- by Kusum Motiani
“Dropshipping is a retail fulfillment method in which you don’t need to own a warehouse and store the inventory. As soon as you receive an order on your online store, all you need is to place the order for the same product with your supplier and get it directly delivered to your customer.”
This concept of dropshipping has become quite popular these days because it doesn’t require investment and also saves you from the loss incurred due to the damages caused to the stock in warehouses.
According to a market research done on online business, more than 60% online sellers said that they are using dropshipping method to deliver products directly to the customers, sold through their ecommerce stores or marketplaces.
The reason of popularity of the dropshipping method is the convenience of product catalogue expansion. The ecommerce merchants can easily trade on more number of products without any extra investment, if they choose dropshipping as a method to deliver products to their customers. One of the biggest example of dropshipping is the increased popularity of FBA (fulfillment by Amazon) – Where the shipment of products sold by different merchants is managed by Amazon.
Thus, dropshipping allows us to increase our SKUs without investing on those SKUs.
Although dropshipping method seems to be very convenient and low investment option, still have many challenges and issues to overcome as given below:-
Being Blamed for Something that was not your Fault
Inventory – The biggest challenge of dropshipping is managing inventory. If you are stocking the items you are selling, it is quite simple to keep track of the stock. But, if you are sourcing products from multiple suppliers, it becomes difficult to sync the data.
Let’s say if you have received order from a customer but by chance the product has been in high demand in last few hours and has been sold by all your merchants and they don’t have stock to fulfill your order. In this case, you will have to inform your customer about this issue, cancel the order and refund the money if the customer has already paid. This can spoil the reputation of your online store and cannot expect repetitive business from the same customer in future. Also that customer can leave a negative feedback for your online store and that would be a great loss for you. So, now you are repenting for the mistake which you haven’t done.
Supplier Errors – It is quite normal that even the best dropshippers commit mistakes while delivering the products like wrong product delivery, damaged product delivery, late delivery or low quality packing. In this case, your online store reputation gets spoilt and you may lose lot of business without your fault.
“Every problem has a solution in this world”
Everybody may agree that there are challenges and issues related to dropshipping but it is also a fact that there are many merchants who are into online business and earning millions of dollars using dropshipping method. So, have you ever thought of how do they address to these challenges and problems of dropshipping? I think we can definitely resolve these issues related to dropshipping and should not prevent you from establishing a profitable and thriving online business. Just read on to know how……
Centralize Inventory Management and Order Management Tasks
If you are dropshipping, you are not just selling products. You are selling the complete information including quality and accuracy of the product. The product details would vary from supplier to supplier. So, it would be important to centralize the inventory and order management so that you don’t oversell the products which would result to disappointment to the customers and leave a bad impact on your business. You can choose an automated inventory management system like esellerhub in which you can manage the available stocks from different suppliers. When a product gets sold from the quantity available at a particular supplier, it automatically gets deducted from the stock and gives a clear picture about the available stock.
Thus, the challenges you may face while dropshipping can be overcome by an accurate inventory management system like esellerhub.