Drop Shipping

[party_pete]

We are getting more and more emails/requests asking;
"Do you do drop shipping?"

Has anyone any experiences of Drop Shipping?

or can someone explain (slowly) exactly what it entails and what the benefits would be?

Thanks

Peter

[jont]

Drop shipping is when you list the product of your supplier - you take the order and payment and your supplier ships the goods direct to the customer.

Advantages are no stock holding and increased ranged

Disadvantage is trusting your supplier, extra steps in the chain for you, chasing orders, issues with breakages & returns etc

[Mike Hughes]

My take on drop shipping (may be different from others):

Drop shipping is where a retailer takes orders for an item he doesn't stock and then 'drop ships' it straight from the supplier.

From a retailers perspective this can be attractive because you can sell a huge range of products without having to worry about stock and tied up capital. The disadvantages are that you end up selling the same kind of stuff as everyone esle doing drop ship stuff and have to deal with returns etc even though they didn't come from you in the first palce.

For the supplier, the benefit is that you gain extra sales volume, albeit at a lower margin.

As a retailer, I would have absolutely no interest in drop shipping my goods for third parties.

- It would create more competitors.
- I would loose the customer relationship.
- My whole operational focus would have to change.

Drop shipping for other retailers really only makes sense where your added value/competency is in sourcing goods, effecient stock management and high volume shipping operations. i.e. you're really a distributor rather than a retailer.

Mike

[jont]

You do need a LOT of confidence in your supplier to ensure they meet up to your existing levels of customer service.

I added in 3 drop shippers last year - all are trade only suppliers with no direct retail outlet and all ship under plain wrap with our stickers on the outside of the box. I have known 2 of them for many years and the 3rd was a calculated gamble but their presentation and meetings inspired confidence in what they could achieve. I did almost £50k in sales with them alone in 2005.

If you do go down this route ensure you tie things down in a contract prior to going live. Who is responsible for returns, will they retain customer details, will they re-brand as your company etc as well as the usual contractual supplier details