Local Warehouse is a revolutionary supply model of Global Resources Optimization (GRO). To explain how this can save money for you, we need to compare it with traditional and internet supply models:
In the above 3 charts, we are using an example product which is manufactured in China at the factory cost of $100. In the Traditional Supply Model, the factory marks up $10 and sell to a US importer for $110. The importer imports a whole container load of this product. The average unit shipping cost is $10. Then the importer sells this product to his distributors all over the country. The distributors purchase pallet quantity. They pay $30 domestic shipping on each product on the top of their product cost $150. The distributors sell these products to retailers. The wholesale price is $230 plus $30 shipping. The retailers end up paying $260. They sell this product to end users for $500.
In the Internet Supply Model, the importer decides to skip “middlemen” such as distributors and retailers. They take phone orders or internet orders from end users and ship the orders from their warehouse. They sell this item for $180 (50% gross profit) plus $120 domestic shipping. In this way, the end users can get this item for $300. Our “Flagship” model is very similar to this.
In the Meilestone Local Warehouse model, the manufacturer (the owner of Meilestone USA) ships these products directly to retailers all over the country by containers. Meilestone USA will only in the position of coordination and technical support. In this model, the retailers can get very low price $110 plus average unit shipping $15. With $125 cost and 100% markup, the retailers sell these products for $250 to their clients. This price is beating both Traditional model and Internet model. Here’s why:
The Local Warehouse model trims off the expensive domestic shipping for large-sized or heavy products. Shipping by containers is much cheaper than domestic LTL trucking. The prices the manufacturer offers to the retailers don’t include the operational cost of Meilestone USA because these products are shipped directly to the retailers. The manufacturer in China consolidates variety products into the containers so this work doesn’t have to be done in the U.S. It helps a lot to lower the cost but the product quality and customer service are still remain the same high level.