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Jul 29

What Is a Drop ship Business and Its Relationship With Online Store

dropship

What is Drop ship Business ?

Drop ship or commonly referred to as drop shipping is a concept of selling online without the need to stock the product because the product will be ordered directly to the supplier and sent directly to the customer without the need to go through this drop ship businesses.

Instead of buying merchandise for stocked, the culprit is quite partnering with suppliers and ask for a list of their merchandise for sale. Once you receive the order, the next step to continue to stay the order to the supplier of merchandise. Suppliers of this merchandise will send it directly to the buyer.

The following process flow a drop ship this process:

  • Customers order and pay for products purchased to the seller.
  • Seller contact suppliers and make a reservation and payment of products purchased by the buyer.
  • Suppliers send products according to the booking details seller to the buyer with the sender on behalf of the seller.
  • The seller sends a confirmation and notification to the buyer that the product has been shipped.

You could say the perpetrators drop ship also as a broker. As for the supplier role behind the scenes and not be seen by the purchaser.

Well … what to do with the online store?

Drop ship business is closely related to physical products such as fashion, electronics and so forth, which require physical delivery through a third party or expedition. Therefore, the business is done online with the online media store. For example, online store itself is like E-bay, Amazon and many other.

In conclusion, drop ship is a concept that is mostly carried out by online store owners who do not want to do a stock of goods it sells.

What Advantages Of Drop ship?

Drop ship business has several advantages, among others:

  1. Low initial capital. You do not need to spend money early to buy the stock of a product which has not been ordered by the buyer or hold product inventory. You simply buy the product when no one is buying.
  2. Various offers Product. If you do not have to purchase a product, then you can freely offer or sell a variety of products in your online store because it is not constrained by large capital beginning.
  3. A low level of risk. Without the need to invest substantial capital beginning to stock the products, the risk borne when starting a business online store is very small. If it turns out your business online shop does not develop or is not successful, then you do not get caught up in the stock of unsold products which is a disadvantage.
  4. Free location. Because you do not have to stock products or setting up the warehouse stock of the product, then you can freely do drop ship business from anywhere as long as there is a laptop and an internet connection. This close relationship and shop online drop ship business.
  5. Easily expanded. Is because you do not need to worry about a stock product and its delivery, then it is relatively easy to develop a drop ship business into a larger scale.

One more thing, it is relatively easy to start drop ship business. Running an online store is much easier when you do not have to deal with physical products. With a drop ship business, you do not need to worry about the following things:

  • Buy, rent, or manage the warehouse stock products
  • Packing and shipping of products
  • Record stock products for administration
  • Handle returns
  • Keeping the level of stock products

What is the Disadvantages Drop ship Business?

There are advantages, there are insufficient and it is certainly fair for a business because nothing is perfect in this world. Well, here is a shortage of drop ship business:

  1. Low margin. This is its greatest weakness, it’s because so easy to get started and the initial capital is so minimal it will automatically many competitors who sell the same product. Not to mention the price competition and share the profits with the product suppliers.
  2. Constraints of product suppliers. Encountered many constraints from suppliers such as stock is empty, product delivery errors, slow response and so that becomes a problem for this drop ship business.
  3. Handling complaints. Due to the buyer him to buy from sellers and not of suppliers as well as the sender’s address written with the seller, then you will be confronted with complaints buyer if they are disappointed with the products and services purchased from suppliers when the errors due to factors suppliers.

Do Drop ship is a Profitable Business Model?

As in all of any business, and the benefits achieved success depends on a number of variables. But if done correctly, then the drop ship business is a very profitable online business. Drop ship business will not make you rich instantly. All the success of the process requires significant work and time, but it’s a good business to be done with low risk.

How Can I Generate From, Drop ship Business?

Again, just like in any other business, results aliases profit depends on a number of factors, of course. Especially commitment and dedication of the perpetrators and the category selected niche markets. But with long-term commitment, hard work and business savvy drop ship able to make you a true entrepreneur.

How to Increase Margins In a Drop ship Business?

Actually margin rate can be measured based on the products you sell. For electronic products, the level of margin is usually low in the range of 5% – 10%. For product accessories, the margin is around 100%.

Margin rate also highly depends on your creativity to offer more value to customers, which allows you to fix the price premium over your competition. This can be done by providing a reward or bonus as well as a premium service to your customers so that your business will be referenced by their each purchased product….