DIY vs Fulfillment Center vs CoShipping
There are a lot of different shipping options for your small business. The first big decision you need to make is how involved you want to be directly. There are a few basic routes that you can go with handling fulfillment. Let’s take a look!
Shipping Options in Brief
DIY (Self-Managed)
You store your products and packaging, use your own software, and ship orders yourself as they come in. You keep 100% control over everything.
Fulfillment Center
A third party warehouse stores your products and packaging. When you get orders, the fulfillment center ships them for you. You can’t access your inventory.
CoShipping
This is the half-way option. You pack and ship your orders yourself at our pack stations. Optionally, you can store your goods with us or bring them with you to ship.
Managing Your Own Shipping
For many small businesses, managing shipping directly is the goal. When you handle everything yourself, you keep total control over quality. I’ve talked to numerous artists and Etsy sellers that hand write thank you notes for each order and cringe at the thought of a stranger packing their orders in a bland warehouse. For other businesses, handling shipping directly makes the most financial sense. When your shipping volume is high enough, you can negotiate favorable rates with carriers and justify warehouse space and staff. Paying a third party to handle your shipping comes at a premium that often doesn’t make sense when you have the volume to justify doing those things in-house.
Some businesses are forced to manage their own shipping, even if they’d prefer not to. Specialty coffee roasters, like Denver roaster Servant Coffee, need to ship their bags quickly after roasting to satisfy customer expectations. A bag can’t sit on a fulfillment center shelf for weeks or months waiting to ship because then it won’t be fresh when it reaches the customer. Similarly, many artisanal Etsy shops that customize goods can’t keep a product ready to go on the shelf. Fulfillment centers don’t let you access your inventory once it’s in the warehouse, so customizing after an order has come in isn’t an option.
Managing your own shipping is also ideal for businesses with very low or inconsistent shipping volume that can operate out of a home. This keeps overhead low and avoids recurring fees for storage when you aren’t shipping things. Many artists, like Kelsey Shields Art, work on series of work and release them all at once. They can go for long stretches with nothing to ship and then have a bunch of pieces to ship at once when the series comes out.
Advantages: This is usually the lowest cost option overall for businesses with large shipping volume. You get to keep total control over the process. If you work out of your house, overhead can be low.
Disadvantages: You won’t have access to the benefits of a fulfillment center such as multiple shipping locations and the center’s negotiated rates. You can easily end up in "no-man’s-land” as you grow. Inventory, equipment, and packaging can take up significant space in your home but your volume can still be too low to justify getting your own warehouse space (see more info about CoShipping below).
Who it’s for: People making custom goods or products that must ship quickly after being produced. Businesses with low enough shipping volume that working out of a home makes sense or businesses that ship enough to justify their own warehouse space.
Using A Third Party Fulfillment Center
Some prefer to manage their own shipping while others can’t wait to get shipping off their plate! If that’s you, a fulfillment center might make sense. There are dozens of fulfillment centers out there, including Shipist in Colorado. Basically, fulfillment centers take over shipping for your business, leaving you to focus on other parts of the business. A fulfillment center provides warehousing, storing products for multiple businesses. As you make sales, you feed those sales to the center and they pick, pack, and ship your order for you. Because they fulfill for many different companies, they usually have negotiated aggressive shipping rates with UPS and FedEx that you can benefit from.
Fulfillment centers have different pricing structures, but they usually will charge you fees for storage space, receiving your product, picking each order, and variable costs for each shipment depending on the shipping and packaging cost for each order.
Advantages: Completely removes shipping from your plate. No more storing goods, packing boxes, or finding the best software options. Many fulfillment centers offer multiple locations so your transit times can be improved.
Disadvantages: You won’t have direct control over shipments or inventory any more. You won’t be able to access your inventory once it’s in the fulfillment center. For low volume or inconsistent shipping, the storage fees can be hard to justify, depending on how each center’s pricing is set up.
Who it’s for: People with medium or high shipping volume that sell items that can sit on the shelf for a while and don’t need to be customized much.
Self-Service CoShipping
This is an option unique at Shipist in Littleton, CO. Think of it as a pack and ship store meets a coworking space. We call it CoShipping. With CoShipping, you get the benefits of using a fulfillment center and managing your own shipping. We have high efficiency pack stations loaded with all of the equipment and packaging materials you need to ship just about anything. Bring your orders in, pack them up with our for sale boxes or with your own packaging, and ship UPS, USPS, and FedEx, all in one place! You’ll get access to our discounted shipping rates and packaging costs. When you’re done, just leave your packages with us. Your packages will be held securely until the carriers pick them up with our daily pickups. The whole thing is self-service, but staff is on hand to answer any questions you have.
You can bring your inventory and anything else you need with you each time. Or, optionally, you can store your goods in our warehouse. Unlike a fulfillment center, when you come in to pack and ship, you’ll be able to access your inventory. Say goodbye to closets full of packing material and garages full of inventory.
You’ll save big on UPS and FedEx shipments, especially if you ship larger items. For small shipments, our USPS rates will be comparable to going to the post office, but our space is much more pleasant than a trip to any post office we’ve ever been to!
Advantages: Allows you to get the benefits of a fulfillment center (efficient work stations, discounted shipping rates, optional storage) without having an ongoing commitment. Also let’s you keep total control over your packing process. If you’d like to use a fulfillment center but can’t because your goods can’t sit on a shelf, this is perfect.
Disadvantages: You have to be near Littleton, CO or one of our future locations to take advantage.
Who it’s for: People that ship as part of their business but find it unpleasant, mysterious, or terrifying. Anyone that enjoys working in cool spaces, doing DIY, and being part of a community of shippers that are all growing together. It’s perfect for art shipping, Etsy shipping, and other artisanal goods.
Want to discuss your shipping needs? We’re happy to talk through any of the options above to help you figure out what works best for you! Leave a question in the comments or reach out with the info below.
Call/Text 303-900-7214
Email: jacob@shipist.io
