As eCommerce continues to grow in popularity there has been a surge in new and unique business models such as affiliate marketing, retail arbitrage, and drop shipping. Although these new business structures aim to eliminate inefficiencies they are not necessarily easier to operate, contrary to popular belief. In the past, retailers would purchase inventory and keep products in stock before making the sale, drop shipping aims to streamline this antiquated process. Instead, when a customer makes a purchase from your eCommerce store the order is directed to the manufacturer or wholesaler to be fulfilled. This means you never have to touch the product.
The benefits of starting a drop ship business can seem too good to be true, and although there are some disadvantages you will want to consider, the risk of starting is extremely low. The costs of starting a drop shipping company are also low since you will not be purchasing a large inventory order. Some negatives you will want to be aware of include the quality control and inventory management, which you will lose oversight of.
It’s important in the current eCommerce environment to focus on customer engagement and retention since today customers likely will not interact with any representatives of the company. This is why you should consider highly personalized email engagement and customer relationship management software. Drop shipping is a great way to experiment with starting a business without taking on substantial risk. In this guide to drop shipping, RedStage Fulfillment has outlined tips to help get your drop shipping business up and running: