Dropshipping - The Advantages & Disadvantages

Dropshipping - The Advantages & Disadvantages

What's drop shipping?

Drop shipping is whenever you, as a retailer take orders and a product distributor takes care of all of the shipping for you. You don't have to order stock in bulk and the stock stays with the distributor. All it's a must to do whenever you make a sale is contact your distributor and so they pack up the item and ship it straight to the customer with your organization label on the box.

Drop shipping is a extremely popular option because it takes a variety of the grunt work out of selling on eBay and even setting up your own on-line store. However, for new sellers, there will be some major downsides to drop shipping.

Advantages of Drop Shipping

1. No storage required

As you are not buying stock to ship, you do not have to store your products in your house or have a dedicated storage area. This turns into essential in case you are selling giant items equivalent to kit-sets, furniture, sporting items etc.

2. One set of shipping costs

As you aren't purchasing stock from the distributor, you don't have to pay a service to convey stock from the distributor to your own storage area. The only shipping prices are those to ship the product directly to your buyer - this can imply that your sales value is decrease because you do not have recover shipping fees.

3. Spend more time on different areas of your enterprise

When you may have a dropshipping arrangement with a distributor, you are not spending time packaging up the purchases or attending to the post shop to ship the packages. This permits you more time to spend on the other parts of your enterprise like marketing and strategic planning.

4. No packaging supplies required

Not only do you get monetary savings by not having to order packaging supplies, you also do not have to find space to store the supplies till you need them.

Disadvantages of Drop Shipping

1. May be Pricey

Most distributors will charge a seller for the cost of the labor and materials involved in drop shipping and this is usually between $2 and $5 per item. Many new sellers don't embrace the additional prices of drop shipping in their pricing model and find that their addition significantly reduce their profit margins, causing the drop shipping operation to be unviable.

2. You might be nonetheless answerable for any shipping problems

Because the front for the enterprise, any points with the shipping will be yours to handle and rectify. This includes shipping delays and damaged items. Such points can have an effect on your popularity as a reliable vendor.

3. Hard to find a distributor who will do it and do it well

Finding a distributor who will drop ship and drop ship reliably may be difficult. Many distributors won't drop ship because of the additional paperwork involved whilst others may not exercise sufficient care within the packing and dealing with of shipments.

4. Low stock ranges can cause delivery delays

Many drop shippers won't tell you that they are running low on stock, which means you possibly can't tell your prospects about presumably shipping delays before they order. In case your distributor runs out and the products should back ordered, you could end up spending a great deal of time placating a bunch of unhappy and impatient customers.

Actually, drop shipping is a very appealing prospect for a lot of sellers however, the process could not always a realistic one. Despite the hassle, extra costs and storage issues, 'doing it yourself' can typically be a more wise option and simpler to handle overall.

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