Could Starting An Online Fulfillment Business Help You Exit The Rat Race For Good?

Posted on: 2 June 2016

If you're certain you'll never achieve the lifestyle you've envisioned by working a 9-5 job and are considering opening your own business, you may be wondering what type of business you'll need to launch in order to avoid the dreaded 80 percent entrepreneurial failure rate. With the high entry fee of restaurant franchises and the risks of starting a new business from scratch, you'll want to go with a tried and true way to recoup your initial investment costs and generate a modest profit. If you already own some vacant land with a warehouse or a large detached garage, you may have the tools to start an online fulfillment service -- and with the average online shopper spending nearly $2,500 per year, listing, storing, and shipping retail items could prove a lucrative investment. Read on to learn more about what you'll need to get started in the online fulfillment industry to help you determine whether this is a good fit for you.

Find the products (and customers) with the lowest shipping costs

One of the keys to your business's success will involve keeping shipping costs low. To do this, you'll need to ensure you have a relatively short distance between your supply points and your shipping hubs. This doesn't necessarily mean you'll be limited to storing and delivering local products, but if you're hundreds of miles from the nearest international airport, you may find it costly to purchase directly from China or other common overseas manufacturing sources or to ship outside the country. If this is the case, focusing on products made in the USA (or purchasing inventory from a middleman who imports overseas-manufactured merchandise) can help you avoid hefty shipping and freight charges.

On the other hand, those who are fortunate enough to own land near a central supply hub (like a city with access to trains, river or ocean freights, and an international airport) can choose from any variety of manufacturing sources and shipping destinations for the same low cost. Because of your proximity to shipping services, you'll be able to fulfill orders quickly and offer "free" or two-day shipping without the surcharges imposed by some online retailers. In a market where customers can price check with just a few clicks, ensuring your shipping costs remain competitive is key to attracting customers away from the competition.

Invest in an inventory storage system

Because quick and inexpensive shipping is crucial to an online fulfillment business's success, the ability to locate your products quickly and pack them on-site should be a priority. If you have an unorganized or inaccessible inventory system, you could find yourself struggling to find and pack items before shipping deadlines or winding up with product shortages or excesses.

Purchasing and installing industrial shelving systems and heavy-duty clear plastic storage boxes can allow you to take an immediate visual inventory while keeping your product safe and out of harm's way. This shelving is reinforced and designed to hold thousands of pounds of items, and plastic storage bins with locking lids can help keep your inventory safe from a number of potential hazards (from rodents to rising floodwaters). These storage bins are crafted from thick plastic that is durable enough to last for decades, making them a good investment at any stage of your business expansion. 

When determining the size of the storage bins you'll need, you'll want to give some thought to your shelving capacity and your own ability to lift or carry heavy boxes. For example, purchasing extra-large storage totes to store a large quantity of small but dense items may leave you with boxes you can't move or lift. On the other hand, purchasing small or medium storage boxes that will only fit one or two items in a larger inventory can be an inefficient use of space and money.

Look into logistics software

At some point, you may find that managing these orders yourself is consuming so much time that you're unable to investigate new products or truly evaluate your business model to find cost savings. Automating as much of the process as you can through the use of logistics software can help you focus your time and energy where it's needed most and will ensure you're not spending the majority of your day responding to emails and printing shipping labels. Instead, you'll be able to provide yourself with a list of items to be packed and shipped (along with their locations in your warehouse or garage) with just a click, rather than packing each box piecemeal as orders come in.

For more information on storage tips and materials, talk with suppliers, such as Garland's, Inc..


Choosing The Right Industrial Supplies

A few years back, I realized that we needed to upgrade our factory--and fast. I was tired of dealing with broken pieces of equipment and issues with our system, and it was really frustrating for me. Instead of giving up, I decided that I needed to take a second look at replacing different items around our warehouse. I started with the most important machines and worked my way towards other items. It was really exhilarating to see things transform, and before I knew it our warehouse was operating at top capacity. This blog is all about choosing the right supplies and streamlining your operation.

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