Dropshipping is a business model that allows retailers to act as a middleman while selling a product.
Instead of actually handling the inventory that is sold, the retailer instead passes orders onto a dropshipping company for them to complete the task of picking, packing and fulfilling the order.
Essentially, this business tactic creates a relationship between a business and the manufacturer or distributor of a product.
Retailers get to manage the website of their business, while another company handles the product development and order fulfillment.
There are many positive benefits to dropshipping, and a few steps that are necessary to complete before tackling this new business format.
First, if you are interested in putting dropshipping in your business structure, you need to find a manufacturer who is willing to partner with you.
Once you find one suitable for you, asking a few questions is crucial to success and transparent communication.
- Do they offer products you are interested in?
- Do they charge a handling fee?
- How do their shipping procedures work?
If a manufacturer does not have these answers, you should go directly to the disruptor before making any decisions.
“A distributor is simply a company that maintains a large inventory of another company’s products and distributes those products to smaller companies.” Entreperuner reported.
The distributor can also give direct answers about any specific products you are hoping to sell.
Once you get the answers you need, you can begin to work with these companies and integrate dropshipping into your business.
Then, you can reap the benefits.
Dropshipping turns out to be very beneficial for retailers starting a business because it allows them to gauge what inventory is profitable, without being stuck with leftovers.
Instead of investing extra money into inventory that may not sell, you can be more precise without having the hassle of handling the products yourself.
When a retailer has extra inventory leftover due to customers not being satisfied or simply products becoming outdated, they often times lose money.
“Many online retailers find themselves having to offer deep discounts–and taking huge losses–on old products just to get them out of their homes or warehouses to make room for more inventory.”
Not dealing with inventory also ultimately leads for businesses to perform tasks in a quick, efficient way.
“Compared to buying inventory for your store, you don’t need to wait to receive inventory or take product photos. With dropshipping, you can easily import product details such as specifications and images” According to Oberlo.com.
While developing a retail business, it may feel overwhelming while thinking about implementing resources such as:
- Setting up a warehouse to store inventory
- Figuring out a shipping structure
- Producing Products
- Tracking inventory
While using dropshipping, these things can be left for the manufacturers and disruptors to worry about, leading to seamless business productivity.
Targeted Customer Engagement
Since retailers have less responsibility of shipping, they can focus directly on the customer while handling the website, engaging with the audience frequently.
This can lead to increased customer communication and can give businesses an opportunity to really learn what inventory the customer wants, therefore, arranging the business model to meet these needs.
“With the ability to add new and expanded product selections consistently, you can keep your existing customers engaged and returning to see what new items you’ve acquired.” According to MultiChannelMarket.
Now that you have learned about the background of dropshipping, the benefits and questions that are necessary to ask, now you can implement this new tool into your business structure.
Learning about the best dropshipping companies to partner with will make this transformation easier. Luckily, Digital Diary has done the research for you.
Doba is a comprehensive dropshipping company that has created its own market of wholesalers and manufacturers, giving businesses many options to list and sell products through these sources.
Having over 200 suppliers gives retailers the opportunity to have many choices of inventory.
Dropship Direct is a provider that offers 100,000 wholesale products to more than 50,000 online retailers.
“From our 100,000 square-foot warehouse facility in Saint Joseph, Michigan, we provide customers with inventory storage, pick-and-pack drop ship services, and turnkey e-commerce click-and-mortar management.”
This e-commerce company’s mission is to make the shipping hassle free for retailers, “to better leverage profit margin and minimize risk”
Dropship Direct provides a variety of services such as warehouse management, marketplace data, and import/export abilities.
They offer an immense selection of inventory from outdoor supplies to health and beauty products.
Sunrise Wholesale is a dropshipping company that was built to maximize businesses online profits while using marketplace automation.
They offer 22,281 products from an assortment of different brands.
“Sunrise Wholesale Merchandise has been a leader in online dropshipping since 1999. With an A+ rating from the Better Business Bureau, Sunrise is your trusted dropship partner.” According to Sunrisewhole.com.
Retailers, you are now informed and ready to take the plunge into the dropshipping world. Good luck!
ABOUT DIGITAL RETAIL TRANSFORMATION ASSEMBLY
The retail industry is constantly fluctuating, influenced by innovative ideas from business leaders and entrepreneurs. Dropshipping is one example among many proving that this industry is moving in the direction of digital transformation. Don’t allow your business to suffer by being uninformed about the latest trends in your industry.
By working with the industry, The Millennium Alliance has put together an event to challenge attendees and anticipate the highly complex digital retail marketing environment that will develop over the next few years.
Stay ahead of the digital wave and above the competition. Learn from leaders, share your own personal knowledge, and grow in your industry. It is vital for CDO’s and CMOs to take full advantage of these unique tools in order to be successful in the retail industry.
This is not just another “Retail” event. Spaces are reserved for the best in the business. Register your interest here >