The Realities of eCommerce, Part 1: Making a Product
Have you ever wondered what truly goes into bringing a new product to life in an ever-changing online landscape? In part one of our exploration into the realities of eCommerce, we share our experience with the often-unseen challenges that manufacturers like us face when it comes to making the products that you all love and enjoy. From the initial investment in creating a new product, to navigating the intricacies of global shipping and the impact of tariffs, we'll shed light on the financial and logistical hurdles involved. Join us as we discuss these challenges and our commitment to forging a more transparent and sustainable path forward.
Our manufacturing cycle focuses on five stages, which you can see outlined in the graphic below. We will touch on each of these points in this article, starting with the process of designing a product.
Product Design
Before we ship out your Bamboozle order, a lot happens behind the scenes to get that product to your doorstep. Our journey begins with the initial product design. For us, bringing a new product to life is an intricate process, often spanning eight months to over a year from that initial spark of an idea to the moment it arrives in our warehouse.
The very first step in this venture is product design. Any time we create a new product, we seek out to make something that combines aesthetics, functionality, and of course sustainability. Everything is intentional, from the shape of the product to the colors we use. While you can dive deeper into our core design values in The Design Philosophy Behind Bamboozle, it's important to understand the investment this stage entails. We're talking about a financial commitment that can range anywhere from $20,000 to upwards of $75,000 or more!
A substantial portion of this investment goes into creating the product mold. For those unfamiliar, a product mold is a precise and robust casing that acts as the blueprint for our products, giving our materials their final form. We primarily use injection molding, a process where heated liquid material is carefully injected into this mold – think of it like a high-tech, industrial-strength Jell-O mold! In our case, Bamboozle products are currently made with a sustainable material, called Astrik. This material is made up from PLA, Bamboo, and a small amount of calcium which helps give our products more durability.
Once the design is finalized, a process that can involve numerous brainstorming sessions, countless calls and emails, and painstaking attention to every last detail, the next step is receiving physical samples. This isn't just a formality; it's our opportunity to catch any potential hiccups before mass production begins. And trust us, sometimes those hiccups can be quite memorable!
Take, for instance, the tale of the oversized bunny plate:
A few years back, we were thrilled about a charming bunny-shaped plate we had worked on for a special collaboration. The design was perfect, the material selection spot-on, and the chosen colors were delightful. However, a crucial detail got lost in translation: the actual size of the plate. When the first sample arrived, let's just say we had a good laugh (after the initial shock!). This "bunny" could have easily doubled as a serving platter for a small gathering – it measured over three feet long! This hilarious miscommunication, while providing a memorable office anecdote, unfortunately meant we had to revisit the design and endure a few more weeks of delays.
The product design and initial sampling phase can take multiple months to complete – a testament to the precision and care we put into every Bamboozle creation.
Manufacturing, Minimum Order Quantities, and Shipping
With approved samples in hand, our team can share a collective sigh of relief before moving on to phase two. The next step is giving the green light for mass manufacturing. This isn't an instantaneous process; depending on the volume we need and the complexity of the design, it can take anywhere from 30 to 60 days, or even longer. Think of it like getting in line at a very busy bakery. Our production run must be scheduled alongside all the other orders the factory is juggling.
Speaking of volume, here's another key reality of bringing products to you: Minimum Order Quantities (MOQs). For a factory to efficiently and profitably produce an item, they need to manufacture a certain minimum number. This necessity boils down to basic economics. If a product costs $10 to manufacture, producing only a small quantity wouldn't allow the factory to cover its expenses and ensure a profitable return. Therefore, they establish MOQs. These minimums can vary greatly depending on the factory, the specific product, and the raw materials involved. At Bamboozle, we typically have an MOQ of 2,000 units. This means that every time we decide to introduce a new product, we're committing to producing at least two thousand individual pieces! This significant commitment is why we put so much thought and care into selecting each new addition to our collection. We have to be confident that it's something you'll love and that aligns with our brand ethos.
At Bamboozle, our commitment to sustainability extends beyond the materials we choose; it also influences how our products are made. We actively work with our manufacturing partners to implement principles of lean manufacturing. This approach focuses on streamlining production processes to minimize waste in all its forms; from reducing excess raw materials and energy consumption to optimizing production flow and minimizing defects. By striving for efficiency and eliminating unnecessary steps, we not only aim to control costs but also significantly reduce our environmental footprint throughout the manufacturing process. This conscious effort to embrace lean practices is a crucial part of our broader mission to operate responsibly and create products that are both beautiful and sustainable.
The journey doesn't end once the products are made, of course. The next hurdle is shipping them from overseas to our warehouse in the U.S. This leg of the journey can come with its own set of unique challenges. A vivid example of this occurred during the Covid-19 pandemic:
The years 2020 and 2021 threw a massive wrench into the gears of global shipping. A severe shortage of available shipping containers sent prices skyrocketing. What was once a cost of around $2,500 for a single container suddenly ballooned to an astounding $20,000 or more! We had just completed a large production run and had 15 shipping containers worth of our beloved Bamboozle goods ready to make their way to the U.S. This coincided with widespread port closures and a significant reduction in available dockworkers. It was a logistical puzzle of epic proportions! Thankfully, relationships we've cultivated with our manufacturing partners and the port authorities proved invaluable as we are able to coordinate all 15 containers to arrive on-time.
We use public tools like VesselFinder to track container ships. As you can see in the image below, there are thousands of ships transporting goods at any given time.
After the investment in designing the product, producing it, and shipping it overseas, there is one more crucial step that involves a currently popular topic: tariffs.
Tariffs & Importing
There’s a lot of talk these days surrounding tariffs and how they impact everyone from consumers to businesses alike. There’s a lot of information out there and it can sometimes be confusing to know what is accurate and what isn’t. So you may be asking yourself “what is a tariff?”
A tariff is a tax imposed by the government on goods imported from a foreign country, applicable to specific items or broad categories.* When our shipments arrive, the federal government assesses the declared value of the goods, and as the importer of record, Bamboozle is responsible for paying these tariffs, which are separate from the standard shipping and handling costs.
To illustrate this with simplified figures: Imagine we're importing a shipment of products with a value of $20,000. If the government has a 20% tariff in place for this type of product, we would be charged an additional $4,000 in tariffs. It's important to know that tariffs are added on top of other duties and fees associated with the overall importing process, such as harbor maintenance fees, customs clearance charges, and inspection costs.
Now, beyond this basic calculation, the world of importing and tariffs gets even more nuanced. Tariff rates can fluctuate significantly based on a variety of factors, including international trade agreements, political relations between countries, and the specific classification of the goods being imported. A product's classification directly dictates the applicable tariff rate, and even unintentional errors in classification can result in significant penalties and costly delays.
The landscape of international trade is constantly evolving. New trade policies can be implemented, existing agreements can be renegotiated, and unexpected events can lead to changes in tariff structures. For businesses like ours, this means staying constantly informed and adaptable. We have to closely monitor these changes, analyze their potential impact on our costs, and adjust our strategies accordingly. This might involve exploring different sourcing options in the long term, or carefully considering pricing adjustments to ensure we can continue to offer our sustainable products at accessible prices. The complexities extend to managing the flow of goods through customs, ensuring all documentation is accurate and compliant with regulations from both the exporting and importing countries. It requires a dedicated team and strong relationships with customs brokers to navigate this intricate web and keep our products moving efficiently from our manufacturing partners to our warehouse and ultimately, to your doorstep.
Bringing a new Bamboozle product from a mere concept to your doorstep is a journey filled with intricate steps and challenges. From the initial design phase and the creation of essential molds, through the complexities of overseas manufacturing, to the often-turbulent waters of global shipping and the realities of tariffs, the process is far from simple. We hope this peek behind the curtain has shed light on the dedication, investment, and careful consideration that goes into making the eco-friendly and thoughtfully designed home goods you trust and enjoy. Stay tuned for part two, where we'll explore what it takes to sell a product online as an eCommerce retail business.
Leave a comment