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- Feb 17, 2015
Back of the napkin whats the cost look like for 3rd party? You say you're just treading water as is but would it require a 3% price increase? 10%?
That seems like the logical choice (third party , wether by increased price or cheaper sourcing) as it solves more than the immediate problem at hand (allows you to focus on other areas)
Have you tested how sales react to different prices? (Is the current price actually optimized or did you just land on it because its in the range of competition?)
Thanks for your reply. We ship on average 4000 orders a month, the fulfilment company want £0.70p per item to pack. So to cover those costs i would need to increase sales prices by that for starters. That's if i couldn't get the product cost down. Our products sell for between 8.99-12.99 usually.
Prices are pretty competitive in the niche, it's a non desirable commodity type product so putting the prices up too much would hurt sales.
In an ideal world i'd pick 3rd Party all day long, at the moment to keep the costs down i'm not even insured for the stock in my warehouse that i've got!
Plus the UK minimum wage has just increased by around £0.30p an hour so the new warehouse employee would need paying more!
I suppose the crux of it is the additional cost each month which is my major concern. 3rd Party fulfilment is the last step to making my business 100% location independent free!