Drop shipping definition: an electronic fulfillment model in which you sell goods individually from a wholesale distributor to a consumer. Rather than buying a bulk amount of stock, you simply contract with a drop shipping distributor and list their goods for retail sale. The difference between your original order and the drop ship order is the profit made on each individual sale.
The e-commerce world has grown in recent years and this has created many opportunities for businesses both large and small. However, one area that seems to be growing faster than any other is online sales. This is partly due to the fact that drop shipping eliminates the need to store large volumes of inventory. With the fulfillment model, your inventory supplier simply takes care of stocking the goods and shipping them to your customers. Your only job is to manage your e-commerce website.
There are two major categories of drop shipping suppliers. There are wholesale drop shipping suppliers who source directly from the manufacturer. The benefit to this type of supplier is that they can offer much better prices than importers due to lower overheads. However, the major drawback is that you have no control over the quality of the goods as they are ordered from a manufacturer, not a wholesaler. You therefore have to be careful about offering products that will sell.
Another type of ecommerce company is the traditional retail seller. This person usually operates their business in a local market. The advantage of working with this type of retailer is that you can offer your goods in a convenient manner at a price that the public can afford. The main drawback is that your profits will be higher from drop shipping costs than from traditional retail sales. If you offer products that are too trendy or too fashionable, you may find that you don’t have any customers.
One of the biggest challenges for any ecommerce business is how to keep your customers satisfied. One of the ways to do this is by offering good customer service. The more satisfied customers you have, the more likely you are to sell drop shipped items. This is because satisfied customers will keep coming back to buy more products. This keeps your ecommerce business growing and therefore expanding.
The traditional brick and mortar retailer have a problem with its delivery options. In order to meet the needs of most customers, an online store will often have to use two or more carriers to make it feasible to deliver their products to their homes. The best solution to this problem is to use a drop shipping model instead of a traditional retail model. With a drop shipping model, your supplier will take care of your inventory and all of your shipping logistics for you, allowing you to concentrate on growing your online store and generating a great deal of profit for your business.
Using a drop shipping business model will also allow you to build more profit margins. Since you won’t have to hold the stock or handle the logistics of shipping your products, your margins will be much higher than what you would experience using a traditional retail model. Because you won’t need to invest money in storage spaces or fulfillment space, your overhead costs will be significantly reduced. And, as your drop shipping business grows, you can expect to see more profit margins because you will no longer be paying for shipping costs. These two factors combined will allow you to enjoy even higher margins than you would if you were to invest capital into these areas of your operation.
The reason that many people sell drop shipped products through their online stores is because they want to stay local. By choosing to sell through a drop-shipping company, you can ensure that your products can be delivered directly to your customers, which eliminates a lot of extra expense for you. You will also enjoy significantly higher profit margins because you won’t have to spend money on storing and handling of goods, which will also help you make more money on a monthly basis.