Drop shipping allows retailers to sell products without holding real inventory. When a customer places an online order using a drop ship merchant, the retailer passes that order on to the product’s manufacturer or wholesaler, which then ships the item directly to the client. The retailer doesn’t cover the producer or wholesaler until the consumer has already paid for the item, nearly eliminating the need to maintain stock or make substantial financial investments to begin an internet retail business.
Drop shipping has several benefits, such as making it easier to provide a wide assortment of products and come to market more quickly. I’ve addressed the benefits of drop shipping here in “5 Reasons to Consider Drop Shipping.”
Finding Providers Is a Challenge
The challenge with the drop shipping business model is that the merchant must trust the wholesale supplier or manufacturer to send the order promptly and properly. This means that the merchant should trust that vendor explicitly. What is more, finding great manufacturers or distributors interested in taking on the issues related to individual order fulfillment can also be difficult since many product manufacturers or distributors aren’t actually interested in handling direct-to-consumer orders.
What follows are three tips aimed at helping an entrepreneur find a fantastic supplier that’s both willing to drop ship and capable of providing fantastic service to both the ultimate customer and the merchant.
Hint 1: Choose Products You Are Passionate About
Since the fall ship model effectively outsources all order fulfillment to a wholesaler, the retailer adds value, if you will, through marketing and client service.
Ecommerce marketing frequently includes buying pay-per-click advertisements, writing blog posts, engaging potential clients on social networking, and nurturing relationships with loyal shoppers. In practice, these tasks imply that the drop shipping ecommerce is going to spend plenty of time thinking about, talking about, and writing about the business served.
These tasks are simpler when the entrepreneur is already passionate about the subject. By way of instance, if an entrepreneur enjoys golf or fly fishing, then it may make sense to seek out goods associated with those actions.
Consider making a list of those things you want or love to do. Call it a passion or interest list. The items on this list may be anything action — believe gardening, watching professional football, knitting, or investing. Simply make a list.
Next, start looking for products that are associated with the actions on your passion or interest list. Once you find an interest which has related products which you think you can sell, begin to speak to the manufacturers of these products to learn whether they provide drop-shipping services or if they have vendors that provide drop-shipping services.
Tip 2: Pick Suppliers Carefully
I must be somewhat careful with this analogy, because of what I will go over in Hint 3 below. But it can be useful to think of selecting a drop-shipping supplier like selecting a spouse.
You want to discover a manufacturer or wholesale distributor to have a very long and mutually beneficial relationship with. This vendor will be taking good care of your clients, and also to some extent impacting your business success.
Andrew Youderian, author of the ebook Profitable Ecommerce, recommends having one or more long telephone conversations with a representative from any possible supplier. You will need to know you could work with this provider on a continuing basis.
Tip 3: Choose Over 1 Provider if You Can
You want good provider relationship, but the marriage analogy from Tip. No two aside, it can be a very valuable concept to have more than one wholesale provider for all the products that you sell and carry.
One of the substantial drawbacks to the drop-shipping version is that the merchant doesn’t have direct control over merchandise inventory. Imagine a drop-shipping supplier has five Gibson Guitars in stock, and gets orders for 10 guitars — five from a brick-and-mortar retail and five person orders from five distinct retailers. The distributor can’t fulfill all the orders, so some clients will be disappointed.
If the merchant has a second source for Gibson Guitars, that merchant might still have the ability to satisfy the order.
Additionally, having multiple providers may lead to lower shipping costs and shorter delivery times. By way of instance, if a merchant has a provider in California and a provider in New Jersey, it makes since to have the California-based business ship to customers in the western half of the U.S.. The rates should be reduced and the orders should arrive sooner.