How to Increase Visibility with Your Drop Shipping Company
Drop shipping has become one of the most widespread business practices taking over eCommerce today. The model has absolutely helped transform some businesses, allowing them to have stores with virtually no cash investment, meaning as long as you have distributors, you too, can start a drop ship business. However, with a low-risk potential, the industry has become much more competitive, meaning that a lot of firms are searching for innovative ways to keep up.
When drop shipping initially began, it was a great way for mom and pop shops to compete online with big-box retailers without the expensive overhead costs. It allowed them to take their model of having a couple of things in store and ordering them for customers online without having to comply with minimum orders or renting out storage space. Plus, distribution is a lot easier, as they can find distributors more central to shipping channels. Now with major players entering the market, remaining competitive can be tough, but not impossible. In fact, your business can actually end up on top of this trend. Here’s how:
Expanding Your Offerings
Drop shipping has become one of the most prominent methods of growing an eCommerce store. As noted in data collected by SparkPay, 22 – 33% of Internet retailers have adopted drop shipping as a primary method of fulfillment. This makes sense for a couple of reasons. First, drop shipping can be a much cheaper way of running a business online without having to worry about massive inventory. Second, this allows you to test and try products on your site without fully committing. And finally, you’re able to potentially offer products your competition doesn’t have.
This trend has made it possible to purchase literally anything online, which has come down to less of trying to up inventory, but instead seeing who can get it to consumers for the lowest cost. Factors such as shipping, distribution centers and efficient transactional data are going to play significant roles in how cost is going to come out in comparison to others in a similar field. And if your business is looking to increase its sales via drop shipping, then it’s best to start analyzing the growing competition.
Growing Competition
As more online retailers have shifted to drop shipping, the competition over who gets the final sale has been changing as well. As noted by The Wall Street Journal, more retailers have started to pick up on this trend, as it enables them to save in inventory costs. How this will impact small businesses can vary. On one end, if your prices are the most competitive in your industry, then perhaps an increase in marketing can help keep your profits consistent. However, without a smart strategy in place to combat big box firms from cutting into your market share, you could potentially be left in the dust.
To begin, look at your current supply chain and assess if there are any distributors you might be missing out on that are closer to where your customer base is. This will help decrease shipping costs tremendously, as well as contribute to making fulfillment a much more seamless process. Additionally, it might not be a bad idea to see if there are other distributors around the country as well that can perform similarly. As you begin to simplify your supply chain, it will make expansion much easier, including if you wanted to take your business international.
Take It Global
While to some it seems like a pipe dream to have an internationally run drop shipping business, it’s actually much easier than you’d imagine. Drop shipping allows you to easily transfer your merchandising practice to a new audiences in overseas locales without incurring a tremendous hit on your revenue stream. As noted by Oberlo, international drop shipping businesses see conversion rates in the 3.5% – 4% range (especially in English-speaking countries), which is half a percent to a percent higher than America’s rate. And although it’s going to take a lot of legwork to set up distribution overseas, the payoff can be huge, especially in trying to compete with national retailers.
Drop shipping is a practice that a lot of eCommerce retailers have found success in, the market is only becoming increasingly more fierce. However, given the proven track record of how this model works, your firm still stands a chance at staying in the game. And as you should always be looking for ways to improve, how do you plan on taking your drop shipping business to the next level?
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