Drop Shipping
Delivering Your Product
You have made your first product sale and are anticipating more sales to follow. Now you must ensure that your customers receive their products.
Having an effective shipping process in place is critical and always has an effect on your standing as an online seller, which is why you need to do this right. This is where drop shipping comes into play.
Drop Shipping
Drop shipping is a supply chain management method that is very effective and easy on the seller. Instead of the seller stocking products, orders are handled and shipped by the wholesaler or the manufacturer.
This is an excellent option for an online business. The seller lists new items on his website; handles the sales and collects the money, pays the wholesaler, and the wholesaler ships directly to the buyer. EZPZ.
Seller makes his profit one of two ways:
- From the difference between the retail and wholesale price.
- Receives a commission on each sale as specified in an agreement with the wholesaler.
Drop shipping is often the preferred delivery method for small businesses and online retailers. It works well because customers do not expect to walk out with their purchase and the slight delay between placing the order and the product being shipped is the accepted norm.
A great benefit of drop shipping is that the seller does not have to stock items he offers for sale and is not burdened with inventory control. This eliminates storage costs, need for security to prevent theft, and employees to handle and ship the items.
Be aware, however, that there are manufacturers who will not drop ship products – OR – they may require someone to oversee shipment and process orders. Others only accept bulk shipping. These types of manufacturers are not typically good options for a small business or someone who is just starting out.
Do your research and find a manufacturer or wholesaler that will work with you. Two good places to start are Amazon Services and DOBA.
When you can find a good product fit with a manufacturer or wholesaler that is willing to drop ship, the benefits generally outweigh the problems.
As an online entrepreneur, this supply chain management method can be a very good choice.
In addition to the benefits noted above, it gives the seller more time to spend on other business matters that are better suited to his/her talents and expertise.
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