Whether you are just getting started in business or currently operating a thriving company, consideration of the business model should never be overlooked. Although it is difficult to change your business model once established, it is sometimes necessary and can result in lower operating costs.
The internet has enabled businesses to communicate effectively and nearly instantaneous with the entire supply chain which has opened the door for new and improved efficiencies. One of these improvements has been the introduction of the drop shipping business model.
What is Drop Shipping?
Drop shipping is the streamlined process for product fulfillment that transfers inventory and shipping responsibilities to the manufacturer or wholesale partner. This is a huge benefit for retailers who have previously focused a large percentage of their energy and capital on inventory management. Drop shipping is very similar to the lean manufacturing methodologies as it allows each party to focus on their expertise while trusting the other party to highlight their strengths.
Why chose the drop shipping business model?
The drop shipping business model is relatively simple to get started with since you will not need to deal with the traditional timelines of product manufacturing, freight, inventory replenishment, and all the associated costs. In order to begin drop shipping product, you will need a partner willing to provide these services, likely at a premium on cost per unit. This can be achieved through platforms like Alibaba and AliExpress. Once you have established a working drop shipping relationship with a supplier you will need to ensure a smooth line of order processing before starting to sell.
The guide to drop shipping
In this complete guide to drop shipping, Red Stag Fulfillment weighs the advantages and disadvantages of choosing to utilize this business model. The guide also helps determine if the business model is a right fit for your needs and what technologies you can expect to work with. In this infographic, Red Stag Fulfillment features tips to get started in your drop shipping business: