More than Just Lines on a Map: Best Practices for U.S Bike Routes
Drop shipping the good and the bad
1. Drop Shipping: The Good and The Bad
Drop shipping may help online retailers increase sales and profits. But the strategy is not without
problems — ranging from gathering product information, managing orders, providing good
customer service, and removing poor-performing items.
How Dropship Works:
As a business model, drop shipping has online retailers marketing products, and manufacturers
and distributors fulfilling orders, shipping directly to customers. The aim for merchants is to give
customers more options to choose from without the burden of inventorying every possible size and
color from a product line.
The use of drop shipping to satisfy demand among ecommerce retailers has been one of the main
advantages of doing business on the Internet.
2. Drop Shipping’s Benefits for Retailers
The drop shipping model has several benefits for online retailers. The first is the potential for more
profit.
Drop shipping is a retail method in which you don't keep products in stock. instead you transfer
your customer's order and shipment details to us. We will ship the goods directly to your customer.
The biggest benefit of drop shipping is you don't have to worry about fulfillment or inventory
issues.
But drop shipping is not without its problems.
The Order Processing Problem
“Most retailers work with more than one product supplier. Since there is no common standard for
data formats, order processing, account setup, and billing; managing multiple drop ship supplier
relationships has been complicated, expensive, and messy,” said Dropship.com in a promotional
paper.
Consider that when a customer buys something from an online store in the drop ship model, a
retailer must create a purchase order, submit that order to the vendor, wait for a reply to confirm
that the product is still available, wait longer to get the tracking number from the vendor once the
product has shipped, and then relay that shipment tracking information to the customer.
If this process doesn’t sound to hard, imagine having to do it once or twice for every order,
understanding that each vendor has different purchase order requirements, different response
times, and different shipping options.
If an online retailer cannot automate the order management process, there is no opportunity to
scale and grow with drop shipping.
The Information Problem
One of the key benefits of drop shipping is the supposed ease of getting to market and offering a
variety of products. But drop shipping has a significant information problem too.
For an item to be offered online, a merchant needs a minimum of five pieces of product-related
information.
A written product description.
A good quality product image.
A known shipping weight.
A price.
The available inventory.
3. Manufacturers and distributors do a surprisingly bad job of providing this sort of information.
Some of these companies simply do not act like sales or marketing organizations and employees at
these firms may feel like it is the retailer’s responsibility to come up with the marketing materials
needed to sell the product. This attitude, however prevalent, is not helpful. The marketers at a
typical online retailer have no specific knowledge about given product that is not derived from the
manufacturer and may not even have a sample in hand to take a picture or get a shipping weight.
If drop shipping is to be successful for a merchant, there must be an easy, automated way to keep
up to date on product descriptions and images.
Available inventory is another problem. Typically, vendors will publish available inventory levels
in a tab-delimited file, or similar, that is made available on an FTP site. Retailers are responsible to
collect those inventory levels and update website quantities. Again, this data must be automated to
be efficient.
The Customer Service and Shipping Problem
Another major category of drop shipping problems has to do with customer service and shipping.
When a customer orders online, he or she expects that an item will ship quickly and arrive as
described. When a merchant employs the drop shipping model, manufacturers and distributors are
being trusted with this portion of customer service.
Most major retailers have been able to use their sales volume to require drop shipping vendors to
meet certain shipping and customer service requirements. Sometimes there are even penalties in
place, but small and mid-sized retailers are not likely to have these sorts of safeguards. It therefore
becomes imperative to vet vendors before drop shipping begins and track performance after orders
are flowing.
Finally, merchants would be wise to consider that drop shipping can dramatically increase
shipping costs. Imagine an order wherein a customer buys four products from three different drop
shipping vendors. Collectively, those four items might have fit into a small box and could have
been shipped together for a few dollars. But in this model, each will ship separately and each will
cost a few dollars.
What products are you planning to dropship? I would recommend you to go to the website
www.buyeasyonline.com§
no dropshipping fee and free shipping worldwide