Dropshipping Fulfillment: The Complete navigator

Dropshipping fulfillment allows ecommerce businesses to meet order demands without the costs and risks of keeping inventory.

But how does dropshipping fulfillment work? And how can you commence dropshipping? Read on for answers.

What is dropshipping fulfillment?

Dropshipping fulfillment refers to when a business doesn’t keep the products it sells in ownership. Instead, when a dropshipping business makes sales, it outsources packaging and shipping to a third event fulfillment service, which ships the order to the customer.

As a outcome, the seller doesn’t handle products directly or manage the supply chain.

In most cases, there are three players that make up the dropshipping supply chain: manufacturers, dropshipping suppliers, and retailers.

📚 Read more: Gymshark Started with a Dropshipping Business

Manufacturers

Manufacturers make the product, and most do not sell directly to retailers or consumers. Instead, they sell in bulk to suppliers.

Buying directly from the manufacturer is the cheapest way to purchase products for resale, but most have minimum purchase requirements you’ll require to meet. You’ll also require to ownership and then re-ship the products when selling them to customers. For these reasons, it’s often easier to associate with a dropshipping supplier.

Dropshipping suppliers

A dropshipping supplier could be a:

• Manufacturer 
• Distributor 
• Brand that had the product created by a manufacturer

The distinctive thing about the dropship supplier is that they own the title of the goods, hold the inventory and ship the product to the customer.

Retailers

A retailer is anyone who sells products directly to consumers. If you run a business that fulfills orders via a dropshipping supplier, you’re a retailer.

5 dropshipping fulfillment benefits

Dropshipping fulfillment allows you to propose different products in your store without the responsibility of managing the supply chain. After partnering with a dropshipping supplier, you’ll be able to quickly import product listings from their catalog into your store at no expense.

Here are five benefits of using dropshipping as your store’s fulfillment way:

1. Low financing requirements

You don’t have to purchase products ahead of period when using dropshipping fulfillment. This makes it expense-effective to commence an ecommerce store or expand your product offering without investing thousands of dollars in inventory up front.

2. straightforward to commence

You also don’t have to deal with physical products. Dropshipping suppliers have their own fulfillment centers where they pack and ship your customers’ orders. Depending on how you handle returns, you won’t have to worry about inventory management or managing ownership levels. All you require is a laptop to commence.

3. Low overheads

Because you don’t have to invest much money upfront, your overhead costs are low. Many dropshipping stores commence as a home-based business concept that turns into something bigger.

4. More scalable

If you’re a traditional retailer, every period you receive an order, you must receive, fulfill, pack, and send the order manually. That’s a lot of work for a tiny throng. With dropshipping order fulfillment, suppliers do all of that for you. So you can sell as much as you desire, on any marketplace or channel you desire, without falling behind.

5. Wide variety of products to sell

As a dropshipping retailer, you’re not limited to the items you can sell. If your supplier stocks a recent product in their fulfillment center, you can list it for sale in your store at no extra expense.

ordinary dropshipping challenges

Like any fulfillment way, businesses using dropshipping face a variety of pros and cons. Some get stuck on finding excellent dropshipping suppliers, while others have trouble attracting store traffic.

Here are the most ordinary challenges for dropshipping stores:

Low returns margins

Low returns margins are a top test for many dropshippers operating in competitive dropshipping niches. Because it’s straightforward to commence, competitors can sell items at low prices to develop income through sales volume rather than standard. Since they don’t invest much to commence a dropshipping business, they can afford to operate on tiny margins.

Supplier challenges

Even the best dropshipping suppliers will make mistakes fulfilling customer orders—mistakes you’ll require to receive responsibility for and apologize on behalf of. A low-standard fulfillment associate can factor havoc with missing items, mishandled shipments, and impoverished packaging. If you work with multiple fulfillment centers, which many dropshippers do, it makes order fulfillment more challenging.

It’s significant to discover reliable dropshippers to fulfill your orders. Vet your options. Check reviews on supplier sites like DSers. Top things to look out for when choosing a excellent supplier include:

• Fair fees
• Low order minimums
• quick, reliable shipping
• specialist knowledge
• Customer back
• Responsiveness

If you can discover a supplier that checks the boxes above, you’re more likely to have excellent dropshipping fulfillment experiences.

impoverished unboxing encounter

For online businesses, shipping and fulfillment is the most direct touchpoint and connection with a customer. Customers can’t touch or feel products before purchasing them. The unboxing encounter is where you can make a memorable encounter and differentiate yourself amongst competitors. It’s also a ordinary test for many dropshippers.

Shipping issues

Shipping times and delays are ordinary in dropshipping fulfillment. Depending on the country you’re shipping to, shipping times can receive up to 60 days.

Shipping from your home country is one alternative to bring down shipping costs and complexities. Some dropshippers also solve this shipping issue by buying products wholesale, then hiring a fulfillment center in the country they ship to. This lets them deliver orders in a few days versus a few months.

Dropshipping fulfillment in action

Let’s imagine we’re running an online store called Phone Outlet that sells phone accessories. Phone Outlet dropships all its products from a fulfillment supplier called Wholesale Accessories.

Here’s how Phone Outlet would receive a dropshipping order and procedure it with Wholesale Accessories:

Customer places order with Phone Outlet

Mr. Allen needs a case for his recent smartphone and places an order via Phone Outlet’s online store. Once the order is approved, a few things happen:

• Phone Outlet will be notified of the recent order through their ecommerce software. Depending on the software, Mr. Allen will also get an email order confirmation.
• Mr. Allen’s remittance is captured during the checkout procedure and will be automatically deposited into Phone Outlet’s financial institution account.

Phone Outlet places the order with its supplier

This step is usually as straightforward as Phone Outlet forwarding the order to a sales representative at Wholesale Accessories. Wholesale Accessories has Phone Outlet’s borrowing card on file and will statement it for the wholesale worth of the goods, including any shipping or processing fees.

Many dropshipping supplier apps back automated order forwarding or allow retailers to batch submit orders.

Wholesale Accessories ships the order

Assuming the item is in ownership, and they are able to successfully expense Phone Outlet’s card, Wholesale Accessories will box up the order and ship it directly to the customer. Though the shipment comes from Wholesale Accessories, Phone Outlet’s name and address will appear on the profitability address label and its logo will appear on the invoice and packing slip.

Once the shipment has been finalized, Wholesale Accessories will email an invoice and a tracking number to Phone Outlet.

The turnaround period on dropshipping orders is often faster than you’d ponder. Many standard suppliers will be able to get an order out the door in a few hours, allowing merchants to advertise same-day shipping even when they’re using a dropshipping supplier.

Phone Outlet alerts the customer of the shipment

Once the tracking number is received, Phone Outlet will send the tracking information to the customer, likely using an email interface that’s built into the online store. With the order shipped, the remittance collected and the customer notified, the order fulfillment procedure is complete.

Phone Outlet’s returns (or setback) is the difference between what it charged Mr. Allen and what it paid Wholesale Accessories.

Handling returns as a dropshipper

Returns get more complicated with a dropshipping supplier involved. Every supplier will have different policies for returns. Some won’t allow returns at all, some will expense you a high restocking fee. You may have to pay postage to profitability defective items. It varies. Regardless, the customer will arrive to you for returns. And you require to make sure it’s an straightforward encounter for them.

Fulfillment services aside, the returns procedure for dropshippers looks like this:

1. The customer requests a profitability.
2. You request an RMA (profitability merchandise authorization) number from the supplier.
3. The customer mails back the merchandise to your supplier, noting the RMA number on the address.
4. The supplier refunds your account for the wholesale worth of the merchandise.
5. You refund the customer for the packed worth of the merchandise.

There is no correct or incorrect way to procedure returns as a dropshipper. Some ecommerce businesses will even propose “returnless refunds,” or a packed refund that’s granted to a customer without having them profitability the merchandise.

Write out a profitability policy and place it on your website for customers to view. It can construct depend with shoppers and inspire them to buy. If you’re stuck, use Shopify’s profitability Policy Generator to make one quickly and easily.

Fulfillment companies are invaluable

Despite the significant role they play, dropshipping fulfillment companies are often silent partners and invisible to the complete customer.

For example, if Mr. Allen receives the incorrect case, he would contact Phone Outlet, which would then coordinate behind the scenes with Wholesale Accessories’ fulfillment service to get the correct item sent out.

With dropshipping fulfillment, the procedure of stocking products and shipping orders is managed by fulfillment services from commence to complete. With third event fulfillment on your side, you can stop worrying about your inventory management and concentrate on the things that assist develop your online business: marketing, website advancement, and customer encounter.