Ecommerce Dropship Integration
Feb 1, 2008
Drop shipping is a technique of supply chain management in which the eCommerce business owner does not actually keep the stock on hand but takes orders from his customers and then places the same order with a wholesaler who will then ship the goods to the customer. The eCommerce owner then keeps the profit from the retail markup of the goods ordered in the sale. Drop shipping is a common method used by ecommerce business owners who might not stock any products at all, but drop ship everything sold through their ecommerce business.
There are some definite business advantages to drop shipping. For one thing, you don’t have to purchase the goods and then hope that you sell out of your inventory. Instead, you simply charge the retail price and then keep the profit when you order the item at the wholesale price. And, because you aren’t required to purchase the items before they get sold, you don’t have to actually find space in your home or office to store the items that you sell on your ecommerce site. Also, if you are running your ecommerce business out of your home, your town or county might have very strict rules about what you are and are not allowed to keep in terms of inventory. Using a drop shipper could help you circumvent the inventory laws but allow you to still ship the goods being sold from your business.
Of course, there are risks as well. One of the biggest risks when using the drop shipping method to sell items via your ecommerce site, you run the risk of taking an order for something and then, when you try to order it through your wholesaler, finding out that the item is out of stock. Having to refund the customer’s money makes you look unprofessional and, if it happens too often, your business could suffer. Another big risk is ending up with a wholesaler who is less than ethical in their business practices. Middle Men can make working with drop shipments complicated and, often, costly.
There are lots of drop shippers that offer their services on the internet and the best way to find one is to search for wholesalers who specialize in the same sorts of goods you are selling on your website. Another option is to ask the wholesaler who would be supplying your business with goods if they will drop ship the goods directly to your customers for you and, if they will, what kind of cost is involved?
Drop shipping is a great way to save yourself time and money. While you are selling the goods at retail prices, you are actually having them sent at wholesale prices. You get to keep the profit and you don’t have to deal with any of the inventory issues or shipping problems that can arise when having to ship goods to customers. Drop shipping can be kind of a sketchy business so make sure the drop shipper you use has ethical business practices and is reliable!
Posted bySite Admin at 1:52 PM
