What is a drop shipping?

Drop Shipping is a method of delivery of a product in which the seller accepts payment for the order, but the customer receives the product directly from the manufacturer. The dealer's profit in the transaction is the difference between wholesale and retail price of the items sold. This process offers the benefits of retailer and manufacturers, but it is not suitable for every seller or product.

uses

This method of delivery is commonly used by smaller retail stores, shops only with the Internet and those who primarily use catalogs for sale. Customers of these stores do not always expect to leave physical trade with purchases, thus accepting a slight delay between ordering and receiving the product. Shops that have a component of brick and mortar often depict representative items on their shelves so that consumers can see and feel them before buying, but real products sit in the factory warehouse. Sellers on Internet auction sites also normally abandon the ship, operating auctions for items that do not have physicIicka, and then transport them from the manufacturer to the highest candidate.

benefits for sellers

Some of the biggest advantages that this process offers to retailers relate to stocks. In the traditional settings of the store, retailers discover bulk items from the manufacturer, and then must store these products in a secure area until they can be displayed, involving the maintenance of the right storage space, hiring employees to manage stocks and invest in safety measures to prevent theft. When transporting Drop, retailer does not keep a large inventory on the spot, which allows the shop to devote more space to the display and hire fewer employees to handle transport, income, supplies and security. All this is reflected in the reduction of costs, which can lead to greater profits for shops and savings for consumers. In addition, a drop of Shipping allows retailers to offer a wider semi selectionThe pupil, because they can sources of products from many different manufacturers without having to care for import and storage.

Many sellers also prefer this type of transport, because it takes many logistics problems from the hands. The manufacturer provides packaging and transport labels for items and contains a trading account of the merchant, so the seller does not have to. This is particularly useful for small businesses and those that are just starting, because they do not have to have a lot of money at hand to pay for packaging and shipping before they can supply items. Many wholesalers offer the transport of Blind Drop, in which instead of their owner put the name and labels of the seller on the package, so it looks like the product is unique to this seller. Businesses such as these also tend to prefer dropping drop because they create a positive cycle of cash and prevent waste because they receive money for Zam customers before they actually have to pay manufacturers for goods and do not have to pay for the goods thatmay never actually sell.

benefits for wholesalers

The main advantage of transport for manufacturers is increased penetration into the market. In this method, each retailer becomes another salesman of the wholesaler's products and helps them to exhibit a wider audience. It also gives them a much wider market for their products because they can be sold and sent to consumers anywhere in the world. Sometimes factories can also benefit from transporting because they have greater flexibility in choosing transport options. For example, they could decide to use a low -cost local delivery service to send individual items to the nearby consumers or by means of another company to get a discount on a pile when sending many items at the same time.

disadvantages

Despite the logistics and cost benefits with this method, this process is not for EVE by the Purpose of the Seller or the wholesale. Some manufacturers do not copy transport at all due to additional costs of hiring staff for this process and workor associated with shipping orders. It can also create narrow places in the transport and reception system, especially if many retailers place orders at the same time, leading to a delay. This can also make customers frustrate with a retailer, because it seems that the delay comes from a place from a wholesaler. In situations in which the manufacturer triggers the ship, the customer can take over the cost of transport and the retail price, which could be unbearable for large items such as furniture or top electronics.