Today, drop shipping is still a fairly unknown practice in India. But that’s only a matter of time. In many countries drop shipping is already a well known, very popular manner of selling online . Bascially it’s about selling items that you don’t have in stock. It’s a lot like affiliate marketing with the big difference that with drop shipping you act as if you are the owner of the products that you sell.
This means that you do receive the money yourself and that your visitors don’t leave your website to visit the site of your supplier, so you don’t risk losing them to your supplier. The other good thing is that you don’t have to stock, pack and ship the products. But you probably will have to take care of customer service and handling aftersales. As well as handling the payment process. In many cases the actual drop ship supplier will ship the product to your visitors on your behalf. This means that your company details can be put on the package label. So in most cases the customer will never know that it received the product from a different company than the one it placed the order with. This happens a lot more often than people actually realize. In summary the drop ship process for you would look like this:
A customer orders a product online at your web shop and makes the payment . You forward the order plus the payment (minus your profit margin) to the drop shipping company/manufacturer that owns and stocks the product. After receiving the order and payment the drop shipper now packs and ships the product to your customer on your behalf.
There are many benefits of drop shipping. A few of them are:
- Minimized Risk: You only buy a drop shipped product after you received the order and payment from your customer. Then you forward the order and the wholesale price to your drop ship supplier. So no up-front payment needed from your side. The biggest financial risk is in your website and marketing activities.
- Low Costs: Since you don’t need an inventory you have minimal start- up costs. No worrying about stock piles and paying for storage room .You needn’t worry about unsold goods neither. Also, You are likely to have access to better shipping rates then you would as a small business shipping your own products. The drop shipper often has a better deal since he distributes a lot more than you do.
- Convenience: You don’t have the hassle of stocking, inventory counting, packing and shipping etc. You can run your online drop ship business from the comfort of your home or from wherever you choose.
- Wide variety of products: Drop shipping allows you as a merchant to offer much more different products than you would be able to do if you had to buy and store everything yourself. Now you can offer all models available of let’s say an espresso machine. While if you would have a physical shop and were to buy and stock everything you would be much more selective of what you would choose to offer. There is also no risk in offering perishable goods and new novelty items of which you don’t know yet if the consumer will like them.
Of course drop shipping also has some disadvantages. Note these below:
- The possibility of being scammed: Finding the right wholesale drop shipper is crucial when getting into this business. There are many “smart” business men that act as if they are the actual wholesale drop shipper while they merely function as the middle man. This leads to higher prices, additional shipping, handling or whatever kinds of fees, product delivery delays and so on and so on. We strongly suggest you visit www.worldwidebrands.com as this company has many years of experience in this field and has already done a lot of the homework for you. They have a list of thousands (international) drop shipping companies for you to choose from and have a great helpdesk at your service. You can also find many tips and tricks etc. that you should be aware of.
- Stock Availability Control: If your drop ship supplier is out of stock, then so are you. You have no control over the stock carried by your supplier. It’s very depressing when you have customers ordering products and you will have to tell them no because your supplier is out of stock. We always advise people not to depend on solely one supplier but try to find at least one back- up.
- Customer Service Issues: If your customer addresses you with an issue to resolve, chances are that you will be dependent on your drop ship supplier. When the supplier is not willing or capable to resolve the issue with you , you will have to choose between satisfying the customer at your own costs or risk getting a bad reputation. Www.wordwidebrands.com has an enormous list of thousands of reputable drop shipping companies for you to source from. If you choose to register with them it will cost you a one time only fee that grants you a lifelong membership which will definitely be worth it as they offer you immense value in many ways.
Drop shipping really is a great way of making an online income and will definitely bring you to the market faster if you want to start selling products. We are signaling the first signs of it’s popularity rise and it will be only a matter of time before drop shipping is widely available in India.