Do companies in UK provide dropshipping for own products?

[beautyandthebeast]

Hi,

I am looking to reside in Dubai but want to set up a company in the UK selling items I have sourced from India.

I had a business premises here that I was going to use, but decided to sell it to set up this new venture. I do not want to risk setting up a storage unit and staff member especially during the early days where sales may be weak.

I remember years ago a courier telling me that they offer a picking and packing service.

Is there a way I can send my products to a warehouse here in the UK and they pick, pack and post the items out on my behalf from sales off our own website?

If yes, please can you point me in the right direction of what to look for and what kind of costs are involved aside from postage costs.

I have tried to search this but only companies that sell their own products come up.

Thanks guys

Jamie

 

[Mr D]

Fulfilment service.
There are a number of companies doing it, have a search on google.
Or search on the forums, may find members running such services.

 

[beautyandthebeast]

ahhh thank you, I was typing in Dropshipping and was not finding what I was after. Thank you very much

 

[Mr D]

Not a problem.
The search is a lot easier when you know what terms others are using.
Have used Royal Mail fulfilment service a few years ago. It was reasonable price for what I wanted at the time, not cost effective on cheaper items though.
Things may have changed, have not kept up with their pricing and services.

 

[beautyandthebeast]

Just had a look on Google and had a couple of quotes now for ideas on costs. I will have a look at Royal Mail too. Our profits will vary across items but I would try to add the cost into the postage and packing charge where possible.

I will continue my search again tomorrow.

 

[mtools]

I am in the process of outsourcing all my warehousing and packaging to a fulfilment centre. I've had quotes from James & James, Pack-It, DK Fulfilment and Fulfilment Logistics UK. I'm sure there are one or two others as well. They're all very similarly prices (except James and James who are about 50% more expensive), but there's a lot of variation, some charge more for storage, some charge more for picking and packing (then there's depending on whether a second item in an order is the same item or a different etc.) and then there's all sorts of other things to consider. For me, when i factored everything in it works out at about £5 per order, i.e. if I had 500 orders in a month I'd be paying out £2,500 to the fulfilment centre. Obviously you'll want them to integrate with your website, most of them do it with a plugin or API and they take your orders automatically so don't even require any form of upload. Definitely worth looking into though. I worked out that I could get rid of 1,500 sq ft warehouse, rent a small 120 sq ft office for admin and pay the same outgoings as I do now, just without the hassle of packing orders for 2-3 hours a day (and also not being able to go on holiday because there would be no-one to pack orders!). Hope that helps!

 

[Mr D]

And not forgetting at the busy time of year someone else is employing the staff and doing the hard work.

 

[Ray272]

£5 per order seems way pricey. Is that Inc shipping and have you also added in the actual storage cost?

If it includes shipping it would be pretty good.

I do b2b so my orders are fulfilled as follows.

1.50 order charge
£0.45 per pick regardless of carton qty or single unit qty.
£2.5 per pallet per week storage.
+ materials for packaging

An Order today was for 22 units of 7 items.

Cost:

22 x £0.45
1.50 order charge
Materials @ £0.79
Total: £12.19

Order tomorrow is:

60'000 units of stock on 4 pallets.
Reformatted to 3 pallets.

30 picks for reformatting to 3 pallets.

30 x £0.45
Order charge £1.50
Pallet charge @ £10 each.
Total cost: £55

Shipping is never included and storage is not being factored. The 60k order arrives tomorrow and ships within 2 working days.

I've moaned a bit about my fulfillment people but I've also noticed many clients who use this type of service swap and change a lot. That would be a nightmare for me.

been with the same company 3 years.

 

[mtools]

£5 per order seems way pricey. Is that Inc shipping and have you also added in the actual storage cost?

Yes, hence the "when I've factored everything in", i.e. everything ;-)

 

[mtools]

My best price was:
Pick & Pack £1 for first item then 30p for subsequent items
Mail bags (I supply)
Returns: £2.50 per order
Storage: £8.07 / pallet / month
RM 24 Tracked: £3.77
RM 48 Tracked : £2.92
2kg+ Courier: £5.95

Management fee: £100

All fees exclude VAT

At 10m3 storage + 500 orders / month with 1.7 items per order average it works out at
Pick & Pack: £1 x 500 + £0.30 x 300 = £605
Postage: 200 x RM24 + 300 x RM48 = £1,630
Storage: £8.07 x 10 = £80.70
Returns: £20 x £2.50
Management: £100

Total £2,465.70 (£4.93 per order)

 

[Mr D]

Compared to doing the work yourself that's.... not bad. Not bad at all.

 

[lesliedocherty]

My best price was:
Pick & Pack £1 for first item then 30p for subsequent items
Mail bags (I supply)
Returns: £2.50 per order
Storage: £8.07 / pallet / month
RM 24 Tracked: £3.77
RM 48 Tracked : £2.92
2kg+ Courier: £5.95

Management fee: £100

All fees exclude VAT

At 10m3 storage + 500 orders / month with 1.7 items per order average it works out at
Pick & Pack: £1 x 500 + £0.30 x 300 = £605
Postage: 200 x RM24 + 300 x RM48 = £1,630
Storage: £8.07 x 10 = £80.70
Returns: £20 x £2.50
Management: £100

Total £2,465.70 (£4.93 per order)

Thats a pretty decent deal, no hassles, go on holiday etc, defo worth letting someone else do it, you can spend more time growing the business

 

[mtools]

Thats a pretty decent deal, no hassles, go on holiday etc, defo worth letting someone else do it, you can spend more time growing the business

Yeah it is isn’t it? hopefully it works out as well as I think. Running my company for 5 years 3 of those in 1,500 sq ft unit and my outgoings are about the same as the above so financially I’ll be in a similar position whilst freeing up a few hours per day for other things. Having had on average of 4 days off each of those last 3 years I’m looking forward to having a holiday at some point!

 

[Trevor Unitt]

I should look to increase my prices!

First Pick £1.00
additional pick is £0.25
Returns £1.00
Pallet storage £6.50 pcm
2KG courier £5.50
Management fee of £65pm.

Who was that quote from @mtools ?

 

[Sam Drury]

Looks like I have a really good deal then, paying £0.85 first pick, £0.20 each additional item.

 

[Trevor Unitt]

Those are very good rates but it all depends on much more the first and additional picks. You must be selling quite a few to get them rates. Theres storage charges and other charges to think off

 

[IanDade]

I am happy to provide prices to anyone who wants to start up with a fulfilment house or wants some prices to compare to their current operation.

Thanks

 

[AW Swindon]

The structure of how a fulfilment warehouse costs its service offering is basically a balancing calculation between the fixed cost and the variable costs.
It is important to get the balance right for your business and your set of products and volumes. As some have mentioned earlier its good practise to look at the total costs over a period not just focusing in on the pence per order. This will take in to account the low order days and the high order days, remember the costs like Admin and Storage are there even if you sell only a few orders.
Please be cautious if a fulfilment supplier can rattle off a price over the phone after only talking to you for a few minutes, It is likely that the balance is in their favour. Make sure the provider takes time to understand your business and provides you with a Win Win set of prices.
Purely as a networking opportunity, I am happy to discuss and help with any aspect of Fulfilment and Supporting Logistics (UK/Global), please don't hesitate to contact me.