Blind Shipments have become increasingly popular in the international shipping scene.
While the practice is relatively simple, you must understand what Blind Shipment means.
You need to know the benefits of Blind Shipment, associated risks, and how you can enforce blind shipping in your business.
Here is a detailed overview of Blind Shipment.
- What is a Blind Shipment in International Shipping?
- Why use Blind Shipping
- Difference between Blind shipping and Double-Blind shipping
- Who can use Blind shipping
- Blind Shipment in E-commerce
- How Blind Shipments Work
- How to prepare a Blind Shipment
- Importance of Blind Shipment to drop shippers
- Rules of Blind Shipment
- Cost of Blind Shipping
- Problems that can Arise during Blind Shipping and How to avoid them
- Manage your Blind Shipment with Bansar
What is a Blind Shipment in International Shipping?
Blind Shipment is a shipping practice where one or more parties to a shipment are ‘blind.’
In this case, the parties are unaware of who is the shipper, consignee, or both.
This information is omitted to deliberately conceal the identity of the shipper to the customer or vice versa.
To understand Blind Shipment better, let’s look at an example.
Suppose, as a customer, you order jewellery from distributor x.
But distributor X doesn’t have a physical inventory of the product you ordered.
In this case, he/she decides to ship the jewelry from China through a 3rd party vendor but doesn’t want you to know this.
To conceal this information, distributor x will provide your shipping address and instruct the vendor in China to ship the product/s directly to you.
In addition to this, x will also instruct the shipper to omit their details.
In this case, the jewelry will be delivered to you as if it has been shipped directly from distributor x.
Why use Blind Shipping
Distributors use blind shipping for various reasons.
Mainly, it is for the benefit of saving time and cost.
By shipping blind, your goods will have fewer distribution channels to go through.
This is because the goods will go directly from the supplier to the customer under your name (the distributor).
Secondly, blind shipping helps you to conceal the supplier’s details.
In Blind Shipment, the supplier’s information is not included.
Instead, only the distributor’s details are shown, so the customer can’t know the origin of the Shipment.
Generally, blind shipping allows you to keep the suppliers, importers, and other aspects of your supply chain confidential.
Typically, this type of shipping is done through a 3rd party (shipping agent) who books and controls freight movement.
This also hinders the supplier from attempting to do business directly with your customers, or vice versa.
In a nutshell, blind shipping helps you control competition as it put a limit to who has access to your suppliers or customers.
Difference between Blind shipping and Double-Blind shipping
Blind shipping may be inexpensive for your business, but it is somewhat unreliable.
While struggling to hide the vendor’s information from the customer, the vendor may still access your customer.
With this, the vendor can quickly contact the customer and ask to do business with them directly.
Double-blind shipping enables you to maintain the anonymity of both your supplier and customer.
This way, the vendor cannot contact your customer and vice versa.
Who can use Blind shipping
Generally, blind shipping is for anyone who wishes to conceal shipment information from one or more parties in their supply chain.
Distributors, importers, drop shippers, manufacturers, sourcing agents are all legible to use blind shipping.
Benefits of Blind shipping
Blind shipping comes in handy and has several benefits.
Maintain a Competitive Advantage
By default, dropshipping is applicable where a distributor lacks the physical goods to meet the customer’s order.
Typically when you dropship goods to the customer, your supplier will deliver essential details about the price and contact information.
Your competitors can use these details to rival you in the market.
But you want to keep this information hidden so that no one gets a hint of where you’re sourcing your products.
Blind shipping helps put everyone in the dark about your operations and, as such, guarantees you safety in the market.
Protect your Supplier
It is common for suppliers not to want their information, such as contact details and address in public.
This could be for many reasons, such as exclusivity deals they’ve signed, among other things.
In this case, blind shipping is proper.
It allows you to protect your supplier’s privacy by keeping details about their location and operations confidential.
You already know that you don’t have to have a physical store of goods to fulfil your customers’ orders.
This is especially if you’re into the consumer products business.
As a business, you can embrace blind shipping as a strategy to reduce risk exposure.
You can do this by shipping only when a customer has placed an order.
This reduces the chances of deadstock, among other losses and inconveniences that accompany keeping a physical inventory.
Higher Profit Margin
Of course, with blind shipping, a business will not have any inventories and many employees.
Your team needs only to take customers’ orders and direct them to the vendor to do the shipping.
In the long run, if your reputation and services are high, you will command a large customer base.
As a result, this will drive sales leading to good returns.
Ability to Retain Clients
The only reason that makes customers loyal to a single brand is the high level of satisfaction and convenience.
Therefore, with proper blind shipping plans, a distributor can hang on to vendors’ hard work and claim exemplary results.
Blind Shipment in E-commerce
In addition to distributors, suppliers, and importers, many online stores and sellers like Aliexpress use Blind Shipment.
These sellers use Blind Shipments to protect their supplier sources.
This helps to prevent customers from jumping ship to do business directly with the suppliers in the future.
Blind Shipment allows e-commerce sellers to reach more customers while avoiding the expense of maintaining a physical stock.
This type of Shipment from e-commerce stores come with only the store’s details.
Nothing about the supplier or person that fulfilled the order is included in the order.
Blind shipping is advantageous for e-commerce stores acting as intermediaries with the need to hide their product sources.
How Blind Shipments Work
As already mentioned businesses use blind shipping to simplify the shipping process and also mitigate related costs.
The consignee in a Blind Shipment will essentially buy goods and have them shipped directly to their customer.
Here is a real-time scenario to help you understand the blind shipping process better.
So we have three parties here;
- Distributor (you)
- Retailer or customer
In this example, let’s assume that you run a business in Manila, Philippines, and wants to ship furniture to a customer in Cebu.
You buy the furniture from a supplier in China to resell to the customer at a marked up price, which is slightly higher than the wholesale price.
To fulfill this order cost-effectively, you decide to request the furniture to be shipped directly from China to Cebu.
You also decide to blind the Shipment so that Z thinks that the furniture arrived from Manila, rather than from the Y in China.
Note that Blind Shipments usually have two bills of lading documents: one with the correct details and another, a dummy used to fulfil the order to the customer.
In this case, you will find a shipping agent who will then file two BOLs.
The real bill of lading will have the correct shipping details- pick up in China and delivery in Cebu.
You will get the real BOL and pass it along to your contact in Cebu where the furniture is being picked up.
The shipping agent will contact the shipping company to set up the pickup from China and delivery in Cebu.
The carrier will then make the pickup in China as per the demand.
Once the furniture shipment is confirmed as picked up and in transit, the shipping agent will contact the carrier.
Your agent then supplies them with the dummy BOL, which is to be used at the time of delivery.
In this second bill of lading, the shipper’s address will read to your address in Manila.
The carrier will then confirm that they will use the dummy BOL at the time of delivery in Cebu.
After this, your agent will only track the Shipment until it arrives at the customer’s address in Cebu.
At the time of delivery, the BOL will read that the furniture was shipped from Manila.
But in reality, the goods will have come from China.
Disadvantages of Blind shipping
Despite being a perfect solution for startup shippers, Blind Shipment has several problems associated with it.
As a shipper, you have little control of the products shipped to your customers.
In the case of damaged or faulty products, the blame is directed to you.
When customers complain about faulty products, you risk losing your reputation, and your customers can lose trust in you.
Also, you risk having issuing refunds in cases where customers demand it.
Information is freedom for customers. Removing sensitive information about the product may paint a bad image of the distributor’s products to the customers.
With many blind shippers across the globe, you are not alone, and the only hope rests in having good marketing skills.
Unless you are already established, you will spend a lot of returns on marketing.
Finally, blind shipping may prove expensive to your customers, depending on the season.
You rely on suppliers and the shipping company to meet your customers’ needs.
If they increase their prices and rates, you are also forced to increase.
Loading ship in Shanghai
How to prepare a Blind Shipment
Preparing Blind Shipment is not as easy as it may sound.
You need to be careful to be able to handle everything without making mistakes.
If you think your business can benefit from Blind Shipment, here is a quick procedure for preparing your customers’ next Blind Shipment.
Hire a Freight forwarder
The first step in making your shipment blind is to find a capable freight forwarding company or shipping agent.
A good freight forwarder should be knowledgeable in Blind Shipments.
He/she should also have the risk experience and connections to help manage your Blind Shipment tactfully.
Luckily, many freight forwarding companies and agents are offering these services at affordable rates.
You should find one that matches your needs and budget.
Create two separate Bills Of Lading
With a capable freight forwarder in hand, proceed to prepare the Shipment.
Firstly, the forwarder, through his connections, will help find a suitable carrier for your goods.
Remember we said that Blind Shipments require more than BOL.
As such, the forwarder will request two separate bills of lading.
Bill of lading
Note that a bill of lading (BOL) document provides relevant details about the Shipment, such as the shipper’s name, the consignee, and the shipped quantity.
So when dealing with Blind Shipment, there is two bills of lading involved.
The first bill of lading, as you know, is the original bill of lading that shows the consignment’s actual information.
This bill of lading is hidden from the blinded customer.
The second bill of lading is the dummy/falls bill.
This bill is faked, and some details about the supplier omitted.
On delivering the goods to your customer, the carrier will switch the bills of lading and issue the customer with a fake bill of lading.
Let your Shipper Handle the Rest
After doing all that is necessary and providing the customer’s address, your work is done; the remaining part is for your shipping agent to handle.
Blind Shipping vs. Dropshipping; How do they Compare/
Blind shipping and drop shipping are somewhat interrelated.
When discussing the concept of blind shipping, it is usually within the context of drop shipping.
Therefore, understanding the dropshipping process can help you figure out the puzzle that is blind shipping.
Remember that the conventional business model is such that a business has physical inventory from which customer’s orders are delivered.
In contrast, the drop-shipping model eliminates physical inventory.
Instead, it allows businesses to keep virtual stock.
Although there is no physical inventory in dropshipping, businesses can still deliver customers’ orders without much trouble.
Please note that the drop-shipping model has a clear cut working system.
In this, the virtual store only functions as a marketplace for suppliers’ goods.
And since branding and customization costs tend to add up too quickly, many drop shippers often opt for blind shipping.
No doubt, dropshipping is convenient and saves costs.
However, it is riskier as you can quickly lose clientele if you do it straightforwardly.
Openly indicating the shipper’s and customer’s information makes it easy for them to contact each other and negotiate to work directly in the future.
Worse still, your competitors can order from your store in a bid to find out your supplier source.
Blind shipping provides a solution to this by allowing drop shippers to blind their return addresses.
Understand that blind shipping is not 100% guaranteed as a relatively high cost of shipping usually accompanies it.
Apart from this, there is also an additional link to the supply chain.
This tends to increase the risk of errors and losses during shipping.
Remember that blind shipping requires partnering with a capable shipping agent.
The problem is that finding a trustworthy and reliable agent to manage your Blind Shipment safely is not easy.
Comparing blind shipping and drop shipping, you should note that both require a substantive investment to ensure success.
Shippers in both scenarios need to invest in proper marketing and customer service tools; otherwise, they might not be effective for your business.
The good thing with drop shipping is that it doesn’t have minimum volume requirements like blind shipping.
You can always place orders to suppliers even when the customer needs just one piece of the product.
Likewise, Blind Shipments tend to become unnecessarily costly when delivering small volumes.
This is because of the minimum cost of handling the blind BOL.
Importance of Blind Shipment to drop shippers.
Blind shipping offers several benefits to drop shippers.
Primarily, it provides a low-cost strategy to enter any business niche.
All drop shippers need is strong marketing skills and an online platform where customers place their orders.
The traditional business setup requires setting warehouses and offices, which are expensive to run.
Blind Shipment allows shippers to have goods directly delivered to customers.
Blind Shipment provides shippers security in terms of guaranteed future existence.
By concealing information about suppliers and manufacturers, your customers will continue placing orders, and competitors cannot identify your suppliers.
Under blind shipping, you will retain your customers because the shipments are directly delivered to the customers.
The time between placing orders and deliveries is thus short.
Rules of Blind Shipment
Blind shipping requires keen attention from all parties involved.
One mistake made can allow customers to access critical information about the supplier or customer in the case of double-blind shipping.
The following rules apply to blind shipping:
- Distributors must have valid credit cards for payment
- Carriers can accept shipping of goods under Blind Shipment but are not responsible if the objective of blind shipping is not achieved.
- The third-party (in this case, the distributor) shall request blind shipping before the goods are picked up for shipping. In most cases, carriers reject late requests.
- You must use two bills of lading, both of which attract a payment.
- Charges that relate to the request of blind shipping shall be paid by the distributor before shipping.
- The original bill of lading shows the supplier/manufacturer’s actual details, the units, and the carrier shipping on behalf of the shipper.
- The dummy/falls bill of lading contains the distributor/third-party’s details and the owner of the goods being shipped. It also contains the zip code and address of the customer to receive the goods.
- The final invoice to be used in the shipping process is generated from the dummy/false bill of lading.
Cost of Blind Shipping
COSCO Shipping Lane
The cost of blind shipping is not fixed and depends on several factors, such as the agreement between the supplier and shipper.
Because you purchase goods from your supplier who then delivers to your customers directly, the cost of blind shipping can be the:
- The cost you pay the carrier to deliver the goods to the customer
- Fees you pay the freight forwarders to handle your goods
- Any other fee that you incur from placing an order with your supplier until the order reaches the customer
When calculating the cost of blind shipping, remember to add up all related expenses, so your freight bill is as accurate as possible.
Problems that can Arise during Blind Shipping and How to avoid them
The following are the main problems associated with blind shipping:
For the goods to reach the target customers, a distributor must place an order with their supplier, hire a freight forwarder and have the carrier handle shipping. ‘
Along this supply chain, everybody gets a commission, which usually depends on the season.
During festive seasons, shipping is expensive, and suppliers hike prices, reducing profits for the distributor.
Since the business operates online, many such distributors are established and are willing to offer the goods at lower prices.
To beat them, as a distributor, you lower your prices, which eventually lowers profit margins.
Low Control of Suppliers Stock
You want your customers to have orders shipped to them throughout the year.
However, this is usually not the case because your suppliers run out of stock.
As the distributor, you are solely responsible to your customers; remember they have no connection with the supplier.
It would help if you communicate any possible delays on time or find other suppliers to avoid disappointing customers.
Problems in Setting the Right Prices
As a distributor, your profit margin depends on the difference between your marked up price and the wholesale price.
Doing market research on wholesale prices helps you set reasonable prices for your customers.
However, problems arise when suppliers offer their products at low wholesale prices but recover the costs by charging hefty shipping costs.
Finding the Right Seller
You can have a vast customer base making orders.
Still, the problem will arise when it comes to finding a reliable seller.
Not all sellers who claim to meet your demands do so.
Therefore, investing in finding the right supplier will prove beneficial in the long run.
Proper communication is core in any business venture that involves one or two people.
Transparency is paramount in blind shipping between the supplier and the distributor.
When customers place an order, you should tell them how long it would take to deliver the order.
Delivery is a factor determined by the supplier and the shipper.
Sometimes it becomes difficult to fulfil customers’ orders as promised because of a lack of transparency and proper communication from the supplier and carrier.
Blind shipping is complicated and requires proper analysis of every little element of it.
Solving this problem lies in conducting thorough due diligence at the start.
Research your suppliers’ history before settling to use their services.
Also, creating good communication behaviour ensures transparency and trust.
Manage your Blind Shipment with Bansar
Blind shipping from China can be overwhelming. It would help if you had a reputable business partner who is well versed in dealing with Blind Shipments.
If you are looking for the best partner to handle your Blind Shipment from China, Bansar is the best choice.
At Bansar, we value your business potential and are always available to ensure success in every aspect of your business.
Our rates meet your business budgets, and our team of professionals is on standby to answer any questions you raise.
Leave us a message, and we will gladly reach out.