Ecommerce businesses are switching fast to a new business model known as ‘drop shipping.’ It’s the kind of model that will save businesses money while simultaneously making them money. But what are the drawbacks? And will drop shipping damage our environment beyond repair?
In 2020, eCommerce sales accounted for 16.1% of retail sales worldwide. An already booming online industry is now enticing business owners and entrepreneurs to start using drop shipping to meet the demands of customers – at no additional cost.
Drop shipping is a new model used to make shipping products easier for companies by introducing a middle man. This might seem like something that would draw out the sales process unnecessarily. Instead, it actually makes shipping and selling for businesses a whole lot easier.
You may have heard the term ‘drop shipping’’ from business colleagues or floating around the dinner table with friends. Drop shipping really is becoming that common a topic. Why? Because drop shipping is part of the eCommerce boom. It’s the art of online selling made easier than it already is.
Drop shipping is when a third-party supplier takes over responsibility for shipping goods directly to your customers. It means that rather than having to store sellable goods in a shop or perhaps at a warehouse, you can immediately ship them after an order is placed. Someone that owns a drop shipping business will often never see, hold or ship the item themselves. Instead, they will advertise a product and await orders. This will then be passed on to their chosen drop shipping suppliers.
Drop shipping is a very simple concept – something that makes it all the more appealing for budding entrepreneurs and business owners. The process of drop shipping is so simple that it’s understandable in 3 easy steps:
Having a drop shipping business effectively allows you to market and sell products to consumers without having to handle any fulfillment and shipping. Now, most businesses probably don’t have insight into this portion of their sales anyway. But drop shipping’s prime benefit? You don’t pay for anything until your goods are ordered. Cutting costs and making online selling easy.
Drop shipping sounds so appealing and accessible that anyone in their right mind would be crazy not to implement it. But like everything that has its pros, it also has its cons.
Drop shipping is popular. It’s appealing and everyone wants to use it because of all the benefits it grants your business. The issue with this is it makes having a drop shipping business highly competitive. A market saturated with competition means you risk your products not standing out amongst the crowd and sales may dwindle as a result.
Remember that point earlier about never actually having to see or stock the products you’re selling? Drop shipping suppliers are often stationed overseas and it’s unlikely you’ll ever be able to check inventory quality yourself. Which in turn only invites a hub of complaints. If you’re on a mission to build a brand that people recognise as unique, a drop shipping business might not be for you.
Goods still have to be flown or sent by sea to customers when using drop shipping. Your lack of insight into what is happening across fulfilment areas of the business means that you could be held responsible for its environmental impact. 88% of consumers want you to help them make a difference. So maybe your focus on a greener impact model…
Drop shipping is not coined sustainable. Like most things that make our lives easier, they often come with a sustainable price tag.
However, green drop shipping is an environmentally conscious variation of drop shipping that anyone can implement into the supply chain. It effectively reduces the number of times goods have to be moved by rearranging the standardised drop shipping process.
Green drop shipping eliminates the first part of the traditional shipping equation by shipping products only once – directly to the customers. From this perspective, green drop shipping is certainly a greener choice.
If you go one step further by drop shipping eco-friendly products, then you’re definitely making a more sustainable choice.
Modern consumers have shown an adamant preference for buying from socially responsible businesses. With 65% of online shoppers preferring to make purchases from companies that support social or environmental causes, they’ll be especially concerned now that drop shipping is becoming well known in more colloquial settings.
By offering green drop shipping you can appeal to a wide range of shoppers and be one of the first to advocate the eco-friendly side of drop shipping.
While it is often that we sacrifice our environment for convenience, owning a drop shipping business can be sustainable if you implement the right practices.
Put simply – use less. Use packaging only where necessary and avoid reams of cardboard, paper and plastic filling out the contents of your box for aesthetics. Recycled packaging is a must to make shipping practices are eco-friendly and you can even help out your customers by adding clear and easy recycling instructions to the packaging itself.
Due to the nature of using a third party provider, the returns process risks becoming more complicated and damaging to the environment. This really is an area that needs taking into consideration because consumer habits mean returns are just too common these days. 22% – nearly a quarter of returns – are due to a product looking different online. Something dropshipping could increase. In order to avoid as many returns as possible, ensure quality checks, provide sufficient and accurate photos, and give thorough product descriptions.
Consumers are quick to blame businesses for not being environmentally conscious enough. But if your customers really are as serious as they say, offer them the ability to take control. You can install web plugins such as Carbon Checkout on shopify or purchase offsets that will counteract the emissions from purchases.
These days, many eco-conscious companies offer some kind of incentive that gives back to the environment. If you’re serious about becoming an ethical business, then you need to consider what you can give that is in line with your company values. Install an app that offers customers the chance to contribute at the checkout, give to charity, or build relationships with proactive partners like OneTribe that will help you achieve your sustainability goals.
Only if you want it to be. If you choose to use drop shipping as a method of selling eCommerce products, you need to put the time and effort into making sure you follow the steps that will make your drop shipping business greener.
If you implement these steps from the beginning, you will find less time is needed on it later down the line. Like all human practices, everything has the chance to be made more sustainable. So embodying an environmentally-conscious consciousness is the way to win over not only consumers but also long-term profits.
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