The client operates in the exercise equipment industry and sought our support to explore alternative manufacturing options. They were facing issues with quality, lead times, and pricing from their current supplier and aimed to make improvements without disrupting their sales flow.
The client’s product quality was below market standards, negatively impacting customer satisfaction and brand reputation. Lead times were too long, causing frequent stock shortages and cash flow disruptions. Their current supplier was unresponsive and charged more than necessary.
We began by performing extensive due diligence on a range of factories within the exercise equipment market. We collected product samples to assess the material quality and consistency. During our investigation, we discovered that the client’s supplier was actually a drop shipping company partnered with a low-grade factory that compromised on materials and design to save costs while overcharging the client. We then sourced a new manufacturing partner that not only provided higher quality products at a better price but also offered greater flexibility in production, payment terms, and lead times. To streamline operations, we introduced a purchasing plan that enabled the client to receive weekly container shipments with only a 20% deposit upfront.
The client successfully transitioned from working with a drop shipping supplier to a direct relationship with a factory. As a result, the quality of their exercise equipment improved substantially, leading to better customer satisfaction and fewer complaints. We also reduced their cost per unit and shortened lead times from a 30-day cycle to weekly container shipments, leading to increased sales. This change not only allowed them to stay consistently in stock but also helped them minimize cash flow strain by reducing the capital required for inventory.
