Dropshipping – The Advantages & Disadvantages

What’s drop shipping?

Drop shipping is while 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 remains with the distributor. All you must do while you make a sale is contact your distributor and they pack up the item and send it straight to the client with your organization label on the box.

Drop shipping is a very fashionable option because it takes a variety of the grunt work out of selling on eBay and even setting up your own online store. Nevertheless, for new sellers, there will be some main 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 becomes crucial in case you are selling giant items such as kit-sets, furniture, sporting goods etc.

2. One set of shipping costs

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

3. Spend more time on different areas of your online business

When you will have a dropshipping arrangement with a distributor, you are not spending time packaging up the purchases or attending to the post shop to ship the packages. This allows you more time to spend on the other components of your enterprise like marketing and strategic planning.

4. No packaging supplies required

Not only do you get monetary savings by not having to order packaging materials, you also don’t have to search out area to store the materials till you want them.

Disadvantages of Drop Shipping

1. Will be Costly

Most distributors will charge a seller for the price of the labor and supplies involved in drop shipping and this is usually between $2 and $5 per item. Many new sellers don’t embody the additional costs of drop shipping of their pricing model and find that their addition significantly reduce their profit margins, causing the drop shipping operation to be unviable.

2. You’re still accountable for any shipping problems

Because the entrance for the business, any issues with the shipping shall be yours to manage and rectify. This includes shipping delays and damaged items. Such points can have an effect on your fame 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 might be difficult. Many distributors will not drop ship because of the additional paperwork involved whilst others may not exercise sufficient care within the packing and dealing with of shipments.

4. Low stock ranges can cause delivery delays

Many drop shippers won’t inform you that they’re running low on stock, which means you’ll be able to’t inform your prospects about probably shipping delays before they order. In case your distributor runs out and the products need to back ordered, you may end up spending a great deal of time placating a bunch of unhappy and impatient customers.

Actually, drop shipping is a very interesting prospect for a lot of sellers nevertheless, the process could not always a realistic one. Despite the effort, additional prices and storage points, ‘doing it your self’ can often be a more sensible option and simpler to manage overall.

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