If you are an internet seller looking to broaden your offerings without any extra investment for stock, you actually need to take a look at the drop shipping business model as a means to do this. The drop shipping business model is one where an entity (generally the manufacturer or wholesaler) makes a decision to allow retailers to order in quantities of as little as one item at a time - and further allows the retailer to specific a shipping address for each order. Instead of being able to offer just a few "best selling" items, you can now offer numerous more products.
Let's have a look at exactly what the drop shipping service design is and how it works.
The simplest way to think about a drop ship business design is to believe about your own retail web based or mail order service. The only distinction to the client is that in the one instance, the item is delivered straight from your place and in the other instance, the item is delivered from another place.
Here is how a drop ship program works mechanically.
You develop a relationship with a drop ship company and incorporate their offerings into your item brochure.
You receive an order from your customer.
You then log onto your account at the drop ship business and location the order with them - supplying your customer's address as the shipping address for the product.
The drop ship business then packs and ships the item and updates their order system to reveal you when the plan was shipped.
That actually is the entire process. Your total time financial investment to deal with the drop ship company is taking the time to get in orders into their order processing system. You don't get involved in any packaging or shipping.
Components of a great drop ship program
Drop ship companies differ commonly in what they use and how they run their company. Things you wish to discover in a drop ship company consist of the following:
You wish to find a business that always has their inventory in stock. There is absolutely nothing more annoying to your customer than to position an order for something just to be told it is back bought for three weeks. If the drop ship company does not preserve a current inventory of all its offerings all the time, you wish to make certain they have an actual time updated inventory list and that your brochure can be incorporated with this inventory list to mark the appropriate status of each product.
You want a company that ships fast. You don't want your consumers waiting permanently for their products so make sure that the drop ship company ships all orders quickly. As a corollary, you want to get your orders to them rapidly so that there is no extra delay in shipping since you took a couple of days to notify them of an order.
You want to make certain the drop ship company ensures delivery of the order. You want to be particular another one gets delivered to them at no charge to you or the customer if a customer contacts you to report the order was never delivered. It might be that the drop ship business will need you to pay an insurance cost for this guarantee or it may be that they don't. In either case, make sure you have a 100% shipment guarantee promise from them.
You wish to make sure that the business provides an easy to use order placement and status verification system. You should be able to go on the internet to position your orders and confirm when they have been shipped.
You wish to make certain that the company does not include any of their own literature/catalogs with the order and that they do not preserve a newsletter of your customers. You strive for your consumers and you need to gain from the cost of obtaining those consumers.
You want to ensure the rates structure allows you to benefit. Numerous drop ship business will offer you discounts that are nearly as good as their wholesale rates and some will even match their tier one wholesale rates.
So is the drop ship business model properly for you to broaden your company?
There are many elements to take a look at when choosing if a drop ship business model is right for your retail service. A number of them have been talked about in the bullet points above however there are 2 other factors to examine in making this decision.
Is this degree of separation in between you and your consumers OK? When you deliver directly to your customers, you have the opportunity to include inserts with the order - catalogs, sale notices, etc. You will typically lose this capability when drop shipping.
Does the cost structure work for you? When you deliver via this method, you will pay shipping charges and in some instances a per item/order drop ship charge. What you need to examine is if the profit structure is sufficient for you when you deduct out the total cost of the order - including payments to the business and any charges - like charge card processing costs - that you sustain. Likewise, you have to think about that if you bring items from multiple companies, you will be paying shipping charges to numerous business if a consumer orders products that must be fulfilled from several locations. This also will impact your revenue per order.
By analyzing all the aspects above, you will be able to decide if the drop ship company model is right for your retail operation. As long as you take the time to work and discover with trustworthy business, it is an excellent way to add to your product catalog and bottom line revenue without any risk on your part. If you are thinking of expanding your business operations this year, you need to give this design a serious look prior to you invest thousands in inventory that you have to store and sit on until it moves.
The only difference to the consumer is that in the one circumstances, the product is shipped straight from your area and in the other instance, the product is delivered from another place.
Your total time investment to work with the drop ship business is taking the time to go into orders into their order processing system. You don't want your consumers waiting permanently for their items so be sure that the drop ship company ships all orders rapidly. You want to be sure the drop ship business ensures delivery of the order. PrintProfits Review When you ship by means of this technique, you will pay shipping charges and in some instances a per item/order drop ship cost.