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To Warehouse or Drop Ship?

When venturing into the exciting world of E-commerce unless you have you own hand crafted or manufactured items to sell to the world you will often have to go on the hunt for suppliers to feed your store with new and unique products that you know your customers will love.

When deciding how to sell online you really have two methods and these are either Drop Shipping or Warehouse stock. Many stores use both methods with each having their own benefits and pitfalls.

Lets look at each method so you can decide what is right for you and your business

Warehouse Stock

Holding your own physical stock is the traditional method of running a store and is the most similar to having a physical bricks and mortar shop. Holding physical stock means that you are in full control of inventory, shipping, customer details and can build up assets within the business as your stock levels increase. The benefit of holding stock is that you are in control of pricing and your own destiny with your store. To the inexperienced striking the right balance of how much stock to purchase or have manufactured can be a costly education that will be learnt, as you understand your customers buying patterns.

Drop Shipping

Drop shipping is a relatively new concept that has increased in popularity since the boom in online shopping. Rather than physically holding stock, arrangements are made with suppliers that allow the online store to stock items and sell them to customers on behalf of the supplier. Once a purchase is made from one of your customers the supplier will dispatch and send the items direct to the customer on your behalf and in turn allows you to purchase the item at a reduced wholesale rate. This method of operating can be very flexible as you are not required to hold stock or manage the shipping to your customers, but the profit margins on occasion may not be as desirable plus it can be difficult to find reliable drop ship suppliers.  In addition, when considering drop shipping you will need to ensure your shipping and returns policies are in line with your suppliers as you will still be responsible to your customers if an item does not arrive or needs to be returned.

Whichever of the above methods works for you or if you are looking at a hybrid model our expert Shopify team can ensure that your online store and e-commerce solution is right for your business.  The versatility of Shopify and our customisation methods mean that we can have your store ready to take sales as soon as you open for business.

For more information talk to our team at Insider Media Group today on 03 9090 7333, or