Cornerstone Insurance Agency Blog
Increasing numbers of entrepreneurs are getting interested in drop shipping. Why? The transaction is fast and easy. If you’re a reseller, your store doesn’t keep the items. Your supplies are coming from third-party suppliers.
How Dropshipping Works
Here’s a simple explanation. If you want to sell something, but you have no means to store the items, your option is to coordinate with a dropshipping company. That company has a vast range of connections to various suppliers, typically, around the globe.
Dropshipping works this way. The supplier (third party) will ship the requested items through a drop shipper, and then you’ll receive the supplies that you will sell to customers eventually. This is known as the retail fulfillment method.
Are There Risks in Drop Shipping?
Yes, there is, but it doesn’t happen all the time. In rare situations, an issue like unavailable of the product arises. That is if the supplier has negligence. You have been working so hard to promote the products and encourage your customers to purchase them. If your customer ordered something, but there’s a backordered product, this is the time you’ll start to have a headache.
It happens that the suppliers can fail to inform the resellers that the supplies won’t be available for a few days or weeks. What if your customers have just ordered and sent their payment? What’s worse here is that they badly need the item and anticipate that the products will reach their address on the next day. If there are backordered products, you have no choice but to explain the issue with your customers.
You’ll be relieved if your customers are willing to wait. But, some people are impatient and will take it against you. When there’s a backorder issue, there’s a high likelihood that you’ll receive negative feedback from your customers.
Another issue that may arise is if the product that your customers purchased caused them a problem. If the item is defective, they will get back to you to get a resolution. Then, you’ll coordinate with the supplier.
Technically, it’s your responsibility to check all the items that you are sending to your clients. Typically, you may not be able to inspect the item through dropshipping because the item is being shipped directly to the customer coming from the supplier. Your customer is purchasing the product through you. What you can do is before you start selling a specific item, order 1 or 2 to test them before promoting them to your customers.
Get the necessary business insurance plan now through a trusted insurance broker. You work so hard to earn profits. Protect your business by obtaining adequate support in the future.
At Cornerstone Insurance Agency, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (888) 661-8831 or Click Here to request a free quote.