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The latest news from Brockman Trucking, including helpful storage trailer and container rental guidelines and tips. 

Drop Ship or Inventory - Which is better?

In managing your e-commerce business, business owners have to decide if they’re better off using a drop shipping provider or managing shipping themselves. 

Both options have merit and, depending on your product and how In a world where Amazon has changed the game for everyone, the best way to ship your products is an evolving conversation. It seems that “Free Shipping” is no longer an added benefit but an expectation. And with margins being cut slimmer and slimmer, it’s difficult to know what to do with the dilemma of shipping for your business. 

Drop Shipping as an Option for your Business

Drop Shipping is a supply chain management strategy where a business owner does not own or store physical inventory, but rather facilities an order for a customer with a wholesale supplier. Products will then ship from the wholesaler without the business owner needing to manage the products or deal with the overhead administration of inventory. 

While margins are slimmer with drop shipping, many business owners - particularly start ups - prefer it because it demands relatively low investment on the front end. It’s easy to manage and requires little technical or administrative infrastructure. 

The Other Side of the Discussion

This type of third-party support for shipping, with its benefits, also comes with inherent risks. The most obvious risk to your business is the dependence your company has on the third-party vendor’s ability to fulfill orders and help you keep your word to your customers. You are giving up control of your customer service and brand experience to another business. Anytime you do that, you’re taking a risk. 

This solution also tends to cut in your ability to control your margins. You’re at the mercy of your wholesaler and their profit margins. When you consider this interdependence, you realize how volatile your control over your business is in these scenarios. 

So there’s your quick rundown of drop shipping. When deciding whether it’s the right decision for you and your business, make sure you’re weighing all the factors. And let Brockman Trailers know how we can help you think strategically about your business. You may be surprised how simple an on-site inventory solution could be.