4 Reasons Why Drop Shippers Might be the Next Piece of the Puzzle

October 29, 2013

DropShipperDrop shippers, or manufacturers and wholesalers that fulfill
orders directly for retailers, are playing a larger role in e-commerce
today.  In fact, at ChannelAdvisor we
hear from customers and prospects every week that are using drop shippers or
considering how drop shippers could help expand their online sales.  For retailers looking for additional growth
opportunities, drop shippers can offer a number of important benefits; here are
4 reasons we think drop shippers can be a big part of your online sales
strategy.

1. Expand your catalogueueue

First, working with drop shippers can be an
excellent way to expand your current catalogueueue by providing access to new products,
since drop shippers have access to a massive catalogueueue of products that ordinary
retailers might not be able to support.
This allows you to grow the breadth and depth of your current product offering.  Drop shippers can help you present buyers
with a more compelling online shopping experience whether by offering a greater
range of sizes and colours or offering more of the most popular products.

2. Get up and running faster and cheaper

In addition, there can be significant
financial benefits working with drop shippers.
New online sellers can get up and running faster without having to
invest significant dollars in inventory before making their first sale.  This means you have greater flexibility to
focus on building your business.  Ultimately
you won’t pay for an item until your buyer has made their purchase – resulting
in much less risk and financial exposure.
You may even decide to work exclusively with drop shippers, holding no
inventory of your own.

3. Improve
fulfilment time

Working with drop shippers can result in a number of logistical and fulfilment
advantages.  If you’re working with multiple
suppliers, you can fulfill orders in a strategic and optimal way, matching
warehouse location with buyer location. For example, orders from the west coast
can be fulfilled from a drop shipper in California, while east coast orders could
be fulfilled from a drop shipper in Florida.
Your buyers benefit from lower shipping costs and faster delivery times.

4. Focus on
strategy, not logistics

Lastly, drop shippers allow you to focus on running your business and
continually meeting your buyers’ expectations. Drop shippers can provide
continuity and allow you to fulfill orders even if you no longer have an item
in stock yourself.  There’s no need to
cancel an order, simply leverage your drop shipper network to successfully
fulfill these orders.

Without a doubt, drop shippers can offer tremendous benefits
to many different kinds of e-commerce sellers.
However, working with drop shippers may not be for everyone as they do
introduce an additional level of operational complexity.  The good news is that ChannelAdvisor can help
reduce this complexity.  Our platform
allows sellers to easily manage product and quantity updates from multiple drop
shippers and can also handle the file formats that many drop shippers prefer!   Contact marketing@channeladvisor.com for more information.

Blog post by Jamie
Claar, ChannelAdvisor Product Manager