Pros and Cons of Using Drop Shipping for Ecommerce

Mar 14, 2017 | eCommerce

Reading Time: 5 minutes
Kevin Fouche

Pros and Cons of Using Drop Shipping for Ecommerce

Posted by Kevin Fouche, Pixel Fish Director

Kevin handles the planning, design, launch and training of every website that Pixel Fish creates. He ensures that every website is highly engaging and aligned with our client’s goals. With over 20 years of design and web industry experience to draw upon, Kevin aims to pass on his knowledge to our clients and like-minded businesses wanting to grow their online presence.

Usually, when a business sells a good, the company must purchase a large quantity of the good and then ship individual units to customers as they purchase them. This can be expensive, time-consuming, and expose the business to the risk of buying a good it cannot sell.

Drop shipping is one solution to this. A drop shipper is a business that ships individual units of a good and ships them directly to the purchaser. So, if business A sells a widget to a consumer, business A can work with a drop shipper who will ship the widget directly to the consumer–meaning that business A never handles the item.

There are several pros and cons to drop shipping. Here are some of the more common ones.

Pros and Cons of Using Drop Shipping for Ecommerce

Pros of Using Drop Shipping for Ecommerce

1. Eliminate the need to maintain an inventory

One of the biggest advantages of using a drop shipper is that it eliminates the need for your business to purchase and maintain an inventory of a particular good. Rather than having money tied up in inventory, you can use it for other purposes. Along the same lines, you won’t have to pay for warehouse or warehouse employees, as you won’t have anything to store in a warehouse.

2. Test out new items

Another advantage is that drop shipping makes it easy to test out new items and see how they sell. With traditional commerce, you would need to commit to making a large purchase and hope that the item sells. On the other hand, if you use a drop shipper, you are freed from the risk of purchasing a large quantity of a good that you are unable to sell.

Finally, using a drop shipper is fast–much faster than the traditional method of ordering a large lot of goods and then waiting for them to come to you, where they must be unpacked, inventoried, and stored pending sale to your customers. If you use a drop shipper, you can start selling the goods immediately without waiting for the good to come to you. This is especially useful for businesses that need to launch products quickly.

Dropshipping is a great option for anyone looking to start selling goods online without all the hassle of traditional commerce. It can help you reduce your costs, test out new merchandise, and get your products to your customers faster. \

Cons of Using Drop Shipping for Ecommerce

Of course, there are disadvantages to this arrangement. One of them is that you have no control over the quality of the item the drop shipper sends your customer. Given that your customer likely won’t even know you are using a drop shipper, he or she will judge your company by the quality of the item the drop shipper sends. This means you’re putting your reputation in the hands of the drop shipper.

1. Reduced Profit Margin

In addition, your profit margin won’t be as high when you use a drop shipper, as you won’t enjoy the bulk discount you get when you purchase a considerable lot of goods at once. On top of that, the drop shipper will likely charge something for the convenience of the service, eating into your profit margin even more.

What’s more, most drop shippers use their packaging, meaning you miss out on the chance to use the packaging as a marketing tool for your business.

Likewise, you won’t have the opportunity to put coupons or other marketing materials into the box with the item, meaning you forfeit the chance to encourage return customers.

Finally, there are some very unscrupulous drop shippers out there, and it can be challenging to determine whether the one you are working with is one of them. This means you bear the risk of being ripped off if you don’t thoroughly do your research. This risk can be mitigated somewhat by being very selective in your choice of drop shippers, but it is still something that warrants consideration.

How to choose the right drop Shipping Partner for your Ecommerce business

When selecting a drop shipper, there are some key points to consider. First and foremost, how long has the company been in business? It’s always best to choose a drop shipper with a track record of reliability. You should also inquire about their shipping practices and what kind of tracking options they offer. This will be important in ensuring that your customers receive their orders in a timely manner.

In addition to reliability and shipping practices, you should also investigate the quality of the products being shipped by the drop shipper. Make sure that any products being shipped on behalf of your business are up-to-date and meet industry standards. If the drop shipper is unable to provide evidence that their products are of good quality, you may want to look for another provider.

Finally, it’s important to consider the cost of working with a particular drop shipper. Different companies will offer different rates and fees; make sure to do your research and select the best option for your business. Keep in mind that while cheap prices can be appealing, the quality of products and services may be affected.

Ultimately, finding a reliable drop shipper is essential to running an efficient ecommerce business. Make sure to evaluate all aspects of potential providers before making any decisions. Doing so will help ensure that your customers receive their orders in a timely manner with quality products!

How to integrate Drop Shipping with WooCOmmerce

Integrating drop shipping with WooCommerce is a great way to take your ecommerce business to the next level. Using this method, you can provide a wide variety of products without managing inventory or maintaining stock levels. This can help simplify your operations and increase revenue potential.

To get started, you’ll need to install the WooCommerce software and then add a plugin that supports drop shipping. You’ll also need to find a reputable dropshipper and set up an account with them. Once this is done, you can begin selling products directly on your site!

Remember to thoroughly research all potential partners to make sure they have quality services and reliable shipping. You should also consider the cost of goods, delivery fees, and other service fees that may be incurred when utilizing drop shipping. Utilizing a sound strategy and quality vendors will help ensure your success in using WooCommerce with drop shipping. Good luck!

Once you have completed all the setup steps, it’s time to start adding products to your store. When you find a product you’d like to sell, research the supplier and make sure they are reputable. Also check that their product pricing is in line with market standards.

When setting up each product in WooCommerce, choose the “Dropshipping” option for its Shipping Method. This will allow customers to purchase the product while you source it from the drop shipper.

Finally, don’t forget to check that all shipping information is up-to-date and accurate with the third-party vendors. This will help ensure the timely delivery of your orders and a good customer experience.

If you have any questions about drop shipping, or if you just want to know more about Web marketing in general, please feel free to contact us.

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Further Information:
How to Create Digital Content for Your At-Home Clients
Top 9 WordPress Website Design Trends
How to Stay Top of Mind for Your Customers by Utilising Your Website
12 Steps to Shift Your Business to an Online Delivery Model Business
7 Reasons WordPress is Perfect for Your Website in Today’s Environment
6 Important COVID Web Design Tips for your business
5 Ways to Streamline Your Business to Work and Collaborate Remotely
How to Build a Customer Journey Map to Enhance Your Website Design
7 Key Questions to ask before Choosing the Best WordPress Theme
4 Essentials of E-Commerce Website Design that Converts

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