How you can grow adopting a dropship model?

With the increasing demand of virtual shopping, more and more business owners are moving online.

And, why not?

Leading eCommerce marketplaces that include Amazon and Shopify are making it simple for anyone to start selling from the very same day and are only charged when a sale order is fulfilled.

Technology and cost are no longer barriers for jumping into the online selling world.

However, new sellers with limited resources, at the initial stage, often struggle in managing inventory to fulfill customer’s orders in time.

Modern customers prefer brands that offer confirmed delivery of products they purchase, and unable to cope up with even one of your customer’s order, will directly impact the brand value and sales for your eCommerce business.

“Supply chain” is one of the major processes for an eCommerce business that describes the path of procuring products from suppliers to delivering it to end customers.

For many start-ups this method proves to be costly, however, eCommerce business owners who dropship their customer’s orders are gaining a competitive advantage in this New Year 2016.

Below in this blog will highlight, how dropship model is proving to be a helping hand for eCommerce newcomers?

About Dropshipping

An inventory management and fulfilment model that allows sellers sell products without having to stock them, is considered as a dropshipping model in the world of eCommerce.

How does it work?

Whenever your store receives an order, simply forward your customer’s sales information to relevant dropshippers, who in turn, will process and fulfill the order.

Types of Dropshippers

Ecommerce has two kinds of players that make the supply chain, and both are helping many online sellers to adopt the most convenient way to deal with stock requirements and manage their sales orders efficiently.

A- Manufacturer

Manufacturers are ideal “Just-in-Time” (JIT) approach to inventory management that allow sellers to purchase products for resale in a cheapest way. They do not sell directly to public.

Advantage: List products at competitive price

Dropshipping via a manufacturer is helping sellers to procure products at the best rates. Hence, it automatically allows sellers an opportunity to list products at a competitive price and help them enhance customer’s overall shopping experience with the brand. However, most of the manufacturers have minimum purchase order flow that you’ll need to meet.

B- Wholesalers

Next, are the ones who purchase products in bulk from manufacturers, mark them up slightly and later sell, or, dropship sales orders that come in.

Advantage: Offer a niche product line

Wholesalers are known to stock products from multiple manufacturers dealing in specific product line. This automatically increases seller’s an opportunity to sell products that are in demand and profitable too.

What are the key benefits of dropshipping for eCommerce?

1- Cost optimization

You spend on stock only when needed. Eliminating the cost for renting a warehouse and managing stock until sold, is helping many owners make use of their capital in the most cost-effective way.

Without having to stock products, sellers are also gaining an added advantage of running their business from home.

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2- Product awareness

Dealing with manufacturers and suppliers, you’ll automatically be open to sell multiple categories and increase demand for your brand. Experiment new product line from your suppliers stock, by listing them on your website or marketplaces that you sell on.

Increase your product visibility without worrying about them not being sold, as you don’t stock them.

3- Customer service

Manufacturers or suppliers, who offer dropshipping facility to sellers, compete with each other to offer the best service as they themselves believe in enhancing reputation for increased visibility.

Sellers who are fulfilling orders via dropshippers gain a competitive advantage in offering quick and accurate product delivery, as they are tied up with multiple leading carriers who efficiently fulfil hundreds and thousands of orders in a day.

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Closing advice                                                 

Automated dropship management software– a step further, is encouraging many sellers to expand their offerings. This is because; such tools offer an easy way to communicate with multiple manufacturers and suppliers.

Offering a centralized system, sellers can easily sync new supplier details as well as track performance for each in real-time. Whenever an order is shipped by your supplier, tracking details are automatically synced at one place, from where you can enhance product delivery experience for each of your customer’s orders.

Savio Fernandes

Savio Fernandes

Savio Fernandes is a writer who influences. Writing for over three years at Orderhive, he is currently focused in offering eCommerce and retail solutions for start-ups and medium business owners.

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