Shipping a large order. Need advice

[BizyDad]

Hey Fam,

I got a situation on my hands. You know I run an e-commerce store. I have a potential customer placing a very large order.

The kind of order that doubles my revenue overnight.

The concern is that he wants to ship to a third party warehouse in order to then export the product. He is paying up front.

The product will be shipped from the manufacturer directly.

In a case like this, how do I protect my e-commerce store from the shipment "getting lost" at that third party warehouse? This isn't a hypothetical, we've had this happen twice (With much smaller and more manageable orders).

 

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[machinistguy]

1. Ship w/ Insurance
2. Require a signature so 3PL can't claim they never received it.
3. Explain the above to your customer before hand, and make it clear using a 3PL is at their own risk.

The customer is paying you to ship to a location. Once you've successfully delivered it, anything that happens after is 100% the customer's responsibility and fault.

Usually things like this are stated in the terms and conditions at the bottom of the quote and/or sales order you sent to the customer.

 

[BizyDad]

1. Ship w/ Insurance
2. Require a signature so 3PL can't claim they never received it.
3. Explain the above to your customer before hand, and make it clear using a 3PL is at their own risk.

The customer is paying you to ship to a location. Once you've successfully delivered it, anything that happens after is 100% the customer's responsibility and fault.

Usually things like this are stated in the terms and conditions at the bottom of the quote and/or sales order you sent to the customer.

Thanks.

Any idea how to get insurance on the shipment when I am not technically the one doing the shipment?

 

[machinistguy]

Thanks.

Any idea how to get insurance on the shipment when I am not technically the one doing the shipment?

When you send the RFQ (Request for Quote) and Purchase Order to your manufacturer (who I'm guessing is the one shipping), include in the terms that all shipping carriers must have shipping insurance that covers the value of the shipment. Ask to see their insurance. I'm not sure if you're manufacturing overseas and if that changes things, but when we're buying something expensive that's hard to replace, everyone who touches the item has to have insurance covering if they damage it or something happens to it.

 

[BizyDad]

When you send the RFQ (Request for Quote) and Purchase Order to your manufacturer (who I'm guessing is the one shipping), include in the terms that all shipping carriers must have shipping insurance that covers the value of the shipment. Ask to see their insurance. I'm not sure if you're manufacturing overseas and if that changes things, but when we're buying something expensive that's hard to replace, everyone who touches the item has to have insurance covering if they damage it or something happens to it.

Perfect. Thanks man.

Funny, when it's a 20k order, we don't bat an eye at this stuff. We have a system and a process and we follow it and it works.

This order is so far outside the range of what we've generated over the years... It is tripping all kinds of alarm bells.

But we are following the process. And it is working. I think this is a real company doing real things and has a real reason to place an order this size.

We don't know what we don't know, but I am slowly learning that this is just another order which happens to come with a couple extra zeroes.

 

[MitchC]

Not sure if this helps

What Are Shipping Terms? What Are Incoterms?

Basic information regarding shipping terms, a.k.a. INCOTERMS. What are some examples of the terms? What do they do and how do they work?

www.txintlfreight.com

I'm sure if he's placing an order with you that large you are all over it and so is he

Basically the different terms for order contracts and where the liability changes hands for each

Yours looks like it probably comes under DAP, with the place being his 3PL

I would ensure you have the same terms with your manufacturer

Basically they are responsible up until it's delivered at his place

 

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[amp0193]

You know I run an e-commerce store

I didn’t know that, I thought you were in real estate.

This order is so far outside the range of what we've generated over the years... It is tripping all kinds of alarm bells.

It should. Of the 4 times I’ve had a “very large” order, 3 of them ended up being fraud. Thankfully discovered before I shipped product.

Sounds like this one has some legitimacy to it though. Get that upfront wire transfer and wait a few days and then you’re good to go!

Congrats.

I’d be a little nervous shipping direct personally, as I wouldn’t want them to learn my manufacturer and then just cut me out of it on the re-order.

 

[MJ DeMarco]

Such a shame that as entrepreneurs we can't celebrate these huge wins at 100%, and instead they come packed with anxiety and worry as we wonder if it is real or fraud.

I've dealt with this as well with large book orders as well, but obviously, not with $1000s of dollars at risk.

 

[BizyDad]

I didn’t know that, I thought you were in real estate.




It should. Of the 4 times I’ve had a “very large” order, 3 of them ended up being fraud. Thankfully discovered before I shipped product.

Sounds like this one has some legitimacy to it though. Get that upfront wire transfer and wait a few days and then you’re good to go!

Congrats.

I’d be a little nervous shipping direct personally, as I wouldn’t want them to learn my manufacturer and then just cut me out of it on the re-order.

I don't want to say too much, but they know the manufacturer. The manufacturer is a large multinational whose name you know.

Our rep there looked up this company. They have an existing relationship with another group that works with another division in another state.

So on the one hand, that gives me comfort that they are indeed real.

What I suspected was going on is that they are going to leverage our quote, take it back to those guys to leverage them.

That still may be the case. But it seems just as likely that something went wrong with the previous relationship, and we may become their new supplier. Fingers crossed. We will know more later this week.

 

[amp0193]

I don't want to say too much, but they know the manufacturer. The manufacturer is a large multinational whose name you know.

Is it a customized product they make exclusively for you without comparable alternatives?

Or is it a private label situation?

If the latter, I don’t get why they would order from you. If the former, makes more sense.

 

[BizyDad]

Just a quick little update...

The opportunity is real. Turns out, the guy told us on the first call why he was coming to us. My biz partner just forgot to listen.

Without saying too much, I'll just say he trusts us more than other avenues.

That said, we learned last night this potential order has raised flags and internal politics might leave us on the outside looking in. (Seems like the guy's fears are grounded in reality). The manufacturer has already cut our supplier out of the deal. Our opportunity has become very strange but is hanging on by a thread.

Even if it goes away, this has been an incredible learning experience and I want to thank everyone here for their support and helpfulness.

This place is a hidden mastermind and not enough people tap into it.

 

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[WillHurtDontCare]

The kind of order that doubles my revenue overnight.

Even if it goes away, this has been an incredible learning experience and I want to thank everyone here for their support and helpfulness.

hell, even if it falls through, now you're aware that these types of opportunities exist and you have a new huge lever that you can pull on your business. Congrats man!

 

[Lorenzoo]

Just a quick little update...

The opportunity is real. Turns out, the guy told us on the first call why he was coming to us. My biz partner just forgot to listen.

Without saying too much, I'll just say he trusts us more than other avenues.

That said, we learned last night this potential order has raised flags and internal politics might leave us on the outside looking in. (Seems like the guy's fears are grounded in reality). The manufacturer has already cut our supplier out of the deal. Our opportunity has become very strange but is hanging on by a thread.

Even if it goes away, this has been an incredible learning experience and I want to thank everyone here for their support and helpfulness.

This place is a hidden mastermind and not enough people tap into it.

can't you get another manufacturer ? or is it bound to specific this one

 

[Lorenzoo]

i hope you dont get scammed man

 

[BizyDad]

can't you get another manufacturer ? or is it bound to specific this one

We are a retailer. This specific product is high tech, not something we can just have manufactured ourselves and take to the markets we are taking it to.

We could sign with another competitor of our manufacturer (and do for most of our products), but this is an expansion for us and signing another manufacturer would look bad at this time with this manufacturer, especially considering the manufacturer asked us/invited us to expand into this market.

This isn't something someone just off the street could get into and I doubt another manufacturer would take us seriously in this space.

Yet.

 

[BizyDad]

Welcome to my telenovela.

When last we spoke, I thought the door got slammed shut on us. There was a slight crack.

Today my partner got through that crack. We did two phone calls, one with the Latin American team, and one with our client.

In a bit of a miracle, we're looking to put them on a call together, and this deal might still have a path forward. I would say we now have a good 40% shot at closing this. Maybe better. Both sides have already backed off their biggest negotiating sticking point...

Now it's going to come down to price.

As hard as I push my business partner to keep growing, I have to give him a lot of the credit for this. He pulled a rabbit out of the hat today.

I tried taking some extra time to praise him, and he asked me to just move on. We got work to do.

Which I think also represents his growth as a business owner.

For anyone reading this, like 5 years ago the guy was, in his words, "a terrible journalist". He wasn't born to be a business owner or entrepreneur or or salesman or anything like that. He still struggles with imposter syndrome, but he's gotten a lot better.

And @Kak for the record, I tried to get him to be a copywriter...

Imagine how much farther we'd be if he was a copywriter!

Listen newbies in the Fastlane Fam, it's one day at a time. One step at a time. You too can do it.

 

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[BizyDad]

Final Update (I think)

The big opportunity was real. Unfortunately, our manufacturer/supplier mucked it all up and we were too small a fish to get past the finish line. In the end it was nice thinking I could ship millions of dollars of product to a Latin American nation, and maybe someday we will, but we are moving ahead with other initiatives for now.

Seriously folks, this deal died and was revived at least 4 more times since my last post. Lololol.

Yes, I know some will tell us to charge ahead in this direction, but right now we have 7 different opportunities and are only 3 people, so we are choosing the best 3 for us and focused on growing that way. Someday we might ship internationally, but today is not that day.

I mentioned a second big order (just not as big). We did close that one and the client has placed 4 orders so far totalling roughly $90k. Not sure if they will ultimately hit the 7 figure range I estimate, but at this pace they will be several hundred thousand of revenue this year.

I want to thank everyone once again for your insight and help. I am grateful to have virtual mastermind like you guys.