Hands-off Order Fulfillment - the Pros and Cons of Drop Shipping

When running your online store it's important to consider every factor to make sure you're being cost effective. Shipping can take a huge chunk out of your budget, but can drop shipping be a help or a hindrance? Take a look at this article and decide what's right for your store....

Wait... What is drop shipping?

Drop shipping means the products you sell on your online store are shipped from a wholesale supplier. So when a customer buys from you, you simply forward their details to the manufacturer, and they will take care of the shipping.

Pros:

  1. You don't have to buy in bulk

Drop shipping is good for new businesses that don't have a lot of money to play with. Usually manufacturers will make you buy in bulk for their products, and you may end up with more stock than you know what to do with. Drop shipping means that you can make one single order and they will ship it to your customer.

2. You can open your online store quicker

If you're just about to launch your store, drop shipping means that you open it much quicker, than if you were to stock the inventory yourself. You don't need to worry about investing heavily in products and you can still offer as much stuff as you'd like on your website.

3. You are free to run your store from anywhere

As you aren’t tied down to a warehouse where all your inventory is housed, you are free to run your store from anywhere that has connection to the internet! Just think about running your store from the poolside, or something similarly appealing.

4. It makes life hassle-free

Well, as hassle free as it can be! There is a lot of work that goes into an online store and if you don't have a huge team of people working for you, it can get tough. The good thing about drop shipping is that you don't need to worry about dealing with the shipping process, freeing up time for other important matters.

5. It's a tried, tested and approved service

If you've never heard of drop shipping before it may sound like a dodgy deal, but it's actually really not. Many companies use drop shipping, including Amazon and Sears, and if you put the research in, you'll be able to find plenty of reputable suppliers.

6. You'll save money

Yes drop shipping will help you save money. You will save on having to purchase in bulk, shipping and packaging costs, and even paying for a place to store all of your products.

Cons:

  1. You lack full control

So if you decide to use drop shipping, you won't be able to manage the customer's expectations as well as you could if you were to take care of your own shipping. Some of the problems you may run into include manufacturers running out of stock, or late deliveries – which could fall back on your store.

2. You could be missing out on retention opportunities

Retention is an important part to selling online, but because you don't package the products yourself, you won't be able to add coupons or offers inside the customers package - meaning you may lose out on some serious sales potentials!

3. It's harder to sell

Customers like to buy from people who are experts in what they do. The problem with selling products that you have never seen is that if a customer comes to you with a question, you may not be able to answer it straight away, and the customer will have to wait until you have spoken to the manufacturer.

4. There's more competition

Using a supplier means that the products you are selling are not unique, so there will be a bunch of other people selling the same stuff as you. This can lead to poor margins as your competitors may lower the price to try and out-do your sale.

5. Drop shipping fees can be off putting

Different suppliers will charge different rates and the last thing you want to do is turn your customers away because the shipping costs are too high. Make sure you take into account who is offering what.

6. You can't check quality

As you are not the person putting the product into its package, you can never really be sure whether it's of a good quality. The last thing you want to do is ruin your reputation and if the product isn’t up to standard then you could risk doing that.

Summary:

When it comes to drop shipping, there is no right or wrong answer – it really depends on what you think is right for your store. It definitely provides an easy way to get your shop up and running, and testing different methods is definitely the way to go to succeed with your online store.

If you do decide it is the method you would like to adopt for your shipping needs then make sure you do your research and find a reputable supplier. Take a look at WorldWideBrands as they offer a directory of certified drop shippers that you can trust.

Don't forget to let us know!

Would you, or do you currently use drop shipping for your store? We'd love to hear your thoughts in the comments below. Or feel free to get in touch on Google+, Facebook and Twitter – speak to you soon! 

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Comments
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David Adams
August 19, 2014 11:21 AM
The fees are the bigger deal breaker for me. They can be quite high, but I get used to it. The quality of items really isn't a big deal either, but I suppose that there are risks to it, but I've never had a problem. At least not yet.

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