Drop shipping
drop Shipping is indeed a legal business model in Bangladesh. However, it is imperative to comply with the local business and tax regulations. Drop Shipping is a fulfillment methododel that allows sellers to outsource product storage and shipmenthandling and shipping products to a third- party supplier. This fulfillment method ecommerce model can appeal to entrepreneurs seeking efficiency and low overhead, but it can also have trade-offs.
Drop shipping is a form of retail business in which the seller accepts customer orders without keeping stock on hand. Instead, the seller transfers the orders and their shipment details either to the manufacturer, a wholesaler, another retailer, or a fulfillment house, which then ships the goods directly to the customer.
The seller is responsible for marketing and selling the product, but has limited control over product quality, storage, inventory management, or shipping. It avoids the costs of maintaining warehouses or even a storefront, purchasing and storing inventory, and employing necessary staff for such functions.
Drop shipping has become a popular business model as it requires minimal initial investment and overhead costs. A drop shipping operation can be managed from any location with an internet connection. However, drop shipping also has its drawbacks, including lower profit margins, less control over the quality of the products sold and an increased risk of shipping delays or supply chain issues.
Amazon, the online shopping giant, found early success with a drop shipping business model where they could offer over a million different books to consumers while only keeping approximately 2,000 of the more popular titles in stock. Publishers and wholesalers would receive forwarded orders from Amazon and would ship the products directly to the customer using packaging from Amazon
A drop shipping business to consumer model does not require a brick and mortar store, which may be forgone entirely or combined with a drop shipped order fulfillment business model. Physical retailer may keep potential drop shipped items on display, provide details on mail order items via a catalogue, or maintain a website with information available only online. A virtual retailer only has a website.
Drop shipping retailers are not required to disclose the practice, nor, as with any other retailer, the wholesale source of the products they offer. This can be achieved by “blind shipping” (shipping merchandise without a return address corresponding to the seller), “private labelshipping” (having merchandise shipped from the wholesaler with a return address customised to the retailer), or utilising a fulfillment house. The ultimate order fulfiller might also include a customised packing slip, including details such as the retailer’s company name, logo, and contact information.
Sellers on online auction sites such as eBay also use drop shipping as way of distributing products without stocking the items sold. A seller will list an item as new, and have purchased items shipped directly from the wholesaler to the customer. The seller’s profit is the difference the price the customer paid and the price the seller paid from the wholesaler, minus any pertinent selling, merchant or shipping fees accruing to them. However, some of the drop shipping methods used by sellers are not allowed under the eBay terms of service. This includes drop shipping methods in which a seller fulfills an order by purchasing the item from another online marketplace and then has the item shipped to the customer. Sellers who use this method can be suspended from eBay.
Products may be listed by a drop shipping retailer as available but actually be back-ordered either with the wholesaler or the item’s manufacturer. Such potential delays in order fulfilment are not always known, or if known disclosed, by a seller. Likewise order fulfilment and shipping delays are beyond the seller’s control, yet can reflect badly on the purchaser’s ultimate satisfaction.