Drop Shipping: A Lovely Supply Chain Method of Marketing

What is Drop shipping

The drop shipping is defined as the retail method of fulfillment wherein the store does not keep the products it sells in the stock. Instead, when the store sells the different products, it purchases the different items from third party and has it shipped directly to the different customers. As a result, the different merchant never sees or handles the different products. In case of drop shipping, the suppliers help in sending the different orders directly to the different customers which are being generated by middlemen which are known as drop shippers. In other terms, the customers can give the money then pay them in shopping for them. It is commonly seen that the drop shipping is profitable in nature and it helps in commencing the different activities in a positive manner.

Drop shipping in supply chain

Drop Shipping is the supply chain management method in which the different retailers does not keep the different goods in stock, however instead it helps in transferring the different orders of the customers along with the details related to shipment to either the manufacturer or another retailer or the wholesaler who will ship the different goods directly to the customers in an efficient manner. As per the concept of the supply chain management, supplier is the key along with the fundamental element of drop shipping and the different drop shippers needs to be reliable in nature for building the drop shipping business in a positive manner and suppliers and drop shoppers should be working together for forming the strategic related partnership. In the process of supply chain management, it can be identified that customer places the different orders through phone outlet and it helps them in receiving the different products within the specified time limit.

Drop shipping procedure and development

Drop Shipping is defined as the process of the fulfillment of the product which occurs in the direct manner from the manufacturer to the wholesaler to the customers when the orders are being placed on the third party’s retailer’s website or over the phone call circumventing the traditional kind of retail supply chain. When the order is being placed by the customers, it is immediately routed to the manufacturer, wholesaler or distributor through removing most expensive component of the traditional brick and mortar business related model.

Drop Shipping helps in offering the advantage of testing waters before diving in the same and it is the best aspect that can be utilised in a positive manner to reduce the financial risks in a positive manner. Drop Shipping is the great way to test the overall quality of the new supplier since it will not be forced to purchase hundreds or thousands of the different units which may be defective in nature. In the concept of drop shipping, the different suppliers send the different orders directly to the different customers which are being generated by the different middlemen who are involved in the respective process.

The Pros & Cons for drop shipping

The different pros of the drop shipping include the fact that there is no requirement of inventory pressure and when the different customers place the different orders in the store, they can directly contact with the suppliers along with providing product related information and it will be allowing the supplier to ship directly. In the respective manner, there is no such problem of the backlog of the different goods and services that reduces the different risks related to the operations.

The second advantage is that it will be reducing the costs of investment or zero investment in entrepreneurship wherein it can be seen that there is no such limit of enjoying the wholesale related prices. Furthermore, without any kind of restrictions on the sales volume, it can be seen that there is no such sales related pressure.

On the other hand, the different disadvantages of the drop shipping include the fact that there is increased level of competition in the market wherein with the rapid development of the entire e-commerce industry, there are different people who are choosing to shop online and relative competition is growing at a rapid rate.

The packaging along with shipping of the different goods along with services are not being packaged during the time of transportation and it can easily damage the different products and services that can affect the overall growth of the transported goods. The distribution or the drop shipping are generally online kind of transactions and when there is no such strict kind of control, it can cause the quality of the product which will be poor and it affects the overall effectiveness in a negative manner.

When the inventory is sufficient in nature, there can be different other problems such as there will be no such information related to the product which are present in the inventory and it will be creating a huge damage on the products.

How drop shipping is valuable for supply chain

Drop Shipping is one of the most efficient kinds of aspects that should be managed by the companies as it will be enhancing the overall growth of the company in a proper and positive manner. Drop Shipping can be the lucrative additional sales channel for the different suppliers who wants to grow their business-related activities that will be essential for the overall success of the company along with improve the overall effectiveness of the company in a positive manner.

Drop Shipping helps in offering the different retailers an attractive kind of alternative which will be reducing the fulfillment along with the inventory costs through relying on the third party suppliers to manage, stock along with deliver the orders of the different customers in a proper manner. The Drop Shipping is beneficial in catching the retail world and it helps in the supply of the different goods along with services that are required to be delivered to the various customers in the market as it will be enhancing the overall effectiveness and growth of the drop shipping in a positive manner.