Drop shipping refers to a retail fulfillment method where a store does not keep the product in the stock, instead after selling a product, it purchases the item and makes it ships it directly to the customer Drop shipment has its both advantages and disadvantages, but the gains are always more. Drop shipment is efficient for suppliers for the reason that too many tasks are done within this method. The importance of drop shipping are discussed below ;
To begin with, drop shipment has the advantage of no remains of stock in shelves hence every ordered product is sold. The need of no unsold stocks is low losses occurring from this goods hence maximum gains are made. Expiry dates of products may be reached or could be destroyed when the stock stays longer on the shelves, dropping becomes the answer to these problems.
Secondly, the customer can explain to the business on whatever he or she needs and afterward get the exact specifications. Tailor making goods for a customer enables them to choose whatever standard of products he or she wants and also the fee charged. Drop shipping is an assurance that all of the products being produced will be sold. Hence a high growth is experienced when using this supply chain management technique. 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. The evidence of low costs is, for instance, the reduced transport fee because it is only done from the produce to the customer. The retailer is not always required to have the shop on a specific locality hence there is no building or rental fee. Because of the low cost of all the processes, the manufacturer can charge the customer a lower price hence affordability.
Finally, Drop shipping techniques gives the go-ahead on the use of technological knowledge such as online applications. 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 technological platforms enabled by drop shipping have no time limits on when they open or close hence one can depend on them each time of need.