Blind shipping is a method in which the seller doesn’t disclose any details of the producer/manufacturer to the customer. This process allows the direct transportation of goods from the producer to the consumer, removing third-party vendor intervention. Moreover, from a business point of view, the procedure ensures that the end-user doesn't learn confidential information within the supply chain.
What is Blind Shipment?
A blind shipment doesn't contain information about the shipper or the consignee. In this process, the manufacturer takes help from a third-party company to handle shipments. However, before the customer receives the package, the third-party information on the shipping label is replaced with the seller's details.
These third-party companies also handle freight movement and bookings. So, when the customer receives the shipment, they're unaware (or blind) of the original details of the distributor or seller.
The Purpose of Blind Shipment
Blind shipments are essential for concealing vital information that the customer doesn't need to know about the manufacturers or importers. Distributors use this shipping process when they want goods sent directly to the retailer as it helps them avoid various complicated distribution channels, thus, making the process more convenient.
In effect, the customer will be under the impression that the company itself is the original sender of the product instead of a third-party vendor. A distributor usually prefers this option when they don't have the means to dispatch the goods to the customer.
As mentioned earlier, the process conceals the details of the suppliers. If the customer is satisfied with the goods, they may continue buying from the distributor rather than a supplier, thus bringing more revenue for the former.
Advantages & Disadvantages of Blind Shipment
Blind shipping can help distributors secure their supply chain and transport goods conveniently. It also gives them more control over their business operations.
Advantages of Blind Shipment
1. Customer retention
Since a blind shipment hides crucial details about the manufacturer/supplier, the customer only knows the distributor’s name. So, the distributor can effortlessly continue to be the middleman and maximize their revenue through repeat purchases. By keeping everyone in the supply chain content, distributors can automatically maintain their brand’s reputation.
2. High profit margins
Distributors can even negotiate prices and receive goods at an affordable rate if they develop a strong relationship with the suppliers.
Building a solid relationship with the suppliers also gives distributors a competitive edge. This is because the latter can procure goods at lower prices than the competitors and sell them at the same price.
3. Smoother business
Blind shipping makes the entire process seamless and smooth. Distributors only have to complete the required documentation and contact information to send goods to the customers, making the process straightforward.
4. Reduced overheads
When using this shipping method, distributors only have to focus on finding and acquiring customers. The suppliers will take care of the inventory and the shipment. This helps reduce the overhead costs and the expenses associated with stocking goods.
Distributors can also enjoy lower transit fees, experience fewer problems, and maximize the efficiency of their business processes.
Disadvantages of Blind Shipment
Even if blind shipping offers certain advantages to business owners, it still struggles with the following drawbacks.
1. Lack of information
]Customers these days are particular about details like the manufacturer's name and where the product came from. In the internet age, some of this information may be readily available at the consumer's fingertips. Suppose customers have any queries about the product, they can look up the details of the product and possibly establish contact directly with the manufacturer.
However, the lack of such vital information in a blind shipment can make the customer question the authenticity of the products. As a result, they might not even trust the seller.
2. No Chances of Receiving a Refund
If a customer doesn’t have information about the manufacturer, they can’t ask for a refund. So, if the product is faulty, the buyer has to discard it. This can severely hamper the brand value and customer experience.
Blind Shipment paperwork
The paperwork involved in sending a blind shipment is different from the other shipping processes. Here, the bill of lading (BOL) is the most essential document since it is a receipt between the shipper and the carrier.
The other required documents are:-
- Three BOL's of which two of them are dummy and only one is original and genuine.
- Packing slip without the manufacturer’s details.
In a blind shipment, the documents containing the supplier's name, return address, invoice, and coupon codes aren't included.
Blind Shipment and Blind Bill of Lading (BOL)
When sending a blind shipment, a distributor must maintain what is called as theh blind BOL properly.
There are three different types of BOL:
- A BOL for the shipper.
- A BOL for the consignee.
- A BOL that includes all shipping details.
We have explained below why we need to issue three BOLs.
Besides these primary documents, there might be additional paperwork for completing the shipping process. That is why it's essential to communicate with the local carrier before dispatching goods. Alternately, the distributor can seek assistance from experienced business professionals or a logistics service provider.
How to arrange for a Blind Shipment?
The first step to arrange a blind shipment is to contact and partner with a freight forwarder. These experienced professionals will also specify any additional paperwork or information the distributor may need to fill, such as mentioning the zip code on every BOL.
After that, the distributor has to prepare three separate BOLs needed for the following specific purposes. This is unlike regular shipments where only one or two BOLs are issued.
- The shipping company will use the first BOL when picking up goods.
- The carrier will utilize the next BOL while delivering goods.
- The final BOL will be given to the courier, which will comprise the delivery and shipping information to complete the process efficiently.
Example of a blind shipment
Suppose you are the seller and your customer orders a set of books. If you're the shipper, you have to contact the freight forwarding company, make the payment, and request blind shipping.
After your shipment clears customs, the carrier will remove information about the supplier from the original BOL, so the details aren't available to the customer. This will prevent your customers from circumventing you and reaching out to your supplier to buy products at a lower price. Even if another company comes across the shipment, they won't be able to determine the supplier.
Difference between Blind Shipping and Dropshipping
Although blind shipping and dropshipping are related, it's essential to understand the fundamental differences between the two terms to avoid confusion and complications.
The two shipping terms vary in the following aspects:-
Dropshipping is when a seller sends products directly to the customer from the manufacturer. The seller acts as the middleman here.
On the other hand, blind shipping is a type of dropshipping where the manufacturer is kept anonymous to the customer for business purposes.
The expenses are higher in dropshipping due to the branding and customization of products. Most of these businesses are conducted on an e-commerce platform, further increasing costs.
But blind shipping saves costs as the supplier information is kept confidential. Distributors can spend less money on packaging and shipping costs and more on acquiring and retaining customers.
Dropshipping is a better option while shipping a limited quantity of goods as it comes with no minimum order requirements. Even if the customer wants a small part or amount of products, dropshippers can get it from their manufacturer while saving costs.
On the contrary, blind shipping might be expensive when shipping a small number of items due to the costs of handling the BOL.
FAQs on Blind Shipment
What is a double-blind shipment, and how does it work?
Double-blind shipping is a process where the details of the sender and receiver are hidden from each other. So, the customer will not know where they received the shipment from. The supplier will also not be aware of the customer's contact details.
Is blind shipment legal or illegal?
Blind shipment is purely a legal process, with specific details hidden.
Is there an extra cost in the blind shipment?
Yes, the distributor may have to bear additional expenses for blind shipping as the freight forwarders might charge extra for securing the supplier's details. So, it's essential to talk about all the associated costs before availing of the services of a freight forwarder.
Why do companies make the blind shipments?
Companies go for blind shipping to protect the details of their suppliers. As the customers don't know specific information, they won't be able to connect with the supplier and order directly.