If you’re looking to create and sell your own product I’m sure you’ve spent time thinking about the product itself, where you’ll get it made or sourced and what you’ll price it at. Have you however, thought about how you’re going to ship and store it?
This might be seen as the boring stuff – but it’s really important!
Firstly, if your product’s being made abroad you’ll need to get it to you in the first place!
Secondly, shipping and fulfilment are big costs and you’ll need to consider them when working out if your product will be profitable.
We’ll start with getting your product to you in the first place. Obviously if you’re sourcing from your own country you can skim this bit!
Shipping and importing products from overseas
If you’re not sourcing your product from your own country (see this post for the pros and cons) you will need to think about getting your product from wherever it’s made, to wherever you ultimately want to store it.
What shipping method should I choose?
There are different ways you can ship your products. The most common are air, rail and sea. Air is generally the quickest (and most expensive), while Sea freight is the slowest and cheapest.
However, if you’re sending a few small boxes, there may be little or no difference in cost whether you choose Air or Sea…
I tend to use Rail (I feel it’s a happy medium!), but I’ve tried all shipping methods and the costs really vary depending on the size of your shipment.
Sometimes one is much cheaper than the others, sometimes there’s not much difference.
If you’re unsure, the best thing is to ask for multiple quotes so you can compare.
What are shipping terms?
Incoterms (or International Commerce Terms) refer to the agreement you make when you purchase goods internationally.
Simply put, these terms set out which fees are yours to pay and which are paid by the supplier.
The two most common are EXW and FOB.
EXW means that the supplier hands over the goods to you (via your chosen shipping company) at the factory door. You are then responsible for all fees going forward, including export fees.
FOB means the supplier is responsible for the goods (and fees) up until the point at which they leave the departure port.
What about taxes?
You will need to pay duties and taxes on any goods you import.
How much varies on the product, where it’s been manufactured and the country you’re importing into.
You can work this out yourself online – but I suggest asking your chosen shipping company for help!
Delivery Duty Paid means you pay a flat fee to your shipping company which covers the cost of shipping AND all fees.
It means they’ll handle the paperwork for customs clearance and ensure your product get to their final destination.
An important note to any UK readers: At the time or writing, you’ll need to provide your forwarder with an EORI number, for any shipment you send to the UK. You can find out here what happened when I didn’t!
How do I work out how to do all of this?
The best way to work out how much it’ll cost, and the best method for you, is to speak to a shipping company or freight forwarder.
You’ll need to know:
- The shipping terms you’ve agreed with your supplier (see above)
- The weight and dimensions of the goods you’re shipping
- The total cost you’ve paid for your product
A good forwarder will be able to advise you on the best way to ship your product and help with duties.
My product is in my country – now what?
So backing up a little, before you arranged any shipping you hopefully thought about where your products would be stored. Will they be at your home, in your garage, in a storage unit, will you rent warehouse space?
Remember, you need to know where your products are headed before you arrange your shipping. Yes, you can get them sent one place, then moved on – but that adds time and money. (Both of which I’m assuming you’d like to save if possible!)
How will I ship to customers?
You have two options here. Do it yourself or pay for someone else to do it for you. (And that someone else might mean a professional warehousing and fulfilment company, or it might mean a person that you pay to pack up your products and take them to the post office!)
A word on Amazon FBA
If you’re planning on selling on Amazon, you can use Amazon FBA, which means they’ll store and ship products for you (albeit at a cost).
For me, this works. I don’t have to handle stock, or think about going to the post office / getting parcels collected every day.
However for sales from my own website, and for personalised products, I do generally send them myself – as I can put a little handwritten note in the packaging and make it a bit more personal.
Another option here is to find another warehousing and fulfilment solution, that you can use across all marketplaces that you sell on.
There’s no right or wrong here – it’s down to what works best for you, your life and your business.
Yes, some options cost more – but they also save more time. It’ll come down to where you plan to sell, the volumes you sell, and the time you have.
Finally, remember, you can change what you do at any point!