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Making Sense of All of the Shipping Options (Part 2 of 2)

Read Part One of Making Sense of All of the Shipping Options here.

There are multiple options for getting products where they need to be once they are ordered. In Part 1, we talked about Self-Fulfillment. Here are two more options:

Option 2 – Drop-Shipping

If you don’t want to bother with storing inventory yourself, you can look into drop shipping options.

Drop-shipping allows you to advertise products as your own, and sell them to customers as if they were your own products. The shipping and packaging is completely handled by the owner of the inventory – the drop shipping company – while you act as the advertiser or marketer.

When someone places an order on your website, your company lets the drop shipper know. The drop ship company will prepare the order and deliver it, and then you both get a cut of the profits. There’s little hassle on your part – especially when compared to the self-fulfillment option. You can also open up your product range to include a wider variety of products than you could store.

However, drop-shipping can significantly lower your margins. Since the drop-ship company is primarily shouldering the burden and the risk, you’ll be paying them a lot more than you would fulfilling orders on your own. You can also face some difficulties if you’re just getting started. Drop-shippers want a guarantee that you can move product, and that means having a superior website, marketing plan and potential body of customers when you approach them – all of which are difficult to put together when you’re just starting out. As a final downside, you’ll be limited to what the supplier has to offer which means that an innovative idea for a new product could be impossible to create.

Option 3 – Outsourced Fulfillment

If you have too many orders for self-fulfillment to be feasible, and you feel limited with drop shipping options, then outsourced fulfillment is the way to go.

With this method, you work with a company that will store your products on your behalf and then handle packaging and shipping of those products when orders come in. You’ll send along the order details, just as you would with a drop shipper but there’s more flexibility in product selection.

Ecommerce order fulfillment services can be the best of both worlds. It combines the flexibility and product selection of self-fulfillment with the convenience of drop shipping. You’ll be able to save time since you don’t have to package and ship items in house. This time freed up by your staff can be used on other essential business functions – like marketing, advertising and customer service.

Additionally, you can turn a better profit with outsourced fulfillment than you could with drop shipping. You benefit from the time tested and streamlined processes used by the fulfillment company, but also have customization options available to suit your unique products and customer base.

There are a lot of choices when it comes to your shipping options for your ecommerce store. However, not all are created equally. By considering your company’s needs and your product line, you can find the right option for your company to support its growth.

 

November 11, 2014
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