As drop shipping becomes increasingly popular, e-commerce owners are discovering both the conveniences and challenges that accompany this retail model. Online drop shipping marketplaces are popping up everywhere trying to streamline the process for online stores and address common frustrations.
So the question is, should you follow the crowds and join one of these marketplaces? Is it really worth the membership cost to be part of these networks? While I recommend researching each platform in detail as they all differ in features and tools, let’s go through the general pros and cons associated with these popular drop shipping sites.
Quantity Does Not Equal Quality
Drop shipping marketplaces offer you access to millions of products but they will not all suit your needs. If you are a drop shipper looking to sell a curated selection of unique products, you may have difficulty finding items in the behemoth marketplaces which can be like shopping at Cosco or Ikea. The sheer volume of products is impressive but may not meet all the qualifications for your e-commerce site.
If you do find products you are interested in selling, you should investigate the vetting process for the suppliers on the site. Don’t assume the marketplace’s qualifications are the same as yours. Again, this is particularly important for new e-commerce sites where you want to be confident your customers will be receiving items on time and in good condition.
Some drop shipping marketplaces require standard commission splits and return policies. If you are a young site, this can help streamline your business so you are not spending time negotiating terms that will likely NOT end in your favor. If you are an experienced e-commerce professional and want the flexibility of establishing your own terms, this may be a frustrating limitation.
Access to Millions of Products
One of the biggest challenges for a drop shipping entrepreneur is finding products to sell. This is the greatest benefit of joining a marketplace. Once a part of these networks, you will have access to millions of products without having to reach out one by one to suppliers and negotiate terms. Before these marketplaces, it would take weeks to develop relationships with suppliers through email and dropboxing images and contracts. These marketplaces have virtually eliminated the back and forth negotiation and replaced it with automated messaging and ordering capabilities.
Drop shipping marketplaces have empowered small e-commerce stores with access to products only larger retailers had access to in the past. As suppliers recognize the benefits of drop shipping their collections, there has been an increase in product selection especially among independent labels. In turn, this has attracted e-boutiques specializing in small batch, unique items to join the marketplaces. For younger e-commerce stores and suppliers, the marketplaces will provide a more professional platform through which to conduct business. In following, e-commerce stores will be able to manage hundreds of suppliers, all in one place.
Not only do they give you access to a huge selection of products, the drop shipping marketplaces with APIs also offer one-click sourcing. Combined with easy to use shopping cart technology like Shopify, you can have a store full of products in minutes. Now that you don’t need to spend hours upon hours sourcing and adding products to your site, you will have a lot more time to devote to marketing your store which of course is crucial to your success.
Automatic Inventory Updates
Another time suck for most drop shippers is updating inventory levels. You never want to be in a position of selling something that is no longer available as this is a terrible experience for your customer. Therefore drop shippers are spending tremendous amounts of time reaching out to suppliers to ensure items are still in stock. Marketplaces have helped automate inventory updates so when products are sold across other stores, your inventory level will be adjusted. Hallelujah.
In conclusion, we believe there are a lot more advantages than disadvantages to joining a drop shipping marketplaces. Again, do your due diligence while looking at the different platforms out there so you can find the one that is best for your business.
Interested in starting a drop shipping business? Here is our 11 step guide to a successful e-commerce business.
Tell us about your experience with drop shipping marketplaces by commenting below! We would love to hear from you!