Living Entrepreneurship Blog / Babson Entrepreneurs

Working with Third Party Providers

It’s unfortunate, but in all businesses, you find yourself working with a third party provider to help make the world go ’round. They are meant to make your life easier and make things more cost efficient for you since they have scaled, they have the overhead, and they manage their own people rather than you taking everything in-house which can skyrocket costs and cause a whirlwind of problems. But working with third parties is never a walk in the park.

Third parties have other customers to deal with and if you aren’t pushing incredibly high volume with them, splitting your business between providers, or are fully reliant on their service, then you are in a vulnerable position.

For example, we work with shipping companies, a manufacturer which houses our tailors, and merchant account services. I will leave out merchant account services from this just because they handle our money.

But working with shipping companies can be a real pain, especially when they do not properly communicate problems they are having with you. For example, we occasionally have shipments we shipped to customers returned to us before they reach the customer. Why? Because the shipping companies have issues finding the customer’s address. I think that’s ridiculous, but either way, we get charged for two-way shipping at that point and we get the shirts back in our possession, which is certainly not ideal since the customer should have their co-created dress shirt, not us.

Working with manufacturers has been a crazy process. But the problems we have had with them (scaling, etc.) would have been the same if we brought things in-house, but bringing them in-house would be a HUGE headache and would have been very costly. One interesting dilemma we had was in the early months of our business’ growth, when we wen’t cold on production for a couple of weeks. Chinese New Year was being celebrated so that was distracting our dress shirt tailors.

Working with third parties to make and ship our custom men’s dress shirts has been an interesting process, but we learn more and more each day about how to manage working with these providers for the highest efficiency for our business.