Ecommerce and Manufacturing Your Products

Business to business usually means you create a relationship with another business for some aspect relating to what you do.  In other words you hire a company to make products that you sell in your store.  This store can be online or a brick and mortar location.  The subject of Ecommerce and manufacturing your own products can still be a business to business relationship, though it will work slightly different.

Your online business may be to sell herb starter kits. You have the fertilizer, instructions, herb packets, and plant food all wrapped up in the kit.  This is a kit you are making yourself.  So you create the little basket and wrap it up before boxing it to ship.  Where the business to business deal comes in is purchasing the items you make the kit out of.  For example if you are using baskets you will need a basket supplier, the herb packet supplier, and so on.  Each item probably comes from a different manufacturer for the kit you sell.

In this situation you must get permission from the manufacturer to sell their products as your kit.  Basically you need to state in the agreement that their company name is displayed on the products, but the concept of the kit is yours.  You may even consider striking a deal in which the company manufacturing your product will put your business name on it.  This can be expensive though.

The other business to business relationship you have is with the shipper.  You will need a shipping company that will send your products out in a timely manner.  Using the post office is one idea, but generally if you are manufacturing the kits in your home or warehouse it is easier for UPS or another shipping company to swing by once or twice a day to pick up the items you have to ship.  You can also work out an affordable deal with the shipping company that is a lot better than the post office is willing to do on a per package basis.

This is just one option you have for an Ecommerce business.  The downside is that as your business grows it can be difficult to continue to manufacture the kit because you will need more space and more employees.  Once a business becomes too big for a garage or storage unit you have to look for a different way to provide the product.

Many Ecommerce sites therefore choose a product that they can sell that is already manufactured.  In other words an online business owner approaches a company that has an herb starter kit already made up.  Since the business is small they purchase say a hundred products to store at a facility.  Each time an order is placed the owner ships the product.  As the business grows the online business then creates a new business to business deal with a drop shipper who has the products, the storage space and the employees to handle the orders.  In this case you sit back and take advantage of the revenue.