Supply Chain Milestones:

From the time a Buyer initially considers buying inventory from a Group-Buy to when the last Buyer sells their last units of inventory from it. There are a lot of stages happening in the open and behind the scenes that can directly affect risk. We call these stages “Milestones”. Understanding these Milestones is key to reducing your own risk. Here is a step by step guide explaining the Supply Chain Milestones and what they mean.

 

Due Diligence:

Novanty performs background checks and other verification’s on the Businesses including sources such as Dun & Bradstreet, Better Business Bureau, Pointed Internet searches, etc. We post the pertinent information that we find in each Group-Buy. By posting a Group-Buy listing, Novanty is saying that it is a Business and product that we feel comfortable doing business with in some capacity. It does not mean however that Novanty has the same criteria or even risks as any other Buyer. Novanty strongly encourages each Buyer to do their own due diligence and decide their own criteria before buying inventory from a Group-Buy.

 

Diversify:
Rather than buy a lot of inventory from one Group-Buy, we strongly encourage you to diversify your risk by buying smaller lots of inventory in multiple Group-Buys.

 

Initial Open Buy:
If a Buyer buys inventory from the initial Open Buy period of a Group-Buy and not enough other Buyers do the same to fully fund the Purchase Order with the supplier, the bulk order doesn’t take place. If this happens, Each Buyer will automatically be refunded in full for the money they paid for the inventory. They will not earn a return because the transaction never takes place.

If however enough inventory is bought to fully fund the Purchase Order from the supplier, the Group-Buy automatically switches to pending status and the order process starts with the supplier. At this point, Buyer’s are able to buy and sell inventory from each other freely. There is always a limited number of units available for each Group-Buy, and some perspective Buyers might have just been too late to buy from the Open Buy period. Reducing your Sell price right away reduces your risk by increasing your chances of selling your inventory.

 

Pending Manufacturing
Many people don’t know this, but to actually produce all of the inventory, it usually only requires a 30% deposit of the cost of goods. And this does not include other costs such as freight or customs that the money is often also going towards. This means to have all of the inventory produced, Buyer risk is usually 30% of their money or less. The balance remains in Novanty’s safe account until later. The manufacturing process time frame doesn’t actually fluctuate that much. Depending on the product and the volume, manufacturing time is rarely less than 15 days or more than 50 days. On average, it’s 30 days.

 

Manufacturing Complete
Once all of the inventory is produced, it can then go through an inspection process. Some inventory comes with a great deal of quality checks from the Supplier. Other inventory can be checked with photos, a sample or other inspection. If a third-party inspection is required, this cost would have been included in the Buy-Price.

 

Pay Balance
Novanty will usually only pay the balance to the Supplier once every unit has been produced. This frees up the order so that it can be shipped. Once the inventory has been released, Novanty then pays for freight. This also marks the first time that ALL of the Buyers money has been paid out.

 

Order Shipped
Once the order ships, it is in transit to Novanty’s approved warehouse. This warehouse can be Novanty’s own in-house warehouse, a third-party warehouse or the Business’s own Warehouse depending on the cost benefit/ risk of where the inventory is stored.

 

Order Received
Once an order is received and inspected, the risks of the actual Supply Chain are mostly over. Due to the Businesses existing stock levels however, it may take a little more time before they actually start purchasing inventory from Buyers.

 

Selling Inventory
When a Business starts purchasing units of inventory from Buyers, this marks the first time the Business is fulfilling their end of the bargain. The sheer fact that they have started purchasing inventory goes a long way towards the confidence that they will continue to buy inventory.

As mentioned before, it is very possible that Buyers could sell their inventory long before the Business even starts purchasing it from them if they had adjusted their sell price and another Buyer bought it from them.

 

Group-Buy ends
Once every unit of inventory is purchased from every Buyer, the Group-Buy is considered successful and closed off our system.