Today Drop Shipping Companies are running very successfully in the market of online stores and shopping. The model has created a very convenient system of shopping for the buyers, sellers and the wholesalers with everybody deriving some sort of benefit from it. The main benefit is derived by the retailers or sellers who can start up an online store without even having a proper capita. Let’s have a look at the pros and cons of the drop ship business.
Major Pros that Makes Drop Ship Popular
Flexibility, Mobility and Convenience make this supply chain management concept a great way to run a successful business online.
• The retailer do not have to focus on maintain huge stock of goods and lay stress on marketing to fetch more and more orders.
• The wholesaler is transferred the order with the shipment details. The customers receive the goods from the wholesaler directly.
• The retailer can operate without worrying about the physical problems of stock maintenance, inventory problems and shipping.
• There will be no burden of fulfilling the order on the retailer and neither will he has to worry about the resources.
• Huge amount of capital is not required to commence the business as retailers can leverage the capital of the wholesaler to derive his own profit.
• With private label shipping and blind shipping the customers can never get to know about the wholesalers and whether their purchased items are drop shipped or not.
Some Cons of Drop Ship
• Out of Stock problems and back ordering.
• Cutthroat Competition leading to lower prices of products and minimized profit.
• Logistics and order fulfillment errors due to third party action.
Wholesale Dropship has some weaknesses as well but it can be eliminated with the help of right business decisions.
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The Pros and Cons of Drop Shipping Companies