Drop Shipping is the process of having products shipped directly to a customer from the warehouse or supplier. It essentially takes out the "middle man" (the retailer, in this case.) The retailer forwards the information to the warehouse and they ship from there. This is a very good business plan for online companies especially, since they do not have to buy the product up front, but only after the customer has ordered it. If you are a regular brick and mortar business, this can be difficult, because you will need to present your customers with products at the time of sale, in your business location. In this circumstance, drop shipping probably would not work well.
However, if you are an online business owner, drop shipping can be a very viable option. It is not necessary to keep stock on hand if you use drop shipping. If no one buys an item, it is not going to be sitting around. You will not have to pay for storing products, in a warehouse or otherwise, if you use drop shipping.If you are a new business owner, you won't have to worry about having items "in stock" all the time. This could save you some headaches for sure!
Drop shipping can also give you peace of mind. You don't have to worry about shipments, packaging, labels, the post office, tracking codes, etc. That responsibility is passed along to the drop shipping company. Drop Shipping can also free up time for you to focus on other business aspects like marketing, advertising, customer support, etc.
While all of these are good aspects to drop shipping, there are also a few negatives to think about. You will be paying the drop shipper's fees if you decide to drop ship. Can you afford to take that much of a cut into your profits? Also remember that shipments can be damaged or delayed due to the fault of the drop shipper, and that will probably come back on you. Are you able to handle that kind of issue with your customers?
For some companies, drop shipping can be a great idea. For others, not so much. The factors above are just a few to take into consideration.
