An In-Dept Overview Of How Drop Shipping Works

What is drop shipping? Although the term “drop shipping” has been around for quite some time, but many people who want to enter the retail business tend to have misconceptions on what it really is. It is a method of retail fulfillment in which the products that are sold by a store are not kept in stock. Instead, when a product needs to be sold by the store, the item is purchased from a third party and the retailer directly ships it to the customer. As a result, the product is never seen or handled by the merchant. Unlike the standard retail model, the biggest difference is that no inventory is owned or stocked by the retailer or selling merchant. Instead, orders are fulfilled by purchasing inventory as necessary from a third party, whether a manufacturer or wholesaler.

How Does Drop Shipping Work?
While it is apparent what drop shipping is, but it is also important to understand how it works and how a drop shipped order is processed. The following will provide an idea of what the whole ordering process might look like:

An Order Is Placed By A Customer
Depending on the products that are being sold by a drop shipping Jmwant retailer, an order can be placed by a customer via the online store of the seller. After the dropping shipping retailer approves an order, several things tend to happen. The store software automatically generates an identical email of the new order that is sent to the customer and the retailer. During the checkout process, the customer makes the payment, which is automatically deposited into the bank account of the retailer.
Order Is Placed With The Supplier
The email order confirmation that was generated earlier is forwarded to a sales representative of a manufacturer or a wholesaler. If it is a wholesaler, the credit card of the drop shipping retailer, which is usually filed with the wholesaler, is billed for the wholesale price of the item, which includes any process or shipping fees. The ability to manual place orders online or automatic XML order uploading is supported by some sophisticated drop shippers. However, orders are typically placed via email since it is easy to use and universal.
The Order Is Shipped By The Wholesaler
As long as wholesaler has the ordered item in stock and the drop shipper’s credit card is successfully charged, the order is then boxed up and shipped directly to the customer. Although the wholesaler ships the item to the customer, the return address label contains the name and address of drop shipper, while the invoice and packing slip contains the drop shipper’s logo. After finalizing the order, an invoice and tracking number is sent to the drop shipper by the wholesaler. Usually, the turnaround time on drop shipped orders can be quite quick. If it is a quality supplier, then orders are typically shipped out to the customer within hours. This is why certain drop shippers are able to advertise same-day shipping.
What Are The Benefits Of Drop Shipping?
This unique retail model has numerous benefits:
– Minimal capital is needed– Easy to begin– Low overhead– Wide variety of products– Easy to scale
It is because of these benefits that drop shipping is such an attractive retail model, not only to those who are getting started but also to established merchants. Moreover, it is convenient and flexible.
Is Drop Shipping Worth It?
When it comes to building a successful business, drop shipping may not be perfect and stress-free. However, considering the above definite advantages, it certainly is worth it, as long as a few of the complexities and problems that come with it are addressed. To become a successful dropshipper all that is required is careful consideration and planning, it can then become possible to resolve all those problems and a profitable, thriving drop shipping business can be built.

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