Welcome back for part 2! In case you missed it, you can check out our first part of this series on the upstream supply chain here!
Your product has been sourced, manufactured, QC’d, and shipped. Unless you ordered the MOQ of pop sockets, you probably won’t be able to keep your inventory in your garage. (Maybe you could if you’re Bruce Wayne or Tony Stark. Even then, you wouldn’t have time to pack and ship orders!) Let’s take a look at the functions of the downstream supply chain players that are going to help you get your product to your final purchasers.
Downstream Supply Chain
A little bit of business before we dive into the downstream supply chain. We’re shifting from referring to the brand owner as the Buyer to the Seller. During upstream supply chain when the product is being manufactured and materials are being purchased, the brand owner is the Buyer. Now that the product is ready to go to the end consumer, the brand owner assumes the role of the Seller. Keep that in mind as we work our way downstream.
Downstream supply chain refers to any and all businesses involved in the logistics, distribution, and ultimately the sale of finished goods created in the upstream supply chain. The three major players are warehousing, distribution centers, and of course, end consumers.
Warehousing and Distribution
Warehousing and distribution are illustrated and talked about as two separate operations. However, there are times where the warehouse may handle distribution internally. For this reason, we’ll be reviewing them in the same section. Sellers will organize logistics through their freight forwarder for their product to be sent to their desired warehouse. Warehouses receive the goods from the upstream supply chain and when applicable, often assist with FBA prep. In certain cases, they will handle the distribution of goods to another warehouse such as FBA (Fulfilled by Amazon), or ship your items directly to the end consumer. Some freight forwarding companies have their own warehouses. More often than not, these FF warehouses are third-party logistics (3PL) centers.
Should your distribution center be a separate entity from your warehouse, your distribution center will receive your product ready to be shipped to the end consumer. Your distribution center is responsible for fulfilling your orders.
Your distributor/3PL will often have partnerships with a variety of shipping carriers (FedEx, UPS, USPS) to get discounted rates for shipping labels. They can in turn pass those discounted rates onto their customers which can help your business in a variety of ways. Aside from cost savings, this offers sellers the opportunity to sell on more platforms and offer faster shipping for a better rate than if you were shipping the items from your home. All these benefits are offered while having someone else handle the entire process for you.
Last, but certainly not least, the end consumers! (Arguably the stars of the show). The end consumer, or final purchaser, will be different for each Seller. Well, Sellers in different industries that is. Naturally, your clientele is determined by your product. Where you choose to market and sell your product is up to you! While many choose to sell on Amazon, others may opt for Shopify, eBay, or other e-commerce sites. You’ll want to do some research upfront to decide which platform is going to give you the best opportunity for growth.
Noviland offers tailored 3PL services to help you scale your e-commerce business. With bi-coastal warehouses offering over 500,000 square feet of space collectively, Noviland is ready to store and ship your items! Our services include:
- E-Commerce Order Fulfillment
- FBA Prep and Forwarding
- Cross Docking
- Order Deconsolidation
For more information on our services and our warehouse locations, send us an inquiry!
Lisa Kinskey is the Marketing Assistant of Noviland, Inc., a rapidly growing sourcing & purchasing solution making sourcing from overseas factories simpler. Lisa has a background in sales, marketing, and event planning, and currently resides in Duluth, Georgia.