Can Drop Shipping Help Your Business?
Most retailers have considered this question, done a bit of research, and have run across conflicting information. Some information implies that drop shipping will cut into your profits and take away your delivery and inventory control. Conversely, others state that drop shipping will increase your profits and save you valuable time.
How do you decide what to believe? Basically, both sources are valid. You will spend money to use drop ship companies and they will doing all your shipping for you, along with having the inventory. At the same time, you can save time and money.
Comparing the pros and cons of drop shipping can help you decide. What are these advantages and disadvantages? We’ll start with the cons, and work our way into the pros.
The disadvantages to using a drop shipper is that you will have to pay for their services and a handling fee for each product they ship for you. You are subject to their inventory availability, and can’t take advantage of bulk discounts. And the drop shipper will have control over shipping methods and times.
Your advantages will be that your shipping and service fees are usually very reasonable. You will have a much broader inventory to choose from and won’t be restricted to just how much you can store yourself. Plus, many drop-shipping companies have options available for how they ship for you, so you still have some control there.
Now to compare. Doing it yourself will entail purchasing products, storing and managing your inventory, as well as supplying all the packaging materials, shipping fees, and employing people to handle it all. The bulk discount is great, but now that you own those products, there’s no guarantee you’ll ever sell it.
In contrast, paying a drop shipper their service and handling fees while they do all the warehousing, shipping, packaging, and managing may end up being a better option after all.
As you research your drop shipping alternatives, do an overall tally of what it takes to pay for everything yourself against paying the fees to have a drop shipper handle inventory and shipping. If you find an opportunity to increase your profits substantially by outsourcing, then your decision is easy.
Stuart Lisonbee is a marketing consultant at Doba where they strive to simplify access to hundreds of drop shipping companies offering millions of wholesale products ready to be drop shipped direct to the end customer.
