Advantages And Disadvantages Of Stocking

RESEARCH ON DROP SHIPPING, THE SCOPE, BENEFITS AND ITS DISADVANTAGES.

WHAT IS DROP SHIPPING

Drop Shipping is a retail fulfillment method where a store doesn 't keep the products it sells in stock. Instead, when the store sells a product, it purchases the item from a third-partymanufacturer, another retailer, or a wholesaler and has it shipped directly to the customer. For the retail businesses, majority of them make their profit on the difference between the wholesaleprice and retail price while some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer.

As a result of the Third-Party – Customer supply chain, the merchant never sees or handles the product.

The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn 't stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders

BENEFITS OF DROP SHIPPING

Less Capital Is Required – Probably the biggest advantage to dropshipping is that it 's possible to launch an ecommerce store without having to invest huge amounts of money in inventory or building and stocking a physical store. Normally retailers have had to tie up huge amounts of capital purchasing inventory or goods for their store.

With the dropshipping model, you don 't have to purchase a product unless you already made the sale and have been paid by the customer.

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