Drop Shipping : The Cost Of Convenience

Many online sellers tout drop shipping for its ease, others dismiss it, arguing that it leaves no room for profit. Like every other product sourcing method does drop shipping its own unique advantages and disadvantages of e-Biz:

Basics
Drop Shipping is operating a wholesale distributors provide that you can sell items on your web without physically stocking them. Wholesaler's warehouse large quantities of product that you enter in your web store. Your retail customers place their orders with you, and you send them to decrease the sender. The decline sender sends the product directly to your customers, but remains invisible to them. The end result is that small businesses seem larger than it really is.

The Upside
CEO of a network Enterprises (http://www.dropshippers.co.za/) drop shipping presents your business with many advantages:

Lower costs. Sanchez says, "It costs to go into the warehouse and shipping individual items can be enormous. It is not efficient to do so until you do it on a large enough scale."

No inventory investment. You do not pay the wholesaler for an order until your customer pays you. And you can test new products without purchasing inventory that may not sell.

Recovered time. The time you spent receiving and organizing inventory, which prints the labels and packaging and shipping orders time, you can now spend promoting your website and provide faster customer service.

No order minimum. Your wholesale orders are based on customer orders. You can order as many or few items as you need - right down to individual products.

Wider product range. You can carry items in your product line-up that would be difficult to physically stock, you are also able to offer large items, such as furniture, without the hassle of trying to ship each piece.

The disadvantage
Of course, drop shipping restrictions - two in particular:

Thinner profit margins. Wholesale is a volume business - the more you buy, the better the price per piece. Explains Sanchez, "Although you Dropship prices are true wholesale prices, is the wholesale price of an item." You will not receive additional discounts for buying in bulk, so your per-item-costs are naturally higher. You also pay a drop ship fee, either per container or per unique shipping location, to cover additional labor and materials costs drop shipper incurs.

Occasional delivery issues. If your drop shipper is slow to fill your order, or doing a poor job packaging them, it reflects badly on you and costs you repeat business. When using a new supplier, it is always a good idea to test them first and get an idea of what your customers will experience. Place an order with them yourself, and see how quickly and competently they handle it. If you order a pair of your most popular items, you will also have them on hand if your drop shipper ever go short.

The Bottom Line
Especially when you get started, drop shipping is a simple and cost effective tool for your e-Biz. It does not mean you should limit yourself to using only drop shipping - the most successful retailers use multiple product sourcing techniques. Dropshipping is a great addition to your other product sourcing methods, and should be part of your overall product sourcing strategy.