Dropshipping 1 By Yu Sun At Isnare.com Ezine Articles

Dropshipping is a practice of retail business where the retailer directly passes the orders to the wholesalers and does not make much stock of the selling items. It is latest technique of supply chain management. The difference between the retail and the wholesale rates will be the profit of the retailers.

Dropshipping is an easy to start and profitable business practice. The dropshipping strategies are very effective in ecommerce to reduce the stock holding, and to decrease the overall cost of shipping and time of delivery to the customer. The following are major advantages of dropshipping:

- Minimum stock requirement:

The dropshipping needs minimum or no stock to hold. The retailer will even send the single or less quantity order to the wholesaler or the retailer. Most important role of the retailer is promotion and getting the order from the customer, other activities of order processing is done by the wholesalers. It is greatly beneficial business for the retailers as, there is no requirement of buy a lots of stock in advance or to make a lot of investment on the point of infrastructure as well.

- Wider product range:

As far as the product range is concerned, the retailer can sell a wider product range. It can offer any item to the customer, and there is no risk of getting any product outdated or damaged. All the risk involved in the business is transferred to the wholesalers or manufactures.

- Customer satisfaction:

The customer will be more satisfied as the retailer can offer a more wider range of products, even high quality products which can not be maintained in the stock are also accessible to the customer.

- Small business

Even the small retailer can process the large quantity of orders. When a small retailer will get a large order from the customer, he can directly transfer it to the wholesaler without making the stock. It enables them to take the big orders without investing money in to that.

- Disadvantages:

There are many disadvantages of the retail business as well. Incidents like back ordering can affect the image of the retailer before the customer. If the order is not processed at the time and there is long wait for the customer, it will definitely cause the harassment and dissatisfaction to the customer.

Sometimes the customer will get a product different from the one which they have ordered, may be the product is lower in the quality or damaged. It will became hectic for the customer to get the product replaced, it not only take the time but also cost a lot to the business.
A good wholesaler practice is to keep the retailer updated, with the stock item so that he can take the order accordingly. The retailer should always try to have the updated information; it is definitely a good practice which will save a lot of time and money for the customer.

Overall, dropshipping is a good business practice, where more profit can be earned without making a large investment.

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