Imagine yourself at your favorite grocery store. You buy one of their many store-branded snacks — let’s say those mouth-watering dark chocolate peanut butter cups. When you get home, instead of finding a receipt in your grocery bag, you discover a slip of paper with the snack’s original supplier listed, as well as the much cheaper price that the store initially paid for the item. Seeing that your beloved grocer is selling your peanut butter cups at a higher price than the other company, you plan to buy directly from the original supplier next time.
This loosely describes the consequences resellers and middlemen want to avoid when using a logistics tactic called blind shipping. But is it a worthwhile strategy for your organization?
Defining Blind Shipping and Why It’s Important
When a shipment is delivered through a traditional dropshipping method, the supplier or manufacturer ships the end product directly to the customer. The package includes a bill of lading (BOL), or an invoice. This bill of lading will include important information such as details about the items included and supplier information, all easily noticed by the customer.
So what is blind shipping and where does it come into play? Retailers will often purchase products from suppliers and then turn around and sell them at higher prices to their own customers. As middlemen, they don’t want these customers to discover the identity of their suppliers when they ship the product with a BOL directly to the customer.
Enter blind shipping. With blind shipping, traditional dropshipping still occurs, but the supplier’s information is kept anonymous on the BOL. The selling organization will often include their own name and branding in the supplier’s place, so their customer only sees the seller’s name on the shipment they receive.
The Benefits of Blind Shipping
As a go-to supply chain management strategy for resellers, blind shipping provides important competitive advantages.
Brand Protection and Supplier Anonymity
With blind shipping, you can hide the identity of your suppliers from your customers. The customer assumes they’re ordering directly from you without knowing the original manufacturer. Not only does this prevent customers from buying from the actual supplier (which would result in a loss of business for you), blind shipping allows you to maintain a steady, long-term relationship with the customer with no supply chain vendors in the picture.
In addition, supplier anonymity allows you as the retailer to protect your brand. With heightened retail competition today, blind shipping will hide your supplier from competitors. This is especially vital if your supplier allows you to provide better products or sell them at more affordable prices than your competitors. The last thing you want is your competition to discover the identity of your supplier in this situation.
Supplier Shipping and Inventory Management
With blind shipping following a traditional dropshipping method, you can pass along key supply chain management needs to your suppliers. Instead of managing inventory and shipping, your suppliers will do it for you while remaining anonymous to your customers. This frees you up to focus on other important areas of your business.
The Challenges of Blind Shipping
While blind shipping has its benefits, it can present some drawbacks to organizations like yours as well:
More Complexity, Higher Costs
Because of its intentionality in hiding supplier information, blind shipping can require multiple BOLs during shipment, taking more time and creating more opportunities for mistakes to occur (such as using the wrong BOL and misrouting freight). Due to this complexity, blind shipping can require additional fees. On top of this, dropshipping is already a costlier way to ship due to suppliers managing inventory and logistics for you, so blind shipping cuts further into your profit margins.
Loss of Supply Chain Control
With suppliers shipping their products directly to your customers, blind shipping puts the supply chain—and your product’s quality—into the hands of your suppliers, not you. You have to trust that your suppliers are providing both quality products and reliable shipping protocols that will ultimately please your customers. But if the product is below customer expectations, you may have to manage returns (and deal with angry customers) yourself, as some suppliers will refuse to handle your returns.
A Reliable 3PL: A Better Alternative to Blind Shipping
While some companies are pursuing blind shipping strategies, many more are choosing a better, more well-rounded alternative by partnering with third-party logistics providers (or 3PLs) instead. At Smart Warehousing, we can manage your inventory, logistics, and shipping needs cost-effectively, while providing custom packaging and labeling that highlights you, not your suppliers. With our help, you can have peace of mind knowing all your supply chain needs are in our capable hands. Contact us today to learn more.