How Drop Shipping Will Help Your Distribution Grow

Welcome to our 4-Part blog series on Drop Shipping. We want to show you how your business can start utilizing Drop Shipping as a Lean way to grow your product line and bring greater value to your customers

  1. How Drop Shipping Will Help Your Distribution Grow
  2. Triple Your Product Line the Lean Way
  3. Managing Drop Shipping and Your Own Warehouse
  4. Don’t Waste Warehouse Space on Slow-Moving Inventory

How Drop Shipping Will Help Your Distribution Grow

If you’re a business owner, you’ve likely heard the phrase “drop shipping.” Some businesses are more familiar with the procedure than others, but most have at least heard the term discussed in business circles.

If you’re not familiar it with it, now’s probably the time to stop ignoring it. Drop shipping could be the missing ingredient to your company’s success.

The Lowdown on Drop Shipping

The Lowdown on Drop ShippingDrop shipping is an amazing supply-chain management technique that alleviates many of the burdens that face retailers who cannot afford to keep high levels of inventory and excess stock on hand. “The main concept is that you’re selling products you don’t actually own,” Small Business BC tells its readers.

“It means that you can set up an online store, include a mark-up price, and sell products to clients and forward the order to your supplier. They in return, ship the product to your customer on behalf of your company.”

Although drop shipping isn’t necessarily a perfect business model (risks include potential inventory mix-ups, supplier errors, shipping complexities, and lower margins), it may often be advantageous for firms that need a lean solution which enables them to scale.

Four Benefits of Drop Shipping

You may be thinking: “Great, all of this sounds fine, but how will drop shipping directly benefit my company?” We have the answer. Below are some of the most tangible benefits for companies when they commit to drop shipping for a significant period of time.

4 Benefits of Drop ShippingMuch of your success with drop shipping will depend on the companies you align your business with, and how effective the lines of communication are. But companies that are serious about making this a solid part of their supply-chain model can enjoy a number of distinct advantages.

1. Come to Market Quickly

In many instances, drop shipping enables businesses to bring a product to market much faster. This is typically the case when your manufacturer and drop shipper are one and the same, or the drop shipper is located closer to your manufacturer.

Instead of having to wait for products to be shipped from the manufacturing plant to your warehouse — which in many cases can take weeks — you can begin selling the moment these products are posted to your e-commerce website.

2. Explore New Lines

Another beauty of drop shipping is that retailers don’t have to assume much risk. For example, if you want to explore a new product line, but aren’t quite sure how well it will do with your target market, you can test new SKUs without even having to bring on new inventory.

If the products work, then you can choose to add them to your store permanently. If your customers don’t respond well, you can move on without having to take a loss on a bunch of inventory you never sold.

3. Reduce Investments

One of the biggest benefits of drop shipping is that you don’t have to invest a lot of money into growing your business. Conventional wisdom tells you that you need to spend thousands of dollars in order to grow inventory, expand warehouse space, and fulfill orders, but the reality is that you can enjoy the benefits of being a large business without having to put up such a massive upfront investment anymore.

Because you don’t actually buy the products — and aren’t required to pay for them until a purchase has been made — the startup costs can be much lower. This empowers you to reallocate those dollars to marketing, advertising, and branding.

4. Enhance Customer Service

Businesses often fail when they’re unable to attend to the needs and demands of their customers. If you’re too caught up in the day-to-day operations and logistics of your supply-chain network, it’s going to be challenging to succeed on the customer service front.

Drop shipping alleviates some of these logistical demands and frees you up to focus on what really matters.

A Massive Growth Accelerator

drop-ship-growth-acceleratorUltimately, the above four benefits add up to one thing: massive growth potential. When you’re able to bring products to market quickly, continuously explore new lines with very little risk, reduce your upfront investments, and focus on customer service, very little remains to hold you back.

All too often, warehouse management and inventory tracking are the facets of running a retail or e-commerce brand that business owners dislike the most. Unless you have extensive experience in these areas, the complexities of supply-chain management can be too much to handle. That’s what makes drop shipping such a fantastic solution.

With drop shipping, you may transfer the risk to other parties in the supply chain. Your network handles all of the logistics, independent of your business.

That allows you to focus on building your brand, engaging customers, and making sales. These are the exciting aspects of business that will get you up in the morning and keep you energized late in the day.

You may find drop shipping isn’t right for your business model, but this supply-chain technique isn’t industry- or product-specific. Businesses in a number of niches have started to enjoy the benefits of drop shipping.

The only requirement is that you must be willing to scale. Growth is all but inevitable when you choose to integrate drop shipping into your supply chain, so be prepared.

Contact QStock Inventory Today

At QStock Inventory, we understand how powerful drop shipping can be when you leverage it in the right ways. If you’re looking to jump-start your company’s growth and scale your e-commerce store the lean way, we would love to nudge you in the right direction.

There are two ways we can help. First, we recently hosted a Drop Shipping for Ecommerce webinar that we’d love to share. Claim your spot here.

Second, we’d like to encourage you to check out our QStock Inventory solutions that can streamline your supply-chain and warehouse management efforts, for a consolidated and organized overview of what’s happening in your business. Just contact us today and we’ll be happy to provide you with a free demo.

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