|An introduction to drop shipping
Wednesday, March 6, 2013
As an ecommerce store owner, you are probably familiar with the term ‘drop shipping’ but what exactly is it and how can you use it in your business?
This blog will cover the basics of shipping including:
- What shipping is
- The benefits of shipping
- How to find shippers that are right for you
What is shipping?
Below is a typical purchasing process using a shipper:
1. A customer places an order in your online store
2. You pass the order information onto the shipper
3. Your shipper packages and sends products directly to your customer
4. Your customer receives the products they ordered
This process means you don't have to stock your own products, an ideal situation for a new onlne store owner with little capital.
The benefits of shipping
The main benefit of shipping is that you don’t have to worry about the costs, effort and time of storing, packaging and shipping your own products. There are a few other benefits too:
No wasted inventory - With shipping you don’t need to worry about how much of each product to order and stock, there is no risk of over ordering and having products taking up stock room, similarly you don’t have to worry about under-ordering and having out of stock products.
Increases product range – With shipping you can offer as many products as you like without worrying about worrying about size or perishability.
You have more freedom – As you are basically just acting as a middle man without ever handling the products, you can locate your business anywhere. Fancy running your business from a Caribbean Island for 3 months of the year? No worries, you just need an Internet connection.
Proven to work – Many successful businesses utilize shipping, either exclusively or to supplement their product range. Huge online retailer Zappos rely on shipping as do many VP-ASP store owners.
How to find shippers that are right for you
If what you have read so far has convinced you to try out shipping, it’s time to find a shipper that suits your business, the internet is your friend here and below are two methods of finding a suitable shipper.
1. Search engines - A word of advice - most shippers don’t have shiny search engine optimized websites, so a simple search of "shippers” is not going to get you what you are looking for.
The best shippers will probably not show up on the first page of Google so dig down as deep as page ten.
2. Paid directories - Due to the often difficult nature of finding a shipper through traditional search, several websites have created a list of shippers which they charge for. The advantage of this is that you save time o the search but be aware that there are a lot of scam sites out there that will charge you for useless information and / or outdated links.
Signs of a good shipping company
Before selecting a shipper, ask the below questions:
How long have they been in business?
shippers have a tendency to go in and out of business fairly quickly, so choose an established shipper with a proven record of trustworthiness.
Which shipping company do they use?
Make sure the shipper uses a legitimate and capable shipping company who you can rely on.
Do they offer custom packaging?
If they allow you to use your own shipping labels and packing slips your customers will have no idea that the products are not coming directly from you, which adds trust.
Do they have a datafeed?
You probably don’t want to manually add thousands of products one by one, so ensure the shipper has a datafeed that you can Import directly into your store.
What is their return policy?
This is a big one – Ensure you read the return policy carefully so you know what fees are involved with processing returns and how they are handled.
How much does the shipping service cost?
Most shippers have only a ‘per order’ fee, but some also charge a set monthly fee, which can drive up the cost, especially if you are not making many orders to start off with.
What are others saying about them?
Look for reviews on the Internet to gauge what current users of their service think of them, you can also contact the shipper and ask for references from companies they've worked with.
If you can find a reliable shipper you have a lot to gain, but it’s important you put in the research time before you start using a supplier.
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