Drop shipping: live locally, sell globally [INFOGRAPHIC]

As the ecommerce landscape is evolving, new business models are emerging, with some of them trying to organize the unorganized areas of the retail supply chain. We had discussed five such models in a previous article, and how they are reshaping the industry.

The one model that we are going to discuss today is drop shipping: asking a third party retailer to pack, ship, and deliver an order that was placed on your website; and that too on your behalf. Now what gave rise to this idea?

Two things: first, unsatisfied customers, and secondly, an alarming rate at which visitors abandon websites if their desired products are not in stock. So we carried out a study on 62 top ecommerce players in 4 major regions to find out how companies tackle abandoned cart emails, and what works best.

In a traditional supply chain, if an item is not present in the warehouse of the eretailer, then it would be marked as out of stock on the webstore, and there would be no means of fulfilling it. This led to 25 percent of customers abandoning the website instead of scouting around for other alternatives of the same product. So came the solution – drop shipping.

Another model that also came up as a solution is third party order fulfillment, and with its name, it sounds very similar to drop shipping. There is a very fine line of difference between the two, and the following infographic explains that pictorially.

You’ll also get to know the ecommerce brands which follow each model to get a better understanding of what these two concepts are and how they differ.

One thing that you would have inferred by now is that drop shipping is a better option if one is planning to start an ecommerce business, but is limited by capital at hand. It comes with its own challenges, but gives plenty of benefits that make it worth exploring.

So, give it a try. With drop shipping by your side, you can live almost anywhere, and sell almost anywhere too! Isn’t that a lucrative opportunity?