Five tips for continuing the Prime momentum through the end of the year

Posted on by Amanda Levine

Prime Day 2022 may be over, but your Prime Day momentum should not be. Now is the time to re-engage your target customers and ensure you are prepared to build and meet continuing demand for your Amazon products through the end of 2022.

Here are 5 ways to ensure that your Amazon sales continue to flourish after Prime Day 2022.

Increase advertising budget

Amazon sponsored advertising is a great way to increase your sales on Amazon. By targeting relevant keywords and phrases, you can ensure that your product appears in front of potential customers who are already interested in what you’re selling. 

You can also use Amazon’s impressive data and analytics tools to fine-tune your campaigns and improve your ROI. And best of all, you only pay when someone actually clicks on your ad, so you can be confident that you’re getting a good return on your investment. 

Boost product reviews

Nothing says to a potential buyer, ‘this is a great product’ like positive customer reviews. Customers place a high level of trust with sellers who have numerous reviews. If you do happen to receive negative feedback, make sure you address it immediately.

Encourage customers to leave reviews as often as possible. Well worded, timely feedback requests can massively improve the amount and quality of feedback. 

Amazon makes it easy to request feedback from your customers. Use Amazon’s “Request a Review” button to manually request reviews for each of your orders in Seller Central within four to 30 days of purchase. Or streamline your reviews by utilizing eComEngine’s FeedbackFive tool, which is designed to save you time by automating the Amazon review management process. 

Optimize your listing

The more accurate and descriptive your listings, the higher the chances you’ll get a conversion. You’ll want to double check everything. Including the product title, category, bullet points, images, and full descriptions. Make sure everything is accurate, clear, includes the relevant  keywords and that there are no duplicate product pages.

Amazon uses an algorithm to prioritize product suggestions to its customers. The algorithm is based on seller conversion metrics, like price, performance, customer satisfaction and sales history. By not optimizing your Amazon product listings you limit their discoverability, potentially losing out on sales.

Your title should be attention-grabbing and keyword-rich, so that it appears near the top of search results. And your product description should do more than just list features — it should also tell a story that speaks to the needs of your target customer. By crafting persuasive copy for your Amazon listing, you can give yourself a big boost in the search rankings and convert more browsers into buyers.

Use relevant keywords throughout your description so that potential customers can easily find your product when they search on Amazon. In addition, you’ll want to make sure that your descriptions are clear, concise, and easy to read. 

Use bullet points or short sentences to get your point across, and avoid using jargon or technical terms. You should also include important information such as size, weight, color, and material in your description.

Fulfillment-orders arrive on time

Amazon recommends that sellers maintain an on-time delivery greater than 97% in order to provide a good customer experience to buyers.

Fulfillment occurs after Amazon accepts a customer’s payment without a problem. The customer’s order will move to the shipping process through Amazon’s fulfillment center unless it is seller-fulfilled. 

Amazon’s shipping process includes:

  • Preparing your item for shipment
  • Boxing it 
  • Labeling it
  • Sending tracking information to the carrier

Can you meet two-day shipping obligations as a Prime seller? By enrolling in the Amazon FBA program, you’ll automatically become a Prime seller, and Amazon will handle shipping for you. 

But if you prefer to handle fulfillment in-house, you can join the seller-fulfilled Prime program and manage the process without Amazon’s assistance. Whatever you decide depends on what works for your Amazon business.

Amazon recommends following these best practices to avoid customer order cancellations and late shipment penalties:

  1. Set accurate quantities and production times
  2. Set accurate transit times
  3. Confirm orders quickly/on-time
  4. Ship orders within the production/handling times you set

Stock enough inventory

As an Amazon seller, one of the worst things that can happen is running out of inventory. This can lead to lost sales and unhappy customers. There are a few things you can do to avoid this problem.

Keep a close tab on your inventory levels. Make sure you know how much you have in stock at all times and how fast it is selling. Use this information to place regular orders with your suppliers to ensure you never run out of stock.

You can also use a tool like Restock PRO by eComEngine to ensure you never run out of inventory. RestockPro is a tool that facilitates FBA inventory management from forecasting and reordering to stickering and shipment. Whether you ship to your warehouse, a prep center or direct to Amazon FBA, you can use RestockPro to determine what to restock and when, create purchase orders, manage shipments, print stickers and labels, and keep a close eye on your inventory at all stages.

Consider using Amazon’s Fulfillment by Amazon program. This will allow Amazon to store and ship your products for you, which can help to reduce the risk of running out of stock.

Make sure you have a good returns policy in place. This way, if a customer is not happy with a product, they can return it without any issue. This will help to keep your customers happy and increase the chances of them doing business with you again.

Finally, Amazon inventory funding works by leveraging the resources of a financing partner to pay for inventory production, which is one of the largest expenses for most product brands. Kickfurther is an online inventory funding marketplace where brands access funding for new inventory (or can get reimbursed for recently produced goods). 

Kickfurther funding goes directly to your manufacturer at the time you place an inventory order, and you make no payments on that inventory until after you begin selling. With your custom payment timeline based on when you start selling, this allows you to order the inventory you need without impeding your ability to maintain financial flexibility while you wait for it to arrive and begin selling.

Interested in learning more about using Amazon inventory funding for your business? Create a business account today at Kickfurther.com to see a funding offer tailored to your business.

Key Differences Between 3PL Providers in the U.S.

Posted on by Amanda Levine

Successful order fulfillment operations are key to a product-based business’s success. All order fulfillment services should be timely, cost-effective, and efficient. Companies that don’t have the resources to do so in-house should consider contracting the services of a 3PL provider. We’ll cover what 3PL is and what you can expect from a 3PL provider in this quick guide.

What does 3PL stand for?

3PL stands for “third-party logistics” which refers to order fulfillment via a third-party company acting as a mediator between two groups, in this case the manufacturer and the customer.

Businesses of all sizes often partner with third-party companies to provide services they need.

The term “third-party logistics” or “3PL” has been around since the 1970s and refers to a variety of outsourced logistics services including inventory picking, packing, and shipping.

What is a 3PL provider?

A 3PL provider is a company that provides logistics services such as product procurement and fulfillment to other businesses who contract with them. A third-party logistics company may assist clients with receiving, storing, packing, and shipping products.

Some 3PL providers also offer additional services (known as value added services) such as inventory management, product kitting / customization, returns, and even product assembly.

You may also see a 3PL provider described as a “fulfillment warehouse” or “fulfillment center”.

What are the benefits of 3PL?

The benefits of contracting a 3PL company to assist your product-based business with logistics are many.

Small businesses often struggle to keep up with managing all aspects of their operations in-house and being able to outsource some of these tasks to third-party companies can be extremely beneficial. Companies that may not have the space, the staff, or other resources needed to cover all of the bases when it comes to maintaining product inventory, storage, and shipping should consider using a 3PL provider to handle these services for them.

3PL companies handle all aspects of product shipping and order fulfillment for you, resulting in the best speed and efficiency and freeing up your resources to focus on other business aspects.

Since they are specialized in one area of focus, you get to benefit from the 3PL company’s years of experience and expertise, reducing both shipping costs and delivery times to your customers.

Types of 3PL providers

Before you integrate a 3PL provider into your small business’s operations, you’ll want to consider the different types of 3PL providers.

  • Standard 3PL Providers – These companies provide only the most basic 3PL services such as packing and shipping. Since they only provide minimal services, they are often the lowest-cost option for product-based businesses looking to outsource their order fulfillment. 
  • 3PL Service Developers – 3PL service developers offer value-added services including IT infrastructure and management. This could include shipment tracking and product security. Service developers help ensure the safety and reliability of 3PL operations.
  • 3PL Customer Adapters – 3PL customer adapters handle the entire logistics needs of their clients from start to finish. While they may enhance and improve upon their clients’ existing logistical infrastructure, they do not create their own operation.
  • 3PL Customer Developers – These providers offer the highest level of service to their clients, essentially becoming a company’s logistics department. Like a customer adapter, customer developers take on their clients’ operations. However, there is more innovation and integration at this level of service than with a 3PL customer adapter.

Key differences between 3PL providers in United States

3PL Standard Providers offer the basic level of service to their clients at the lowest price. When you are just getting started, contracting with a standard provider can be a great way to get your feet wet and employ the services of an order fulfillment company. They offer inventory storage, transportation, and distribution for companies of all sizes. These providers may also offer other value-added services beyond logistics such as order returns and customer service.

3PL Service Developers exist to help product-based companies ensure the secure shipment of their products through the addition of value-added services such as product tracking and product security. They take the basic level of services provided by a standard provider and elevate them to the next level. The cost associated with a service developer is higher as well.

3PL Customer Adapters are the next level of service available to product-based businesses. As such, they are more costly than 3PL standard providers or service developers. This type of company handles pretty much all of the logistics services for each of their clients, from the beginning of the shipping process to the very end. As a full-service provider, they essentially adapt your existing logistics operations to be more efficient without entirely taking over and replacing all of the existing infrastructure. Clients may work with the company to oversee the process and step in where needed but remain mostly hands-off.

3PL Customer Developers typically take on a smaller client base of larger companies. This allows them to focus on running the logistics activities of each company individually. Customer developers take over the entire logistics services for each client, which means they are basically considered their logistics department. Contracting a 3PL customer developer is the most expensive option for logistics services since it requires a great deal of personnel, space, and other resources to carry out all of the necessary tasks. They essentially develop each company’s operations to reach maximum efficiency, while clients remain almost entirely hands-off.

No matter which type of provider you select, utilizing the services of a 3PL company can help you grow your business and take your operations to the next level.

How Kickfurther can help grow your business

When you use a 3PL company, your supply chain will look something like this:

  • Your company finds and purchases the products you wish to sell –> Your merchandise ships to the 3PL warehouse who holds your inventory –> You list your available inventory online –> Customer places an order –> Orders are fulfilled from the 3PL warehouse.

With this model, you still have a need for a large influx of capital to purchase your inventory and keep it stocked. This is where an inventory financing company like Kickfurther comes in.

Kickfurther exists to help small businesses grow. The Kickfurther platform gives product-based companies a way to fund the inventory they need without having to have the cash or even the purchase orders upfront. A community of investors provides the capital your business needs, which is then paid back as you receive and fulfill your orders.

Wrapping up

When you need an influx of capital to fund your product-based business’s inventory, consider Kickfurther to cover your expenses. Join more than 800+ inventory financing success stories and get started today with a free business account.

Where to find equity investors for your product company

Posted on by Amanda Levine

When you are looking into financing options for your product-based company, you may come across the term equity investor.

Equity investors may come in at the startup stage or the expansion stage of a company and can be a valuable asset to helping entrepreneurs access the capital they need to succeed.

We’ve compiled a quick guide on the ins and outs of finding and using equity investors for your product-based company. Keep reading to learn more. 

What is an equity investor?

An equity investor is someone who purchases shares of a company in pursuit of capital gains and/or dividends. They may be individuals, firms, or organizations. Equity funding comes in three main types – angel investors, venture capitalists, and strategic partners.

Companies may seek out equity investors when they are about to relocate, expand, develop a new product, participate in a merger or acquisition, or undergo any other change that requires a major influx of capital.

While equity investors have no guarantee of a return on their investment, they expect that they will receive a positive return as the company grows. When the company grows, the investor’s portion of the company (shares) should rise in value. However, if the company declines in value or goes out of business – an equity investor can lose money on the deal. Therefore, there is risk involved in this type of investment, and equity investing is typically a long-term arrangement.

What makes a product brand attractive for equity investment?

In order to gain capital through equity investment, you will have to earn the trust of investors.

Potential investors look for the following:

  • Financial return: If your product is already generating an income, this makes a brand much more attractive to investors. The presence of a steady income stream means that your product idea has been proven. Investors can be attracted by the promise of a healthy return. 
  • Product idea: It takes a good product to attract the attention of equity investors. But a good product is not enough on its own to make an investment worthwhile. The strategic business plan and projected financials must also be solid.
  • Business plan: A business plan is important at any stage of product development, but is especially crucial during the startup phase. A well-written business plan should include elements of strategic planning such as a market analysis, executive summary, and a financial plan. Investors will want to see that you have thought through every element of business strategy from sales and marketing to personnel management.
  • Financial projections: ​​Is there a market for your product? What does the competition look like? What are your profit margins? Will you draw a salary? All of these questions are important factors that investors will look at in determining your revenue potential.
  • Branding: The presence of a strong brand identity plus a strategic marketing plan also helps give investors confidence in the future success of your product. 

Top benefits of attracting equity investors for your product based company

It can take a great deal of funding to bring a new product to market. Brands must factor in the costs involved in manufacturing, distributing, and marketing their new product – as well as maintaining inventory. Equity investing gives companies a way to access the funds they need.

Gaining the support of equity investors will give your product-based company the upper hand on raising capital and getting started with the inventory and other resources required to win. 

Where to find equity investors for your brand

  • Ask family and friends: The most basic form of finding investors for your company is to seek out support from friends and family. There are a number of ways you can offer friends and family a return on their investment if you don’t want to accept the money as a gift. You may draw up an informal agreement promising them a portion of future revenue or the return of their initial investment plus interest. Or you can offer them unlisted shares of the company.
  • Private investors: Alternatively, you can look for private investors who are willing to sow into your company in exchange for a return on their investment. Private investors can include angel investors, venture capitalists, and private equity firms.
  • Venture capital: Venture capitalists are professional investors who focus on investing in startups that have the highest growth potential. Venture capital typically involves giving up a significant amount of control of the company in exchange for large sums of capital. Venture capital investment is typically done through a venture capital firm.
  • Crowdfunding: Crowdfunding is another popular way to gain capital through private funding. Crowdfunding is a means of sourcing funds for your business via small contributions from many different people or organizations. This type of investment is becoming increasingly common, due in large part to the rise of platforms like Kickstarter and Indiegogo. While most people are aware of donation crowdfunding and reward-based crowdfunding, there is also a third type known as equity crowdfunding. Equity crowdfunding allows individuals and companies to invest in your startup in small amounts that add up to the funds you need. In exchange, you offer the investors a portion of your equity via unlisted shares.
  • Angel investors: Angel investors are people or groups who are willing to put their own personal funds into a startup. They are usually friends and family of the founder or may be fellow entrepreneurs or business leaders in the local community. Angel investors may also help provide additional assistance to your company through consulting and networking. While the amounts offered through this type of investment may be smaller, they are typically easier to obtain. Angel investors typically have limited say in the control of the company compared to other investment options.

Whether you decide to grow your business through the use of angel investors, venture capital firms, or inventory financing – having access to capital is vital to the founding and expansion of your product-based business. While you research your different financing options, be sure to build out a solid business plan, conduct the proper market research for your financial projections, and work on increasing your personal and/or business credit score.

Whatever your business dreams are – the right financing can make it come true.

How Kickfurther can help grow your product business

While equity investors can help grow your company, giving up a portion of your business or future profits may be a big downside. In some cases taking advantage of other forms of financing can free up cash flow, thus allowing you to invest in your business and eliminate the need for equity investors. Small businesses that can benefit from inventory funding should visit Kickfurther.

Kickfurther is the world’s first online inventory funding platform that enables companies to access funds that they are unable to acquire through traditional sources. When you compare Kickfurthers rates to other forms of funding, you’ll often see you’re saving. With costs up to 30% lower than other options, Kickfurther is ideal for inventory funding. Companies often return for additional funding. Returning companies often see rates fall each time. 

Kickfurther proudly has more than $100 million in inventory funded to date, proving that they can help you get funded within a day or even minutes to hours. Kickfurther can help supply your business with the working capital it needs while allowing you to maintain full control.

Interested in getting funded on Kickfurther?  Create a free business account, complete the online application, review deals, and get funded in as little as minutes! 

5 Steps To Approaching A Wholesale Grocery Distributor With Your Product Line

Posted on by Amanda Levine

There are quite a few hoops you will need to jump through when it comes to marketing your product line and successfully getting it into retail grocery locations. This doesn’t have to be a difficult process, though, if you are first able to understand the process in its entirety.

When you are ready to get your product out into the market, you are going to need to understand the best way to approach a wholesale grocery distributor with your product line. In this article, I will discuss five steps to help you be successful in your approach.

 

1. Determine your profit margins.

Wholesale grocery distributors care a great deal about profit margins, so you really need to determine your profit margins and what you are willing to adjust while still turning a profit. Put forth some research on what some similar product line margins are in order to figure out if a similar profit margin will, in turn, work out for your personal product.

Take the time to analyze your local area wholesale grocery distributors and their profit margins in terms of products that are similar to yours and compare them to what your own might be. You are going to want to make sure this is something you are willing to negotiate and adjust accordingly, not only without breaking the bank but also while successfully turning a profit.

2. Plot out a marketing strategy.

You will also need to chart a successful path in marketing through the wholesale grocery distributor’s existing customers. When you are able to plan a direct course of action, you can more successfully market your product to customers already shopping in their stores. Customers grow familiar with the products that are on the shelves of the stores that they frequent, and when you offer them a brand new product, they may or may not opt to buy it at first.

You need to make sure that your product line stands out to the existing customer. Plan to make the packaging of your product line engaging and as vibrant as needed for the product to catch your potential customer’s attention and inspire curiosity about what your product is, how it works and why they may want or need it.

3. Manage your expectations.

You need to also put some serious consideration into the fact that not everyone is able to find wealth or success overnight. Successful product sales take hard work, patience and a tremendous amount of faith and dedication in your product line.

Keeping that in mind, you also need to understand the possible need to pay onboarding fees or other costs. It takes money to make money, which is why you need to be a little willing to make some investment if you want to successfully launch your product line and get it into retail stores via wholesale grocery distributors.

4. Balance confidence with flexibility.

When you approach a potential wholesale grocery distributor, you need to make sure that you are clear and concise in terms of what you are looking for and what your profit margin is compared to what they are used to working with. Be ready also to negotiate those terms. The more flexible you are when it comes to working with a distributor to get your product into grocery stores, the more likely they are to pick your product up and work with you.

When approaching potential distributors, ensure you show you are passionate about your product. Be enthusiastic and demonstrate your true confidence in your product line. This will better assure them that they should work with you and that this venture will generate success for both parties. The more confident you are—while maintaining flexibility—the more successful you will communicate to the wholesale grocery distributor the appeal of your product line.

5. Investigate your distributor’s processes.

Finally, when it comes to finding the perfect wholesale grocery distributor whose partnership is going to work in your own personal best interest, you need to make sure that you investigate how the company runs and whether it will be a good fit for your product.

Ask other product developers who have worked with the wholesale grocery distributors you are considering and see their opinions about the distributor and their process. Interview wholesale grocery distributors about what you are curious about, figure out their profit margin and if it is something you are willing to work with and research your competition to determine what made them successful and how you can generate your own success.

A better understanding of the entire process will help you see it through to the end.

Working with wholesale grocery distributors does not need to be a complicated process. But you need to make sure that you understand the process in its entirety in order to figure out what hoops you need to jump through and which ones you can avoid completely.

If getting your product line into grocery retail stores is going to be your best bet in generating successful sales, these are some of the best strategies for you to consider in order to first thoroughly understand the process.

This is a guest post from Mr. Checkout. Mr. Checkout is a national group of Independent DSD Distributors, Full-Line Grocery Distributors and Wagon-Jobbers. They represent products in over 60 major retailers and manage 13 industry associations with over 150,000 independent retail members. Distributors, Wholesalers and Retailers turn to Mr. Checkout to find the best selling products, learn which categories are trending and discover what is the next hot new product.

How to Choose an Order Fulfillment Partner for Your Ecommerce Store

Posted on by Amanda Levine

Your business is doing really well – orders are coming in about as fast as you can ship them! Revenues look good, and the future looks bright. But you’re exhausted, and so are your employees. Shipping is really wearing you down.

This happens to a lot of eCommerce store owners. It’s really exciting when orders are coming in quickly and shipping out in high volumes. However, rapid growth creates logistical problems that need to be solved. That’s where third-party order fulfillment comes in.

But how do you actually choose an order fulfillment partner? It’s a daunting task, after all. Letting another company handle your inventory and directly impact your customer’s brand experience can be nerve-wracking.

In this article, we provide six steps to choose the right order fulfillment partner for your eCommerce store. That way, orders can go out automatically and you can rest knowing that talented professionals are helping you eliminate grunt work from your life.

1. Determine if you need to outsource order fulfillment.

Outsourcing order fulfillment is a big commitment. It’s not something to be done lightly, and should only be done when there is a good business case for doing so.

In general, outsourcing order fulfillment starts to make sense once you’re shipping more than 100 orders per month. In fact, when orders are really coming in fast, having someone else ship for you can actually save money.

Of course, it’s not as simple as 99 orders per month – do it yourself, 100 orders per month – farm it out. The signs that you need help are a bit subtler and more subjective. A few that come to mind include:

  • If your customer base is growing fast with no sign of slowing down.
  • You’re unable to ship orders out quickly and accurately.
  • You and your team are overworked.
  • Your business just generally feels complex.
  • Shipping fees are piling up.
  • You are out of physical storage space.

Any of the signs above are clear indicators that it’s time to hire some help.

2. Decide how many warehouse locations you need.

Deciding you need an order fulfillment partner in the first place is an important step. The next important step before even making calls is to decide how much help you need.

If your store is barely over that 100 order per month threshold, you will likely want to pick one warehouse for a small, tight, simple operation. There are a few reasons for this. First is that when you send inventory to your fulfillment center, you can ship it in bulk all to one place at a time. Splitting inventory shipments between too many warehouses can become very expensive. Additionally, if something goes wrong with order fulfillment, you know exactly who to call.

If you have lots of orders, you may want multiple warehouses – either multiple within a country or multiple across the world. The key here is that you will want to make sure that anywhere you have a warehouse, you have at least decent order volume going out. It’s a complicated trade-off that you will need to calculate: too few warehouses and shipping can be slow and, when traveling long distances or especially internationally, expensive. Too many warehouses and freight, storage, and other overhead fees will pile up.

After a careful cost-benefit analysis, if you find you need multiple warehouses, there are two ways you can go about it. You can either find a fulfillment partner with multiple locations that work for you, or you can find multiple fulfillment partners with different warehouses. In the latter case, you will likely want to manage all your warehouses and inventory with an inventory management software like NetSuite, ChannelApe, Skubana, or QuickBooks Commerce.

3. Review service offerings.

There is one other consideration you will need to weigh before reaching out to warehouses. You will need to decide what services you need.

There is no shortage of order fulfillment partners that can handle small, lightweight, ecommerce-friendly items. However, if you have items that are hazardous, fragile, perishable, or require refrigeration, you will need to do some additional research. Additionally, if you run a store where you have a high SKU-to-order ratio, you may need a specialized partner as well. (For example, apparel companies with clothes in various sizes and colors often benefit from finding a fulfillment partner that specializes in apparel fulfillment.)

You will also want to consider value-added services as well. Many order fulfillment partners offer kitting and assembly, customization and personalization, and even refurbishment services upon request. If that’s an important part of your business model, make sure you have a partner that can support your needs.

4. Find online reviews and check references.

The next step is to compile a list of order fulfillment centers which can meet your company’s requirements. Don’t focus too much on cost at this point, as most fulfillment companies do not publicly display rates. (The pricing model is hard to communicate simply online, and you’ll see why in the following section).

Once you have a list of company names, perhaps 10 good candidates, look for reviews on neutral third-party websites such as Trustpilot, Google Reviews, or G2. Pay attention to the average score, but also the negative reviews as well. Pay attention to what people say about communication, delays, damage, and surprise costs – these are some of the biggest things that can go wrong in order fulfillment.

When you’ve gone through the publicly available information, it might also be a good idea to email customers whose names you see in case studies and testimonials. You may or may not receive a response, but checking references is a good way to find out the details that just don’t make it into online reviews sometimes.

5. Request quotes.

Once you’ve narrowed down your list to a few good potential order fulfillment partners, it is time to request a quote. This process is quite straightforward.

What is a little less straightforward is how order fulfillment companies handle pricing. Generally speaking, there are four types of fees. There are pick-and-pack fees and postage fees. Both are applied to each individual order, with the former representing labor costs for the warehouse and the latter being based on how heavy a package is, where it’s going, and how fast.

Account fees and storage fees are separate from per-order fees. Account fees vary a lot, but are usually not expensive. Storage fees vary based on how much inventory you are keeping in the warehouse.

Lastly, some value-added services like kitting, assembly, refurbishment, and others are priced separately since those require more manual labor.

When you receive quotes, you will want to forecast your sales volume and potential need for value-added services and use the quotes provided to estimate your all-in cost. You will not necessarily want to choose the cheapest warehouse, but the all-in cost should at least be competitive.

6. Pay extra close attention to red flags.

The quote request process is also your best chance to evaluate the company for yourself. A lot of red flags can come up in the selling process before you sign any agreements, so here is a small list of things to look out for:

  • Infrequent or poor–quality communication
  • Long-term contracts or complicated rules
  • Complicated pricing or nickel and diming
  • Low-quality software
  • Poor returns process

If you see any of these red flags, it’s best to find another partner. Order fulfillment is complicated, but the right partner should make it feel straightforward between their expert account reps, their easy-to-understand pricing model, and their useful software.

Final Thoughts

Finding an order fulfillment partner for your eCommerce store is a long process. However, doing your due diligence can really pay off in the long run. Nothing can make eCommerce feel effortless quite like having a partner who will handle shipping for you!

Overwhelmed by all the work that goes into setting up an eCommerce store? Check out Fulfillrite’s free eCommerce/Shopify checklist. It lists everything you need to know to get your store up and running.

Need help fulfilling your orders? Click here to request a quote from Fulfillrite.

About the Author

Brandon Rollins is Director of Marketing at Fulfillrite. His main areas of expertise are online marketing and supply chain management. He also writes for Weird Marketing Tales.

5 Questions to Ask Your Manufacturer for Better Margins

Posted on by Amanda Levine

Your company should always be working to increase its profit margins as your business grows.

For owners of product-based companies, one of the best ways to increase your overall profit is to take a look at how you can cut back on your manufacturing costs. Saving money on the production of your inventory allows you to increase your profit margin on each item sold.

While many companies jump straight to raising the prices of their products to save money, this may not always be the wisest move. Instead, there are a number of considerations to keep in mind to improve your company’s profitability by reducing costs from the manufacturer’s side.

On the other hand, you don’t want to use an untrustworthy manufacturer or produce a cheap yet poorly-made product that won’t stand the test of time. When choosing a manufacturer or looking to increase profit margins with your existing manufacturer, consider the following:

Top questions to ask your manufacturer to improve profit margins

Choosing the right product manufacturer can make or break your company’s potential success.

If you own a product-based business, be sure to ask your manufacturer the following questions:

  • What are my payment terms and are discounts available? One of the top questions to ask your manufacturer is what your payment terms are. A lack of cash flow can make it hard for some businesses to keep up with their invoices, so it is important to know how much time you have to pay your manufacturer for the goods. Generally, invoices must be paid within 30, 60, or 90 days. Some companies may offer a discount for paying in advance or charge late fees for failing to pay on time, so find out what your manufacturer’s payment terms are. You’ll also want to know the manufacturer’s minimum order quantity (MOQ), turnaround time, and down payment requirements. Knowing these conditions and terms up front can save you money in the long run.
  • What will my total costs be and are they subject to change? Before you contract with any vendor for your product manufacturing needs, you should have a complete understanding of the total costs from start to finish. You’ll also want to ask about any relevant fees and how to avoid them. In addition to knowing your total cost, it is important to know whether or not your manufacturer may increase your cost and under what circumstances. Find out how the company determines the need for potential price increases and how much notice you will receive of any changes. Will prices increase with inflation? If a supplier raises their costs, will yours increase too? Finding out these key details upfront is a wise move, especially when comparing potential manufacturers.
  • What is my expected gross margin? Once you know the potential costs for ordering your products, you can begin to calculate your expected gross margin using sales projections. It is important to know and monitor your product’s gross margins. Gross margin is used as an indicator of the health and profitability of your business. To calculate your gross margin, simply subtract the total cost of goods sold (COGS) from your company’s total sales or revenue and then divide by the total sales or revenue. Gross margin is expressed as a percentage. For example, if your company had total sales of $750,000 in a given year with a total cost of goods sold of $250,000 – the gross margin would be 67%. It is important to note that the cost of goods sold includes more than just the manufacturing cost but also the shipping, packaging, fulfillment and staffing costs.
  • Are there any volume incentives? Like many other types of companies, product manufacturers are often able to provide a discount for bulk production orders. With volume incentives, the more product you order, the lower the price per unit. Even if you don’t have the money up front for such a large production order, inventory financing through a company like Kickfurther can help your business get the funds you need to take advantage of these bulk discounts. Volume incentives can go a long way towards increasing your overall profit margins and steer your business on the path to success.
  • Are they keeping up with technological advances? It is important to ensure that the manufacturing company you have chosen for your business is taking the steps needed to remain competitive in the market. Technological advances mean that the product manufacturing industry is changing all the time, and new technologies can greatly affect the way that manufacturers do business. Ongoing advances in software, automation, equipment, and other aspects of production can greatly improve your profit margins. Always make sure that you are staying up-to-date on industry developments and regularly comparing your manufacturer against the competition in order to take advantage of the lowest possible production costs for your company’s products. Choosing a company that keeps up with technology and seeks to keep costs low can save you thousands of dollars over the lifetime of your business operations.

How Kickfurther can help grow your business

Kickfurther exists to help small businesses achieve the growth of their dreams. Inventory financing on the Kickfurther platform gives small businesses an alternative way to fund their inventory purchases without the need for purchase orders or traditional bank financing.

Instead, Kickfurther uses a marketplace of investors who help fund your inventory on consignment, giving you the flexibility to pay back your balance as you receive sales revenue.

This process allows developing businesses to fund their inventory purchases upfront through community backing and keep up with increasing customer demand in a cost-effective way.

Using a company like Kickfurther for inventory financing allows you to cover the costs of producing and maintaining a large enough amount of goods in stock to remain profitable.

Wrapping up

Asking the 5 questions listed above can help ensure that you see the best possible profit margins and net revenue from your product-based business without cutting corners. The better your profit margins are, the more cash flow you will have available to invest back into your business. The most successful companies are those who are always seeking to increase their profit margins and cut costs in every possible area of the supply chain from production to order fulfillment. It is important to continuously evaluate your company’s vendor relationships, including your product manufacturer(s). Saving money on production is key to increased profits.

When you need an influx of capital to fund your product-based business’s inventory, consider using the Kickfurther crowdfunding platform to cover your qualified business expenses.

Join more than 800+ inventory financing success stories and get started with a free business account today.