Drop Shipping?

What is drop shipping? Despite what it sounds like, drop shipping does not mean dropping a shipment out of a plane, or a drone dropping a package at your doorstep, or a delivery person dropping off your order….

Drop shipping is a retail fulfillment method in which an online store does not keep the products it sells in stock. Instead, when a customer places an order, the store purchases the item from a third party and has it shipped directly to the customer. As a result, the seller does not handle the product directly and does not have to worry about inventory management, shipping, or handling costs. Instead, they earn a profit by marking up the price of the product they are selling.

Accelerated growth in e-commerce and online shopping has steadily increased demand for drop shipping services. Platforms such as Shopify, WooCommerce, Amazon…etc. have made it easier for entrepreneurs to start drop shipping businesses, which has led to an increase in the number of companies that dropship. In addition, the growth of cross-border e-commerce has also fueled demand for drop shipping services, as it allows businesses to easily sell products to customers in different countries without having to manage international shipping logistics.

However, there are some challenges, including intense competition, potential inventory and supplier issues, and a need to carefully manage customer expectations regarding shipping times and product quality. Here are few advantages and disadvantages to consider in a drop shipping model:

Advantages

• Minimal risk: Since you do not have to purchase inventory upfront, you do not run the risk of being stuck with unsold products.
• Scalability: Since you do not have to manage inventory, you can easily scale your business without worrying about storage space or shipping logistics.
• Location independence: With drop shipping, you can run your business from anywhere with an internet connection.

Disadvantages

• Lack of control over inventory and shipping: Since you are relying on suppliers to handle inventory and shipping, you may face delays or errors that are out of your control.
• Potential supplier issues: If your supplier runs out of stock, changes prices, or experiences other issues, it can impact your business.
• Customer service challenges: Since you are not in control of shipping and handling, you may face customer service challenges if there are issues with products or shipping.

As a drop shipper, you are responsible for coordinating shipping with your third-party supplier or 3PL . Some ecommerce platforms already incorporate shipping into their platform, but either way, it is important you establish this process with your suppliers prior to listing products for sale.

Here are a few things to consider when arranging the shipping of your products from a third-party supplier.

1) Determine the shipping policy and methods. Confirm shipping details with your supplier and make sure you understand the supplier's shipping policies, cutoffs, lead time, costs, delivery times, service levels, and return policy.

2)?Add this information to the product listing on your website or marketplace. List any restrictions such a ‘No PO Boxes’. If there are any limits to your shipping capabilities, such as international, but you can make exceptions, advise the customer to contact your company for a quote.

?You should include any relevant information, associated costs, estimated delivery time, and any alternative shipping options such as next-day. An additional option is also including the name of the carrier (FedEx, UPS, Ark Transportation…etc.)

3) Be sure to collect all the customer’s shipping information prior to accepting an order. Accurate shipping information is key to ensuring you meet the delivery commitment.

This information should include: the customer’s full name, phone number, complete shipping address, and any special delivery requirements.

4) Once you have all the info and an order is placed, share it with your supplier along with any other relevant order details.

5) Keep track of the shipping status of each order and follow up with your supplier or the carrier if there are any delays or issues with shipping. Send tracking information to the customer along with any other relevant information.

Drop shipping is an attractive business model for both entrepreneurs and established businesses who want to sell products without added overhead costs. In some cases, it might make sense to directly manage the shipping process.

If you plan to arrange the shipping utilizing your own carriers, make sure to establish and implement a clear process with the supplier and the carrier, including communication methods and how information will be shared between all parties.

If you are interested in exploring alternative shipping options to handle your drop shipments, feel free to DM me. Happy to help in any way.

#dropshipping #suppliers #3pl #supplychain #retail #ecommerce #shipping #onlineshopping #business