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Kylee Marin

Ship going off into the ocean from a rocky coast

What is Drop Shipping? And what are the Benefits?

By | Marketing | No Comments

You’re a colonial in early America, history for this country is just beginning but you don’t have time to think about it. You have to get your sister’s shoes to her by next month’s Sunday, or she won’t have them for an important wedding. The only problem is that she lives across the ocean and you have no time to swim across the vast sea. Instead, you wrap the shoes up in a lovely parcel and drop them off onto a ship so it can sail across the sea and get to her in less than a month’s time. Thank goodness you had the option of dropping off the package on a ship, someone else can get the package to her and the fateful Sunday is saved.

Back to the present day: besides the fact that dropping off the package on a ship is similar to the words ‘drop ship’ the ideas, though similar, aren’t exactly the same. So the question becomes, what exactly does it mean to drop ship something? Since Google always explains things best we’ll quote them here:

 “Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.”

In other words, drop shipping is a strategy for order fulfilment where the retailer does not have the product in its personal inventory. Instead, they rely on outside wholesalers or manufacturers to ship orders directly to the customer. So what are the benefits of this magical system you wonder?

5 main benefits to Drop Shipping

A Broad Product Offering

If you are selling something to the public and have your brand in different locations than there are more people you can sell to. For example, if you have a t-shirt company and sell your product at Adidas and Apple you can market your t-shirt brand more openly to the shoe company and the technology company.

Come to Market More Quickly

The more people want your product, the more you can get revenue for the product. However, if it’s just through your company that you sell your product, there won’t be as much of it in stock. Therefore, selling it through a second party means you can get more of your product out into the world.

Explore New Lines

Using the drop shipping method, a company can test out strategies without bringing in the extra inventory. In other words, the second company that sells your product enables the original company to explore and open new opportunities that wouldn’t have been explorable beforehand.

Reduce Your Investment

A dropshipping investment doesn’t require an upfront agreement with the customer, the retailer has the ability to step away. Therefore, the retailer is committing less time and energy to the product and will be able to explore other avenues.

More Time

Allowing a manufacturer to assist your company in sending your product out will allow for a bit of a buffer. The buyer will be happier since the product is getting them so fast because of the second company assisting you in your work.

Like always though, there are downsides such as confusion for any part of this equation (retailer, manufacturer, customer). 

In short, however, drop shipping has its ups and downs. It has the potential to be very beneficial but may not be for everyone. In an even shorter summary: drop shipping is a retailer allowing a manufactory to sell their product and ship it off to the customer once ordered.

Woman paying with her phone/credit card

Why should you consider E-commerce?

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In a world full of business and technology we have the option of choosing to purchase something online instead of going to three different stores just to find the one product that we need. When we find something that we deem worthy of having, looking through different shops online can help anyone find exactly the product they were thinking about, in just the way they imagined it. On the flip side, if you personally look for a product that can’t be found you have the option of opening up a small shop and selling your own goods that way. 

The practice of purchasing or selling goods online is called E-commerce (crazy it has a name, I know!). To put it simply, E-commerce is the activity of buying or selling products on online services or over the Internet. With the knowledge of E-commerce, the question that must be answered next is, why is this such a beneficial practice; besides the obvious reasons stated above.

E-commerce is beneficial to anyone who takes part in the action. 

Top Advantages of E-commerce

Overcome Geographical Limitations

The biggest advantage of e-commerce is the ability to buy or sell a product all over the world. You’re no longer limited to purchase things just within your community, you can now purchase things in other countries and likewise, you have the chance to sell to someone state lines and across country lines.

Gain New Customers with Search Engine Visibility

The best part about e-commerce is the fact that your site has the chance to show up on the top of a search engine. When someone looks for ‘shoes with flowers on them’ and your shop has shoes just like that: your product will show up on the search page and bring in more customers!

Locate the Product Quicker

When shopping through a store, it can be slightly difficult to find exactly what you’re looking for and may become frustrating when a store doesn’t have what you came for (even when you called in beforehand and they said they had it!) Instead, you can watch the product online and see when they have what you need in stock. Sometimes they have a product online that they don’t have in store and therefore, more sells will be created.

Eliminate Travel Time and Cost

Having the option to purchase something online gives the added benefit of buying something wherever you are. You can do it at home, while working, while at a friend’s house and decide you need the exact toaster they have. Having this option, you no longer have to take time out of your day to drive across town just for a toaster. Instead, you can place the product in your cart and continue on with your day if you decide to purchase later on. The control is completely in the buyer’s hands, you as the customer who purchases has all of the control in your hands (literally if you’re purchasing with your mobile device).

Enable Deals, Bargains, Coupons, and Group Buying

The retailer then has the opportunity to add coupons or deals and possibly get more business just through the small bargains they create. People are more likely to buy something with a coupon and often times end up buying more because they have some of the purchases reduced.

In other words, when e-commerce came into the playing field, it changed everyone’s life forever. Whether good or bad, however, you want to define it: our lives were changed. Now we have so many new opportunities and it’s a way to connect with people all over the world. When you think of it like that, it’s beautiful and a magnificent opportunity for a wonderful new development. As the world continues to change, we can either jump aboard, become a part of the new mainstream, or I don’t know, something else a little more depressing.