Drop Shipping vs Basic Supply Chain | Wholesale Drop Ship Direct
When you go to your favorite retail store, whether it's to buy clothing, outdoor equipment or electronics, do you ever wonder how the products get there? The process is simple but the cost of the final product has more to do with the supply chain. In other words, the process involved in moving a product from the supplier to the customer. In the end, the consumer really could care less how the product gets there, they just want what they need at the right price. The retailer, however, must have a deeper understanding of how the product being offered and sold becomes available.
Basic Supply Chain Process:
1) Manufacturing: Where the product is made.
2) Distribution: How the product is distributed.
3) Retailing: Where the product is sold.
4) Consumption: When the product is purchased.
The retailer usually buys from the manufacture or the distribution wholesaler which houses many different items. The wholesaler will then ship items (usually bought in bulk by the retailer) to the retail store where they may warehouse products but ultimately sell them. Sometimes, a retailer is able to go directly to the manufacturer and avoid the wholesale distributor. But the thing to remember is that in the process the products price goes up. The customer may or may not get a good price. The distributor and retailer both tend to buy in bulk…unless of course the distributor offers drop shipping.
Drop shipping process:
1) Online Retailer decides what products to sell from a drop shipper.
2) Customer buys product.
3) Retailer places order with the drop shipper.
4) Drop shipper notifies the wholesaler.
This is where drop shipping comes in handy not only for the shopper but also the retailer. Whether you have an online retail business or a standard retail store, you can hugely benefit in saving money and time. Drop shipping is a supply chain management technique in which the retailer does not keep products in stock, but instead shifts customer orders and shipment details to either the manufacturer or a wholesale distributor, who then ships the products directly to the customer. The retailer never has to commit to a purchase until after they've already made a sale.