Drop Shipping or Order Fulfillment
A few blog posts had been written about drop shipping updates and Third Party order fulfillment services. Among the leading companies in this subject is Shipwire, a business that'll store and drop ship your goods for you. This has numerous advantages. Basically, you may rent a business like Shipwire to serve as your own personal drop shipper.
There are alternatives to sell and ship products to the palms of your buyers. The two options, drop shipping and order fulfillment, may be a source of confusion to many suppliers who're attempting to make their products simple and easy to sell. To put it simply, both these methods are actually two sides of the same coin.
Differentiating Dropshipping from Order Fulfillment
Drop Shipping is a type of fulfillment, whereby the retailer doesn't hold any merchandise in stock. With drop shipping the orders of the purchaser are sent directly to the producer or wholesaler, who then ships the item to the buyer after the buyer has made the purchase from the merchant. This practice is most common among retailers, eBay and Amazon sellers, catalogers or email order companies that provide a very large product catalog to retailers who can't, or don't wish to invest in inventory.
Order Fulfillment is the process whereby a merchant or producer picks, packs and ships an order to an end buyer. Order fulfillment can be carried out directly by a merchant out of a garage or warehouse, or it may be outsourced to a 3rd party warehouse and order fulfillment provider, like Shipwire product fulfillment.
Determining Which is Best for your Business - Drop shipping or Order Fulfillment?
To best determine whether order fulfillment or drop shipping is ideal for you, you need to understand the pros and cons of each to choose which may be best used for your growing company.
- Whenever suppliers provide manufacturer drop shipping they mean that the producer will hold the stock until it's purchased and after that concurrently shipped to the purchaser and bill the supplier a wholesale or dropship cost.
- Frequently drop shipped inventory may have a higher per order merchandise cost than if the merchant really invested in stock by purchasing a small wholesale amount. Fewer stock outs may be avoided when investing or purchasing merchandise stock.
- Among the downsides of drop shipping is that at times suppliers fail to inform their dropshippers when stock levels are low. This raises red flags as it may cause chaos when merchant is able to sell the product to the buyer just to find out the provider no longer has the item.