subject: Drop Shipping: Where's The Catch? [print this page] When something seems to be the perfect answer to an impossible problem, then we start looking for the catch! Perhaps you have wondered what the catch is to drop shipping. Luckily, there is no catch, but the verdict is up to you. There are pros and cons to drop shipping and so it is up to you to decide which outweighs the other!
An obvious result is simply that it saves you time and energy. By shipping products directly from the wholesaler, your business becomes more streamlined and efficient. You no longer have to spend your time in ordering, unpacking, storing, repacking, and shipping your merchandise because the drop shipper does it for you!
A less obvious advantage has to do with the immediate profit that you make as a business owner. While traditional retailers spend significant amounts of money in initial start-up costs or even in buying inventory up-front, drop shipping enables you to collect money from the customer first and then use that same money to purchase the product.
While it may seem that location is irrelevant in the world of online retail, it can be a huge advantage. Drop shipping allows you to ship from a variety of locations, not just your business's primary location. Therefore, customer's orders are filled and shipped much more quickly and efficiently through drop shippers than from your home base.
A final advantage has to do with expanding your business. In traditional retail businesses, expansion nearly always involves up-front capital and therefore, a bit of a risk. In using drop shipping, however, the risk disappears. You can advertise as many products as you want, but you don't have to purchase a single one until a customer orders one! Suddenly, the options for what you will market in your business are never-ending!
Now, one possible problem is back orders. Since you don't keep an inventory on hand of the products you sell, it is possible for a customer to purchase a product and the wholesaler to be out of stock. This leads to a back order on the product and a possible prolonged delay for the customer. Clearly, not a customer-friendly result. However, the situation can be avoided by merely keeping tabs on what sort of inventory your supplier has available.
Another aspect can be seen by some as a con or a pro. As mentioned previously, drop shipping takes the inventory out of your hands. This saves you time and energy, but can also be unsettling to those who prefer to micro-manage their business. In other words, for some it takes away the control they have over their merchandise while for others it frees up time for them to spend on improving other aspects of their retail business!
So, is drop shipping too good to be true? It's up to you to decide!
by: Jake Sabey
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