Drop Shipping
What is Drop Shipping?
After selling on eBay for years, shipping hundreds of orders a day and having to inventory A LOT of product, I came to be a big fan of wholesalers that practiced drop shipping versus companies that were just selling wholesale products without the drop shipping services. Drop shipping is a service provided by suppliers in which they ship the product that you have sold directly to the consumer for you. It really is a superior supply chain management technique for the home business owner. For example, a customer purchases an item from your eBay store or an eBay auction. Instead of your company handling the supply chain management (or keeping inventory of the item), you pass the order to the drop shipper who then ships the product to your customer. Drop shippers are essentially the middle man between online retailers and the end consumer. Do you see how drop shipping services can be so beneficial?
Why is Drop Shipping a Good Option?
Using drop shipping to fulfill orders does not make your job of selling or servicing customers any easier but it does help out considerably in your own risk when it comes to supply chain management. You can begin selling many different items using a drop shipping supply chain management technique without having to inventory the merchandise. You do not actually pay for the products until you sell them! You never have to keep a stock of products yourself. That is left up to the drop ship companies. You also can list items and if they do not sell, you do not have to buy them from your drop ship supplier. Your inventory situation is risk free! Also, you do not have to inventory shipping supplies and you save daily trips to the Post Office of your local shipping outlet.
Some Benefits of Drop Shipping Supply Chain Management
Drop shipping services get you in the game quickly and have minimal fees for their drop ship services. Yes, you do pay a small fee for each order shipped on your behalf but you have NO inventory to manage or store. You have no hassles of dealing with shipping materials or shipping vendors. That is all left up to your wholesale source, your drop shipping services AND, best of all, you do not pay the drop shipper until after your customer has paid you!
As you can tell, drop shipping removes a lot of the financial burdens associated with your overall supply chain management. Aside from the fees paid to the drop shipping company, your expenses are minimal when you consider that your company does not have to inventory any products. It allows you to focus on getting your business off the ground and you can dedicate your time to learning your business, selling product and servicing your customers!
