Drop Shipping
Drop Shipping is a technique where retailers don’t keep stock of goods; rather he transfers customer’s orders to manufacturer or wholesaler, which in turn directly ship the goods to the customer. As we know, retailers enjoy the profit as a difference between wholesale and retail price, but there are certain percentage of retailers who earn commission on agreed percentage of sales.
How Drop shipping agents work
Generally, drop shipping retailers keep display items in a store, so customers can judge the type of product which can be availed. Other retailers may keep a catalogue of prices.
Benefits of DropShipping
• The onus of handling and managing the stock lies with dropship suppliers, thus saving your most optimum resource “time”.
• Packaging and Postage is taken care by these suppliers
• The major advantage of these suppliers is that, there is no risk of obsolete stock, as you pay for the stock that you sell.
• Additionally, you don’t need huge amount of capital, this business can bee started with minimal amount.
• There are distinct advantages for new and old seller. In case, of new seller the greatest advantage is lack of risk and for an advanced or experienced seller is wide variety of options that he get.
But there are certain limitations too. One of the major constraints is shortage of goods. A sudden increase in demand for particular product leaves you in a sticky situation.
The other major drawback is when buyer asks for a particular photo of a product, then most probably you won’t be able to meet his demand. Difference Between Online Selling and Offline Selling helps the person to create the demand of the products. The most important aspect of the drop shipping is that it needs a trustworthy and reliable supplier.
Dropshippers are just like any other human, who are bound to make foibles. Delays in shipping, poor packaging, mistakes in orders, all these in combo may spoil your reputation as a retailer.
Thus as every coin has fillip side, so this business has its own inherent disadvantages, but as age old adage goes no risk no gain.