Subscribe to this RSS feed
Dropshipping - The Advantages & Disadvantages

Dropshipping - The Advantages & Disadvantages

What is drop shipping?

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

Drop shipping is a very talked-about option because it takes a lot of the grunt work out of selling on eBay and even setting up your own online store. Nonetheless, for new sellers, there could 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 if you're selling massive items resembling kit-sets, furniture, sporting goods etc.

2. One set of shipping prices

As you are not purchasing stock from the distributor, you do not have to pay a provider to carry 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 lower because you do not have recover shipping fees.

3. Spend more time on different areas of your enterprise

When you might have a dropshipping arrangement with a distributor, you aren't spending time packaging up the purchases or attending to the put up shop to send the packages. This permits you more time to spend on the other elements of your business like marketing and strategic planning.

4. No packaging supplies required

Not only do you lower your expenses by not having to order packaging supplies, you also don't have to seek out space to store the materials until you want them.

Disadvantages of Drop Shipping

1. Could be Pricey

Most distributors will cost a seller for the cost of the labor and supplies involved in drop shipping and this is mostly between $2 and $5 per item. Many new sellers do not embody the additional prices of drop shipping in their pricing model and find that their addition greatly reduce their profit margins, causing the drop shipping operation to be unviable.

2. You're nonetheless liable for any shipping problems

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

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

Finding a distributor who will drop ship and drop ship reliably could be difficult. Many distributors won't drop ship because of the extra paperwork concerned whilst others might not exercise ample care within the packing and dealing with of shipments.

4. Low stock ranges can cause delivery delays

Many drop shippers won't tell you that they're running low on stock, which means you'll be able to't tell your customers about possibly shipping delays before they order. If your distributor runs out and the products should back ordered, chances are you'll find yourself spending a substantial amount of time placating a bunch of sad and impatient customers.

Definitely, drop shipping is a very appealing prospect for a lot of sellers however, the process may not always a realistic one. Despite the hassle, extra prices and storage points, 'doing it yourself' can typically be a more sensible option and simpler to manage overall.

Here is more information regarding start a dropshipping business review our web site.