Many people fear opening an online store due to upfront costs and logistics issues. But imagine if someone offered to cover the initial inventory costs for thousands of items and manage your shipping and delivery operations. It would be much easier to start and you could run your business from anywhere in the world. Sound too good to be true? Well, there is a good option called DropShipping, which is dedicated to direct shipping from the wholesale supplier to the end customer.
In this article, I am going to teach you all about Drop Shipping through a simple definition and a list of benefits. I'll also show you how to find the best dropshipping supplier that offers Drop Shipping, and I'll give you solutions to some common problems related to this method.
What is Drop Shipping?
Drop Shipping is a method for retail sale in which you do not need to have the products in stock. Instead, you can partner with a wholesale supplier that maintains your own inventory - transfers your customers' orders and shipping data, and ships the products directly to the end customer. The biggest benefit of Drop Shipping (direct shipping from the wholesale provider to the end customer) is that you don't have to worry about shipping, delivery and inventory issues.
Before contacting the providers, you should have your legal affairs in order. In the United States, most vendors will ask for your EIN (Employer ID Number) and a copy of your state sales tax and/or resale certificate. Once you are well established, you can start contacting providers that offer Drop Shipping.
Despite my recommendation, Drop Shipping is not e-commerce nirvana. Like any model, it has its weaknesses and disadvantages. With some planning and knowledge, these issues can be managed and will not prevent you from running a successful business with Drop Shipping.
1. There will be a lot of competition and minimal margins.
Solution: It is true. Products that can be shipped using Drop Shipping will generate a lot of competition. This will generally lead to very low prices and significantly lower profit margins, making it difficult to run a viable business.
2. Inventory timing is difficult and can result in out of stock products.
Solution: The best way to mitigate this problem is to work with multiple vendors with overlapping product lines. Relying on a single vendor is inherently dangerous. Having two suppliers doubles the chance that an item will be in stock and available to ship.
3. It is difficult to sell products that you never see.
Solution: In today's world, it is possible to become an expert on almost anything through information found online. Selling manufacturers' products with detailed websites like dropshippers UK will allow you to become intimately familiar with a product line without ever touching the product. And when you need to answer specific questions about an item, a quick call to the supplier or manufacturer will get you what you need.
4. Involving third parties will result in more errors and shipping, delivery and logistics problems.
Solution: Even the best providers that offer Drop Shipping make mistakes, and the mediocre ones make many. Suppliers often take care of problems financially, but when they don't, you must be willing to spend whatever it takes to solve the problem for the customer.
Hasan Root, a dream lover!