First Card Payments > Ecommerce  > Drop Shipping Proves To Be A Major Boon To E-Commerce Retail

Drop Shipping Proves To Be A Major Boon To E-Commerce Retail

Imagine this… You’re starting a brand new e-commerce retail business and your goal is to begin selling product as soon as possible. The problem is, you don’t as yet, have the initial cash outlay or credit necessary to make the purchase, in order to keep enough stock on hand.

Or… You’re already running an online retail store and you want to add a new product, but you don’t have enough storage space or the cash flow and credit necessary to pay for huge inventory up front. Or… you’re a beginning high-risk e-commerce merchant and you want to do business while you’re waiting on receiving your merchant account. Until you have your much-needed high-risk merchant account, you’re unable to accept credit and debit card payments.

Of course, with the help of an excellent merchant processor, your wait won’t be long. In the meantime, you don’t want to miss any days where money can be made. Or… your e-commerce business already has customers all set to buy, but they don’t want to use a credit or debit card online. Believe it or not, with identity theft running rampant, there are plenty of consumers being overly cautious these days.

The obvious fact is, no business ever wants to be in the position of turning down or losing sales. If you’re wondering how to deal with these situations, rest assured, there does exist a simple and proven solution.

Introducing Drop Shipping

Drop Shipping is a process whereby you, as the online retailer, can take an order from a consumer for a product not carried by your store, purchase that product for less money than you are selling it for, from either the manufacturer or another retail operation that does carry it and then have it shipped directly to the purchaser.

You’re actually the middleman in this process. The result being, you don’t have to turn down a sale, your supplier has made a sale as well, your business has made a profit that you could have missed out on and your customer has received the product they ordered. It’s a win for all involved.

And the good news is, drop shipping is perfectly legal and is an accepted and legitimate way of doing business.

Profit Percentages Confirm Success

As it stands, many very well-known and highly successful online retail outfits often employ drop shipping as a way to do business. They’ve been doing it for years and will continue to do so because the proof is in the profit.

Drop shipping brings a profit margin of approximately 5% to $15% plus. That translates to real money for your e-commerce business. Let’s say you’ve sold about $35,000 for the month in product that’s been drop shipped. That would bring your e-commerce store a possible return of up to and over $5000.

The higher the amount of sales, the bigger, of course, that number becomes. Not a bad return for never having had to purchase, store or actually carry the item(s) sold in the first place.

A True Business Advantage

Of course, many online businesses would welcome making a profit with little to no effort involved.

That goes without saying. However, what a boon the drop shipping process can be to a brand new or struggling e-commerce retail merchant. Whether that business is high-risk or low-risk, they’ll more than likely welcome the leg up that the drop shipping process has to offer them as they get their show on the road.

Perhaps all e-commerce retail merchants may want to consider that drop shipping is just what the doctor ordered as a way to keep their business healthy, profitable and afloat.

( Merchant Account Specialist )

Joyce Hope is a writer who specializes in merchant accounts. She has worked for First Card Payments since 2017.

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