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03 Mar 2011 05:29 AM #1
- Join Date
- Jul 2010
- United States
- 14 Times in 13 Posts
Dropshipping vs Order Fulfillment
Knowing Your Options and Making Your Choice
Deciding how to store and transport your products is a very important aspect of your business. The decision that you make will have a large effect on your time and your profit margin. Dropshipping and order fulfillment are two of the options available to you. Dropshipping requires the retailer to send customer orders to the wholesaler. The wholesaler packs and ships the order directly to the customer from their company-owned warehouse. Order fulfillment requires to the retailer to purchase, store, pack and ship his own stock. Being properly educated about the advantages and disadvantages of both options will help you decide which option is most appropriate for you and your business needs.
Dropshipping Pros and Cons
Perhaps one the greatest benefits of dropshipping is that it is not necessary for you to purchase an inventory. You also do not have to invest in storage space or tools to help you keep track of your inventory. Dropshipping also frees you of the effort and expenses you would have to put into packaging and shipping. Because the wholesaler handles these matters for you, you can invest your extra time and money into expanding your customer base. The freedom of not having to continuously buy and store your own merchandise gives you greater flexibility in what you can offer to your customers. You can offer your products in varying amounts, colors, sizes, etc. or you could experiment with offering different types of products with much greater ease and much less risk. If you so choose, you can completely re-invent your store with far less effort than if you handled your own stock.
As attractive of an option as dropshipping may be, it does have its drawbacks. Because dropshipping is so convenient, you may have to contend with other dropshippers whose prices are more competitive than your own. You also have to face the challenges of not being in control of your own inventory. Because you are not supervising the inventory, you have far less knowledge of what is available. This can be especially problematic when it comes to selling complementary items. There is a possibility that you may sell your customer a product that it is out of stock. As a dropshipper, you are held responsible for any errors that your supplier makes. Even though you may not be personally responsible, it will be your duty to address customer service inquiries and serve as a liaison between your supplier and your customer. Another possible disadvantage is that wholesale companies that are involved with dropshipping may impose conditions upon retailers in regards to return policies, prices, etc. Depending upon the conditions and how they relate to the way you wish to run your business, this may seem like an infringement upon your freedom as a merchant.
Order Fulfillment Pros and Cons
Order fulfillment allows you to have control over your inventory, as well as the date and the condition of the product that is shipped to your customer. You could choose to have your products close by so that you can better supervise your stock or you could outsource your merchandise to a 3rd party order fulfillment company. A 3rd party fulfillment company will manage the inventory and take care of the packaging and the shipping. Using an order fulfillment company is similar to dropshipping but differs in the respect that an order fulfillment company does not supply you with your merchandise.
The disadvantage of having control over your merchandise is that you are responsible for keeping accurate records of what is available and replenishing your stock in a timely manner. Most individual retailers are not equipped to handle such large amounts of record keeping and inventory control. Unless you seek assistance from an order fulfillment company, you will spend a great deal of time just taking care of your stock. Spending so much time caring for your stock could take away from the time you spend expanding your business and attracting and maintaining customers. There is also the disadvantage of changing your product. Should you decide that order fulfillment is the best option for you, keep in mind that any new products you wish to experiment in must be factored into your inventory budget. If your product does not sell, you have lost your own money.
Your personal preference for using dropshipping vs. order fulfillment is largely dependent upon two factors: your knowledge base about dropshipping vs. order fulfillment and what you value most as a retailer. If you value an option that will save you money and give you the greatest flexibility in time and product availability, then dropshipping is the most appropriate option for you. Keep in mind that choosing a good supplier is important in dropshipping. Look for companies that offer order delivery process automation, ship products in a timely manner and provide retailers with invoices and other important updates If you value having greater control over your inventory and logistics and you are willing to invest the money and time necessary to do so, then order fulfillment is the best for you.Want To Be An eBay Powerseller?This is the Service You Need.
Thank you for this post:
tanongsak (04 Mar 2014)
04 Feb 2014 05:21 PM #2
- Join Date
- Feb 2014
- United States
- 1 Time in 1 Post
Truly agree with you!
We are a warehousing and fulfillment service company located in Los Angeles, I want to introduce you the service that you can store your item in our warehouse, and we can process the order for you with just a small amount of fees, you will still be able to receive money from your buyer directly.
Benefit: Help you save cost and time when shipping from China to the USA using DHL, we know DHL is too expensive, instead, we can help you ship to your customer same day with a cheap shipping cost via FedEx or USPS.
How it works:
1. Ship all items to our warehouse
2. Store in our warehouse
3. Send us pick up or ship listed everyday
4. Deliver your product to your use customer by FedEx or USPS
Please let me know if you are interested
Oversea Monster Los Angeles Warehousing and Fulfillment Service
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