Concerns about the slowdown in the economy and retail sales are not just temporary concerns, they are a daily crisis for hundreds of thousands of retailers, e-retailers and suppliers across the country. Because many small businesses rely on consumer spending, many small businesses are looking for new ways to simply maintain capital inflows while attracting purchases for mass consumption, consumption, and consumption. Eventually, they found that their cash has diminished and there are few opportunities to obtain credit to support wholesale purchases. Retailers are turning to dropshipping programs to help their businesses make a living.
While dropshipping is widely used in many retail industries, it is still an undiscovered method of buying and selling products for some small businesses who may have heard of the term but are unfamiliar with the process. Or how dropshipping helps to move inventory and ensure cash flow. The operating principle of dropshipping is to allow retailers to offer products that they sell without physical inventory. Instead, retailers can include images and descriptions of products in their websites or catalogs, and when a customer places an order, the manufacturer/supplier of the product ships the product directly to the consumer. This means that retailers don’t have to spend a lot of money on new inventory or carry products they’re not sure they’ll sell. Instead, the retailer takes a certain percentage of each direct-ship product sold.
“You bet, I’ve been considering giving up shipping! Cash is tight and credit is tighter, so to keep my online boutique’s new products fresh, I’ve recently added only those brands that I can ship directly.” Maternitique Tara Bloom of .com is feeling the financial pressure of buying inventory in bulk, knowing that dropshipping can be a cheaper alternative. Bloom’s second strategy for moving the boutique forward: diversification – in this case the dropshipping option is also very effective. “The latest shipping products we’ve added are organic and eco-friendly baby bedding, maternity clothes and organic baby clothes. These products are not the core of the maternity beauty brand information in our store, but they complement our core products well and we want to keep talking to mom and dad. family after the baby is born.”
Alan Bell, owner of Homeproductsnmore.com, agrees. “About 90% of the products we sell online are shipped directly from the manufacturer to our customers. This means we have positive cash flow – which is a good thing in this economy, as many banks are unwilling to lend or open lines of credit.” Because products move slowly, retailers are unwilling to add products to their physical inventory that they are not sure will be good sellers, on the contrary, retailers can test the saleability of the products through the supply contract without financial risk.
As retailers look for more available products with dropshipping terms, suppliers are looking for new ways to sell their products as they begin to meet demand. For small manufacturers, home product sellers and other small supplier businesses, the increased demand for “no-obligation” products gives them more opportunities to place products in retail locations. Sara Seumae of Choosespun launched her company earlier this year and requests for drop shipping in retail have increased since then. “Over the past few months, we have received many requests for dropshipping and even shipping terms. Dropshipping appears to be a contract for both parties. Not only can we place our products in store and introduce them to their customer base, they also show retailers how much our product line is for them This is a way for them to “test” our brand without placing an order.”
While some suppliers do not believe that direct shipping is the preferred method of promoting and developing their products and brands, it helps to maintain product exposure and sales. Jessica Russel of ShopTumbleWeed.com agrees: “I was recently asked to do some dropshipping. I feel like in this age of economy we all have to do our best to make ends meet. This is not the ideal way to sell my products, but it lets my jewelry into the store.
Theory and risk. However, many of them have not considered the whole dropshipping scheme and how it fits their business model. “Understanding the pricing methods of consignment products (including freight and dropshipping costs) is a critical factor for retailers and suppliers to see how dropshipping affects the bottom line. To more easily foster relationships with retailers Understanding the impact of dropshipping, Frankenstein did did his homework and made a plan. Know the plan as best you can.”
Bottom line: Anyone struggling with retail sales can take a closer look at dropshipping to see if it helps generate sales, much-needed cash, and transfer products. With little financial risk and greater profit potential, direct shipping can provide some relief for those who need it most.
Article source: http://EzineArticles.com/1709063