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Dropshipping – The Advantages & Disadvantages

What is drop shipping?

Drop shipping is if 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 you need to do whenever 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 main downsides to drop shipping.

Advantages of Drop Shipping

1. No storage required

As you aren’t buying stock to ship, you do not have to store your products in your house or have a dedicated storage area. This turns into crucial if you’re selling large items resembling kit-sets, furniture, sporting goods etc.

2. One set of shipping costs

As you aren’t purchasing stock from the distributor, you don’t have to pay a carrier to convey stock from the distributor to your own storage area. The only shipping costs are those to ship the product directly to your buyer – this can imply that your sales value is lower because you do not have recover shipping fees.

3. Spend more time on different areas of your enterprise

When you have got a dropshipping arrangement with a distributor, you aren’t spending time packaging up the purchases or attending to the publish shop to ship the packages. This permits you more time to spend on the opposite elements of your business like marketing and strategic planning.

4. No packaging materials required

Not only do you save money by not having to order packaging materials, you additionally don’t have to search out space to store the supplies until you want them.

Disadvantages of Drop Shipping

1. Might be Expensive

Most distributors will cost a seller for the price of the labor and supplies involved in drop shipping and this is mostly 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 greatly reduce their profit margins, causing the drop shipping operation to be unviable.

2. You are nonetheless chargeable for any shipping problems

Because the front for the enterprise, any points with the shipping will probably be yours to manage and rectify. This consists of shipping delays and damaged items. Such points can affect your popularity 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 may be difficult. Many distributors is not going to drop ship because of the extra paperwork concerned whilst others may not exercise sufficient care within the packing and handling of shipments.

4. Low stock levels can cause delivery delays

Many drop shippers won’t tell you that they are running low on stock, which means you can’t inform your prospects about possibly shipping delays before they order. If your distributor runs out and the products have to back ordered, you might find yourself spending an excessive amount of time placating a bunch of unhappy and impatient customers.

Certainly, drop shipping is a really interesting prospect for a lot of sellers nevertheless, the process could not always a realistic one. Despite the effort, additional costs and storage issues, ‘doing it yourself’ can usually be a more smart option and simpler to manage overall.

If you have any questions concerning where and ways to utilize how to start dropshipping, you could contact us at our website.

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