What is DropShipping and How Does It Work?
There are few things as satisfying opening your front door to find the package that you ordered online just a few days before. However, creating this positive customer experience actually requires a lot of work behind the scenes by any retailers. In order to reduce shopping cart abandonment and unhappy customers, retailers are constantly revising their shipping strategies and looking to streamline their fulfillment and delivery processes. All of this is done while still trying to keep the costs low.
This is a fine balance that will only be achievable if you have the right shipping partners and the right dropshipping strategy. After all, customer loyalty is directly linked to costs and the speed of shipping. Most shoppers will still choose the option that is free over the option that is fast, but more and more retailers are looking to combine these options. It is important that retailers of all sizes find a way to cater to the interests of their customers.
E-commerce sites have a lot of competition and the best way to influence customer buying decisions is to look at the shipping costs. Stores have to look at creating a pricing structure that is able to compete with bigger online retailers while still being profitable. If you are just starting your business and do not know where to bring with shipping, or you are looking to make your shipping more efficient, there is a lot of information that will be able to help you.
Choosing Your Vendors
When you are just starting your business, you might have a small enough sales volume that you will be able to rely on UPS or FedEx to handle all of you shipping. However, as you grow, you will need to look at multistep and multi-vendor options to ensure that your deliveries are getting out faster. Using one carrier may seem to be the simplest solution, it is not always the most cost-effective one. All small businesses will need to take their time to determine what the best shipping mix will be for their business needs.
It is recommended that e-commerce business consider the US postal service as an alternative to the private carriers. This is particularly important if they regularly ship bulky items. It is important that business owners also take into account surcharges for weekend and rural deliveries and use this information to determine what the most economical option will be to meet the delivery expectations that their customers have.
Third-party logistics providers and drop shippers can reduce the shipping costs that businesses face. Drop shipping is a process where a retailer will send the customer order to the manufacturer or wholesaler who will then ship the product directly to the customer from their warehouse. This is a very attractive option for businesses that want to boost their shipping volume, but do not want to increase the space that they need to house storage. Third-party logistics providers will combine the inventory volume of a number of smaller merchants to offer better shipping alternatives.
When you build smart, strategic relationships and use technology small businesses will be able to find the right balance between convenience and price. The little guys in the industry have to be able to act like the big guys. This means that they need to systematically minimize their transit times and costs.
When looking for drop shippers and suppliers, you should consider those that are closest to your primary customer base. This will minimize the distance between the destination and the origin of the product. However, you should also never underestimate the power of negotiation. You should never accept the standard shipping costs of a carrier and you should go through a negotiation process. You should compare rates with other carriers and then pick the one that works for you.
UPS and FedEx will use dimensional pricing models which means that the costs of shipping will be determined by the weight and size of your packages. This has led a lot of businesses to make changes to their packaging to optimize it for this reason. With these pricing models, you will want to use a little space as you can. Packaging your items for safety and density and putting your items in the correct boxes will make the load more efficient.
If you are going to be shipping multiple items on a shrink-wrapped pallet, you will need to label each individual box for the times when they are broken up before they reach their destination. It is also helpful to preassemble the product and kitting so that your orders can be shipped quickly. Depending on the weight of the package, your fastest and cheapest delivery method may be to have a private carrier take the item part of the way and then had it to USPS for the final part of the delivery.
Shipping Technology And Analytics
With technology, businesses are able to carefully monitor every step in their delivery process and update their customers on their shipments at any time. This is not only a great benefit for customers, it also ensures that businesses are not liable for any errors that might occur when the product leaves your business. In the past, when customers report incorrect or damaged products, you had to take their word for it.
This is no longer the case as businesses can now use video surveillance and real-time scanning to track their items. There are other analytic tools that will help your business monitor your entire supply chain.
Another ability that technology offers is the potential to provide tracking details to your customers. This will allow them to know exactly where their purchases are. You should focus on getting your orders packaged and shipped within 24 hours when possible. You should then send out the tracking numbers to the customers immediately.
It is recommended that you review your shipping strategy every 6 months to ensure that you are operating at peak efficiency. This will also ensure that you are delivering the best possible value to your customers at the lowest possible cost to your business. Ongoing data collection and analysis will be invaluable in this.
The expectations of your customers should be at the core of every shipping decision that you make. The right carrier will be able to save you a lot of money and will provide a good service for your customers.
Best Courses to learn about DropShipping
There are many courses on the market right now pretending they will teach you how to start your own business with dropshipping and Facebook ads. The real picture is somehow different from the promission ones in the courses. One of the true exceptions is Adrian Morrison’s eCom success academy which was already reviewed by GFK in on of their recent publication.