The dropshipping practice has become extremely popular with online retailers looking to minimize overhead costs and maximize profits. This is the reason drop shippers are also known as drop shipping wholesalers.
What is Drop- Shipping?
The drop-shipping process begins when an online retailer offers products for sale and collects payment from the customer. The retailer then contacts a drop shipper who is either a wholesale supplier or manufacturer that agrees to drop ship the goods directly to the customer. This dropshipping process bypasses more traditional forms of physical inventory storage and delivery.
As the drop-shipper’s supplier ships the product directly to a customer or consumer, drop-shippers never have to worry about fulfilling orders. When drop-shipping, drop shippers simply forward along with requests for purchase from their customers and clientele to the suppliers of their goods. Because drop-shivers do not hold any inventory themselves
The Difference Between Drop Surfing and Drop- Shipping
Drop surfing is dropshipping’s a faster, more efficient cousin. Unlike drop-shippers who take care of the whole dropshipping process, drop surfers only do one specific step in dropshipping. Drop surfing functions as follows:
A drop surfer supplies a company with their unique affiliate or tracking link, which sends all customer information to the drop-shippers supplier. The drop surfer then waits for a drop-ship order from the drop-shipper’s supplier and receives their share of the sale (usually 80%-85% if they use their unique tracking link).
Popular E-Commerce Sites for Drop-Shipping
Seeing as drop-shipping is an excellent business opportunity, it is natural that some popular e-commerce sites employ this process.
Amazon. This famous multinational company’s drop-shipping policy includes the following: 1) the drop-shippers are always recorded as the seller of the product, 2) the drop-shipper will also be recognized as the seller in all manner of invoices, packing slips, and external packaging, 3) the drop-shippers must take responsibility for accepting and processing customer returns, and 4) the drop-shippers must comply with all other seller terms and agreement by Amazon.
Shopify. This drop-shipping site allows its users to drop-ship their goods via USPS, UPS, and FedEx. The platform even supplies its drop-shipper customers with a drop shipping spreadsheet which must be submitted six days before the drop date to allow enough time for dropshipping.
Yahoo Stores. This drop-shipping site allows drop-shippers to choose from a list of wholesale sellers to order their goods from. The drop shipper can even select between dropshipping with U.S. Postal Service or UPS as their drop shipping courier. Yahoo Store also has dropshipping templates which allow its users to create customized drop shipping invoices easily and quickly for all drop shipping orders.
eBay. eBay drop-shippers can drop-ship their items through USPS, FedEx, and UPS (for a fee). The drop shipper may also drop-ship directly from the wholesaler instead of purchasing the drop-shipped goods from eBay.
ASOS. This drop-shipping site allows dropping shippers to drop-ship on behalf of sellers. The drop shipper then shares the wholesale price with the seller minus a commission fee previously agreed between both parties. Although, selling here can be challenging, as drop-shippers may have difficulty finding the best price for their source. That is, if they do not provide the proper inventory that appeals to customers.
Etsy. This drop-shipping platform allows drop shippers to ship and order their goods from Etsy’s approved drop-shippers. The drop-shipper must have an active shop on the site, open an Etsy drop shipping account (for a fee), and choose items they will drop-ship for other sellers.
CafePress. This drop-shipping site allows drop shippers to drop ship their goods from CafePress’ partner drop-ship program.
Zazzle. This e-commerce site allows drop-shippers to promote artists to their customers. The drop-shippers may or may not acts as the seller on behalf of the artist that is the source of their products.
What are the Pros and Cons of Drop Shipping?
Dropshipping has taken off in recent years, with more and more e-commerce businesses opting for this business strategy over the traditional brick-and-mortar approach.
On the one hand, dropshipping allows eCommerce businesses to expand their business while not hiring more employees to handle all the inventory. On the other hand, Dropshipping also enables entrepreneurs to sell various products without needing many items in stock themselves. The drop shipper can even choose from dropship suppliers they like and trust for their drop-shipping needs.
On the other hand, dropshipping can be risky, as drop shippers have no control over what happens to their products once they leave their hands. Also, drop-shippers might not get paid for drop-shipped orders if the drop-ship supplier fails to fulfill drop ship orders, resulting in a loss of income for both drop-shippers and drop-suppliers.
Drop Shipment Pros:
– Drop Shipping allows eCommerce businesses to expand their business while not hiring more employees to handle all the inventory.
– Drop-Shipping enables entrepreneurs to sell a variety of products without needing many items in stock themselves.
– The drop shipper can choose from drop ships suppliers they like and trust for drop-shipping needs.
Drop Shipment Cons:
– The drop shipper has no control over what happens to drop-shipped orders once they leave their hands.
– Drop shippers might not get paid for drop-shipped orders if drop-ship suppliers fail to fulfill drop ship orders, resulting in a loss of income for drop shippers and drop suppliers.
– Drop-shipping can be time-consuming since drop shippers have to find drop ships suppliers that match their requirements.
– Dropshipping might result in higher prices than those offered by conventional brick-and-mortar stores because drop shippers have to pay drop ships suppliers for their goods.
– A drop shipper has the risk of drop shipping with drop ships suppliers that turn out to be unreliable, usually resulting in lost income and dissatisfied customers.
How to Start Drop- Shipping
If you still want to give drop-shipping a shot, fully aware of its pros and cons, then don’t worry because drop-shipping is easy to count from one to five.
1. Pick drop-ship supplier(s) – drop shippers need to find drop ships suppliers that match their requirements, such as product types and prices for drop-shipped products.
2. Work out shipping costs – drop shippers have to work out the costs of shipping drop-shipped orders before they can sell drop shipped items on their drop-shipping business’s eCommerce website.
3. Build your drop-shipping website – drop-shippers need to create drop-shipping websites that enable them to upload drop ships catalogs and add drop-ship items to drop-shipping shopping carts for sale on their websites.
4. Identify customers – drop shippers need to identify drop-shipping customers who can buy drop-shipped products on their drop shipping website.
5. Advertise drop-shipped items – drop shippers have to advertise drop ships they offer for sale on drop-shipping websites to attract drop-shipping customers.
Drop-Shipping Works Best in Manual or Automatic E-Commerce?
There are only two ways for e-commerce companies to track their inventory:
Manual Commerce: Dropshipping is ideal for manual eCommerce entrepreneurship because drop shippers have to upload drop ship catalogs to sell drop-shipped goods on a dropshipping website. Manual e-commerce drop shippers need to identify drop shipping customers who can buy drop ships products before building drop-shipping websites and advertising drop ships products.
Automatic E-Commerce: Drop shippers need to work out dropshipping costs to build drop-shipping websites and advertise drop ships products before identifying drop shipping customers who can buy drop ships products. Dropshipping is ideal for automatic eCommerce drop shippers because drop shippers have access to dropship cost calculators that help drop shippers work out the dropshipping cost.
In conclusion: choose whatever method you help manage your inventory best.