Retailers can make sales without the cost of carrying inventory when they drop ship from suppliers and manufacturers. Drop shipping really requires three things: a supplier, a channel and a system to manage orders.
Drop Ship: Benefits and Basics
Drop shipping allows retailers to sell products that they never have to touch. When you drop shipt you become your customer’s agent, in a manner of speaking. You make the sale, place the order and arrange for a distributor or manufacturer to ship the product directly to the customer. Here are few of the benefits, risks and basics of the drop shipping model.
Low Cost Customer Engagement
When you drop ship, the product you buy never enters your inventory. That means you don’t have to out lay cash in advance of a sale or cover inventory holding costs. In fact, drop shipping lets you complement your inventory with one-off or niche products that your customers are looking for. You simultaneously increase revenue while fulfilling customer desire.
On the Other Hand…
When you drop ship, you associate your name with a third-party supplier. That means if the supplier runs out of stock or messes up a delivery, it’s your reputation at stake. From a revenue standpoint, of course, drop shipping means you won’t be generating the kind of margin you can achieve by selling products you bought at wholesale. For retailers, drop shipping is a real balancing act.
Working with Suppliers
To reduce that risk, it’s really important to work with a business that you trust. Your suppliers and vendors may already be geared up for drop shipping, which means they should have established proven ways to ship and track orders and handle returns. You can find find suppliers using online drop ship directories or even google searches. Either way, it’s important that they can demonstrate a workable and trustworthy fulfillment process.
Drop Ship with Cin7
Cin7 is a flexible management platform that lets brands track sales and stock regardless of how they sell. With Cin7, retailers can generate purchase orders and sales orders for their drop ship business. Click below to find out more about how Cin7 can help your brand sell and scale.
Book a Demo