The online business community is growing at a breakneck pace when compared to traditional retail institutions.
It is no surprise that recent figures have reinforced this undeniable observation. The e-commerce and drop shipping sectors are expected to grow by as much as 12 per cent when compared to the predicted 2.8 per cent associated with brick-and-mortar sales.
There are two major points to note here. First, consumers are looking for fast and reliable methods to obtain the products and services that they desire. Secondly, traditional shipping methods might no longer be appropriate when dealing with this increased demand. What are some of the primary advantages associated with drop shipping and how can you implement this system to benefit your ongoing operations?
Drop Shipping 101: What is it and How Does it Work?
Many online suppliers of goods and services cannot afford to maintain a physical warehouse. In the past, they would have been forced to purchase goods from a third-party provider and to keep them constantly in stock until an order was placed. Not only was this quite laborious, but there could always be times when a sale did not occur. Anyone who was operating within tight financial constraints would have found themselves facing difficult times. Drop shipping has all but eliminated such concerns.
Online cloud-based applications such as the Oberlo app now provide a fast and streamlined method to procure products when they are required by a business. The process itself is very simple and even beginners can leverage the benefits. The steps are as follows:
- Products are first imported into an online store.
- A sale is made.
- The website owner places an order with the supplier.
- The supplier thereafter ships this product to the end user.
In other words, many of the more frustrating logistics have been taken out of the equation. Website owners will no longer have to be concerned about inventory or shipping fees. They can instead hone their skills toward other core competencies such as sales and product promotions.
Another critical point to make is that drop shipping does not necessarily have to be limited to the digital domain. In fact, some physical retail outlets are utilising these services to “piggyback” their existing brick-and-mortar operations. This can represent a valuable option when we consider the fact that a growing number of consumers are now employing mobile devices such as smartphones and tablets to make purchases. Coincidentally, this brings us to the next section.
The Power of Drop Shipping Platforms and Mobile Applications
Business owners need to understand that they do not necessarily have to possess a great deal of liquidity in order to enjoy the advantages which are particular to drop shipping. The main point is that products can be purchased when they are needed. In other words, it is no longer necessary to keep 300 t-shirts or coffee mugs in stock before making a sale. When a customer places an order, the website owner can purchase the product from the drop shipping provider.
This architecture is now migrating into the digital world; clearly visible in the rise of the dedicated Oberlo app. This application provides users with one-touch access to all of the most important features and above all, no prior experience is required. However, a slight learning curve may still need to be addressed.
Understanding the discrete mechanics involved with drop shipping will take a bit of time. Much of this is concerned with the behaviours of the target audience. Always try to address these basic questions:
- What products are the most popular?
- Which can be potentially eliminated from the current online offerings?
- Are there any times of the year associated with more transactions?
- How much does the average customer spend on a purchase?
Anyone with previous digital sales experience likely recognises these questions as basic analytics. Appreciating the impact of this data will enable users to maximise the benefits of a drop shipping platform. Furthermore, they can be certain that the correct buyer persona is targeted from the very beginning. The presence of mobile apps further reinforces the fact that client-centred purchases and self-checkout platforms are only growing in popularity. Adopting this architecture in advance will enable you to keep one step ahead of your competitors.
The main lesson here is that the efficacy of drop shipping is only as impressive as the analytics involved “behind the scenes”. Still, the power of this opportunity is undeniable and a wealth of options are now available for even the smallest of online businesses. It is nonetheless wise to choose a respected and well-known provider, as you may otherwise sacrifice amenities such as reliability and a wide selection of products.
