Dropshipping is a clever modification of retailing which doesn't require retailers to hold inventory, instead orders are processed immediately by wholesalers on receipt of payment from retailers in global sourcing. In dropshipping supply chain management, retailers' profit is the difference of the wholesale and retail amount. Dropshipping is a boon to export and import.
-What is Dropshipping
Retailers can sell products to global sourcing partners against collect payment in advance and pass the orders 'as is' to a 'dropshipper' or wholesaler. While the wholesale charges his price and dispatches the orders straight to customers, retailers pocket the difference amount, while still being in export/import business. EBay is a popular platform for export and import dropshipping retailers.
Export and import merchants in dropshipping don't need to hold inventory of products and so are insulated from associated costs and price fluctuation as the entire export/import procedure is out of their scope.
Export/import retailers hide their source for the fear of stigma or loosing business. So, many retailers organize dropshipping wholesalers to ship merchandises by concealing origination address, a practice known as blind shipping. Wholesalers may also agree for sticking a customized return address in certain cases depending on the relation they share with the retailers. It isn't very surprising to have customized packing slip being included in dropshipping, depicting the source and entire contact details as the retailers'.
-Dropshipping Suits Beginners and Small Timers
Dropshipping is mostly opted by small retailers especially starting up online. Another advantage of getting into online dropshipping is relief from holding inventory and instant access to import & export. Also, dropping removes the necessity to have export/import license. The model equally suits eBay merchants and over the recent past, thousands of retailers have benefited by adapting dropshipping strategy. They can list items they don’t posses, subject to eBay TOS. The same applies to independent dropshipping websites too.
-Dropshipping Isn't a Cakewalk
Just for this, all the hardcore business principles apply to dropshipping too, right from finding a niche to maintaining tax and payment channels etc. However, independent having export/import license opens new vistas for the industrious. Make sure of the availability of all the items you have listed without which you may find yourself in soup having received the payment. Like most dropshipping retailers find out, convincing your wholesaler to ship the order without his signature, especially for export/import orders.
Despite this, dropshipping is a boon for export and import merchants and is here to stay as it is legal and easy for all the parties concerned.
-Global Sourcing
Global sourcing is changing work practices all around. When you begin looking beyond the traditional way of sales, global sourcing comes handy. Global sourcing is truly different, in which it explores all the new sources.
Global sourcing involves countless responsibilities including risk mitigation. If you didn't know already, Y2K has triggered global sourcing and since then it is global sourcing, all the way. Global sourcing drives the formation of new economic relationships. Revolution in informationalization is heralding new economies and global sourcing is fuelling the manifest articulation of it. Clearly, advantages of global sourcing are facilitation to easier identification of alternate suppliers, capacity utilization and freedom to engage specific geographical talent. Although complicated, global sourcing thrives in modernizing of supply management.
Dropshipping
