What is drop shipping?
Drop shipping is a sales channel technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler (i.e., Powerlink) who then ships the goods directly to the customer. As in all retail businesses, the retailers make their profit on the difference between the wholesale and retail price.
So the seller does not actually hold the physical good in their posession, yet does indicate the item is in stock. This is usually the case with most online ordering processes. Once an order is made (sometimes this can be completely automated via website) and whence funds are approved, the seller purchases the item and the item is shipped directly to the consumer, who rarely has any understanding of the intermediataries involved in the supply of their purchase. Thus margins are added, shipping and labour costs are decreased and the risks of holding stock that won’t sell are depleted. There are several other issues of this technique that are worth considering that we here at Powerlink have perfected in our drop shipping solutions
· Back Orders- due to the buying strength and distribution relationships with Powerlink, we very rarely have difficulties in supplying stock and constantly monitor fluctuations in inventory and currency exchange rates. We offer first-rate drop shipping services to all our customers.
· Positive cash-flow cycle. -a positive cash flow cycle occurs because the seller is paid when the purchase is made. without actually having purchased the good The seller usually pays the wholesaler using a credit card or credit terms. Therefore, there is a period of time in which the seller has the customer's money, but has not yet paid the wholesaler.
· MOQ -Sometimes there may be a minimum order quantity of units; most times it is regarded that you will need to purchase either 100 or 500 units. At Powerlink, we offer Australian business’s the chance of purchasing any number of items from us.
· Drop shipping also eliminates some duplication of effort, since only one warehouse will pick, pack and ship the product. This approach can reduce total inventory management and shipping costs. These cost reductions can subsequently reduce the price to the consumer.
· Also, not having to hold items in stock means you can experiment with trying to supply new products and appealing to new markets, without physically having to make orders on stock. Simply, if it sells on your site or from some advertising you do, you simply purchase from us and we deliver to your customer.
· Drop shipping with international companies can have various problems. However, in dealing with us, these problems are illuminated.
· Fluctuations in internationally currency transfers; has been known to send small businesses bankrupt
· Back ordering (Ordering stock that has already been sold, means customer has to wait longer for goods)
· Customs may well be another issue as with import taxes
· Errors made in dispatching wrong goods and incorrect delivery addresses
Powerlink is an Australian owned and run business. Our products are sold in Australian dollars and we are based just outside of Sydney. Most items can be delivered customer in 3 to 7 days, depending on availability.