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Drop-ship or U-ship: That is the Question

For small Internet retailers, drop-shipping is one of the best innovations since sliced bread. How else can a start-up offer a wide variety of products and convince customers that they have a fully-stocked warehouse-while investing virtually nothing in inventory or warehousing? Before you jump right onto the drop-shipping bandwagon, however, there are some pitfalls to avoid.

While a quality drop-shipper is truly a dream come true for the Internet retailer, there are plenty of painful pitfalls to avoid. Things can get embarrassing and costly in a hurry when a drop-shipper:

? sends products out late
? forgets to process your orders
? sends out poorly packaged products
? double-bills your credit card for orders on a regular basis
? provides cheaply made products and/or shoddy workmanship.

In addition to the above drawbacks, many customers are not very impressed when they find out you retail drop-shipped products. This is especially the case with the rustic log furniture I sell on the web. Many phone customers ask if we make the products ourselves, or are "merely" drop-shipping.

They are relieved and impressed when they find that we manufacturer, finish or pack most of the log furniture we sell at our warehouse. We sell to a lot of people with expensive vacation homes, and quality is of utmost importance. It's always easier to testify to the quality of furniture when you have seen it yourself, and we are able to offer a more unique line by going to Amish suppliers whose products aren't sold elsewhere on the Internet.

With this said, there are still some sizeable advantages to drop-shipping. As the volume of our orders grows, it becomes more and more difficult to package all of that furniture. Fortunately for us, our largest supplier is only two miles away and we have a pretty good deal going: we finish all the log furniture they want finished, and they drop-ship the unfinished furniture. So they make it, we finish it.

That means if somebody orders unfinished furniture, it can go directly from the factory. This might have made me nervous about quality control at one point, but I have developed a high degree of confidence in our log furniture manufacturer. In the five years I have been associated with them, they have never let me down. They fill orders with a high degree of quality and accuracy, which makes our job easy.

Unfortunately, not all drop-shipping companies are as reliable as the one I have found. This is why it pays to do your homework before choosing a drop-shipping company. If you align yourself with fly-by-night operations, your business will most likely suffer as a result. If you are wildly successful, which you no doubt hope to be, a small start-up may not be able to manufacturer or ship product fast enough to meet your needs. A drop-shipper that is unstable as a business may be happy to take your cash but fail to fill orders on a timely basis.

Any business who drop-ships your orders will affect your reputation as a company one way or another. As a result, it's important to make sure any drop-shipping companies you partner with meet the high level of customer service and quality control standards you set for your business.

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Drop-ship or U-ship: That is the Question

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