Drop shipping can be referred to an agreement between the business and the manufacturer of a good that the business wishes to sell, to ship the products directly to the customers. Drop shipping like any other supply chain management technique has its pros and cons. However, the pros outweigh the cons. Drop shipment is efficient for suppliers for the reason that too many tasks are done within this method. Here are some of the benefits of drop shipping;
To begin with, in drop shipping there is no dead stock because the business only sells the ordered products. This advantage is necessary because there are no losses occurring from lack of sales of goods hence maximum profits are reachable. Stocks may expire, become destroyed or out of fashion but luckily drop shipment gives the best solutions.
The other importance of drop shipping is that the customer gets whatever he or she wants to buy just ordering. For this reason, the goods that the consumer gets are from his or her preferred costs and quality hence satisfaction is felt. Drop shipping is necessary for full board sales because all of the produced goods are sold without any remainders. Therefore, exponential growth is witnessed when this method is used. Drop shipping method is a benefit to the producers because they first look at what they have been requested to produce which helps them to save on cost, labor, and resources, giving them maximum results.
Thirdly, the other importance of Drop shipping is that the general cost of the processes becomes lower. This is evident because there is no, for example, multiple transportations because the retailer does not directly get in touch with the goods. Another instance is that the drop shipping business place is not mandatory therefore there is no cost of the housing. Because of the low cost of all the processes, the manufacturer can charge the customer a lower price hence affordability.
Lastly, drop shipping enables the use of technological innovations such as online platforms. It is possible to order a good online in a period and you get the same product, this helps the business to make high sales just because of technology. It is a good thing that technological innovations have brought, because more customers can be reached within a period of time hence sales are higher causing the manufactures to charge a lower fee on the products. The online platforms made possible by drop shipment are always available in the day and night hence very reliable compared to the shops that close at certain times of the day.