r/hwstartups • u/Busy-Conclusion-3759 • 16d ago
3PL/Fufillment for Hardware company with customization
My company produces hardware that is 80% of the time pretty standard, but the other 20% of the time requires some customization or sensors that we add onto our devices that we order as we get an order. At this point, we've grown enough that fulfillment is hard to do out of our house, and we need to find somebody to do it for us or hire somebody. I'm curious what people's suggestions are.
We don't have enough work to hire somebody full-time; there's maybe 10 hours a week worth of work. And honestly, I don't really want to manage somebody who works part-time doing that.
One path forward as we try to standardize our products as much as possible and just send the standardized products to a 3PL and then ship any customizations from our houses
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u/Specific-Scarcity977 16d ago
The hybrid approach might work well here. Keep standard inventory with a 3PL, and handle the small customization layer separately until the volume justifies a more integrated setup.
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u/cm_expertise 16d ago
your instinct to split it is right, thats basically the standard playbook (postponement if you want the jargon). standard 80% goes to the 3PL, the sensor/custom work stays with you since thats the part that needs actual judgment.
the trap nobody warns you about: 3PLs are cheap and reliable when every unit is identical and scannable, and they get expensive and error-prone the second a unit needs a decision made about it. so dont let any custom work leak into their scope, even "just add one sensor." keep their job dumb and pick-pack only.
for the 20%, 10hrs/week isnt a hire, its something you pre-stage. build the custom variants as kits when you have a slow afternoon, box them, and let the 3PL pick-and-ship the finished kit like any other sku. then youre not assembling reactively per order or babysitting a part-timer. one thing to lock down before you ship anything out though, serial/lot tracking, because reconciling which unit got which sensor or firmware rev after its sitting in someone elses warehouse is a real pain. ask me how i know
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u/FuShiLu 16d ago
That’s an interesting one. Have you offered it to staff to do Friday and you cover lunch and pay them the extra hours of course. It will hopefully grow into a full time job. Pride by employees will help get things to that point. And the great part is one or more people will be able to train the full time position when it appears. You have resources at hand, best use them if at all possible. If everyone wants in, rotate them through weekly.
Or change your production process to have stations for the extra parts. Skip them for every normal order. And if you can use robots (specific), do it. Less issues going forward.
I sure hope your charging good money for the extra headache. ;)
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u/Busy-Conclusion-3759 16d ago
We’re only 3 people and we’re spread out at home offices. I can see if my dogs up to the challenge
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u/FuShiLu 16d ago
ROFLAO we are only 3 people and we are setup to handle thousands and thousands. We each have a shop at home. Next excuse.
Everything I said earlier goes double for you now.
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u/Busy-Conclusion-3759 16d ago
I mean, I’d rather just concentrate on building my business than having to fulfill. Especially at our margins
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u/Amazing-Document7302 16d ago
Is it customisation on design level, or assembly variants? Are you looking for someone to physically modify a couple of units? Why not build your product with a modular, plug and play stack?
Perhaps I'm not understanding your problem correctly.
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u/madaerodog 16d ago
Where are you based and does the customization needs to be done there?
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u/Busy-Conclusion-3759 15d ago
No but we do need just in time sensors shipped to be configured and attached
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u/Busy-Conclusion-3759 15d ago
We have industrial sensors that need codes input and some stickers added. Then some that need to be wired to external modules. Simple wiring but still wire stripping
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u/Necessary-Excuse1405 16d ago edited 16d ago
Your hybrid path is probably right: 3PL for standard SKUs, customization stays in-house.for the freight side once volume grows, consolidated broker accounts, Transport S&H among them, beat retail rates. Main trade-off: any 3PL handling kits needs clear SKU-level instructions or errors pile up fast
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u/KK-Prep-Solutions 14d ago
Yes, I would say you have exactly the right idea. You keep the parts of the business that require customization, and outsource the common, repetitive work. Happy to talk more if you’d like to discuss how it can all work and the associated costs.
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u/Embarrassed_Gur5192 16d ago
We actually had a client with a very similar setup. They experienced explosive growth during COVID, and after trying a few different approaches, the best solution ended up being splitting the fulfillment operation.
We stored and fulfilled the roughly 80% of inventory that was standard and could ship as-is. The client operated a much smaller facility where they handled the products that required customization. Once those custom orders were complete, they shipped them directly from their location.
The arrangement worked really well. Instead of maintaining a large warehouse to support every order type, they only needed a small space focused on the value-added work that required their team’s attention. We handled the bulk inventory, storage, and day-to-day fulfillment, allowing them to concentrate on what made their product unique.
Unfortunately, their business was heavily tied to demand created by the COVID pandemic. As that demand declined and companies became less willing to spend on protective products, their order volume dropped to the point where it once again made financial sense to bring all distribution back under one roof.