Dropshipping – you may have heard the term before. Dropshipping is a logistics solution for eCommerce stores that cannot afford managing stocks. Basically, in dropshipping, instead of keeping a stock yourself, someone else (usually the manufacturer or dropshipping suppliers does this for you.
As soon as you receive an order, you forward it to your supplier. They will pack the product and ship it to your customer. The consumer receives the package in your brand's name. But in reality, you just forwarded the order to the supplier, and he did the rest of the work.
But that's not what dropshipping is all about. In this article, we have shared all the important aspects of dropshipping, starting with its advantages.
Advantages Of Dropshipping Business Model
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You don't have your own stock, so less risk and less space is needed.
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You are not left with unsold products.
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The entire logistics process remains outside the door, so you have more time for it marketing
Disadvantages Of Drop Shipping
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You have to trust your supplier.
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You have only limited influence on how the package looks. You can't just add a perk or a handwritten card.
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Not every dropship supplier accepts returns.
What Does Dropshipping Cost?
You might place products from your supplier’s catalogue in your own webshop. But you determine the selling price yourself. The costs for dropshipping usually consist of three parts:
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The purchase price of the products
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The shipping fees
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An amount for order processing and administration
The big advantage of dropshipping is that you only pay the price of the products once you have sold a product. And by working on creating a long term relationship with your dropshipping companies, you might be able to decrease your retail cost too. Moreover, since they will ship your order, the shipping costs are lower than if you would ship yourself.
With this way of working, dropshipping isn't as expensive as keeping your own stock, especially if you include the time it takes to prepare an order for shipment. This makes it an ideal business model for many online stores.
How Do You Find A Dropship Supplier?
Choosing a reliable dropshipping supplier is an important step for the success of your store. When looking for a suitable dropship supplier, you should pay attention to a number of things:
Where Is The Supplier Located?
If you want to be able to deliver products quickly, always choose a dropship supplier based on your country. Even if there are unexpected problems, it is nice that your contact is easily accessible. For example, if your target customers are from India, choosing a dropshipping suppliers USA won’t be a pretty good decision.
It is simply impossible for someone in China to deliver within 24 hours. And every customer these days expects fast delivery. Moreover, when you choose such sellers who aren’t from your country, you will be charged with high shipping costs.
How Is The Service?
As an online retailer, you are bound by legislation, your supplier is not. As a result, they are not obliged to accept returns. Therefore it’s best if you inquire about the return policy beforehand. In addition to the return policy, it is also good to know about the quality of their customer support. Bad service from the supplier can cost your goodwill.
The Stock
There is nothing more annoying than having to sell ‘no' to a customer because the product on your site is no longer available. So inquire about the quantity of the stock at your supplier and ensure that you are always aware of products that are (temporarily) sold out.
The Delivery Times
Online shoppers are impatient and prefer to receive their purchases the same day. Delivery time is, therefore, an important point on which you can distinguish yourself from the competition. Therefore, always inquire about the delivery time that your supplier uses.
Final Words
We hope now you have a clear idea of what dropshipping really is. If you want to know some more detailed points related to dropshipping, do tell us in the comment section below.
