The Many Advantages Of Drop Shipping Rather Than Affiliate Promotion
In short, drop shipping is a mid point between affiliate advertising and being a merchant yourself. Affiliate promotion protects you from handling orders and stock. You do not need to handle queries and bounced payments nor do you have to find stock and set competitive prices. With affiliate selling you merely find the customers and pass them to the merchant’s web site.
The alternatives are not straightforward
But affiliate advertising is by no means perfect. Repeat orders are potential to go to the merchant’s web site, so the affiliate loses commission. The jump between sites can lose traffic and there are lots of missed cross advertising opportunities.
But being a merchant is by no means easy. Carrying sufficient stock, somewhere to store it and lots more problems come into the equation. So there is a mid point.
What is drop shipping?
With drop shipping you act like a merchant up to the point of payment for the goods. But once you collect the payment you pass the order over to the warehouse who sends the order out on your behalf. It is up to them to carry enough stock, not you. Returns are passed back to the warehouse and most good drop shippers will also either not label the goods at all, or use your logo. As far as the customer is concerned, the goods have come from you.
The problems with drop shipping
So where’s the downside? Well, you are still handling the payments. Any chargebacks hit you and you need to be ready and prepared for them. This can be quite costly, not only in the fees involved in handling chargebacks but also if the goods have been dispatched and cannot be recovered.
The advantages to drop shipping
Let’s look now at the advantages then of drop shipping. First, you take the merchant’s catalogue and load to your web site whatever products from that catalogue that you want to promote. Because the customers come to your website and stay on your web site to place the orders, there is the chance of cross promotion.
For example, if you are promotion widgets from one merchant then you could also promote to the customer a suitable cover for the widget even it it is merely available from a different merchant. There is no reason why you could just use one supplier – you might combine the product catalogues of loads of suppliers!
Also, if you want to make use of the bounced traffic you can display third party adverts for instance Google Adsense or even third party affiliate schemes. This might involve you advertising travel products and showing adverts for travel insurance, a product that you cannot sell yourself.
Lastly, if you are running it as a full ecommerce website you could collect email addresses, both through orders and a newsletter, and keep mailing latest offers to this list. Suggest that traffic and those placing orders follow you on Facebook and drop them notes of weekly offers to tempt them to your website. Customers will also look at receipts and come back to your site only by remembering they have purchased from you in the past.
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Written by Keith Lunt
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