How shipping cost can make or break your drop shipping business

How shipping cost can make or break your drop shipping business

To the casual observer, working as a drop ship retailer is pretty simple, low-cost and profitable all at the same time. Working online as a dropship retailer is even simpler, simply get in touch with a dropshipping supplier (a manufacturer or wholesaler) and get into an agreement. Once you have done that, you can start to sell their products at your website or online store without actually buying any stock. You will do this by placing the product images and details at your website. The customers will come to your website and make an order, you will forward the recipient address to the drop shipping supplier and they'll dispatch the product. As far as your earnings are concerned, you will be getting the product at low wholesale price, while you can charge slightly higher prices from the customer. The difference between the selling price and actual price is the profit you can retain. Dropshipping allows manufacturer or wholesaler to save various overhead and marketing expenses by simply allowing the drop ship retailers to do the selling on their behalf.

In spite of the aforementioned benefits, Drop shipping is not a magic technique that offers a win-win situation for everybody. It has its drawbacks, and one of the most major ones is dealing with the shipping cost. Problem is that even if you've found a drop shipping company that offers less than market price, you're going to end up losing your profit because of high shipping cost, as most dropshippers have quite high shipping fees. Sometimes because they are just being greedy, and sometimes this outrageous fee is justified by distant location of the buyers. Selling to the customers located in close proximity is not always the answer to this predicament, knowing that an Internet business can hardly survive if it limits itself to a small area.

Question is, is there any other way, one can reduce the shipping cost?

One of the best options is to conduct business with more than one supplier. Especially, if you are getting majority of your orders from a specific destination, you can always search for a supplier who is located in close proximity. The low shipping cost will justify the time and resources spent in the search. In case, you cannot find a supplier close to the buyer's location, you can opt for inexpensive shipping modes. There are plenty of comparatively cheaper shipping methods that maybe slower but in most cases, the customers wouldn't mind waiting for some time as compared to paying high shipping cost.

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