June 18th, 2020 | Updated on August 20th, 2020
When one reads about drop-shipping, a stereotype is generally formed in their head that puts all salesmen from this business sector into one category.
However, this should not be done because drop-shipping is a very broad sales strategy and there are many different ways one can go about it.
For those that are confused, drop-shipping is a relatively new development that allows a goods sales store to feign availability of stock for a customer, leading to them making a purchase.
After the purchase has been made, once the retailer knows the demand for the product he poses as a distributor for, he then purchases the same goods by the same amount of initial purchase at a price that is lower than the price that they sell it for.
But the difference in price cannot be too big, as they have to be able to pick up customers that aren’t gullible enough to pay prices that are much more than what the product is actually worth.
But, the strategy is not limited to a single individual carrying out such sales. In fact, there are several different methods of dropshipping and they are as follows:
1. Goods And Stock Resale
This is the stereotypical drop-shipper’s job. They take responsibility of providing where there is demand, by buying from a separate retailer and selling for a higher price. It is as simple as that and has no elaborate structures within it.
2. Extended Businesses
Sometimes, drop shipper’s lack credibility and require the presence of a larger, parent company to make their sales credible. At the same time, sometimes big companies require smaller businesses to establish their social media presence and tap into the online market.
This leads to the creation of a mutual relationship where the parent company gives sales to the drop-shippers and in return, the drop-shipping business sets up e-commerce sales opportunities for the company.
3. Grouped Products
Sometimes customers want several items together. For example, if a customer wants to fix their car, they would not want to have to purchase a wrench from one platform, a screwdriver from another, and cleaning liquid from a third.
Some drop-shipping companies provide a solution for this by grouping several items that work together and selling it as a collection of items. This helps focused buyer get what they want at minimal effort.
4. As Per Requirement
Sometimes customers want custom goods and will look towards drop-shippers to provide them. For example, if a college sports team wishes to get jerseys with their college name on them, they would contact a dropshipping service that would first purchase jerseys from one retailer, and then correspond with a printing company, to make a request come through.
This manner of drop-shipping is considered ‘more ethical’ as the seller is making an actual product rather than simply reselling items for a higher price at no difference in quality.
These processes must be kept in mind and it must be noted that these services are very different from each other and mustn’t all be grouped together into one singular function due to them having completely different outcomes.