Forums: Discussions for entrepreneurs and small business.

 I am starting a business that caters to e-commerce companies. Providing product receiving,warehousing and distribution.
Outsourcing this function will hopefully make my clients much more profitable and enable them to grow without the need to lease or buy expensive real estate in their local area. The warehouse will be somewhere in the midwest  and this service will allow people to warehouse inventory for definitively cheaper than they could in most urban markets, use space according to their needs rather than a ridgid lease or purchase scenario, and for a much more flexible time frame. The business would essentially be a wharehouse co-operative or 3rd party logistics company for small to medium businesses that have grown out of their garage or home and don`t mind outsourcing this function.

Any advice or critique is very appreciated.

 

 

 

 

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Basinet

Welcome Basinet,

Receiving has always been a big issue with me.  I`m always in search of a loading dock where I can send small shipments that have been palletized. We can later break down the pallet at our leisure. Yes, there are trucks with lift decks, but its always a crap shoot if they`re going to arrive with one.
Love the idea, how about Michigan or Ohio


SuN moderator , you might want to put this thread under "Strategies & Tactics for Getting Efficient"

Basinet,

I founded a fulfillment company in the NorthEast, Rapid Fulfillment, Inc.  You are right about the services being very benefical to the e-commerce world.  Starting this type of business is a long, expensive journey, but well worth it if you go about it the right way from the beginning.  My advise to you is to check out an organization called MFSA (Mailing & Fulfillment Service Association), they offer conferences and local meetings that will be able get you started in the right direction.  They have proven to be an invaluable partner in my business.

 

Good Luck,

Dan

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Product & Literature Fulfillment Experts Dan Coll, President Rapid Fulfillment, Inc. 461 Cochran Road, Suite 300 Pittsburgh, PA 15228 dan@rapidfulfillment.com www.rapidfulfillment.com

Thanks so much for the feedback

I want to tailor this company to appeal to companies in expensive urban  and suburban locals. I am in San Diego,Ca up on a hill looking at the Pacific, great place to live, near impossible to start and run a profitable business that involves real estate and employees.  My goal is to provide say  500 square feet and up of  dedicated warehouse space for these e-commerce companies for approximately $125 per month and up. The emphasis will be on  receiving and warehousing with the client primarily dealing with their customers. I will be able to receive a pallet of product or a shipping container, or 10.  If a customer sees an opportunity for buying a closout of merchandise from a competitor, they now can. If they can get a substantial discount for buying a whole container of raw material or parts from china they now can. All this without needing to lease or buy very expensive space in their local. For someone operating out of their apartment or garage, I want to give them the boost to the next level. What someone gives up in having their product far away from their location, hopefully they more than make up for in cost savings. I want to allow business that can not expand past the infant stages, a chance, for the price of a couple of cel phones. Also for 25% to 50% the cost of a mini-storage unit, which they cannot work out of typically.

I am trying to tailor this busines to appeal anyone in Start-Up Nation. Any referals, ideas, or feedback is awsome for me.

PS.. how do I link this to "Strategies & Tactics for Getting Efficient"

 

 

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Basinet

Dan

Thank you for the feedback

Your website and advise are great

Like I said above, I want to tailor this company to appeal to entreprenures in expensive urban  and suburban locals. I think primarily Start-up`s that cannot afford to buy or lease warehouse space without it destroying their profit margin. Companies that are too small to yet need your wide aray of services. A couple of hundred dollars a month for the guy who sells antique Juke Boxes but can`t receive or store them in New York City. A start-up clothing manufacturer who needs to buy a shipping container of fabric but cant receive it at her apartment or store it without going broke in Los Angeles.

Thanks much for your imput, I would love to hear more about your business and how you price your services, and any ideas, concerns or resources you may have about what I am trying to accomplish.

Advice Anyone....... Please....Thanks

 

 

 

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Basinet

I would suggest you keep it as close to CA as possible, as shipping containers within the US is fairly expensive. If a company brings a small container from China and has to ship it halfway across the country, the cost may outweigh the benefits of outsourcing warehousing.

Points you should keep in mind,

• Insurance, will you insure the product for your customers? if so, will you insure them at their retail, cost or anything in between.
  
• Is this just a staging area or will you be operating as a fulfillment company. In other words, if a client stores microwave ovens in your warehouse, can he ship one at a time from there? If so, will the handling expenses be extra or will that be covered on their contract?
  
• What type of environment will the warehouse guarantee? Some items are temperature/humidity sensitive. Will the warehouse be heated/air-conditioned?

Good idea, big project.

Will this such company offer packaging supplies? I think idea is great and could work. I would be interested in knowing how the packaging of this product will work, and what happens if the company you are partnered with offers a money back guarantee, how will you support shipments back to the warehouse?

This would be terrible for me!!  It would mean i have to unload the container in CA, fly out there to inspect the shipment and direct the shipping of pallets, (or smaller packages).  For a small operation this is just cost prohibitive. Basinet is trying to focus on the small guys. Break out of CA man.

Elids

Thanks for the feed back

I would love for the business to be next to my house in San Diego or I even have business in Long Beach an hour away. However The cost of real estate is so prohibative that it destroy`s the numbers. I was a Real Estate analyst for many years for accounting firm and I am currently a real estate broker. What I am trying to do is provide the lowest possible cost for Start-up companies to have Space without going broke. The cost of real estate, labor and regulations strangle most ventures in California and I believe in most major Metros.  To start off with, the facility I am opening will be inthe middle of the country. Bad for international  receiving  (Ports) but central once it gets there and (oh so much cheaper). I want to provide this space for hundreds (not thousands) of dollars, and receive a slight mark-up on handling (receiving and distribution).  My customers could be anywhere and their customers could be anywhere nationally or internationally. Eventually I could expand to more expensive space in a port city, but my intial venture I believe needs to compete by providing this service as cheaply as possible. I`m not sure how much business will come domestically or internationally. Once the product comes to me the customer will not go broke if these items sit on the shelf for a while and their customer will be paying for the shipping to the final destination. One gentleman I spoke with receives military "stuff" from former soviet countries. If he receives a shipping container of "stuff" it is extremely cheaper than by piecemeal. He then goes and sells these items over months and years on e-bay. He lives in an apartment in boston and although they have a port, it would cost him more to recseive and store these items than it would be worth.

 (Insurance) I have had a self storage facility in the past an the tenants can either put the items on their own insurance policy or a policy can be purchased for a nominal amount.

I think something like your microwave example may be hard to make work, especially in the age of Wallmart. This I think is more like custom motorcycle wheels at $300 each and the handling fee at $10. to cover my employee`s time. The employees time is will also cost significantly less in the mid-west.

Again I still working out the kinks.

The warehouse will be cheap basic storage probably hot in the summmer (no ice cream) and cold in the winter.

For the Start-up that stops because the costs seem insurmountable, I want to be their partner to help make it work on a shoestring budget.

Your questions and imput are great and your background in trade is fantastic. Let me know if you or anyone you know has ideas.

Thanks Mucho.

 

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Basinet

Thanks for the imput

I envision the products received and stored will be larger ticket items both size and price over $50  and the client can send them to me already packaged or I can do light assembly/packaging.  Again cheaper in the mid-west than in big cities. The client will tell me what is comming, sign a storage contract for the amount of space needed, I will receive it, warehouse it  and await instructions. Send them a portion of total shipment,ok  ...package and ship 100 items to the following retailers ok  ...package and ship 1 to this person ok. Anything they want. My client maintains the customer relationship and makes the promises. I do what ever my client wants. The only difference is, if the product was in Los Angeles with my client, the warehouse would cost 3 times as much and the employee twice as much. The only promise I am making is to my client (the small Start-Up) Someone will be there to receive product, store safely, ship out to whomever whenever.

All question appreciated , Thanks

 

 

 

 

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Basinet