What is Dropshipping Fulfillment?

If you’re in the retail or e-commerce business, then the chances are that you must’ve already heard about dropshipping. If you don’t have the slightest clue about dropshipping, then you’ve landed at the right place. We are about to explain what dropshipping is, what it does, and how it can help your business.

What is dropshipping?

To explain in simple terms, dropshipping is a retail fulfillment method where a store doesn’t keep the items and products it sells in stock. Instead, when a customer places an order for a product, your store will purchase the item from a third party, and it will be directly shipped to the customer. As a result, your store won’t have to handle the product directly.

When did dropshipping begin?

If you think that dropshipping is a new method, then you’re wrong. The practice was first introduced around 1928, but then came the great depression, and everything fell apart. Years later, Toyota implemented the Just-In-Time (JIT) supply chain model in the 1950s. The several benefits of JIT inventory management soon were the talk of the town.

Today’s dropship business model mirrors some of the biggest areas of the JIT supply chain by eliminating costly inventory storage and transportation cost for retailers.

How dropshipping works?

In the section, we’ll explain the process of how dropshipping works – when a customer places an order over your website, it is directly routed to your manufacturer, wholesaler, or distributor to be shipped and packed, removing the most expensive process of the conventional brick and mortar store.

You might expect the drop shipper to also be the manufacture of the product that is ordered; there exists a market for wholesalers to drop ship products and even offer customization.

Let’s say you’re running a clothing brand that offers t-shirts– now there are two ways to do this. First, and the conventional way is to order hundreds of t-shirts with different designs printed on them, running the risk that your product doesn’t sell well or even sells at all.

The other and smart way of doing this is by partnering with a dropshipper who offers custom printing services. Using the same above example, your customer orders a new shirt through your website, and the order will be routed to your dropshipper to print and fulfill.

Why choose the Dropship Business Model?

Dropshipping is fairly common between aspiring entrepreneurs and small to medium-sized business owners because it’s accessible and easy to begin with. With dropshipping, you can easily rest multiple business ideas while reducing the risk to a minimum – this lets you learn a lot about different markets and in-demand products.

Here are a few more benefits of choosing the dropship business model.

Less capital requirements

If you pursue the dropship business model, you won’t be burdened by the financial liabilities you might have endured if you followed a different business model. When you start a business that fulfills orders through dropshipping, you won’t need to research and develop a new product, manufacture it, and stockpile the inventory; this caps the capital requirements to expenses mostly relating to legal business formation and the technologies needed to operate your company.

Testing the market beforehand

The biggest advantage of dropshipping is that it allows you to test the waters before actually diving in. if you aren’t sure about your product and are doubtful about whether it sells or not, then it’s best not to drown all your resources into it. Don’t worry about the expenses that you’ll have to bear on a per unit basis because the overall financial risk will be capped.

Dropshipping might also come in handy if you’re planning to test a new supplier because this way, you won’t have to purchase hundreds or even thousands of units that might be defective.

Managing your dropshipping fulfillment has never been easier

Dropshipping business model allows you to manage your fulfillment from any location. If you’ve partnered with a supplier that also handles returns, then your only physical tie with the company in question will be a computer.

A dropshipping business can be managed from just about anywhere with an internet connection. As long as you’re able to communicate with customers and suppliers easily then, you can run your business from any location.

By POS Highway Staff | July 24th, 2023 | eCommerce | 0 Comments

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