de-outsourcing: Taking work back

[Sven]

For the last few years I had my product parts picked and shipped by other people. This company gives people with that had an accident or illness a new work place if they can no longer function on "a normal level"

With budget cuts this whole industry is in turmoil and the results are stressing me out in a mayor way. Parts do not get sent correctly, shipments leave incomplete and I get a lot of grief from customers. And I can't blame them.

It has also highlighted how much difference it makes to me to be able to take some time in manufacturing if needed. When rushed, things go wrong.

So I am pondering on change. Here is what I'm thinking of doing and I'd like your feedback.

- Take back stock and again ship myself
- In stead of shipping parts I'll ship partially assembled systems. Assembly does not take much more time then picking parts and it is harder for parts to miss from the shipment. Assembly is a lot more fun than picking too.

So far the amount of time spent by me on selling a system does not change that much as for each system I also travel 2 hours to the shipping centre.

I am very curious if shipping mostly assembled systems will change the customers perception. Do you think it is a more appealing product? And could that mean I'll sell more?

Then pricing.
If the perceived quality goes up, value goes up. Also, I need to give up the freedom of more or less location independent working. But I think price level is more or less ok, I consider myself an A brand and I am the most affordable of the A brands. And I think there are good understandable reasons to have more affordable systems.

Most of the systems are sold at the start of the sailing season. What I want people to do is order early so I have a clear view of how many systems to manufacture. I'm thinking of offering a discount for ordering early:

- No discount for 2 week delivery, which will be about 10% more expensive than it is now (eu 1595,--)
- 25% off if they order 3 months before they want the system delivered
-15% off 6 weeks delivery

I've tried discounts before but people do not use them. I've offered group discounts, no enquiries.

Should I try priced discounts instead of percentages?

[FrozenCanuck]

Sven - I think all of your concepts sound worth of testing. I wouldn't consider shipping myself as a solution, more of a migration to a new fulfillment company. The rest is all good. Test away.

Where do you get traffic? Organic, paid, or both?

[Sven]

Thanks Froz,

I've been pondering on different fulfilment companies too.
But the thing is, it is complex matter. Each system is 500 parts of over 200 different types.
It seems that that can only be done well in sufficient volume or at a high price. But I am happy to sell one system a month.

If I can add perceived value by delivering mostly assembled systems, I'm happy to do the assembly.

By now all my traffic is organic.

[B-rad]

It is hard for me to give feedback on your concerns because the description of your product is a little vague. But you said it is for people who cannot work in a normal environment, so I gather that some customers may be physically disabled and would benefit greatly (or perceive great benefit) from a pre-assembled product.

It doesn't sound like something that would respond well to advance order discounts to me. To me that is more for wants, while this product sounds tailored more towards a base need.