In 2016 80sTees started listing products on our website that weren’t in stock in our warehouse. The way we started was by transitioning any products where our suppliers offered dropshipping to a hybrid model where we would sell our stock if we had it or route the orders to our supplier if we didn’t. Also, any new product that we could add to the site without bringing in stock is one that we would never purchase inventory for.
This saved the business. We were able to greatly expand our catalog while converting inventory into cash. Since the business was losing money freeing up this money from being stuck in inventory was a what allowed me to continue to invest and improve our processes as we transitioned to a new business model.
There are downsides to drop shipping. One is a loss of control. The other is turnaround time. Back when I had inventory in the building if an order was placed at 5:30 PM on a weekday in December we would ship it that same day. Also, since most of our drop shippers use direct to garment printing each individual shirt is more expensive than buying 144 or 300 pieces in a “print run”.
Because of the disadvantages of drop shipping I would sometimes order print runs of our top selling tees to keep in stock. I did this a ton during the ecommerce covid boom and in fact I would say it was somewhat of a necessity because all of my suppliers were so busy that they got to the point they were 3 weeks behind. My customers weren’t happy to wait 3 weeks. By ordering some top sellers for stock they were able to shift production to a silk screener that wasn’t as busy and I reduced my per piece cost and offered better service on at least a few top selling SKUs.
But here we are 5 years later and I still have a few pieces of inventory from the covid boom. That money has been inaccessible to me for 5 years, and since space isn’t free there is a carrying cost. As recently as 2023 during the Christmas season I was stocking some Christmas themed shirts. Last week I made the decision to throw away about 100 of those shirts I still had left in size medium because the silk screened version is different than the direct to garment printed version and the shirts are often worn together in groups. So even though I paid less per shirt now I need to subtract the cost of those shirts that I just threw away from any profit I made by “paying less”.
The reason I wrote this post is as a reminder to myself that buying in bulk may seem less expensive but in the end it’s often not as big a savings as it may seem.