What is drop shipping and how can it benefit your business?
In short, Drop shipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Meaning, when a store sells a product using the dropshipping model, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly or cover the overheads/costs of holding stock.
The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfill orders.
Here are a few examples of how our program can benefit you and your business
- If you are a current Vendor who holds stock on Cannarket you can opt into the Drop shipping program which enables you to essentially build a commission-only sales team pushing, promoting and selling your products leaving you just to ship each sale as they come in.
- If you are a new Vendor in the CBD space and you don’t yet have the funds to buy the stock you can join our Drop shipping program, select great products from vetted Vendors who have opted into our program, add them to your store and start selling. All you need to do is push and promote the products, make sales and the logistics side of things are handled by the product owner and you take the commission per sale.
Benefits of dropshipping
Drop shipping is a great business model for aspiring entrepreneurs to start with because it’s easily accessible to everyone on the Cannarket platform. With drop shipping, you can quickly test different product option ideas with a limited downside, which lets you learn a lot about how to choose market in-demand products. Here are a few other reasons why dropshipping is such a popular model.
1. Less capital is required
Probably the biggest advantage of dropshipping is that it’s possible to launch a store on Cannarket without having to invest thousands of dollars in inventory upfront. Traditionally, retailers have had to tie up huge amounts of capital purchasing inventory.
With the drop shipping model, you don’t have to purchase a product unless you’ve already made the sale and have been paid by the customer. Without significant up-front inventory investments, it’s possible to start sourcing products and launch a successful dropshipping business with very little money. And because you’re not committed to selling-through any inventory purchased upfront, like in a traditional retail business, there’s less risk involved in starting a dropshipping store.
2. Easy to get started
Running your store on Cannarket, business is much easier when you don’t have to deal with physical products. With drop shipping, you don’t have to worry about:
1. Managing or paying for a warehouse
2. Packing and shipping your orders
3. Tracking inventory for accounting reasons
4. Handling returns and inbound shipments
5. Continually ordering products and managing stock level
3. Low overhead
Because you don’t have to deal with purchasing inventory or managing a warehouse, your overhead expenses are quite low. In fact, many successful dropshipping stores are run as home-based businesses, requiring little more than a laptop and a few recurring expenses to operate. As you grow, these costs will likely increase but will still be low compared to those of traditional brick-and-mortar businesses.
4. Flexible location
A dropshipping business can be run from just about anywhere in the world with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business from a beach somewhere on a desert island.
5. A wide selection of products to sell
Since you don’t have to pre-purchase the items you sell, you can offer an array of trending products from vetted Vendors on the platform to your potential customers. If suppliers stock an item, you can list it for sale on your online store at no additional cost.
6. Easier to test
Drop shipping is a useful fulfillment method for both launching a new store and for established business owners looking to test the appetite customers have for additional product categories, e.g., accessories or wholly new product lines within the Cannabinoid space. The main benefit of drop shipping is, again, the ability to list and potentially sell products before committing to buying a large amount of inventory.
7. Easier to scale
With a traditional retail business, if you receive three times the number of orders, you’ll usually need to do three times as much work. By leveraging drop shipping suppliers, most of the work to process additional orders will be borne by the suppliers, allowing you to expand with fewer growing pains and less incremental work.
Sales growth will always bring additional work—especially related to customer support—but businesses that utilize drop shipping scale particularly well relative to traditional eCommerce businesses.
If you want to take advantage of all of the features here on Cannarket including our drop shipping program whether you are a seasoned store or brand new Vendor simply follow this link to get started.