Wednesday, July 22, 2009

Selling "Stuff" Part Two: Fulfillment

If you are going to get serious about selling products online, you'll have think about how you'll get them to your customers. To give you an idea of all that goes into the process, here's one company's list of steps. Fulfillment Services

If you are doing a relatively low level of business, you can handle the shipping out of your house. The popularity of eBay has turned a lot of people into shipping experts. From-the-home shipping as been facilitated with priority mail and free priority boxes, labels you print yourself, scales that calculate postage, and so on.

To give you a sense of what you'll deal with if you do your own shipping, here is what Yahoo has made available about using UPS. Shipping Manager Overview

If you need bulk shipping supplies, you might want to check Sam's Club or Costco. You can also comparison shop for supplies online. Here are several sources, though you should do your own search once you determine what you need.
ULINE
PackagingSupplies.com
Papermart

There are a lot of tricks that online commerce experts have learned over the years which you can apply. For example, it used to be that direct marketers would offer attractive product prices and then inflate shipping charges to pad the sale. Now that free shipping is popular, the products might be priced higher to cover the difference.

Here's a resource specifically directed to musicians. Should you handle fulfillment for the merchandising webpage yourself?

If you decide your merchandising business is big enough to outsource fulfillment services, you'll find many companies that do this. For example: Fulfillment by Amazon - Let Amazon Ship for You

Some companies specialize in working with bands. Here are two examples.

Musictoday
Musictoday couldn't possibly coordinate orders of this scale, complexity, and precision without state-of-the-art warehouse-management software and equipment, such as handheld scanners and a $200,000 automated packing machine. The logistics are made even gnarlier by the special offers that bundle in exclusive knick-knacks and routinely turn the sale of a single CD into a shopping spree. It's a fine example of Capshaw's vision of the symbiotic artist-fan relationship--fans get special items, the artist gets the profits. But that kind of customization creates a fulfillment nightmare that would challenge any retailer--and bring a hungover band to its knees. All the more amazing that Musictoday boasts 'a 98.4% to 99.8% accuracy rate,' according to COO Del Wood.

The other side of the warehouse is like the stash of some obsessive-compulsive collector: 30,000 items from about 400 clients. The shelves, lined with different-colored bins, keep going and going. Ramones flip-flops. Cans of Arnold Palmer iced tea. AC/DC boxer shorts. And behind a locked door, pricier items, like a $5,000 lithograph signed by the Stones. The inventory, too, is organized for maximum efficiency, with the fastest-moving items on the front racks, within easy reach--"nose to knees," as Hubbard says. "Way Behind The Music," Fast Company, 12/19/07
Factory Merchandising
In traditional online merch contracts, the band authorizes the merch company to sell an exclusive item, and that company then pursues sales online. The merch company manufactures the merch and/or receives the merch from the band, then sells it and takes a percentage of the total sales. The usual rate is around 30% of the total sale. With our arrangement, the band retains complete control over what is being sold, and how the sales are made. The products are sold through the bands own website, so there is no need to license the merchandise rights to another company. The band simply decides which items to list for sale, and our fulfillment company fills the orders made through the band's website.

... The fulfillment company charges exactly HALF of what most companies charge for fulfillment services: only 15% of the total sale. That means on a $15 t-shirt sale, they only take $2.25 to package and ship the order and handle all payments and returns. Secondly, prices at Factory Merchandising are consistently lower than those of other merch companies. Even though this arrangement is made available through Factory Merchandising, we will not charge an additional fee for the service. The manufacturing costs are the same as they are for tour merch. In addition, since we already have the screens for the band's designs, there won't be an additional set-up fee to make the merch for the store. As an example, suppose you sell a t-shirt online for $15. The manufacturing cost for a one color shirt is only $4.25, and the fulfillment company only takes $2.25 to ship the order. That sale returns $8.50 to the band, a much higher return than most bands receive for their online merch.
Here are other companies that provide music merchandise and fulfillment.
BUYSWAG
nimbit
Zambooie
Audiolife

Here's another list. Fulfillment | The Indie Band Survival Guide

My discussion of music merchandise fulfillment is by no means comprehensive. There are many resources available from experts in direct marketing, online commerce, and retailing. My purpose is to make people aware of the complexities involved. This is important if everyone in the music business heads this direction.

Suzanne Lainson
@slainson on Twitter

4 comments:

  1. I buy a lot of music by bands that don't have that mass audience appeal. Most of the time you can buy directly from their label. That way they get the money. Also, buying from them at shows is a great way to know the money gets in the band's pockets.

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  2. I prefer to sell digital goods and access to membership sites by using wordpress websites on hostgator web hosting, 1shoppingcart, paypal, and email autoresponders, but some people will want tangible versions.

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  3. another great company geared just to the music industry is Total Fan Shop... you can find out more at www.totalfanshop.net

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  4. Your purpose is to make people aware of the complexities involved, especially for those who are doing a relatively low level of business, and you did that!Thanks for sharing!
    Kindest regards,
    classyresumewriter.com/resume_editing

    ReplyDelete