Drop shipping is a popular way to do business, especially with online shopping becoming such a big way to make sales. It seems like an easy business model where you don’t have to have a huge inventory supply or much financial involvement, while you get to handle things like marketing and customer service.
Drop shipping (verb): The act of moving goods from the manufacturer directly to the retailer without going through the usual distribution channels.
Rather than keep an inventory and fulfill orders through eCommerce, you can run the business from anywhere because you don’t need a warehouse to accomplish this part of the business.
While you may be wondering why everyone doesn’t choose to do business like this, there are actually some big downsides to drop shipping.
The most common drop shipping problems include potentially losing control of your business to someone else and limited influence over the way your orders are processed.
Here is a closer look at the most common drop shipping problems business owners experience.
Delays with orders
When you receive an order to your store, you want to rush to place the order with the producer in order to get your customer the product they are looking forward to. Instead, you don’t receive a confirmation and tracking information from your producer. When you hear nothing from the producer, your customer is going to start calling ask where their stuff is and why they don’t have a confirmation of shipping.
To beat this issue, automatically advise customers that orders take 24 hours to process. That gives you a little time to talk to producers to make sure there isn’t an inventory issue. If there is, you could contact the customer about the delay or a refund.
Out of stock items
Sometimes items are simply out of stock and the order fulfillment company hasn’t had a chance to tell you yet. In this case, you need to call your customer and let them know personally that there was a mistake in that this is a discontinued product.
Try to find it from another supplier before cancelling the order with the customer. Most of the time, customers will be happy to choose another product.
Wrong product or quantity shipped
Your customer won’t be happy when they didn’t receive all of their order the first time. When the quantity is wrong from the fulfillment company, you have to deal with the customer’s frustration as they wait for several days for the rest of their shipment. If you happen to review an invoice and see that the wrong quantity is being shipped out, you can call the fulfillment company to have the issue corrected before it leaves the warehouse.
Other times, it’s simply the wrong product that was shipped to the customer. It’s not only bad customer service, but it makes your business look unprofessional. Always call the customer and apologize, since it will appear as though you are the one to blame and offer a discount off of their next order for the trouble.
The other most common drop shipping problems include shipping to the wrong address, damaged items and providing the wrong tracking codes to customers. All of these issues can make your business look inadequate, unprofessional and rank poor with customer service.
When you notice a problem, take it as an opportunity to go above and beyond for the customer that is not getting their shipment exactly as they ordered it. Offer them a personal apology on the phone, regular updates on the correction and a discount for their next order to ensure their loyalty.
Consider these problems when looking into starting a business with a drop shipping model.