Once you’ve gotten your product idea developed and your manufacturing outsourcing all setup you will want to start thinking about how you are going to deliver your products to your customers.
For the purpose of this post we’ll assume that you are shipping directly to your end user (rather than to a distributor or retailer) and are starting with buyers in your local country first but then plan to also start selling overseas.
Order Fulfillment In-House
If you are just starting out, one thing that I like to suggest to our clients is that you try and do your fulfillment and shipping in-house for at least the first couple of weeks. That may be from your garage, office, or bedroom; wherever you ship from you will want to start off by making a deal with one of the major freight carriers like UPS or FedEx. You can usually apply on their website, otherwise get a rep on the phone.
UPS’s daily pick-up deal will basically knock 50% off their standard shipping rates and it’s a very convenient service for a small business. All you’ve got to do is wrap the package, print the labels, and wait for the UPS guy to come pick it up at a fixed time each day. As your volume picks up make sure you re-negotiate rates as you can usually save another 10-30% on your shipping costs.
For our US based readers, USPS is another decent option and is significantly lower cost than the express couriers, however you lose most of the detailed parcel tracking features that come with those couriers. If this isn’t a deal-breaker for you then USPS might be a good option though you’ll want to note that customs clearance is not as smooth and quick as with FedEx or UPS.
Remember, doing the fulfillment yourself doesn’t have to last for long. Just long enough for you to get the hang of what goes into it so that you’ll be prepared when the time comes to outsource your shipping.
3rd-Party Order Fulfillment Centers
As things progress in your business and as your volume picks and you outgrow your own ability to keep up with demand, you will probably want to look for a 3rd-party shipping and order fulfillment center to start handling your orders, returns and warehousing.
In fact, the sooner you can get to this point the better as you will free up a lot of time (and reduce loads of stress) that you can spend on better things such as improving your marketing and increasing sales.
There are many great services out there, including of course Amazon’s fulfillment service, as well as company called Shipwire.
You will usually have to pay a couple extra dollars or so per unit above the cost of shipping for this type of service, but the convenience and benefits to the overall flow of your business will be well worth it in the long run.
One benefit of Amazon’s fulfillment service in particular is that because they ship out tens of thousands of packages every day they get extremely low rates on shipping, savings that they will usually pass on to you. Be sure to discuss this with the order fulfillment company that you are talking to and at the same time check if they are able to use your preferred carrier.
You will also want to choose an order fulfillment center that has a facility that is local to your customers so that you can benefit from ground rates and 1-2 day shipping.
For example, if most of your customers are from the Mid-West then you’d want to work with a fulfillment center that has a warehouse in the are. Alternatively, if you find that most of your buyers are from Europe or Asia, getting an order fulfillment center in those regions will save you lots of money on shipping costs.
Sourcing Overseas is an end-to-end product design, development and outsource manufacturing service. We help our clients to get their product’s design and manufacturing properly, and for the best price possible!
We also provide a wide range of free consumer education such as:
1. Free e-book on how to outsource the development and manufacturing of your product
2. Free Product Development Checklist to help you determine whether your idea is worth pursuing.
Tags: Product Manufacturing