There is often a lot of miscommunication and confusion when it comes to the differences between e-commerce fulfillment services and drop shipping. One of the most common questions that we at Ship Sensei get from e-commerce business owners is clearing up the confusion between e-commerce fulfilment and drop-shipping. Read on to learn more about the difference between drop shipping companies and fulfillment companies, and what we at Ship Sensei provide for e-commerce business owners. Ship sensei is a top e-commerce fulfillment company in the Miami area. Call Ship Sensei today for your e-commerce order fulfillment needs today!
The Basics of E-commerce and Drop-Shipping Fulfillment
Let’s discuss the difference between e-commerce and drop-shipping fulfillment. First of all, what exactly is e-commerce fulfillment? E-commerce fulfillment includes the process of accepting orders in your e-commerce shopping cart and shipping the correct products to your customers on time. There are four distinct parts of e-commerce fulfillment:
- A customer goes to your online shop, puts items in their shopping cart, and clicks the buy button.
- The online order is sent to one of the fulfillment companies and to a fulfillment center.
- The fulfillment center picks, packs, and ships the order that has been processed
- FedEx, UPS, or another shipper will end up making the delivery to the customer.
If you are a smaller seller or just starting out, then the fulfillment center may end up being your garage, and you may have to personally pick and pack the orders. Or, you may end up using Amazon’s fulfillment services and have your products shipped from an Amazon warehouse. If your company is scaled larger, then you may use a fulfillment warehouse such as Ship Sensei.
Here’s the standard e-commerce fulfillment model: If you sell coffee, for example, it’s possible to invest $10,000 in stock of a new coffee blend for your online coffee company. Your supplier will ship in the coffee to your fulfillment warehouse. The fulfillment center will ship the inventory orders, and when the stock gets low you will reorder from your coffee supplier.
What Drop Shipping Companies Do
With a drop-shipping business model, you don’t purchase the inventory until your customer puts the order in. For example, you may want to add a couple of new coffee blends to your online offerings if you are a coffee company. You don’t want to put all of your cash in inventory, especially if you aren’t sure if the new blends will sell well. Your coffee supplier will create the blends and keep a small amount on hand at the facility. When a customer puts in an order for one of the new blends on your e-commerce site, your supplier will ship bags of coffee directly to the customer. With the basic drop-shipping fulfillment model, it is just you, your customers, and your supplier. While drop-shipping has the advantage of having a smaller-cash investment up front, your profit margin on each product will be much smaller. Moreover with drop-shipping, you will have less control over the speed, cost, and quality of fulfillment.
Contact Us Today
There are certain key differences between what drop shipping companies and fulfillment companies do that you as an e-commerce business owner may want to keep in mind. Ship Sensei is a top fulfillment company in the Miami area. Call Ship Sensei today for your fulfillment needs!