eCommerce is on its rise and is showing no signs of slowing down. Every year millions of retailers are diving in this industry to harvest its offerings.
However, it is not possible for every retailer to set up their fully-fledged online operations including a website, inventory, shipping services, and so on. Thus, drop shipping comes in as a great survivor for them.
Drop shipping a perfect eCommerce business model for startups. In such model, retailers do not need to undergo the hassles of managing inventory and shipping products or it is an order fulfillment method where a store selling products need not keep the products in stock on itself.
It allows the retailers to sell products on their store while passing on the sales order to 3rd party suppliers, who shall be responsible for completing the order shipments.
An overview of Drop shipping Business Model
An ideal drop shipping allows you to choose from the product list of a third-party supplier available in database and sell it to the potential customers on their own website.
Afterward, whenever there will be an order placed on their web store, they need to notify the drop shipping service about the product, quantity, shipment address, and other customer details. Here ends the duty of a retailer.
Now, the supplier or wholesaler is responsible for fulfilling the order and managing the complete inventory & shipping.
When it comes to Shopify drop shipping things become easier with its easy-to-use features. A successful example of Shopify drop shipping is Aliexpress that holds a database of multiple suppliers who are utilizing its product list on their web stores.
Major Concerns involved in drop shipping
Although, drop shipping seems an easy affair still, it is not the clear picture. It also comes with many hindrances for the retailers.
Let’s have a brief look at some of those below:-
- Subscription costs involved to use services
- Low-profit margins involved
- Immense competition
- Supplier’s errors
- Inventory or shipping complexities
- Drop shipping services’ biased payouts
- Fixed retailer’s commission rates
In case, you are a supplier then there are fair chances of facing multiple drawbacks of a traditional drop shipping service. However, it does not mean that you should avoid utilizing this eCommerce model.
You can hire Shopify developer get a custom approach to Shopify drop shipping that may help you to smooth down the hassles to a great extent. For e.g.,
- You can directly engage the retailers without any dependency on 3rd party drop shipping services’
- Directly sharing your inventory with retailers via custom Shopify drop shipping app.
One way of achieving this is via developing a YII 2.0 interface for a drop shipping product selection on the client-server where order data and inventory can be synchronized in between yours and retailer’s store.
A supplier can easily receive and manage orders while using the default Shopify admin. And, such orders hold an automatic generation and sync depending upon orders placed on retailer’s store.
To achieve this customization, you can consider consulting experts who hold years of expertise and hands-on experience in web development.
Among various eCommerce business models, drop shipping comes out as a strong and fruitful option to opt for. However, many retailers find it difficult to dropship in collaboration with third-party involvement.
So, there is also an option to start your own online store for drop shipping. This way you will get more control and fewer expenses and no 3rd party fees at all. But you always need to remember that every advancement comes with some cons involved.
Here, you will be solely responsible for generating traffic, doing marketing and SEO, and other requisite configuration. And, if you are backed up with a strong team of experts, there will be nothing impossible.