Over at the Volusion blog, I found this great article describing the advantages of drop shipping.
While I agree with the pros of drop shipping mentioned in the article, in my experience of working with small businesses, drop shipping is not always as rosy as it seems. Here are 3 things to watch out for -
- You have to manage the dropship requests with the vendors and ensure that your customers receive the products on time. I have seen cases where the vendors do not ship on time. And when they do, sometimes they ship the incorrect product. This will directly affect your customer satisfaction levels.
- As your vendor count increases, the complexity of managing all those vendor relationships also increases.
- You no longer have strict control over the look and feel of the package being shipped. While the vendor will use the label provided by you, they may not agree to adhere to other packing requirements.
It is good to be aware of these issues while negotiating the drop ship contracts with your vendors.
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