Blind shipment and its role in enhancing SMB efficiency

In the fast-paced world of eCommerce and B2B transactions, efficiency is key. However, a significant challenge businesses face is maintaining their suppliers’ confidentiality. As such, they employ solutions like blind shipment, whereby their customers are unaware of the manufacturer’s identity when receiving their goods. 

Yet, many SMBs find this logistics method tricky, raising questions about its legality and practicality. If you’re curious about blind shipping, you’re in the right place. This article provides accurate answers, explaining its process and how businesses can use it effectively. It also considers its associated perks and drawbacks. Without further ado, let’s dive right into it.

What is a blind shipment?

A blind shipment is a logistics strategy that conceals the identity of the shipper (supplier) from the consignee (buyer). When employed, the manufacturer sends products directly to the customer without revealing their information. 

Notably, blind shipment slightly differs from double blind shipment. In the case of the latter, an SMB hides the details of both the buyer and supplier from each other. Thus, the shipper is unaware of where they will deliver the shipment, and the consignee is unaware of its origin.

Understanding and applying blind shipping as a business owner cannot be overstated. If your customers discover who your suppliers are, they may bypass you and buy directly from them at a lower cost. By keeping supplier information confidential, you maintain control over the supply chain and ensure customer loyalty. 

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How to use blind shipping in business

Preparing for blind shipping may initially seem complex, but with the right approach, you can succeed. Here are three steps to implementing it effectively.

1. Choose reliable suppliers

Ensure your suppliers understand and can facilitate blind shipment. They should be able to ship products without including their details on the shipping documents.

2. Communicate the process clearly

After selecting the right supplier, you must ensure all parties understand the process. These include the supplier, the carrier (the company that sends products on behalf of the supplier), and any intermediaries. Clear communication helps prevent the producer’s information from appearing on shipping labels or paperwork.

3. Review the shipping documentation

As the carrier prepares shipping documents, such as the Bill of Lading (BOL), it’s crucial to ensure that the manufacturer’s information is concealed. Also, verify other necessary details for the shipment to reach its destination.

What is blind BOL (bill of lading)?

A blind BOL is a shipping document that masks the supplier’s identity. Key parties involved include the shipper, consignee, and carrier. The carrier issues this document when they take control of the goods, which usually marks the beginning of the shipment process.

When using blind shipment, the carrier prepares three forms of BOLs: 

• The shipper’s BOL, which contains shipment details but hides the supplier’s identity 
• The consignee’s BOL, which is for the recipient but omits the supplier’s details
• The complete shipping BOL, which includes all the shipping information

Notable blind shipment example

To better understand this logistics maneuver, let’s examine a blind shipment example. Suppose you’re selling custom-printed phone cases. You don’t specialize in producing them; however, you have a website where customers can choose their preferred custom designs and place an order.

Whenever a customer buys on your website, you forward the order to your supplier, who prints these phone cases. After the supplier makes the design, they prepare to ship it to the buyer. They first forward the items to a reputable carrier that will issue a bill of lading. After all the right documentation is in place, including masking the supplier’s identity, they ship the item. 

As soon as the buyer receives the order, they won’t have a clue about the supplier’s information, as you’ve created an impression that you make these phone cases. Ultimately, you make a profit based on the difference between the price you charge the customer and that which you pay the supplier.

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Is blind shipment illegal?

Absolutely not! It’s entirely legal and widely used in various industries. It’s prevalent among drop shippers and bulk distributors because there’s no limit on how much you can ship.

While it’s a common practice, it has specific rules and restrictions. Since carriers are involved in maintaining the anonymity of the supplier to the customer, they have guidelines that ensure smooth operations and no identity slips through.

So, before beginning the blind shipping process, it’s vital to check carrier rules. This way, you can guarantee a seamless deal, secure your shipment, and ultimately maintain a sound relationship with your customers.

Pros of blind shipment 

Blind shipping is excellent for businesses looking to maintain confidentiality and stay ahead of their competitors. Here are some of its advantages.

It keeps customers loyal to your business

Blind shipment is a powerful tool for maintaining customer loyalty. By hiding details about the supplier, customers only see you as the distributor. Thus, it keeps you in control of delivery, encourages repeat business, and boosts your revenue. 

Your business maintains its competitive edge

If you have access to exclusive or high-quality products, this strategy helps keep your suppliers’ secrets safe from competitors. Also, strong supplier relationships allow you to negotiate better prices. This advantage enables you to stay ahead in the market, leading to more customers bidding for your products.

 Guarantees supplier details protection

Certain suppliers may prefer not to share their details due to exclusivity agreements or privacy concerns. Via this sales method, their information remains confidential. This allows your business to be the main intermediary between suppliers and buyers.

It simplifies supply chain management

It can also streamline your operations. Your supplier handles all the shipping logistics while keeping their identity under wraps. This means you don’t have to deal with the headaches of inventory management. Now, you can focus on what you do best – serving your customers and transforming your online business. 

Cons of blind shipment

Despite its perks, blind shipping is not without its challenges. Let’s explore the potential drawbacks.

It could lead to trust issues among customers

Customers today often want to know where your products come from. So, if you resort to blind shipping, they could question the authenticity of your goods. Ultimately, it could harm your reputation if they can’t verify your product details.

This method can be challenging for refunds

Another drawback is the hassle it can cause when handling refunds. Since customers don’t know the actual supplier, they can’t reach out directly if there’s an issue. Instead, they turn to you. 

If a product is defective, returning it and getting a replacement can become frustrating. This lengthy and sometimes complicated process can hurt your brand’s reputation and customer satisfaction.

It leads to complex paperwork

Per reports from Ware2Go, one in three buyers expect fast shipping. However, despite its legality, blind shipping demands more paperwork. It requires preparing three bills of lading while ensuring supplier anonymity. This adds complexity to the shipping process and could delay goods from reaching customers.

Carrier restrictions can be an issue

Despite being a legal method, not every carrier agrees with masking supplier details. Some may accept to mask the shipper’s name, while others insist on providing the shipper’s zip code. Finding a carrier that meets your needs can be a bit challenging, so it’s essential to consider their policies before booking your shipment. 

Blind shipping vs. drop shipping

It’s easy to confuse blind shipping with drop shipping, but they’re quite different. In simple terms, drop shipping focuses on directly sending products, while blind shipping adds a layer of secrecy to protect the supplier’s identity.

Interestingly, dropshipping is becoming a popular business model, with the global market size projected to exceed $476 billion by 2026, according to Statista. 

The table below provides more clarity between these two methods:

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Ready to blind ship? Partner with Stenn

After exploring the ins and outs of this logistics strategy, it’s clear that this method is a game-changer for managing your supply chain and maintaining a competitive edge. It also ensures your customers receive exceptional service without any disruption.

If you are also wondering how to keep your cashflow and operations running smooth, Stenn can be your perfect ally. We offer excellent financing options to keep your business thriving regardless of stringent economic situations. 

By partnering with us, you can get up to 90% of your invoice amount upfront. This helps you manage liquidity and seize new international trade opportunities without delay. Explore our invoice financing and revenue-based financing options to further boost your business growth today.