Origins #29 — Thinking about storage and fulfilment

Time to figure out an efficient process for storing and shipping our products.

Photo by Axel Ahoi | unsplash.com

The end of our first product development cycle is near finalising details around the first collection, it’s time for us think about storage and fulfilment.

The are a lot of variables that come into play when trying to make the best decision, but the two constants that we can base our thinking around is that we are producing our product in Bulgaria and that both me and Marin are currently based in Amsterdam.

A third important factor that comes into play is that we will be using Shopify as an e-commerce platform.

Having the aforementioned facts in place, at this point, we see three different viable options, when it comes to storing our inventory and shipping it. I’ll take you through each of them, thinking about the pros and cons of each.

Something to note. The way we have approached this process so far and the mindset that has been working for us, is to make decisions quickly, after considering all the facts that we have at that point and move on. As we touched in a previous post, clarity seems to come from doing, therefore a decision at this point about storage and fulfilment can be overridden, if some parameters change, or new options come up.

Anyway, the best time to make quick decisions and changes of processes is now, when we are a very small and flexible team and the inventory and resources that need to be moved are very manageable.

Option 1 — Store and ship from Amsterdam

The first option is to ship the inventory from Bulgaria, where it is being manufactured, to Amsterdam where we will store and send it ourselves.

PROS:

  • The most control, as the inventory is with us physically.
  • We can be sure in what state the product is being shipped. As the whole experience around the product is a focus.
  • We can react quickly in a proactive manner, when interest arises from folks in Amsterdam.
  • We also have complete freedom and control of what company we ship with. We can use different couriers based on where we are sending to and what the best rates are.

CONS:

  • Shipping costs from Bulgaria to the Netherlands
  • We need to allocate time for packing and going to the post office
  • Dealing with returns

Option 2 — Use Fulfilment by Amazon (FBA)

The second option is to use FBA. In Europe, Amazon have FBA only for the UK, therefore this option would entail sending our inventory to an Amazon warehouse in the UK and then integrate that with our e-commerce platform. Amazon then takes care of storing, shipping and returns.

PROS:

  • Time saved in: shipping, storing, dealing with eventual returns.
  • Established storage and fulfilment processes
  • Quick integration with Shopify
  • Future scalability. Relying on Amazon’s infrastructure can take us pretty far ;)

CONS:

  • Shipping costs to the Amazon warehouse
  • Not complete control of how the products are shipped, when it comes to presentation, packaging etc.
  • Fixed shipping costs paid to Amazon. No flexibility in choosing a service provider

Option 3 — Store and ship from Bulgaria

Third option is to store it closer to the original place of manufacturing, find a warehouse and a person that can take care of fulfilment.

PROS:

  • Quick inventory recharge, as the manufacturing and storage will be the closest out of the three options
  • Save in costs for shipping inventory to a warehouse outside the country
  • Cheaper shipping rates from Bulgaria for Europe, compared to the Netherlands
  • Moderate control, as we can visit, see and talk to the people who are going to be responsible.

CONS:

  • Inventory is not with us
  • Have to find a person responsible + a warehouse. Two additional and very important variables that we avoid with the other options.

That’s the quick analysis at this point in time. There are a few things that we are looking into, when it comes to what we need to prepare legally and accounting wise, depending on the option we go for. We haven’t made a decision on this yet, so if you have any experience or expertise in this area, we would highly appreciate you reaching out!

We will drop a post once we figure out which option would be the best for us. Hopefully, it might be useful for someone else who is trying to start an operation with a similar setup


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