner, creative director, and CEO who took P.F. Candle Co. global.

What is global brand management?

Global brand management is the process of managing a company’s brand in multiple countries. Also referred to as international brand management, its goal is to establish a global branding strategy that maintains a consistent brand identity across markets worldwide.

A solid global branding strategy also maximizes profit potential in each market with a plan for increasing brand awareness, decreasing overall marketing expenses, and reducing the cost of market entry.

Cultural considerations in global brand management

International brand management involves deciding how you want to represent your brand in foreign markets and making sure your business can deliver on its brand promise worldwide. For some businesses, it’s part of a coordinated international expansion effort. For others—including P.F. Candle Co.—the demand comes first. The company’s international presence grew organically out of the traction they experienced on social media and tourist foot traffic to their San Francisco store. But they chose to work with retail partners and distributors to grow their global reach in Japan and China.

Throughout the process, Kristen learned that culture affects how your brand is perceived in a market. “Cultural difference may be one of the hardest things to grasp and can be a business culture shock,” says Kristen. “What works for marketing in the US is unlikely to work in other countries, and business practices may be different.”

There are two main approaches to this challenge: localization and standardization. Localization adapts brand materials for local markets, and standardization emphasizes unified branding and messaging worldwide. Although they’re strategic opposites, they’re not mutually exclusive; most successful international brands use both strategies.

As you choose your approach, consider language and visual style, and how much you may want—or need—to adjust these to resonate with customers in international markets:

Language 

Effective translations preserve meaning, voice, and tone while accounting for regional idiom and usage differences. You’ll need to bear in mind that your product names and marketing messaging might mean different things in different cultural contexts, so lean on local expertise to advise.

You might also decide to translate your packaging materials or create a localized version of your brand website, even if you’re selling primarily or solely through a distributor.

You can use a translation service or rely on local partners for help with this. Kristen uses local distributors, who have experience selling to local audiences and are familiar with the P.F. Candle brand. 

Visual style

Visual styles or color choices can also mean different things in different cultural contexts. This is another area where a distributor who understands the market can be helpful, but you’ll need to provide them with detailed brand guidelines and a system to check localized assets are correct. 

“If you work with a distributor, the biggest challenge is how they are representing you,” says Kristen. “You need to provide a lot of assets—photos, design guides—and double-check the work to ensure it’s a proper representation.”

How to build a global brand management plan

1. Know who you are
2. Conduct local market research
3. Audit your brand presence
4. Establish market groups
5. Vet your strategies
6. Define your global brand identity

A global brand management plan protects your brand image, maximizes the benefits of selling in foreign markets, and can even help you vet new markets for entry. Here’s how to create one for your ecommerce brand:

1. Know who you are

Your brand isn’t its name, logo, color palette, or even its products or services. All of these things can vary between markets without damaging your credibility or diluting your brand image. What can’t change are your mission, vision, and values—and that’s true whether you sell around the world or just on your own block.

Start by revisiting your:

• Mission statement. Your mission statement tells new customers what to expect from your brand. It also provides your employees with direction, inspiration, and focus. What is your business setting out to achieve and why? 

• Vision statement. Your vision statement articulates where you aspire to be once you achieve your mission. What’s the long-term goal of your business beyond making a profit? 

• Brand values. Your brand values guide how your company operates. How do you source your products, deliver on promises to customers, or treat your employees? Brand values inform how your business operates and fulfills its mission.

Update these pillars as needed so that they accurately represent what you stand for and where you’re headed. These will guide your approach to international brand management. 

2. Conduct local market research

Dive into the research on any new markets under consideration and map out key data points about the target audience that will inform your branding decisions for each. You can start with familiar market research strategies like reading trade journals or interviewing customers. Kristen recommends leaning on local partners for help. “You can read articles or search the internet, but this is where an agent or distributor can really come in handy,” she says.

Assess if your brand ethos and creative will resonate with customers in those markets, or if you may need to make adjustments. You can also frame up your company’s philosophical position on localization as part of this step. P.F. Candle Co., for example, prioritizes standardization wherever possible.

“We are lucky that many of the countries that export us are really interested in the California lifestyle, so they buy into the content and brand identity we’ve already created,” says Kristen.

3. Audit your brand presence

If you’re already selling internationally, assess your current brand presence by performing a multimarket brand audit, starting with your local market and repeating the process in every market in which you operate. Here’s a list of questions to ask yourself as you go:

• Is there brand consistency within this market?

• Are the marketing strategies and brand assets my business uses in this market consistent with my larger brand image? 

• Has my team developed a localization strategy for this market? If so, do current practices align with the written strategy? 

• Do localized practices correspond with my larger brand strategy? Which elements differ? 

• Is this the best approach based on local market research findings? If not, do local research findings or performance data suggest that my company might benefit from a more localized approach to branding and marketing strategies? 

Take note of any inconsistencies or areas for improvement. 

4. Establish market groups

International brands increase efficiency by grouping markets with similar needs. Here’s how to develop market groups:

• Define local strategies. Use your research to define the bare minimum localization efforts necessary to compete in each of your target markets. You might decide that you only need to translate your website, for example, or that you need to localize product and service descriptions and pricing structures.

• Group target markets. Create target market groups with overlapping characteristics such as region, development stage, or any other factor relevant to strategic branding and marketing practices. A company that sells outdoor gear, for example, might group countries by language, climate, or terrain. 

• Outline group strategies. For each group, define a strategy that meets the bare-minimum localization needs of the relevant markets. If this is difficult, you may need to restructure your groups or even reconsider the markets you’ve chosen.

5. Vet your strategies

Compare group-level strategies to your available branding and marketing resources to determine if your team has the bandwidth to serve the markets you’re considering. If you’ve taken on too much, scale back by eliminating markets or groups.

You can also use market groups to evaluate efficiency. If a current or potential market has distinctive localization needs, decide whether to focus elsewhere or proceed with a one-country group based on the market’s potential. 

P.F. Candle, for example, keeps its social streamlined with one main account per platform. “We try to run one main social media account rather than having diverging accounts,” says Kristen. “I think it’s important for content to be pretty streamlined so you can also see the customer feedback in one place.”

It makes an exception, however, for Japan. “The distributor we’ve worked with for over a decade uses our existing content and his own to represent us in the language of the area,” Kristen says. In general, businesses only create one-market groups when a market’s anticipated revenue offsets the cost of a market-specific strategy.

6. Define your global brand identity

Once you’ve locked in your list of markets and market groups, identify the messages, practices, and assets that are or can be consistent between group strategies and review the results. These are all potential elements of your global brand.

If you’re not happy with the results, you can return to previous steps and make changes. If you want a consistent visual style across markets, for example, you might go back to step four; identify the groups or markets driving the inconsistency, and either standardize your local approach, remove the outlier markets, or rethink the importance of consistent global visuals. Remember that mission, vision, and values are non-negotiable. If your global brand contradicts these, opt for standardization or market exclusion.

When you’re satisfied, draw from your list of consistent elements to create global brand guidelines for your company. The specificity of these guidelines will depend on your approach to localization: If you’re planning for highly localized strategies, your global brand guidelines might include only mission, vision, values, and primary color palette. If your brand is more standardized, your global brand identity might define everything except for the language in which you communicate with customers.