In an effort to start an eCommerce store quickly without managing lots of inventory, sellers often choose to build their business around dropshipping. The seller selects a dropshipper who offers products within their chosen industry, and then the seller offers those products on their website or on a marketplace like Amazon. The seller collects the orders and sends them to the dropshipper, who then packages and ships the items directly from their warehouse to the end customer.
This method is appealing to sellers because much of the shipping logistics is handled for them, without the associated costs of owning a warehouse, buying supplies, and negotiating with delivery companies. However, dropshipping does have a few areas of difficulties that sellers must navigate if they want to create a smooth buying experience for their customers, which is key to retaining loyal shoppers and creating brand advocates.
A great fulfillment company can help sellers streamline the dropshipping process, eliminating hassles for both the buyer and seller. By planning how to work around common dropshipping limitations, a business can quickly grow without unnecessary hurdles.
The Difference Between Dropshipping and Branded eCommerce Sales
With dropshipping, the seller has very little control over how the products are packaged and shipped. The supplier packages them however they see fit, which is often with the least expensive packaging that will do the job. Most dropshipping suppliers do not offer the opportunity to customize packaging with a brand logo or colors.
The supplier also retains control of the entire shipping process, including when, how, and where products are shipped from. Many dropshippers are located internationally, often in China, which may slow down the shipping and response times. There are instances where the supplier handles customer service for the seller; however, usually sellers handle customer service inquiries directly and they must rely on the supplier for information, which can create a stressful situation if the customer and seller must wait for long periods of time to get a response. Sellers may also have difficulty creating a solid returns policy if their terms are subject to how the dropshipper operates.
A branded eCommerce store is completely controlled by the seller. Branded packaging can be chosen from the beginning, creating a positive customer experience and brand loyalty. Logistics is completely managed by the seller, allowing for faster shipping times and better customer service. Since the seller must also handle all of the inventory management, packaging, and shipping, branded eCommerce comes with a lot more responsibility and overall costs.
While sellers value the convenience of dropshipping, they also seek out ways to improve their customer relationships in a very crowded marketplace. Dropshipping with a fulfillment company gives sellers the best of both worlds, while minimizing additional costs and stress.
Differentiate your Dropshipping Business with Repacking
Once product sales have reached a sufficient volume, it makes sense to turn to a fulfillment company to assist with dropshipping efforts. Dropshipping suppliers will ship directly to the chosen fulfillment company, where products can be repacked with branded packaging tailored to the retailer’s individual needs. From there, products can be shipped directly to the customer, building brand loyalty as customers enjoy the unique packaging and overall shopping experience.
With the inventory management systems that fulfillment centers provide, this process can be completed ahead of schedule as desired, reducing overall shipping times. This improves the customer’s buying experience, and allows the buying cycle to happen more quickly for frequently purchased products, increasing sales.
Stand Out with a Reputable Returns Policy
The other major difficulty that sellers face when working with dropshippers is creating a reputable returns policy for their shop. It is a challenge to dictate how returns will be handled when relying on another company to set the terms. Without a clear and reliable returns policy, customers are uncertain what will happen if they need to return a product, which may prompt potential buyers to look for more reputable sellers.
Working with a fulfillment center can eliminate this challenge. By handling the returns, the fulfillment company will follow the procedures put in place by the seller. The product will be handled as requested, either returned to inventory, sent back to the dropshipper, or disposed of according to standard operating procedures. The seller can then spell out those terms in the returns policy, reassuring customers that they can buy with confidence. This establishes trust in the buyer and helps to encourage more sales. Customer service time is also greatly reduced, as the fulfillment company can provide logistics insights to help your customer service team manage inquiries directly.
Expand Available Offerings Beyond the Dropshipper’s Inventory
Another benefit of working with a fulfillment center is that a seller can diversify their product offerings. Dropshippers only have a certain selection of items for sale, which can result in too many sellers with shops that are identical to their competitors. If a seller wants to stand out and improve their product lines, they can do so through a fulfillment company.
Sellers can add new products at will, and the fulfillment center can either manage those products from new suppliers like they would with a dropshipper or use their own warehouse to store and package the new products. This allows sellers to customize their shops to meet their customers’ needs and provide seasonal or niche options that bring their shop to the forefront of their industry.
Dropshipping allows sellers to quickly enter the marketplace and start selling, but it has its limitations. Challenges with branding, returns, and product availability can limit business sales potential and overall standing in the marketplace.
By combining dropshipping with a fulfillment company, sellers can easily overcome these challenges. Fulfillment companies allow sellers to use branded packaging, create a reassuring returns policy, and offer the selection of products that is right for their business.
This improves brand loyalty and trust, creates smoother buying and returns processes, and allows for better market positioning. These benefits make dropshipping with a fulfillment center a perfect choice for many online retailers.