Drop shipping is a strategy used in business in which manufacturers and suppliers ship their products to the clients, purchased through an online store directly to their doorsteps.
Drop shipping is a very popular and easy way to start an online business. It removes all the retail problems that arise during the process of purchasing, stocking and shipping merchandise.
After a transaction, a drop shipping store forwards the order to a supplier with the payment, who takes the responsibility of shipping the product to the customer. For example, you own an online drop shipping store that sells baby skin products so if a customer purchases a baby oil, you will forward the order to your supplier, who has a warehouse of baby skincare goods. This lets the store owners concentrate on their other duties such as branding and marketing.
Drop shipping is widely preferred by many business owners because it passes the responsibility and burden of order fulfillment on the suppliers. As a result, retailers no longer have to invest money on warehouse space or take the risk of being stuck with unsold merchandise. Consequently, companies are able to allocate more resources to other retail activities like advertising or marketing.
WHOLESALERS
Wholesalers are those who sell the products in bulk to the retail market or the retailers who after that sell them to the consumers. Traditional retailers buy large quantities of products in a great discounted price from the wholesalers who then sell them at their own price. Drop shipping doesn’t include wholesale suppliers in their process.
Dealing with a Drop Shipping Supplier : First step is to look for a good supplier that reaches your needs and offer all those products that you want to sell. After signing an agreement with them, they’ll handle storage, packaging, and shipping of customer purchases.
Creating your own online store : Start your own online store that consist of all the list of products that you buyed from the supplier including the price that you have decided for selling.
Add a drop shipping app to your store to keep updated with the product listings which will forward the orders to the suppliers automatically. Some suggested drop shipping apps are DSers, Zendrop, Spocket.
Receiving customer orders : As usually in every online ordering process, the customer purchases an order from your online store and website. They pay, receives order confirmation and wait for their delivery.
Forwarding the order to the Supplier : Once an order is placed by the customer, the order details must be sent to the supplier. A drop shipping app will do this process automatically.
Product is shipped by the supplier : The supplier prepares and ships the product directly to the customer.
Customer the receives the product : The final process, customer receives their product from the drop shipping supplier. Other customer needs and services are handled by the store itself.
WHY TO START DROPSHIPPING?
A skilled person in SEO (Search engine optimisation) or a Social media marketing then you can surely be a good fit for drop shipping as the main goal of drop shippers is to increase traffic onto their sites and promoting them through social media and digital apps like Instagram, youtube, google e.t.c by understanding the algorithm.
If a retailers business strategy goals are more focused on increasing sales rather than building a brand of their store then drop shipping could be a good fit for them. Drop shipping offers very few branding opportunities.
With dropshipping, retailers can sell a large range of goods from a global network of suppliers without having to worry about the stock.
BENEFITS OF DROP SHIPPING
Cost Effective : Many drop shipping stores are run from home with a laptop with no need of buying any inventory.
Trending Products : It offers a service of selling wide array of products worldwide to the customers. We can add new catalog anytime to the sale.
Location Flexibility: Drop shipping can be done at any location anywhere with just an internet connectivity and a way to communicate with suppliers and provide customer support timely.
Easy to Start: It is an easy way to run as it doesn’t include managing the warehouse, monitoring inventory, packing or shipping orders.
Easy to scale : Dropshipping businesses tend to scale more efficiently. Plus, you can expand your reach by dropshipping on popular marketplaces like Amazon, ebay and Etsy.
DISADVANTAGES OF DROP SHIPPING
Low Profit Margins : As drop shipping has lead a good competition, the more you reduce the price of products, the harder it becomes to reach the profit margins.
Inventory Management : Inventory levels can fluctuate unexpectedly while fulfilling orders for multiple retailers
Complicated order fulfilment : If a customer orders three items from three different suppliers, you’ll need to cover separate shipping costs for each. The items may also arrive at different times.
Fulfillment Errors : A supplier can make mistakes like missing items, packing errors and product quality issues.
Still drop shipping remains a great choice in 2024, for the retailers and online store owners.
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