Advantages of Drop Shipping
Drop shipping implies a type of selling in which the retailer will not keep items in stock, but alternatively sends the client’s shipment details and order to the supplier, who then delivers the items directly to the client. The retailer then keeps the difference between the retail and wholesale prices. If you are planning to begin an online retail company, drop shipping might be the best choice.
First of all, you do not need to pay upfront to get an inventory of products before you can begin selling. With drop shipping, you may get into business by exhibiting the products that you would like to market on your website, before you actually purchase some of the goods. When you have received your order through the website, you may then forward the order to the drop shipper, typically via email, that will then send the goods to your client.
The next feature of drop shippers is that they take care of the products delivery and shipment for you. This is highly beneficial in case you are just starting out in business as you can focus all of your efforts on advertising your company, rather than worrying about order delivery.
Since you do not need to purchase a massive inventory of stocks in the drop shipper, there is no demand for warehousing costs too. Should you rely on the usual wholesaling business model instead of drop shipping, you need a place to store your goods after purchasing your initial stock. Depending on the space you require, your monthly warehouse leasing costs can cut into your profit margin significantly. You might even be operating at a loss.
With drop shipping, you have the option of marketing any number of goods that you want on your site catalog. As you don’t make upfront capital investments, then you have got the flexibility of marketing as many goods as you want, provided that the goods are associated with the kind of merchandise that you sell.
The final advantage of drop shipping is that most drop shippers do not impose a minimum quantity order. If your clients place orders at your website, it is possible to forward your orders to your drop shipper one-by-one. Most drop shippers do not have an issue with that. Therefore, drop shipping is quite helpful for your company since it gives the best flexibility.
As seen, drop shipping is definitely an option you may want to think about if you are when planning to start an online retail company without the many hassles of inventory and product delivery. If you check the above advantages carefully, you will see that drop shipping is undoubtedly a workable option for your small-business firm. Large retailers, on the other hand, have enough resources like capital to utilize the wholesaling version due to their business.