Introduction
A business invests a significant amount of its resources trying to line up suppliers and manufacturers. A lot of the market is made up of brokers and merchants bringing the products to the consumers.
However, it wouldn’t be feasible if the broker could line up its own supply by ordering from the competition. This is why the blind shipping approach was implemented.
Introduced as a way to keep the competitive edge, this shipping approach quickly gained popularity. The logistics sector had to figure out feasible approaches to enable merchants to safeguard their supplier discoveries.
As dropshipping became a popular thing in the e-commerce sector, the blind shipping approach became a standard shipping approach.
In this blog, we will understand the whats and hows of the blind shipping approach. This will allow you to measure the right fulfillment approach for your e-commerce store.
What Is Blind Shipping?
Blind Shipping is a shipping method where the seller or the mediator of the sale chooses to hide the supplier and/or customer information on the shipping label.
This shipping method is usually used by brokers and mediators to avoid direct contact between the buyer and the manufacturer/supplier. This is done by creating a separate Bill of Ladings (BOL) for the manufacturer and the carrier.
In the e-commerce sector, blind shipping is typically adopted by drop shippers. The approach allows them to retain their customers and avoid confusion during the Return Merchandise Authorization (RMA) and returns process.
Along with this, they can add their margins to the wholesale prices provided by the customers to compensate for the marketing and sales investment made.
Additionally, third-party merchants can keep their discoveries of good manufacturers and amazing wholesale prices to themselves. Your competition can’t make a purchase from your platform and get an insight into your procurement operation.
However, blind shipping adds to the normal challenges of the e-commerce shipping process. The carrier finds it difficult to locate the sender or the receiver as multiple BOLs have to be created. This may result in shipments getting lost in transit or being stuck due to missing information.
5 Key Benefits of Implementing Blind Shipping for E-commerce
One might wonder why someone would want to go the extra mile to hide their manufacturer/supplier information. Here are five key benefits of implementing the Blind Shipping Approach for E-commerce merchants.
1) Discreet Supply Chain Management
Using this shipping approach, merchants can ensure a regular flow of orders from their customers. Since the supply chain is majorly handled through third-party services, it helps secure the supply chain elements. Your operations are converted on a need-to-know basis so that you won’t have to worry about losing hard-earned customers.
2) Competitive Advantages
As a third-party merchant, lining up a manufacturer/supplier for a certain product is the main task. It won’t be feasible if your competition can just order off your website and find out these details of your business. Therefore, the blind shipping approach protects your supplier information, reducing the risk of the competition poaching your source. This will ensure that the competitive advantage you have in the market is protected, and you can freely think about expansion and growth plans.
3) Limited Liability
As blind shipping means that you will be shipping directly from the supplier or manufacturer, your inventory and storage liabilities are reduced significantly. The responsibility of handling the shipping and returns is also transferred to the manufacturer. The merchant will then be able to focus all of its efforts on outreach and marketing.
4) Improved Profit Margins
Blind shipping allows you to improve your profit margins by establishing your platform as a brand. Additionally, as you safeguard your vital supplier information from your competitors, you can now control the pricing and flow of the product in the market. All these factors boost the bottom line number.
5) Scalable Business Model
With Blind Shipping, your distribution responsibilities are being transferred to the manufacturing partners. As your sales grow, you will not take a lot of additional distribution workload. This allows you to focus your resources on further growth on the business. This can include expansion into newer geographies as well as investing in better marketing and outreach channels.
How Does Blind Shipping Work for E-commerce?
The blind shipping approach may seem complicated on the surface. However, once you have the setup, it is quite simple. Especially for e-commerce businesses, they can configure their platforms to send their orders directly to their manufacturer’s/ supplier’s warehouse.
When the first BOL is created, the supplier’s information is replaced with the information of the merchant/ company. This is typically sent to the consignee so that they have the information about the package they are receiving. The second BOL is used by the shipper, in which the supplier information is typically redacted from the document.
Once the order is ready to ship, these two separate Bill of Ladings are created. This process can also be simplified if you notify your carrier that you want to keep the shipment blind. Most carriers will guide you. However, there are some carriers that require you to submit the paperwork beforehand.
3 Main Differences Between DropShipping and Blind Shipping
When you take a closer look at the approach of Blind Shipping, it might be easy to confuse it with drop shipping. To Clear this confusion, here are three key differences between Dropshipping and Blind Shipping.
1) Returns Liability
If you are using the Blind Shipping approach, you will have to clear it with the supplier if they will handle returns for faulty or defective products. This is because many suppliers do not deal with these returns. This is because you take responsibility for selling and marketing the product in the market.
On the other hand, in drop shipping, the supplier does take responsibility for malfunctioning products. However, you will have to undertake shipping responsibilities. Therefore, faulty and defective products won't be your headache anymore.
2) Quality Control Access
In both cases, the sellers have very little control over the quality of their products. However, drop-shippers have the advantage of handling their fulfillment. This allows them to implement additional measures for quality control and reduce the risk of losing customers due to poor quality.
However, in the blind approach, the merchant does not mediate in the fulfillment process. As a result, there is virtually no quality control process. Therefore, customer experience can be seriously hindered in case of oversight from the supplier.
3) Difference in the Profit Margins
A drop shipping initiative usually requires more capital and effort. Additional expenses for shipping, inventory, storage, etc., can take a nice bite out of your profit margins.
On the other hand, the limited liabilities associated with the blind shipping approach allow merchants to maintain their profitability and leave much more room for growth.
Conclusion
The blind shipping approach is like an antivirus for your business. It allows you to protect crucial data from being exposed to the outside world. Protecting your business interest without hampering your operations, the strategy allows you to take a better approach to the middle-man business model. The above blog has hopefully outlined the key factors of the concept.
FAQs
1) What kind of e-commerce businesses prefer blind shipping?
The blind shipping method is preferred by dropshippers and merchants from the e-commerce sector. These merchants tend to use the blind shipping method, as their supplier/manufacturer is the real asset of their business.
2) Can carriers process an order as a double-blind shipment?
Double-blind shipment is when you retract the information of your supplier and your customer from the shipping documents. There are a few carriers that will process a double-blind shipment. However, you might have to fill in additional documents or place a request in advance with your shipping partner to enable this.