Ask HN: Do you have a dropshipping ecommerce?
3 comments
Here is the answer I posted on Quora http://qr.ae/tswXk about dropshipping in ecommerce. Main points to note -
Pros of dropshipping - You are not sinking your cash into inventory. So, dropshipping is better for your cashflow. - You can vastly increase your product offering at very low cost because you are just displaying the pictures of someone else's product. You are not buying the product up front. - You don't need to worry about shipping goods, managing a warehouse etc. You just focus on marketing and selling the goods, and you keep the margin (Diff between what the customer paid you and what you owe to the supplier)
Cons of dropshipping - You are trusting your brand with some one else. If the supplier doesn't ship on time, the customer is gonna scream at you, not at the supplier. - Margins are much lower. Since the supplier carries all the inventory risk, they will also eat up the margin correspondingly.
PS: My company Ordoro (http://www.ordoro.com/) offers software that helps ecommerce retailers manage their dropshipping workflow. This includes rules-based notification to your suppliers, and shipping notifications to your customers.
Pros of dropshipping - You are not sinking your cash into inventory. So, dropshipping is better for your cashflow. - You can vastly increase your product offering at very low cost because you are just displaying the pictures of someone else's product. You are not buying the product up front. - You don't need to worry about shipping goods, managing a warehouse etc. You just focus on marketing and selling the goods, and you keep the margin (Diff between what the customer paid you and what you owe to the supplier)
Cons of dropshipping - You are trusting your brand with some one else. If the supplier doesn't ship on time, the customer is gonna scream at you, not at the supplier. - Margins are much lower. Since the supplier carries all the inventory risk, they will also eat up the margin correspondingly.
PS: My company Ordoro (http://www.ordoro.com/) offers software that helps ecommerce retailers manage their dropshipping workflow. This includes rules-based notification to your suppliers, and shipping notifications to your customers.
My business artisurn.com uses a drop shipping model and it's been working out well. I use Shopify for my website and e-commerce and Ordoro inventory and shipping app that integrates with Shopify. I deal with individuals (artisans) not companies so I had to tweak my setup to accommodate that by setting up virtual warehouses and assigning shipments to those warehouses.
Dropshipping is great if it doesn't eat your margins too much. Some business models work around having a solid income from shipping margins. We do both dropshipping and have our own warehouses where I work. Basically we adjust and stay flexible depending on the prices / areas we're shipping to. Dropshipping is a huge part of our business now, it is very nice for scaling flexibility / rush periods.
One tip, sometimes you can do a mix, one of our suppliers will dropship fully to an entire country, but for another country they pack and ship directly to our warehouse where we slap a new label on and forward through that countries courier. (we got a stupidly good deal from that courier to the point it made economic sense)
One tip, sometimes you can do a mix, one of our suppliers will dropship fully to an entire country, but for another country they pack and ship directly to our warehouse where we slap a new label on and forward through that countries courier. (we got a stupidly good deal from that courier to the point it made economic sense)
Any advice is fine, but i'm also interested in doing dropshipping in Europe (i suppose there are some differences).