What is Dropshipping | How does drop shipping work?

What is dropshipping | How does drop shiping work ?

When you think of the term “dropship”, what first comes to your mind? Someone who sells their products online or has a reseller website that allows them to sell them directly to customers. They make a little money on each sale they receive and then pocket the rest of the profit.

With dropshipping however this isn’t as much of a guarantee. The retailer must have trust in your business and will only provide an estimate for how much it will cost to get goods from your local store. This is why many people prefer to work with a service company instead.

What is a DSSR and Why do we need one?

Diversification is key in any successful marketer. Without diversification there wouldn’t be enough business to keep track of. There are so many companies out there offering different services or product lines but if you’re looking to start a new firm then you need to find some sort of way to increase your profits without having too many competitors at the same time either.

One way of doing so is through something called Dropshipping. A distributor will take care of getting sales from your website by placing an order from you and shipping them out in full. Just like Amazon does, you can choose when it gets shipped out and whether it’s delivered right then and there or not. You will receive all payments by cash or credit card.

 No matter how big or small your company is, you’ve got a lot of options in terms of suppliers and retailers. It’s important to choose wisely so that you don’t run up against someone you don’t know. For example, if you sell toys then your supplier for supplies is probably quite large and established whereas just ordering a few more items would push you into competition with their main competitor or even worse lose them altogether. 

So picking the right suppliers and keeping a track of every single item being sold is crucial to any success with your brand. This also can be used in case you don’t want to be responsible for it. Having your own drop ship partners means you are free to have a relationship with them, you do not worry about the fact that they might go bust.

How does dropship work?

Dropshipping works in a similar fashion to taking orders from stores. An Order is made via the consumer’s website by visiting their store. They then place their order and pay for it. These companies provide packaging by using cardboard boxes. That is then placed in your warehouse using a pick-up truck. Once the box is ready to be brought to the warehouse, another courier will then deliver the package to the customer and ship it out on a specified delivery date. 

Your store will see the box coming in and will pay the transport fee along with all other costs and expenses. The final delivery will happen after which no extra charges will be incurred. If anything goes wrong you will get billed for the parcel and that should be fairly easy to recover since its a lost item.

There are two ways of finding sellers:

Approach the person and ask them to be a part of your distribution channel. Don’t give them any details about yourself unless you are sure that they will understand it. In either case, you may need to show evidence of paying off the last invoice. This will show to your supplier that you’ve spent a considerable amount and that they are capable of delivering the goods.

 To complete the process of selling products online, most sellers tend to use third party apps (for example eBay) to help them track down their potential buyers. As opposed, Dropshipping requires very minimal setup and administration if anything has to be done.

This is because all you need to do is set up a payment processor account in the seller's store website with an accurate address. On top of that, your supplier will need some form (with a form) on your site to send an email request to confirm receipt of payment. By default the system will respond with confirmation of delivery on the next day.

Drop shipping vs Fulfillment

Both businesses require a separate account to handle both. Dropshipping involves holding all information and communication related to the business and the customer, while fulfillment deals are very different. Both require a buyer to place a bid before the inventory and once an auction is completed and fulfilled, the order is executed and released. 

With B2B, fulfilment is required before the purchase is made, but with B2C it is after the transaction is complete. However, in the case of Ecommerce fulfillment is pretty straight forward and that makes it easier to manage. But with B2C it becomes complicated when dealing with multiple sellers (it becomes much harder to figure out who the real owner of the merchandise is).

When dealing with dropshipping and outsourcing it becomes difficult because of this and you have to deal with the problem of supply chain management of outsourced vendors and intermediaries.

To sum it up; Dropshipping is a great way of making good money, it doesn’t come with a huge overhead so you don’t have to focus on marketing. You can concentrate on growing your client base and getting sales out of it. Whereas maintaining a quality product is a bit tricky and can be challenging because of the high costs involved. Fulfillment is when a customer receives goods.