Advantages and Disadvantages of Dropshipping
Should you choose a drop shipper?
How to choose a drop shipper?
It’s a pretty serious question that faces retailers of wholesale's wholesale clothing these days. ‘Do I dropship, and act as a middleman, or do I stock the inventory myself?’ There are arguments on both sides of this issue, because while there are attractive advantages to dropshipping products, there are also disadvantages involved. To help explain the issue, we’ve put together a little primer for you.
What is Dropshipping, exactly? In a nutshell, it’s selling through a third party. Company A, who holds the actual inventory offers Dropshipping. Company B is, for instance, a women’s clothing retailer, wants to sell company A’s products to their customers. The Customer then orders the items through company B, who sends the order on to company A. Company A sends the items directly to the customer. It can be a little confusing, but in reality, it’s a fairly simple process.
What are the advantages of Dropshipping? The advantages are fairly clear cut. A company who uses another party to dropship does not have to buy inventory of their own. They can start a business much more cheaply because they do not have to pay the cost of start up. They don’t have to store items, nor are they ever left with spare inventory.
What are the disadvantages of Dropshipping? There are always negatives to every positive. With dropshipping, retailers hold far less physical merchandise, if any. As a result, their customers have no way of seeing the physical items before they purchase. This can be problematic, as it can lead to a high percentage of returns. Another disadvantage is the time involved in handling customer service. If a customer is dissatisfied, they will contact you, rather than the company who shipped their product. You will have to contact the shipper, delaying customer service time, which may anger the customer. Also, by relying on a third party shipper, you will be responsible for any mistakes they make. If they delay shipping, or have a problem with the order, it will be you who is held accountable. A customer may avoid buying from you because of a mistake on the part of your shipper. Competition is also a large factor. Dropshippers sell indiscriminately to anyone, meaning that there will be a lot of places offering the same products you are selling. You may not be able to afford to compete with their prices
How to choose a drop shipper?
It’s a pretty serious question that faces retailers of wholesale's wholesale clothing these days. ‘Do I dropship, and act as a middleman, or do I stock the inventory myself?’ There are arguments on both sides of this issue, because while there are attractive advantages to dropshipping products, there are also disadvantages involved. To help explain the issue, we’ve put together a little primer for you.
What is Dropshipping, exactly? In a nutshell, it’s selling through a third party. Company A, who holds the actual inventory offers Dropshipping. Company B is, for instance, a women’s clothing retailer, wants to sell company A’s products to their customers. The Customer then orders the items through company B, who sends the order on to company A. Company A sends the items directly to the customer. It can be a little confusing, but in reality, it’s a fairly simple process.
What are the advantages of Dropshipping? The advantages are fairly clear cut. A company who uses another party to dropship does not have to buy inventory of their own. They can start a business much more cheaply because they do not have to pay the cost of start up. They don’t have to store items, nor are they ever left with spare inventory.
What are the disadvantages of Dropshipping? There are always negatives to every positive. With dropshipping, retailers hold far less physical merchandise, if any. As a result, their customers have no way of seeing the physical items before they purchase. This can be problematic, as it can lead to a high percentage of returns. Another disadvantage is the time involved in handling customer service. If a customer is dissatisfied, they will contact you, rather than the company who shipped their product. You will have to contact the shipper, delaying customer service time, which may anger the customer. Also, by relying on a third party shipper, you will be responsible for any mistakes they make. If they delay shipping, or have a problem with the order, it will be you who is held accountable. A customer may avoid buying from you because of a mistake on the part of your shipper. Competition is also a large factor. Dropshippers sell indiscriminately to anyone, meaning that there will be a lot of places offering the same products you are selling. You may not be able to afford to compete with their prices
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