Monday, 19 May 2014

The Pros and Cons of Drop Shopping and Order Fulfillment

Drop shipping and order fulfillment are two methods often used by online retailers. Drop shipping involves a third party who handles the shipping for you, meaning you don’t have to have the physical stock in your home or place of businesses. Order fulfillment is when you have the products, you pack and process the orders and are responsible for shipping too. Both are commonly used, but what are the pros and cons associated with each one?

Pros and Cons of Drop Shipping - One of the cons revolves around the supplier and their stock levels. If a customer places an order with you and the supplier is out of stock this can result in delays and disappointment between you and your customer.  However, the advantage of having less inventory expense, wider product ranges and the ability to try new lines often outweighs the negative side.

Pros and Cons of Order Fulfillment -The biggest advantage of order fulfillment is the higher level of control you have over your inventory. You know what the stock levels are; you can update your online listings accordingly to avoid issues. However, the disadvantages include the higher level of investment required for the stock and the costs involved in storage. You do have the option of hiring a third party warehouse that would save you from paying out for your own warehouse and staff.

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