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Warehouse Shipping vs. Dropshipping - What Makes Sense for Your Business?

Frank Jackson, 03/23/2018,

With so many options for fulfillment, how do you know what is right for your business? Today, we‘re going to compare two of the most popular fulfillment methods, Warehouse shipping and Dropshipping, to see what option is best for you.

What is Dropshipping?

Dropshipping is a fulfillment method that allows a business to accept orders before owning the inventory. Instead of storing the inventory in a warehouse, you partner with a third party – usually a wholesaler, distributor, or manufacturer – to fulfill orders directly to your customer. You do not purchase the inventory until you have an order from your customer.

What is Warehouse Shipping?

Warehouse shipping is the traditional model of retail fulfillment. You purchase the product from a distributor or manufacturer, store it in your warehouse or third-party location, and ship to your customer when you receive an order.

Dropshipping v. Warehouse Shipping

Pros of Dropshipping

No Inventory: Because you do not buy the inventory until you have sold the product, you will not be stuck with inventory that is no longer popular.

Low Overhead: By dropshipping, you eliminate the need for a warehouse and the capital expense of carrying inventory for all your listings.

More Efficient: Dropshipping creates a streamlined process for you and your customer. The product goes directly from the manufacturer or distributor to your customer and eliminates the extra steps of your business receiving, storing, and shipping the product.

Scalability: Your growth is only limited to your ability to list products. You can even use integrators like the ones we offer to make Shopify dropshipping, selling on Etsy, and mastering Amazon, easier.

Cons of Dropshipping

Less Flexibility: Because you don’t own the inventory, you have to rely on the dropshipping provider to provide accurate timelines and thorough work.

Middleman: You can become the middleman trying to resolve customer service issues. Your customer is contacting you while you work with the dropshipper to resolve the issue.

Pros of Warehouse Shipping

Control: You own your product and always know exactly how much stock you have.

Customer Service: Unlike dropshipping, you don’t have to play middleman to correct shipping errors. You have the ability to resolve issues on the spot instead of relying on your dropshipper.

Cons of Warehouse Shipping

Upfront Cost: You will pay for your inventory and warehouse space before selling any product. As you grow, these costs will increase.

Overhead: The recurring costs associated with owning inventory are required whether the product sells or not. Not only can you be stuck with inventory that is not selling, you’ll be responsible for all the costs that go along with holding the inventory like loss of liquidity, storage fees, and labor costs.

Still the Middleman: When you use a third party warehouse to fulfill your orders, you will still be playing the middle man when resolving any customer disputes.

What’s the Verdict?

To us, it seems like a no-brainer. Dropshipping is the best option for almost every e-commerce business. The ability to have an endless aisle, with no inventory risk, low costs, and a streamlined supply chain that quickly ships products to your customers, gives your business endless potential. But how can you get started?

Gooten Can Help

We offer print on demand and white label drop shipping (more on this later) from a network of small businesses to streamline your dropshipping and provide a great customer experience.

Not only do we offer high quality products (which you can find here) and competitive pricing, we give you the ability to quickly integrate with some of the largest e-commerce retailers and sell from your website:

  • Shopify: Download the Gooten Shopify App and in just minutes Shopify dropshipping can be live on your site.

  • Etsy: Use our product creation tools and customer order form to route your orders to our network of small businesses to print, pack, and ship right to your Etsy customers.

  • Amazon: You can instantly sync your Gooten print-on-demand products from your Shopify store to Amazon.

  • API: Our industry-leading API lets you easily create a customized integration between your ecommerce store and Gooten’s on-demand platform.

Sound like a great fit? We think so too. If you’d like to learn a little more, please visit our dropshipping platform page.
If you’re ready to sign up (for free!) you can do so here. We can’t wait to grow with you.

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