Drop shipping means a kind of selling in which the retailer will not keep products in stock, but rather takes the client’s order together with the shipment details and passes them to the supplier, who then delivers the items directly to the customer. The merchant then keeps the difference between the retail price and the wholesale price. Drop shipping may be just the option for you if you are planning to start an online retail company.
First of all, you do not need to pay upfront to get an inventory of products before you can begin selling. With drop shipping, you may get into business by exhibiting the products that you would like to market on your website, before you actually purchase some of the goods. After you have received your purchase through the website, you can then forward the order to the drop shipper, typically via email, that will then deliver the products to your customer.
The next feature of drop shippers is that they take care of the products delivery and shipment for you. This is highly beneficial in case you are just starting out because you can focus all of your time and efforts on marketing your business, rather than worrying about order fulfillment.
Since you do not need to buy a huge inventory of items in the drop shipper, there’s no need for warehousing costs as well. Should you rely upon the normal wholesaling business model rather than drop shipping, you need a place to store your goods after buying your primary stock. Based on the space you require, your monthly warehouse leasing prices can cut into your profit margin considerably. You may even be operating your company at a loss.
With drop shipping, you have the choice of promoting any number of products you need on your website catalog. Since you do not need to make upfront stock investments, you have got the flexibility of marketing as many products as you want, provided that the products are related to the category of products you sell.
The final advantage of drop shipping is that most drop shippers do not request a minimum quantity order. If your clients place orders in your site, it is possible to forward your orders to a drop shipper one-by-one. Most drop shippers have no problem with that. Therefore, drop shipping is quite helpful for your company since it gives the best flexibility.
In summary, drop shipping is a good option to think about if you are planning to begin an online retail business without all of the hassles of stock and merchandise shipping. If you assess the aforementioned benefits carefully, you will understand that drop shipping is unquestionably a workable choice for your small-business retailer. Large retailers, on the other hand, have enough resources like capital to utilize the wholesaling version due to their business.