Whenever e-commerce business comes up, the first thing which strikes in the mind is the inventory and warehouse. It has become the greatest challenge for all retailers whether new or established. Keeping the exact product in stock which is currently in demand requires a proper survey of the market. That’s how dropshipping comes into place.
Dropshipping is a part of the e-commerce business model which actually eradicates the burden of stock or inventory. It enables the sellers to sell the products without stocking the products they are selling nor worry about warehouse (s). Rather than that, the sellers can partner with the manufacturers, to sell their products directly to customers after they ordered it. Let’s learn about dropshipping and its benefits and disadvantages more precisely.
It is a part of the supply chain management business model. All the sellers whether established or beginner sell the products online without stocking the respective products. So, the time the customer purchases any product or item from the window store, the retailer arranges for the same to be shipped on-time or before the scheduled time, from the manufacturer or supplier directly.
There are 3 players in the dropshipping- the manufacturer; the retailer; and the customer. It is considered a profitable business as the sellers don’t have to pay for the shipping nor for manufacturing. The business profit gets reaped after you get efficient suppliers to carry out the same further.
Benefits of using Dropshipping
More distinct on the strengths
Retailers and manufacturers can focus more on their fields of expertise. The reason why the dropshipping model should be encouraged because almost all retailers have a certain vision to build storefront which is going to attract as well as convert the customers to buyers. On the other hand, it is beneficial for the suppliers too, who aren’t keen on selling their products on the e-commerce platforms. This model helps both parties to focus on their strengths and partner with one another for profit.
Inclusive of products
The retailers don’t have to go for pre-purchasing of the products which they have thought of selling in the market. Instead, they can provide a range of products to their valuable customers. Suppose, if the manufacturers or suppliers have stocked an item on their warehouse then the retailers can easily list them on their respective websites with zero cost.
Drawbacks of using Dropshipping
Customer experience is less manageable
The retailers have less control over the suppliers. It results in less guarantee of delivering the products on-time as well as the quality of the products which the customers ordered. In any business, the reputation comes hand-in-hand and putting that entirely on the hands of the supplier is risky. All the successful dropshipping companies have mainly focused on organizing the standard of the products from the manufacturers or suppliers. Also, it tried hard to agree on delivery the products on-time without delay.
Product quality is erratic
The product quality can get deteriorate if the supplier belongs from a foreign land. If the supplier’s manufacturing process isn’t good enough and been a retailer if you don’t screen your selling products properly then you are making a big blunder. You must be selling something which is completely opposite the description and the quality standard is poor which eventually loses customers’ trust.
Still, it is regarded as the best option for all the business holders who are new in the market or who wish to explore more on the other categories. In order to amalgamate the dropshipping method with your e-commerce or retail business but before that you need to survey on the business profit margins. If you are struggling with the thought of managing your e-commerce business along with the manufacturers and customers, then worry less. You can opt for Unicommerce software which manages your entire supply chain management operations effectively with ERP integration with your system’s software. To know more about it, book your appointment right now!