For retail businesses, a simple definition of drop shipping is selling products without stocking them. In this retail technique, one will partner with wholesalers and suppliers that stock their inventory. The drop shipper will transfer orders and details of the customers to the supplier or wholesaler for them to ship products directly to the customers. Well, this idea may sound a little bit complicated, but here are ten advantages that come with this technique.
1. Little capital required:
2. Minimizes risk:
Drop shipping provides the retailer the freedom to access customers from all geographical areas where there is an internet connection.
4. Trusted retail model:
Offering for products that are in your possession may sound to be a sketchy idea before you venture into it. But you should understand that most of the established online retailers like Sear use this business model to provide for virtually everything to their customers.
5. Increased cash flow:
since you do not spend money stocking, you quickly count your profit after the sale of the product. Remember, you don’t pay for the product until when sold to the customer.
6. Exposure and visibility:
Drop shipping is mostly done through the internet which gives your business an opportunity to reach a lot of people connected to the internet. With this sort of visibility, you can be confident that you will access a vast market.
7. Saves warehouse costs:
Drop shaping saves you the need to lease a warehouse space for housing inventory. Your wholesale will store all the inventory for you. With this mode of operation, you will save a significant amount of money spent on operating the business.
8. No getting stuck with excess inventory:
In conventional retailing models, a situation may occur where some inventory stocked fails to sell due to changes in the market dynamics. This case never happens in drop shipping because you will not stock any inventory.
9. No shipping expenses:
In drop shipping, all you be required to do is link the customers with the wholesalers. Your role is done once you submit the order and details of the customers to the wholesalers. After that, all the after sale service like shipping will be at the expense of the wholesaler.
finally, drop shipping allow you to test products and add the new ones to your catalog without ordering bulk that might end up failing.
Without any reasonable doubt, this retail model is a tested and proven success that you may want to give a try to the little capital you have anywhere with Internet connection.
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