Drop Shipping Benefits and Problems
Drop shipping is one of the best way to help online retailers increase their sales & profits. But at the same time drop shipping have a lot of problems attached to it ranging from product information, managing the orders to providing good customer service which all the customers expects.
Drop shipping as a business model, have the online retailers who market the products, manufacturers & distributors who are fulfilling the orders, shipping directly to customers. The main aim for the merchants is to give their customers more and more options they can choose from without having the burden of inventorying every possible size & color from a product line.
Retailers Benefits for Drop Shipping
By using the drop shipping model online retailers have many benefits and the most important one is the potential for more profit.
According to a study that was conducted around 2009, online retailers who use drop shipping earn more profit as compared to their warehousing counterparts. A typical drop shipping retailer normally earn 5.18% more profit as compared to those merchants who inventory everything.
But, at the same time there are some problems which comes with drop-shipping model.
Customer Service & Shipping Problems
The most significant drop shipping problems from the beginning has to do with customer service & shipping.
When a customer makes an orders online, they expects that item to be shipped quickly & arrive as soon as possible. In case a merchant is using the drop shipping model, distributors and manufacturers are being trusted related to this portion of customer service.