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Dropshipping - The Advantages & Disadvantages

Dropshipping - The Advantages & Disadvantages

What is drop shipping?

Drop shipping is once you, as a retailer take orders and a product distributor takes care of all the shipping for you. You do not have to order stock in bulk and the stock stays with the distributor. All it's a must to do while you make a sale is contact your distributor and so they pack up the item and ship it straight to the client with your organization label on the box.

Drop shipping is a very talked-about option because it takes numerous the grunt work out of selling on eBay and even setting up your own online store. Nevertheless, for new sellers, there may be some major downsides to drop shipping.

Advantages of Drop Shipping

1. No storage required

As you aren't buying stock to ship, you don't have to store your products in your house or have a dedicated storage area. This turns into very important in case you are selling massive items corresponding to kit-sets, furniture, sporting items etc.

2. One set of shipping costs

As you are not purchasing stock from the distributor, you don't have to pay a provider to convey stock from the distributor to your own storage area. The only shipping prices are those to ship the product directly to your customer - this can imply that your sales price is decrease because you don't have recover shipping fees.

3. Spend more time on different areas of what you are promoting

When you could have a dropshipping arrangement with a distributor, you are not spending time packaging up the purchases or attending to the publish shop to send the packages. This permits you more time to spend on the other parts of your business like marketing and strategic planning.

4. No packaging supplies required

Not only do you save money by not having to order packaging supplies, you also do not have to find space to store the supplies till you need them.

Disadvantages of Drop Shipping

1. Will be Pricey

Most distributors will charge a seller for the price of the labor and materials involved in drop shipping and this is generally between $2 and $5 per item. Many new sellers don't embody the additional prices of drop shipping of their pricing model and discover that their addition drastically reduce their profit margins, causing the drop shipping operation to be unviable.

2. You are nonetheless responsible for any shipping problems

As the entrance for the enterprise, any points with the shipping will probably be yours to manage and rectify. This contains shipping delays and damaged items. Such points can have an effect on your repute as a reliable vendor.

3. Hard to find a distributor who will do it and do it well

Discovering a distributor who will drop ship and drop ship reliably could be difficult. Many distributors is not going to drop ship because of the extra paperwork involved whilst others might not exercise ample care in the packing and dealing with of shipments.

4. Low stock ranges can cause delivery delays

Many drop shippers won't tell you that they are running low on stock, which means you possibly can't inform your prospects about probably shipping delays earlier than they order. In case your distributor runs out and the products must back ordered, you could find yourself spending a great deal of time placating a bunch of sad and impatient customers.

Certainly, drop shipping is a really interesting prospect for many sellers however, the process might not always a realistic one. Despite the trouble, further costs and storage issues, 'doing it your self' can typically be a more smart option and easier to handle overall.

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