SOURCING CASE STUDY

If our client had used Back at the Hive for sourcing their first production run, they would have saved $24,100 and put less money down for the deposit, lowering their risk.

BACKGROUND

Our client ran a very successful KickStarter campaign for a product they had designed.  Because they had no sourcing or production experience, they hired a sourcing agent to work on their first production run.  The agent was able to organize the following deals:​

 

 

MOQ:                      10,000 units

Price/Unit:            $ 3.76 FOB Shenzhen

Tooling Fee:          $ 8,000.00

Embossing Fee:    $ 1,000.00

Terms:                    50% deposit/50% balance after inspection

Total Spend:          $46,600 ($23,300 deposit/$23,300 balance after inspection)

 

 

THE BACK AT THE HIVE APPROACH

For their second production run, they hired us to source the same product so we reached out to our factory contacts in China and were able to get a very competitive rate for a higher quality product.

 

MOQ:                      3,000 units

Price/Unit:            $ 2.20 FOB Shenzhen

Tooling Fee:          $ 0

Embossing Fee    $ 0

Sample Fee:          $500 (includes three patterns and shipping fee for samples)
Terms:                    30% deposit/70% balance after inspection

Total Spend:          $7,100 ($1,980 deposit + $500 sample fee/$4,620 balance after inspection)

 

 

RESULTS AND BENEFITS

Based on the above details, if our client had used us for the first production run, they would have saved $24,100 and put less money down for the deposit lowering their risk.

 

Going forward, they will save $1.56 per unit, equating to tens of thousands of dollars per year.

 

“'Tis the worker bee back at the hive that makes the world sweet with honey.”

   

© 2020 by Back at the Hive 

San Francisco, California

- author unknown