Third-party shipping: Is it really that important for an online business?
Countless online articles focus on the ways in which an online business can enjoy success. Some mention the power of SEO while others instead highlight the correct marketing techniques. While there is no doubt that these and other methods are indeed powerful tools within your arsenal, very few speak about a process known as drop shipping. Drop shipping essentially involves the use of a third-party supplier who keeps your products in stock and ships them to the client once an order has been confirmed. The main question involves why you should consider this method as well as the benefits that it will inevitably provide to your budding firm. Let’s examine both of these understandably important topics.
Saving Time, Money and Physical Space
Let us imagine for a moment that you have recently launched a website providing custom-made dress shirts for businesses. The orders have become pouring in and as you live in a small apartment, on-site inventory storage is not an option. Furthermore, you have become so wrapped up in shipping tasks that your ongoing marketing campaign is beginning to suffer as a result. Both of these situations can be eliminated by choosing an effective drop shipping provider.
These firms can be thought of as digital middlemen, as you will no longer need to maintain a physical stock of your products. Furthermore, they address the shipping process from beginning to end; logistics are therefore less of a concern. Besides these obvious advantages, there are additional windfalls associate with this technique:
- Millions of quality products are at your immediate disposal.
- You may be able to offer prices lower than the MSRP (manufacturer’s suggested retail price).
- Anyone can become a drop shipper; little prior experience is necessary.
So, it is no surprise that nearly one-quarter of all online sales were made via drop shipping in 2017 alone. This roughly equates to $85.1 billion dollars (1). User-friendly dashboards are specifically designed for those who might be new to the online retail marketplace and the learning curve is virtually nonexistent. It is possible to ship products around the world and in the majority of cases, the client will never know that you are employing a drop shipping firm. Now that we can fully appreciate the advantages associated with this method, let’s quickly address some of the most common queries.
Addressing Frequently Asked Questions
Will the drop shipping platform eat into my profits?
This is arguably the most common concern and it is quite understandable. Drop shipping is a business model which does require the provider to turn a small profit. However, this is negligible when compared to the higher ROI that you will experience from expedited sales. The bottom line is that drop shipping allows you to turn your focus back towards other areas of business development while remaining confident that logistical concerns are in good hands.
Should I be concerned about the quality of the products?
By its very definition, drop shipping involves a supplier sending his or her products to an end user. We are all aware that the quality and reliability of certain products can differ from time to time. This is why it is important to team up with a reputable drop shipper that has already gained a significant amount of positive exposure. Take a look at user reviews and other statistics in order to be certain that you are in good hands. After all, a low-quality or defective product can quickly lead to equally poor online reviews.
What about returns and refunds?
Even the most reputable online sales platforms will be required to deal with unhappy customers from time to time. Drop shippers offer contracts that stipulate their policies regarding refunds and returns. Once again, you will no longer have to personally ameliorate such issues; a notable benefit when compared to the alternative. Always read the terms and conditions carefully so that you can understand their policies, as each shipper tends to be slightly different.
How long will it take me to see success when using a drop shipping service?
There is no single answer to this question. While the dynamic and flexible nature of drop shipping is impossible to deny, a healthy return on investment (ROI) has just as much to do with other core operations such as sales, marketing and product promotions. Drop shipping is not a panacea for an ill-conceived campaign. It is instead meant to be used in conjunction with your current efforts in order to streamline logistics.
It is a foregone conclusion that drop shipping is here to stay. Whether you own a massive online business or you have recently taken a foray into this world, using such third-party services can have a massive impact upon your ongoing operations.