In recent years, the number of orders being fulfilled via dropshipping has surged. So, what exactly do we mean by dropshipping, and why has it increased in popularity? We’re here to give you the good, the bad, and the ugly on this newly popular model.
Dropshipping is a retail fulfilment method that doesn’t require the store to hold its stock. Instead, when a store sells a product using the drop-shipping model, it buys the item from a third party and has it shipped directly to the customer. The seller never handles the product directly, and therefore doesn’t have to engage in the storing, picking, and packing process. To fulfil orders, the seller will purchase only the necessary stock from a third party when it’s needed.
If you’re a business owner, the process looks a little something like this:
However, it’s not all as great as it sounds.
Although no logistics journey is completely smooth sailing, there is an increasing number of obstacles that merchants selling via dropshopping face:
Dropshipping ultimately takes away the responsibility from the seller to their consumer. Overall, the disadvantages to drop shipping includes errors in the product shipment, shipping problems, inventory issues, miscommunication, and low margins. If a customer calls the merchant to make a complaint or locate an order, the process is lengthy and often lacks the desired clarity – all the information for customer service is in the hands of the supplier.
If you want to follow a model similar to dropshipping, you have some options:
From these options, half of them involve having stock. And actually having stock might solve at least half of your dropshipping issues.
For dropshippers, having no stock saves money but is also a source of headaches. If you want to avoid the dropshipping disadvantages, you’ll probably need some stock.
If you don’t like the idea of keeping a stock in-house, you can save time and money outsourcing your fulfilment. See how Huboo fulfilment works:
A fulfillment company can usually fulfil orders from many categories. Some examples are:
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