Drop shipping is a practice of order fulfillment where a manufacturer/distributor ships a product to a consumer on behalf of the retailer. Drop shipping can be very attractive because it helps to minimize risk and cost while offering convenience and practicality.
- Money does not need to be paid upfront to acquire the inventory which means that if the business does not pan out, the only money you have lost is what you paid to get your website started
- Your business is less susceptible to loss of revenue as a result of changes in tastes or trends because there is no such thing as excess inventory
- Lower volume niche products can be offered along-side popular best sellers
- New products are less expensive to launch because they do not require an investment before they can be sold
- Often you have access to better shipping rates through a drop shipper than you would as a small business shipping your own packages
- The number of goods that get damaged during shipment is generally lower when using drop shipping because it reduces the number of times that the product has to change hands
- All the hassle of packing of products to prepare them for shipment is taken care of for you
- You can add new products to your offerings very quickly
- A storage facility or retail location is not needed- just the website where the items will be sold
- Your business can offer a wider variety of products than would be possible if you had to buy and store all of the items you decided to sell
- Products that are impractical to store (ex. large products, perishable products, etc.) are easier to sell
Remember, many drop shippers will allow you to supply your own labels so customers do not even need to know that you are using a drop shipper rather then sending them their merchandise personally. The increase in drop shipping providers and offerings has made it easier than ever to start an online store!
Kate Pierce, Volusion