eCommerce Know-How

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Straight Talk

May 18, 2010

Straight Talk on Drop Shipping

What can drop shipping do for you?


Full Article: Click here to view printable PDF version

  What can drop shipping do
for you?

Drop shipping lets a mom-and-pop webstore look like a large retail company. And lets a large retail company expand its product offerings.

"Tell me more!" you say. With pleasure.

Drop shipping means:

More variety. Offer a broader or deeper merchandise assortment than you currently can. Explore new brands or manufacturers.

More quickly. Add "hot" products to your site without waiting the 6 weeks (or 6 months) it would take to set up and receive those products into your warehouse. Take products down with a click of a button.

Fewer expenses. There are no (or limited) upfront costs. You display the product on your site, the customer places the order, your drop shipper delivers, you are billed when the merchandise ships. You eliminate the expenses (including personnel) of receiving, stocking, warehousing, pick/pack/shipping and, sometimes, return-handling. You're probably also benefiting from their buying power on shipping supplies and rates.

Less risk. If a product doesn't sell, you're not stuck with the inventory. You can experiment with merchandise without investing too much.

Improved service. The right drop shipper may be better and faster at fulfilling than your business is or will be.

"I'm sold!" you say. Not so fast.

Drop shipping also means:

More dependencies. You are heavily reliant on a company that you do not control. Shipping delays, backorders, errors, problems with returns - all are outside your control but directly impact you and your customer.

More need for quality and integration. Visibility and access to your data to ensure quality and consistency is even more critical when you have multiple fulfillers or systems. You must have good data, well-defined processes, and integrated and automated systems.



Bottom Line:  Don't let the advantages blind you to the challenges. Even
though the products may never be in your hands, in your customers' eyes, you are responsible for the quality of their entire experience.



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