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Drop Shipping

†Drop shipping is becomming the most popular and cost effective way to integrate sales, ordering, dipsatch and delivery, and can be completely automated with your website.

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So what is exactly 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.

The seller does not actually hold the physical good in their stores/warehouse, yet does indicate the item is in stock.† Once an order is made (sometimes this can be an automated process via the website) and funds are approved, the seller purchases the item from the drop shipper and the item is shipped directly to the consumer, who has no awareness of the company providing the drop ship service. Thus margins are increased via lower shipping and labour costs and† this also illiminates and the risks of holding stock that wonít sell.

Main Advantages

†††††††† 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 provide first-rate drop shipping solutions to our customers.

  • Another advantage of drop shipping is positive cash-flow cycle. A positive cash flow cycle occurs because the seller is paid when the purchase is made. The seller usually pays the wholesaler using a credit card or credit terms.

  • Sometimes there may be a minimum order quantity (MOQ) of units; most times it is regarded that you will need to purchase either 100 or 500 units. At Powerlink, we offer Australian businessís the chance of purchasing any of items from us, as long as the order is in excess of $100.
  • 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, to not physically 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.

Disadvantages

††††††† Drop shipping with international companies can have various problems. However, in dealing with us, these problems are illuminated.Some things to consider:

  • 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

As Powerlink is an Australian owned and run business, we do not deal with overseas customers. 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.


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