Is It Possible to Drop Ship Internationally? How?
Connor Gillivan
I scale companies w/ SEO & content. Daily posts about the process. 7x Founder (Exit in 2019).
Are you thinking about whether or not you should drop ship internationally?
A lot of sellers consider this option, especially when they are just starting out. It’s a big question, and there are widely varying responses depending on the smaller questions that can complicate matters.
It’s definitely possible to drop ship internationally – lots of people do it, and successfully at that. There are a few considerations that you have to carefully weigh, however, before you jump in. To give you the best answer to the big question, I think it’s important to focus on logistics. The main question here would be:
What’s the difference between sourcing locally and internationally when you’re selling to the same market?
When you are thinking about your Manufacturing Cost of Goods (MCOG), you can easily get blinded by the huge gap in costs. The same product can cost you twice or three times as much if you source locally versus sourcing from China, for example. China has a long history of manufacturing items for sale abroad, and can therefore give you great prices.
You have to think about shipping, however, things get hairier. Shipping is actually one main reason why locally sourced products are that much more expensive than internationally sourced ones. Makes sense, right? When logistics becomes a struggle, it may not be the best option to drop ship internationally.
With that in mind, let’s look more closely at the five main logistics challenges that you would face should you choose to drop ship internationally.
(1) Shipping Costs
Obviously, the cost to drop ship internationally is our first consideration. Actual shipping costs weigh most heavily on the cons side of the scale right off the bat.
Where are you sourcing from? Let’s say you’re sourcing from China from a stable manufacturer. How much is it going to cost to have a single item shipped to your customer? Let’s say you’re selling to customers in the US. Shipping from there is going to cost a lot because of the distance and the number of switches (land, sea or air, and land again – possibly multiple switches for each).
(2) Shipping Times
Again, because of the distance and switches, shipping times will be much longer when you fulfill from a far-away land. With overnight shipping offered by most eCommerce stores and platforms, today’s customer is used to getting items fast.
Online shoppers, spoiled by industry standard-setting Amazon’s customer satisfaction policies, will not be happy with one-week shipping as opposed to one-day shipping offers. If you choose to drop ship internationally, your customer satisfaction ratings can suffer drastically. You can get around this by informing them ahead of time and offering better prices. Weigh this carefully against your already narrow margins, though. Otherwise, you might not be making enough for it to be worthwhile to drop ship internationally.
(3) Finding the Right Shipping Carrier
It can be really tough to drop ship internationally if you can’t find a good carrier to work with. There aren’t that many who will have the vast network needed to take your product from a factory in China, for instance, all the way to different customers’ doorsteps across the US.
Because of the demand and limited supply of service, costs can also be higher than you would have expected. You should also think about your opportunity cost. How much time and effort are you going to have to put into finding the right carrier? What does this take away from your other, probably more important tasks?
You can also try to work with different carriers to make sure your product completes the journey, but organizing this can be a real pain. You’re probably better off sourcing locally, or using another model entirely.