Advantages Of Drop Shipping
Being a popular method, drop shipping service is a beneficial arrangement between retailer and wholesaler
. Many people running online businesses turn to this service because its cost-efficient and time-saving. By cutting down cost and saving time, business productivity increases. Retailers dont have to worry about inventory check or storage. Basically, they only need to market the product and get consumers to buy. Here are some drop ship advantages.
For the retailer, there is no need for product packing, documenting or delivering. This is handled by the respective wholesaler companies. Since there is no need to rent a storage area (to keep the merchandise), cost of product is also greatly reduced. Consumers dont have to absorb the cost of storage anymore. They only need to pay for product delivery costs from manufacturer. Generally, this leads to higher chances of consumer purchase. Retailers not only stand to profit from consumer, they may also receive payment from manufacturer for this partnership.
For example, you own a website that sells Merchandise A. When a customer decides to buy your product, they pay you for the product (including shipping cost). Then youll inform the wholesale distributor with order and mailing information. Based on the drop shipping agreement, theyll package, label, and deliver the product directly to customer. As the retailer, youll receive the billing details from the distributor. Youll need to pay for the products wholesale price plus shipping costs. You profit from the difference between retail and wholesale price. Besides that, you make a certain amount of profit for your partnership effort.
Depending on the size of your business, you may need a few workers for the purpose of stock keeping, inventory monitoring, and product delivery. These valuable employee resources can be freed and utilized in a more efficient way if you engage in the service discussed above. These drop ship advantages are just a few out of the many advantages.
by: Chris Cornell
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