Many online sellers tout drop shipping for its ease; others dismiss it, arguing it leaves no room for profit. Like every other product sourcing method, drop shipping brings its own unique set of advantages and drawbacks to your E-Biz:The Basics Drop shipping is service some wholesale distributors provide that enables you to sell items on your web site without physically stocking them. The wholesaler warehouses large quantities of product, which you list in your web store. Your retail customers place their orders with you, and you pass them on to the drop shipper. The drop shipper sends the product directly to your customers, but remains invisible to them. The end result is that your small business appears much larger than it really is.
The Upside According to Jason Sanchez, CEO of One Net Enterprises (OneInc.com), drop shipping presents your business with numerous benefits:Lower OverheadSays Sanchez, “The costs that go into warehousing and shipping individual items can be tremendous. It doesn’t become efficient to do so, until you do it on a large enough scale.”No Inventory Investments You don’t pay the wholesaler for an order until your customer pays you. And you can test new products without purchasing inventory that may not sell.Recovered Time The time you spent receiving and organizing inventory, printing labels, and packing and shipping orders is time you can now spend promoting your web site and providing faster customer service.No Order Minimums Your wholesale orders are based on your customers’ orders. You can order as many or few items as you need — even down to individual products.Broader Product Selection You can carry items in your product line-up that would be difficult to physically stock. You’re also able to offer large items, such as furniture, without the hassle of trying to ship each piece.Content Continues Below
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