What Does The Virtual World and Drop Shipping Have In Common?

Sometimes you have to wonder if there is anything in the world that can’t be done virtually. When you sit down in front of your computer you can create a whole other life for yourself complete with a house, relationships, and even pets.

Well, with drop shipping, you can even manage your own virtual warehouse for your company. Luckily, this virtual warehouse isn’t just a world inside a computer, but a way to let your business grow without building a warehouse in your backyard!

What is Drop Shipping?

To begin, drop shipping, in its simplest definition, allows retailers to ship products to consumers directly from wholesalers. As in all retail business, you as the retailer make your profit from the difference between the retail and wholesale price. At this point, you may be asking yourself about how drop shipping may or may not help you.

What’s in Drop Shipping for Me?

Drop shipping saves you time, the inconvenience of storing bulky inventory, and lets your business grow to the size you want it. As you may already have encountered, running a retail business, online or otherwise, involves creating and maintaining inventory from which to take orders and sell products.

Drop shipping eliminates this need for inventory. Rather than keep a stock of merchandise from which to take orders, you can simply take the order, pass it along to the wholesale retailer, and let them take care of the rest. Clearly, this makes for a more efficient delivery process. Instead of you receiving a shipment from the retailer and reshipping the merchandise to customers, it goes directly from the wholesaler to the consumer.

Other advantages have to do with physical location. Although you run your business from one location, your customers, on the other hand, may be spread across the globe. Since you are stuck in one spot, all your shipments go out from that one location as well.

With a worldwide online company, this means that you may experience lots of shipping fees and your customers may have to wait a while for their purchases. With drop shipping, products can be sent from the warehouse closest to the customer, thereby cutting wait times and increasing customer confidence.

Interestingly enough, the advantage of not storing your own merchandise can in fact be a disadvantage at times. Back ordering can occur if a customer orders a product that the wholesaler has run out of. This problem, however, can be solved by simply keeping tabs on what the wholesale retailer has available.

Even considering possible events such as back ordering, drop shipping gives you a sky-is-the-limit inventory option. It can even create, if you will, a virtual warehouse for you!