Location PlanningAugust in Blog
When Should You Move Out of Your “Garage”?
If you’re an ecommerce company the big factor deciding when you should move out your proverbial garage is whether or not you want to do fulfillment in house or not. If you’re 100% drop shipping then this isn’t a factor but if you are holding stock then it is a critical choice you are making.
In today’s Amazon FBA world, doing completely outsourced fulfillment is more of an option than it has ever been. However, if you’re bringing in products from China, often you need to have a middle man in the U.S. serving as an intercept for your goods from China to an Amazon FBA warehouse. If you’re shipping very small orders that are air couriered, or ironically very large orders where it makes sense to send full containers or large LCL shipments in, then you may be able to forego the middleman. Everyone else in between probably needs to work with a 3PL.
The big mistake I see people making with 3PLs is only looking online for 3PLs with major online presences. Almost every sizable city has some sort of third party logistics company in it, and often dozens or hundreds. Essentially a 3PL is just a warehouse with some man power. It is entirely beneficial to keep the 3PL geographically close to you so that you can actually physically go check out your shipments.
Pros and Cons to a 3PL
- Not tied down with a lease
- Not tied down with warehouse staff (and warehouse staff turnover quick)
How much for a 3PL?
Should You Get an Office?
Until you have more than a few staff members, my opinion is that you should not have an office. As small businesses operating ecommerce company our goals should be to keep our overhead and fixed costs to a minimum and our flexibility to a maximum.
The biggest mistake you can make is getting an office for ego sake. Lets face it- there’s always a small degree of shame when someone asks where your company is based and you respond “the den in my condo”. It feels much better to say you have an office down on such and such street. While there’s some validity to having a proper commercial address for trust factors when selling online, Amazon buyers never look at this (nor can they) and you can rent a PO Box or have a 3PL handle your mail delivery.
Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He’s also a former Amazon warehouse employee of one week.