May 26

You’ve ordered a pretty dress online and it arrives at your home in fewer than two days. As a customer, you think that the ecommerce website probably sent an email to its warehouse. The warehouse staff then packed and mailed the product to the correct destination and you got your dress on time. That was then, but most ecommerce websites now use drop shipping to get their customers their products quickly and efficiently. You might be wondering what drop shipping is and how does it work but this is not something unique or innovative. The drop shipping method can save the retailer and the customer a lot of time and money, and it is effective.

So what is Drop Shipping and How Does it Work?

Traditionally, websites had local warehouses where they stored their goods. When customers placed an order, the POS, or point of sale, system on the website notified the warehouse and warehouse workers would pack and ship the item. However, this was expensive. It became even more expensive when large websites started stocking third-party goods. This meant they had to contact vendors individually get their goods and store them in a warehouse until customer orders came through. Drop shipping changed all that. The website no longer has to store goods and the vendor can store goods with them. When a customer order comes through the website, the website will notify the vendor and the vendor packs and ships the item to the customer. As everyone is invested in the process, vendors are paid quickly, the website gets successful, and the customer gets his product on time, states Flippa.

Does Drop Shipping Have any Benefits?

  • Smaller Inventory – For website owners, drop shipping is very useful. They no longer have to invest in inventory, as goods are stored with the vendor at the vendor’s warehouse. Website owners also now do not have to worry about maintaining a warehouse and warehouse staff, and it can save them a lot of money.
  • Expanding Website – The website owner can now retail thousands of products from vendors located all over the world and they do not have to worry about shipping costs.
  • Ready-To-Sell Data – As the goods are stored with the vendor, the website owner has no idea how the product looks. The vendor supplies a written product description, high quality images, shipping weight, dimensions, price and inventory. This can really streamline the website and ensure regular product updates on the website and high-volume sales.
  • Lower Customer Costs – As an incentive, most vendors also provide free shipping and on minimum orders or clubbed orders. This brings down the price of the item and it can be very good for the customer.
  • Immediate Shipping and Delivery – The POS system on the website can be completely automated and sales are processed quickly. For example, when an order is placed for ‘x’ vendor, the POS notifies the vendor. A shipping label and invoice customized to your ecommerce store is supplied to the vendor who will ship the item immediately. As orders are placed and processed quickly, shipping and delivery is fast and effective.
  • Highly Scalable – Drop shipping has no limits. It can be used to ship small items like clothes and shoes and large items like washing machines, air conditioners and even refrigerators depending on the vendor and his shipping costs.
  • Reliable Model – Drop shipping is reliable and website owners can trust the vendors to pack and ship items quickly to maintain sales and their personal reputations.

Drawbacks of Drop Shipping

Drop shipping does work but it is by no means a perfect solution. For website owners, the problem starts with no control over the shipping and delivery process. Sometimes, the supplier or the vendor may run out of products and this may result in a shipping delay. The supplier or vendor will charge you, the website owner, shipping and storage charges and this may add to your overall costs. As a website owner, you cannot change the overall cost of the product, as the vendor determines price, and this may affect what discounts you can offer. However, these are small drawbacks that can easily be overcome by a hands-on website owner.

Will Drop Shipping Work for Retailers?

Shipping and delivery are a critical aspect for any website and if the business can deliver goods quickly and accurately, it can make the website an immediate success. Drop shipping is popular as the vendor is motivated to ship the items quickly and it does ensure success. However, it is not right to assume that every eCommerce website will switch over to drop shipping, as large retailers like Amazon still prefer to pack and ship their items themselves. Drop shipping is an affordable and simple option for new websites and it can ensure that goods reach the customer on time but the actual choice of a shipping method will depend on the website and its goods.

 

 

written by Joe

Apr 22
A guest post today from Andrea Woroch -
Budgets, investing and other methods of personal finance are at the forefront this April in honor of National Financial Literacy Month. Smart spending is another essential part of financial literacy, yet many of us continue to make blunders in pursuit of things we want or need.
Online shopping can compound these mistakes since a few clicks is all it takes to complete your desired purchase. What’s more, many eRetailers are using a marketing method called Dynamic Pricing to maximize profits which may be costing you more. For example, Amazon changed the price of a microwave oven nine times in one day, making a sucker out of whoever purchased it at the peak price. Being aware of this tactic gives you an advantage when finding the best times to shop, but there is still a lot more to this marketing and sales tactic to be aware of.  Happily, the following e-commerce trends actually help you make better buying decisions online and will improve your eShopping IQ.
1. Monthly Product Subscriptions
Despite the appeal of shiny new things, there are some daily necessities we all hate to buy and often forget to restock before it’s too late. Leaving us to a limited selection of pricey choices at the closest convenience store for those items like toilet paper, razors and pet food. Monthly product subscriptions are a great solution to maintaining necessities in stock while keeping costs down. Take the Dollar Shave Club, this inexpensive monthly subscription offers you replacement razor cartridges for just $1 every month. RollDelivered.com keeps your toilet paper in stock for $8.99 per month while online pet stores like PetCo.com offer free shipping with additional savings of five percent on repeat deliveries of pet food.
2. Specialized Comparison Sites
Speaking of items we hate to buy, is there any purchase more irritating than ink cartridges? With markups exceeding 2,000 percent in some cases, buying replacement cartridges is about as much fun as getting a root canal. Enter InkjetWilly.com, a very specific comparative marketplace helping shoppers find the best price on printer ink. This comparison search engine even offers a coupon code for 10 percent savings at the sites it recommends for buying ink. We’ll likely see more of these specialized sites as consumers become more informed about product markups through dynamic pricing strategies and turn to the Internet for savings.
3. Tracking Tools
The Internet makes comparing prices much more accessible than it used to be. Unfortunately, the process can sometimes be overwhelming with all the products, reviews and websites available. That’s where browser add-ons like Hukkster come in, helping you nab a good deal without much effort. When you find something you like, “hukk” it and you’ll get an email notification when it drops in price or when the store is offering a sale. Similarly, Yapta alerts you when a desired travel itinerary is offered at its best price, and when airfare you’ve already purchased drops in price.
4. Site-to-Store
Free shipping isn’t as prominent as we’d like since many stores require a minimum purchase. So you may end up forking over an extra $8 to $12 to receive your online purchase. Luckily, big retailers like Target and Walmart offer site-to-store shipping options on several products, waiving shipping fees and sometimes enabling you to get your purchase faster. You may roll your eyes at the notion of driving to the store to get something you want delivered to your door, but you have to evaluate how much that perk costs you in the long run. Avoid shipping costs and get your item faster? No-brainer.
5. Peer-to-Peer Shopping
Ever coveted the clothes in your friend’s closet or wished you could shop the boudoir of a celebrity? Though Rihanna has yet to offer her personal style for sale to the masses, you can shop the closets of fashionistas across the country with Poshmark. Think of it as a combination of Pinterest and an online consignment store. Simply browse photos of items and chat with sellers directly to complete the sale. You can also create a profile and sell clothes from your collection, though Poshmark does take 20-percent commission.
Andrea Woroch is a nationally-recognized consumer and money-saving expert who shares smart spending tips and personal finance advice to help transform everyday consumers into savvy shoppers. A sought after media source, she has been featured among top news outlets such as Good Morning America, NBC’s Today, Dr. OZ, New York Times, Kiplinger Personal Finance, CNNMoney and many more. Andrea is a dedicated smart money blogger with stories posted on popular lifestyle and personal finance sites and writes for the New York Daily News Dollar Stretcher as well. You can follow her on Twitter for daily savings advice and tips.

written by Joe \\ tags: ,