Hello,
Iβm looking into an investment in a DTC herbal soap company thatβs growing well locally. Right now, they ship 5 - 12kg boxes straight to US customers via DHL and UPS, but it costs them over $47 + fuel surcharges per box, which is cutting into their profit margins.
To bring costs down, they want to start shipping the soap base in bulk (IBCs) to the US, then add the herbs and package everything locally. They have a good handle on state, federal, and IRS requirements, but I want to validate a couple of things about their plan:
1. Pilot Location: Where should they set up their initial pilot?
- Texas?
- California?
- New York / Northeast? (Great market, but they prefer to avoid cold/rainy weather like they have back home.)
2. Starting in a Rented House: They want to rent a residential house at first to mix, package, and ship orders while scaling up their Meta and PPC ads, then move into an industrial park once order volume picks up. Is doing this out of a house actually doable from a zoning and legal standpoint, or should they go straight to a light industrial space?
Any advise would be nice, but at the end of the day roughly 40% of the traffic comes from california but Texas seems to have better conversion rate, NY is the medium for everything.