Drop-shipping is an increasingly popular strategy for order fulfillment where the retailer does not hold products in inventory, but rather, relies on manufacturers or wholesalers to send the orders out to customers. The fact that no stock is needed on site to fulfill this retail model makes it a very attractive option to e-commerce merchants. Once a customer places an order for a drop-shipped product online, the retailer will pass this on to the manufacturer or wholesaler to issue a purchase order and provide the customer's shipping details. The product is shipped directly, whilst the retailer earns a profit. If you currently run or are thinking of starting an e-commerce store, we've got some great reasons to consider drop-shipping.
#1. Wider product range:
Drop-shipping makes it entirely possible for smaller merchants to offer many more products for sale compared to what would have been feasible if they had to hold everything in inventory. For example, a small business owner who sells clothing online and operates from their home may only have room for so many items of clothing in their spare room, which leads to less of a selection for customers to choose from on the site. On the other hand, using drop-shipping
means that they can increase their product base significantly as there’s no need to worry about storage space or the cost of purchasing stock beforehand. In addition, having a wider range of options available to buy at your e-commerce store can boost marketing, since each product page is a landing page for search engines to index. #2. Reduce risk of testing new products:
Starting a new e-commerce store can be a risky experience, particularly when you’re up against the big names of today such as Amazon, eBay, and sites for physical retailers who’ve become household names before the internet. Trying out sales for a new product can cost a lot if you have to hold it in inventory, and if sales don’t go as expected, this can quickly lead to a financial loss. On the other hand, drop-shipping means that you can test customer reactions to products without paying for it first. Even if the item doesn’t sell, you won’t lose any money. #3. Start your business with less:
Today, running an e-commerce store and becoming one’s own boss is the ultimate dream for many people. If the cost of starting your own business is the only thing putting you off from taking the plunge, then you’ll be glad to hear that the majority of drop shipping arrangements do not require any upfront investment. As a result, this allows would-be e-commerce store owners to start their business on a shoestring budget
by eliminating the need to purchase and store stock. #4. Save time:
Last but not least, since you’ll leave important jobs such as picking, packing, and shipping to the drop-shipper, this can be the perfect arrangement for saving time when running your online business. Since you’re effectively outsourcing these tasks to somebody else, you’ll be left with more time to dedicate to growing your brand, marketing, and engaging with your customers
Would you consider drop-shipping as an e-commerce option? Let us know in the comments.