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Our small independent record label (home-based) has finally reached the point where packaging and mailing our product is no longer viable due to the time it takes. However, we still only ship out 2 or 3 orders per week, each one averaging 2 CDs in box mailers.
I've perused the posts on this forum but couldn't really find an answer, so I'm hoping someone can point me in the right direction.
Either of 3 methods would work for us.
1. We package the orders still, but never leave the house. Someone would pick up the order and mail it. We live in one of those neighborhoods with the common mail hutches a half-mile away, so no postal worker comes by the house regularly. Currently we have to drive our orders to toe Post Office.
2. A 3rd party maintains a small inventory, and ships our orders. We could still handle the paperwork and web orders (PayPal shopping cart), but we would e-mail orders once or twice a week to this 3rd party, and they would package and ship the CDs.
What you are suggesting is a fulfillment company. You take the orders and they ship. This would be fine if you were dealing with multiple orders but with only 2 or 3 per week you'd save by doing this yourself. You might look into FedEx to pick up at your house.
Roban is correct. Drop shipping is when you have your vendor or manfacturer ship directly to your customer but with your return address on the label so it appears to have come from you. What you described in option 2 is using a fulfilment center.
Regards to option 1, again Roban is correct. Not only will FedEx pick up from your facility, but so will UPS and DHL.
By the way, you mentioned 3 options. What's the third.
Roban and KenRyan offered some solid advice. I would like to give you something else solid, but completely different so that you have many options to choose from.
You mentioned drop shipping your products. Currently, you're shipping about 2 or 3 boxes per week, which is not that much. If you were able to sell more and have FedEx pick up your shipments once a week, then you would greatly increase your efficiency and profits. The question is how to sale more.
This is where you can become a drop shipper. You find some quality resellers to sell your product for you, and then you ship your product every week to whomever bought it. In this way, you can have multiple people selling and pushing your product, while you hold the inventory and ship it out once a week with FedEx. This way you don't have to consistently drive to the post office.
Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer. As in all retail businesses, the retailers make their profit on the difference between the wholesale and retail price.
Some drop shipping retailers may keep "show" items on display in stores, so that customers can inspect an item similar to those that they can purchase. Other retailers may provide only a catalogue or website.Many sellers on online auction sites, such as eBay, also drop ship. Often, a seller will list an item as new and ship the item directly from the wholesaler to the highest bidder.
A new emerging trend in the drop ship business is private label drop shipping, in which a manufacturer produces a custom item for a retailer and drop ships it. The range of private label drop shipped items varies from simple keychains and t-shirts with custom logos or pictures to customized formulations for vitamins and nutritional supplements.Two main benefits of drop shipping are - no upfront inventory to purchase and a positive cash flow cycle.Other benefits of drop shipping include:
* Eliminates duplication of effort as only one warehouse will pick, pack and ship the product thereby reducing costs in the supply chain.
* Reduces total inventory management and shipping costs which can be passed on to the customer by the retailer.
If you can make your product in bulk and in advance then sending them to a fulfillment center. Even amazon offers 3rd party fulfillment services. If you have to make them more when orders come in then a drop ship approach will be more of a match for you.
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