Drop Shipping

A lot of people are interested to learn the ins and outs of drop-shipping, so I thought some information on this topic might prove useful on the website.

What is drop-shipping?
Drop shipping involves selling products on your site that are shipped directly to your customer from the wholesaler or supplier that they are purchased from, rather than from you. Basically, you set up an account with a drop-shipper, or multiple drop-shippers, and they offer merchandise that you can purchase and list for sale on your website. A lot of drop-shippers will even provide you with product images and descriptions that you can put on your website for the products being sold. Once the products are listed on your website, your customers purchase the items from you, but they are shipped from the drop-shipper instead.

What are the benefits of drop-shipping?
One of the benefits of drop-shipping is that you don’t have to physically stock the merchandise being sold. It’s all stocked with the supplier it’s purchased from, so you don’t have to make room for any products yourself.

Another benefit of drop-shipping is that it allows you to build a great variety of products on your website from a wide range of vendors. This can be a big plus for new store owners looking to start with a larger inventory.

You also don’t have to package and ship the drop-shipped products, so that is a time-saver, if nothing else.

What is the downside of drop-shipping?
There are some disadvantages to drop-shipping as well, and these deserve some careful consideration. Perhaps the biggest of these is that since you do not stock the inventory yourself, you have no control over the availability of the products, or how expediently and efficiently the orders are processed and shipped. This can create problems with customers when they are kept waiting on products, and they will be complaining to YOU, not the drop-shipper.

Another disadvantage can be minimum order requirements required by the drop-shipper. Not all drop-shippers will require minimums, but this is something to consider when searching for drop-shippers. If there are no minimums required, then that can be a nice advantage, because then you can sell products one-at-a-time, without a large investment up front.

Shipping costs can be a big disadvantage, depending on how you have shipping set up on your website. If you use the USPS real time calculators, for example, your shopping cart will figure the cost of shipping based on the weight of the product, and the distance between the customer and YOU–not the distance between the customer and the drop-shipper. If the drop-shipper is much farther away, you could end up losing profit on a shipping deficit.

If you’re considering utilizing drop-shipped products, do your research. Check out companies you’d like to use as drop-shippers and find out their track record. You want to use drop-shippers who are reliable. After all, it’s your business’ reputation that is on the line, not the drop-shippers! And you want to keep your customers as satisfied as possible with every order.