I'm selling home decor items from Morocco to the US. Shipping is the main cost concert as sometimes it costs more than the item itself. Is it more cost effective to start manufacturing the items myself, warehousing them in the US and selling from here?
It largely depends on the cost to manufacture and the number of items you are selling. The more items you are selling every month the more profitable it would be to have production in the US. If you are only selling a few items, it may be worthwhile to keep producing them overseas, but look for a cheaper way to ship them.
There are many factors to consider, either to talk to experts to discuss further or you need to build the strategy yourself. The factors can be (but not conclusive):
1. Custom duty and other taxes
2. Movement of the inventory
3. Economic of Quantity
4. Confident of future sales
5. Ability to build correct costing framework
6. Optimal Cash flows model
7. Risk of foreign exchange, warranty, return sales rate, etc
Select your decision-making model and use the factors above to develop an ongoing measurement of the above matter. Monitor this as part of operating activities and make scientific, consistent, and objective management of your business.
I have 4 simple decision making approaches that I use to help 400+ companies grow. If you like to explore this - please feel free to contact me for further discussion.
I think you're on the right track. It makes sense to ship your products in bulk to a warehouse/fulfillment center (like Amazon). There are other companies that offer the same service, but you'll probably want to look for one that integrates well with your e-comm store.
*Make sure you factor in shipping costs to your prices.
