You’ve had plenty of success selling digital products, whether apps or stock photography, but now you’re ready for the next level.

When it comes to handling physical products, the process and requirements are much different. Suddenly you have a lot more overhead and the cost of doing business can spike.

Here are five ways to prep for this big change and come out ahead.

1. Research shipping costs

Many shipping companies are open to negotiation, and simply asking for a discount can work. Don’t forget to include the cost of time and labor when looking at shipping companies, too.

For example, a company that picks up shipments from your office but costs a little more might be worth it so you’re not driving 20 minutes to the post office every day. Create your own comparison chart and don’t be shy about asking for a deal.

2. Get warehouse ready

You’ll likely need a warehouse, and these come with a variety of features and costs. Choose a company with a flex contract, so that if business picks up or slows down, you’re not paying fees to move to a different unit.

Verify the security, temperature control, and professionalism of the company, too. Think about various management software to stay on top of things. If you’re buying a warehouse, carefully consider whether this is the ideal space for the long haul; otherwise, you might paying more to upgrade soon.

3. Insurance

If you actually manufacture a product, product liability insurance is an absolute must. You might not be able to foresee how a particular item can be defective or hurt someone, but don’t discount people’s ill-thought-out actions and overreactions.

Protect yourself, your company, and your customers by putting this in place. Insurance requirements for physical products are vastly different from those for the digital e-commerce world.

4. The hiring process

You’re going to need to hire at least a few more employees in order to manage the physical demands. Whether it’s packing boxes, operating forklifts within warehouses, or delivering items around town, your company is about to go on a hiring spree. Use hiring best practices or perhaps retain a consultant to help.

5. Increased loss

Virtual items might have bugs, but they can’t be dropped and broken. You’ll naturally experience more losses with physical products, so work this into your bottom line. Mistakes happen, shipping companies get a little rough, or customers return things, which costs you shipping for no profit.

Plan for this and you’ll be on the right track.

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