The world of electronic commerce has certainly moved forward in leaps and bounds during recent years. One of the most profound paradigm shifts involves the role that start-up businesses are now playing. Although the online sales sector was dominated by giants such as Amazon and eBay in the past, things are beginning to change. We are now witnessing smaller businesses entering into the digital community and this trend is expected to continue. While there are a number of reasons behind such a movement, one of the most influential involves the role that drop shipping plays. Let us take a look at the principles associated with this method before moving on to examine how its advantages can be leveraged during the coming year.
The Theory and Associated Benefits of Drop Shipping
One of the issues facing countless online retailers involves inventory management. Many individuals and entrepreneurs do not have the on-site facilities to accommodate such needs and shipping represent a very real concern. As a result, the scope of their operations tends to be notably limited. These metrics can be effectively addressed by embracing a principle known as drop shipping.
Modern drop shipping eliminates the need to maintain on-site inventory. There are a few steps which are crucial to this process:
- The customer places an order.
- The seller verifies the transaction and contacts the third-party supplier.
- The supplier ships the product directly to the customer in exchange for a small commission.
Well-respected software developers such as Oberlo have designed these platforms in such a way as to offer an intuitive user interface (UI); ideally suited for entrepreneurs with little technical e-commerce experience. However, the benefits do not end here.
Drop shipping takes daunting logistical concerns out of the equation. As opposed to being distracted with variables such as shipping rates, maintaining stock and verifying delivery dates, business owners can focus upon other aspects of their organization. Product development, promotions and client engagement will once again be provided with a greater degree of importance.
Finally, modern drop shipping software applications are easy to work with and they can reflect the branding of the company in question. This provides a sense of cross-platform uniformity; ultimately enhancing the experience of the end user. Now that we have developed an appreciation for this approach, it is prudent to determine how entrepreneurs can take full advantage of its dynamic nature.
Leveraging the Power of Self-Styled E-Commerce Platforms
We have already mentioned that the user-friendly nature of these platforms is one of their most attractive qualities. However, it is still wise to understand how such systems can be successfully integrated into an e-commerce website. This is when branding comes into play. The logos and any associated materials should appear the same across multiple pages. This is important from a marketing point of view and such an approach will provide a greater sense of transparency.
The next step is to determine shipping rates. There are two approaches which tend to be chosen. The first is to calculate different rates depending upon the country or region. However, this can become confusing if a business is sending products to different portions of the world. The other choice is to offer free shipping and simply raise the price of the individual product. Not only will customers like the fact that no hidden surprises await during the checkout process, but it is much easier for the seller to manage his or her profit margins.
It is also wise to consider the payment methods that are offered to the end user. Common options such as Visa and MasterCard should always be present along with electronic wire transfers. However, keep in mind that a growing number of buyers are now employing e-wallets such as Skrill and PayPal. You might even consider providing the option for cryptocurrency payments through denominations such as the Bitcoin. Flexibility is key if you hope to attract as wide of an audience as possible.
Finally, carefully examine the aesthetics of the drop shipping interface. It should be extremely clear and transparent. Navigation must be simple and above all, a link to contact the business needs to be present in the event that the customer has a question or problem. The best drop shipping interfaces are highly intuitive and straight to the point. In other words, less is more when referring to these portals. Never forget that providers such as Oberlo and Shopify offer businesses a wide range of templates to choose from. The chances are high that you will encounter one which is relevant to your online company.
Drop shipping has opened up a wealth of possibilities that startup businesses are able to use to their advantage. There is no doubt that the online retail community is set to be influenced by these methods in the coming year.