"Your suppliers can't necessarily drop ship to your customers, because their items will need to be combined with others - if you have your suppliers drop ship to you, your gift boxes will take too long to come out." - Jefflinwood
That is exactly the issue simplified! Thank for such a good explanation.
You are absolutely right on the last point but we are looking to build a model were our customization is from the item picking part not the warehousing part. Be a tech play more than a warehousing play. Now we currently ship to us the items, repackaged and send back which is a very non-scalable way to grow not to say non-profitable too.
YEs those warehouses are called 3PL's (Third party logistic provider) the issue with those is that local products and niche items aren't using those since they don't have the volume to be in them. The idea of having one warehouse is good but most of the large companies (Does using 3PL's) already have theirs signed. Now I could partner up with them but it won't allow me to gain diversity in my items.
I know I sound negative about it but challenge me on that cause it would be the easiest scenario to go with if I crack that model correctly.
If you are using niche product and your suppliers are small, they are too small individually for 3PLs but collectively they can be big enough for 3PLs to accommodate them. Pool together such small niche suppliers yourself to be attractive for 3PLs It is similar to consolidating fractional container load to have one shipping container worth of material.
If your suppliers are large companies, they already have 3PLs. So you need to go to the 3PLs which has most of your large suppliers or setup your operation within local delivery area of these 3PLs. Most 3PL warehouses tend to be located nearby to each other.
I will suggest talking to operation research people at a business school. Those people teach and do this for living. Also look into some of the case studies on consolidator models for ideas (Amazon, Walmart, Costco, Toyota).
You challenge is you are too small of a consolidator and your suppliers are either too small or too large. You need to hack existing models to fit your need. I would most probably start with a hybrid approach of setting up my consolidation and shipping operation near the warehouses of my large suppliers and offer onsite inventory storage and shipping for small niche suppliers. Until you become large enough, you will have to give up some efficiencies of scale.
BTW, you are not in software business, you are in consolidation and shipping business.
Honestly if you are talking about considerable amount of money you should seek out to first and accountant (He will save you more money that he will charge) he will figure those things out cause even if you research on that a lot, my personal feeling is that you might do mistake that will catch up to you in the future.
For the were to invest it, well no one can answer that for you it depends on your attitude towards risk and where you are in your life. If you 25 no family and looking to risk more to (hopefully) earn more then invest back in yourself and start your own but if you have a family and looking to work in o a more steady environment, wait a bit because with over 100K in your bank account, you will get calls from portfolio managers! : ) Those guys will know who to invest your $$ better and at a risk level your will be comfortable with.
An personal opinion, fix everything with an accountant an then relaxe a take the time to answer those questions they will affect a lot how you will live your futur!
I'd hire a therapist first because the greatest threat to your money is you.
A lot of issues will crop up about your values, relationships, and life goals. Think of the therapist as someone who can help you know yourself, design your life, and above all, use your fortune as a tool to get what you really want. I say this having sold my first co at 32 and banked $10M.
Bubbles create large wealth when on the upside but wealth creation at a rapid extend creates a high volatility in markets until a point where people can no longer follow their current way of life. By then the bottom of the pyramid falls and the economy collapse. Your clients are to one bringing the business and is wealth is not properly give away they cannot afford them anymore and your the one suffering and the end. Read Henry Ford's theory.
That is exactly the issue simplified! Thank for such a good explanation.
You are absolutely right on the last point but we are looking to build a model were our customization is from the item picking part not the warehousing part. Be a tech play more than a warehousing play. Now we currently ship to us the items, repackaged and send back which is a very non-scalable way to grow not to say non-profitable too.