What Is Drop-Shipping?

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drop-ship
verb dräp-ship
to ship (goods) from a manufacturer or wholesaler directly to a customer
instead of to the retailer who took the order.

Merriam-Webster Dictionary

“Drop-shipping” is a renowned term among many small businesses. This article describes drop-shipping and its benefits for small businesses to realize its usefulness when it comes to eCommerce.

Drop-shipping is a model that allows a retailer to buy products individually from a wholesaler and ship them directly to a customer. Yeah, it’s that easy and that complex at the same time. Instead of purchasing a huge amount of products, partnering with a drop-shipping service provider could be very helpful. Then, once an order is received, it is then forwarded to the service provider for fulfillment. The supplier will ship the product(s) directly from the warehouse to the customer, and charge only for the price of the shipped item.

Now, the drop-shipping model has several advantages. For example, it doesn’t require one to invest thousands of dollars. You only purchase a product when there is an order to fill. And that’s great because you can offer a significantly larger number of products, since you don’t have to pre-purchase all the items you sell. The risk involved with starting an online store is very reduced without thousands invested. If things don’t work out, you won’t be stuck with a bunch of products. Besides, there’s no need to worry about running a warehouse for this. You can start a drop-shipping business from anywhere with a laptop and a reliable internet connection.

Real success takes a lot of work and time. Everyone knows it. Achievements such as success and profitability depend on many variables, but drop-shipping is a viable online business model with very low risk. You, as a business owner, must have commitment and dedication to make a right approach. If you’re a retailer, you’re 100% responsible for dealing with customers. A tracking code should be received immediately after the shipment is processed or by the end of the day the order was shipped. Most suppliers (but not all) will accept orders via email. Many will accept them over the phone, and those with more advanced websites will accept them online. Ensure your drop-shipping service provider takes orders through all of these means, and will be able to customize your packages with your company’s name and logo. So it appears like the package was shipped directly from you.

International shipments can quickly get expensive, and getting accurate quotes regarding shipping fees, customs and duties for hundreds of countries is complex.

One of the biggest challenges with drop-shipping is that it can be difficult to know when an item is available at the warehouse – and when it’s out of stock. When a customer orders an item that is listed in-stock and then discovers it’s actually not available, it’s a very poor experience. If this happens too much, your business’ reputation can suffer. As a drop-shipping business, you can’t blame the supplier for the problem. To the customer, you are the supplier.

If you’re not certain about the quality of your next drop-shipping service provider, you may want to place a few small test orders to gauge the fulfillment and communication speed.

MI Group provides drop-shipping services to small businesses in the Caribbean and Latin America who are interested in markets within North America. Contact us for further queries or questions.

Guzman Gonzalez is a Staff Writer

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