eCommerce has flooded the shopping market with its ubiquitous presence and easy to order methodology. There are different mechanism of operating this business, one of which is drop shopping. The concept of drop shopping involves selling products without any inventory or stock. They act like a middle layer between manufacturers and consumers.
In this model, the eCommerce store merchants buy products from third party as and when to needed to fulfil orders. The obvious benefits are increase in sales and profits. In this mechanism, the businessmen markets products while manufacturers and distributors sell products by directly shipping to the customers.
Advantages of drop shopping in eCommerce:
Low capital investment: This concept allows one to create an eCommerce store without investing huge chunks of money in purchasing products, inventory design and management. Here, the sales are made by first receiving money for the product from the customer and then getting it delivered.
Best for start up: It’s finest to start up with drop shopping as you don’t have to manage warehouse, order processing, track inventory, handle returns, inbound shipments and manage stock levels. All these aspects make it the best start up business.
Least overheads and wide selection: Since you don’t need to manage warehouse, you can handle the business from home. All you need is a laptop plus little initial investment. These so called virtual ‘eCommerce stores’ also offer list of products on your website without any additional cost.
Apart from all this, it is easily expandable form of eCommerce store as order processing is borne by suppliers. It is also flexible and convenient method of managing online shopping business. The flip side of the business are low margins, shipment complexities, inventory challenges etc. So, drop shipping can be lucrative business if you manage these small issues!