Drop shipping is a three way selling method between a customer, a reseller and a supplier. Unlike a traditional e-commerce site, the seller sells a product that he does not have in stock. It is the supplier who ensures the delivery of the goods. We could translate “drop shipping” by “direct delivery”. To simplify: The customer places an order, the reseller asks his supplier to deliver the order and the supplier delivers the order without attaching either advertising or invoice. Does this sales method appeal to you and do you find it interesting? Find out how drop shipping works and the advantages and disadvantages of this online sales system.
How does drop shipping work? The basics
If this method of sale is so widespread, it is because it offers many advantages. In the classic supply chain, we find production plants, storage warehouses and distribution platforms. If only one of these links is missing, the chain is broken and the products will never see their end user. This is not the case for drop shipping! Explanations…
An e-commerce without stock to manage
The main reason why many e-commerce sellers use drop shipping is the idea of zero risk. Indeed, to sell a product on the internet, you have to promote it and then put it in stock. The risk if it doesn’t sell is to have spent all your money on a product that is sitting in a warehouse and no one is buying. In addition to the price of the product, storage and insurance costs must be considered, but also the cost of product obsolescence. By opting for drop shipping these risks go to zero, since the intermediary only buys what is already sold.
An ultra-simplified supply chain
Delivering a product to a customer cannot be improvised, it is a profession. From the labeling of the order to its delivery to the customer, this requires time and investment that the best fiction ghostwriting services, again, e-commerce intermediaries do not have to bear. The customer places his order, and the reseller’s only task is to send an e-mail to his supplier asking him to deliver the goods to a third party address. The seller has not advanced any money, has spent a very limited time on the transaction and will be able to invoice his client.
An e-commerce site focused on its sales
To each his job. The supplier manages production, or at least storage, as well as the entire supply chain. The reseller, also called distributor, must find customers. The fact of not worrying about all this logistical part allows him to stay focused on his core business, namely the promotion and sale of the product. Having an e-commerce sales site is a job, and numerous studies have shown that more than half of e-commerce sites do not generate enough turnover to be viable. Moreover, most, if not all, of the big merchant sites on the planet use drop shipping. They only stock and distribute high turnover products on which they can afford a substantial margin. They thus limit the financial risk. Everyone finds their account.
The risks of drop shipping
Outsourcing the entire supply chain to a supplier is good if, and only if, the distributor has previously negotiated the return of the products with him. Indeed, as French law allows, even if the product is not defective, the customer has the right to return it. In the event of a dispute, both parties must have complete confidence in each other. This is why many resellers look for local suppliers, who produce in their country.
A low margin
Working with a local supplier certainly has many interests, the two most important being French language and law. But working locally means, on the one hand, limiting oneself in terms of the products offered for sale and, on the other hand, having to limit one’s profit margin. A local supplier delivers faster than a foreign supplier. He communicates daily with his dealer. It also allows easy tracking of deliveries. The counterpart is that faced with a product coming from China, for example, the margin will be reduced.
Unsatisfied customers
Faced with the monsters of e-commerce, capable of delivering everything, anywhere and in record time, the primary objective of any online retailer must be customer satisfaction. Resellers must remain very vigilant to ensure delivery times, product quality and the after-sales service they will provide. Nothing is easier on the internet than commercial infidelity. At the slightest misstep, the user changes creamery, and for that he only has to lift a finger.
Sales that do not take off
The last thing you need to understand is that the competition on the internet is such that you can have the best product at the best price, but sell nothing. In addition to the marketing plan put in place, and the presence hammered on social networks to make known a commercial site or a blog, the editorial content is just as important. It sets the tone for the seriousness and professionalism of the company or blogger it represents. Poorly constructed product sheets, unsuitable articles, or even content full of spelling and syntax errors will not allow the e-commerce site to survive and will scare away visitors, which will have a direct negative effect on sales. You want to get started but the Web writing part and what is more SEO Web writing does not speak to you at all? Do not hesitate to contact us to build a team of experts in SEO web writing.
We have seen together how drop shipping works. In summary, it is a very widespread and proven method of e-commerce sales. Many companies make a living from it, whether they are resellers or suppliers. The advantages are numerous and many entrepreneurs start their e-commerce sales activity using this sales method. We have also seen the risks of not choosing the right partners. However, you will have understood it, an adapted and optimized editorial content on The Tiny Tech will allow your site to be better placed in the Google results page. And boost your sales. To be able to put the odds on your side, do not hesitate to discover the profile of the editors of the Web. They will be able to help you write effective product sheets, without spelling mistakes, or even write articles optimized for your blog. Their objective? Ensure you the best Google referencing. This will lead to a natural increase in visits and therefore a dynamic increase in your turnover. Want to learn more about how to succeed in drop shipping?
