However, it is hard work to take care of shipping and logistics.

That means you either need to ship things yourself or contract a fulfillment service to do so for you.

There are several fulfillment services in the market today that can help you take your business to the next level by taking care of shipping and logistics for you.

We’ll explore what those companies do and how to take advantage of them and which is best for your situation.

Our Top Picks

An overview of favorite fulfillment services from our comprehensive list below.

Our Pick

ShipBob

• A great 2-day shipping option makes fulfilling Amazon orders simple and easy
• The company offers robust data analytics, meaning sellers can make informed decisions

Visit ShipBob

Runner Up

FBA by Amazon

• The biggest benefit of this platform is the seamless integration with the Amazon marketplace
• High-quality customer service and great uptime makes issues easy to solve and quick to work through

Visit FBA by Amazon

Also Great

Deliverr

• Great for smaller operations that focus on selling through eBay, Walmart, and Shopify
• Simple, fixed-rate pricing makes budgeting easy and reduces surprises for operational overhead

Visit Deliverr

What Are Fulfillment Services?

Fulfillment services are companies that take on several different aspects of the shipping and logistics process, including:

• Warehousing
• Shipping
• Order processing

They often vary in their specializations and the specific services they offer, but the central thing they do is store products and ship them to customers.

What Does a Fulfillment Service Do?

There are several different tasks that a fulfillment service can take on.

Shipping is the central one that all such services perform.

But shipping also frequently entails warehousing – keeping your products within a warehouse so they have them ready to ship as soon as they receive the order from you.

Beyond that, fulfillment services can take on payment, order processing, returns, and quality control.

What Is a Fulfillment Service Provider?

A fulfillment service provider, also known as a third-party logistics provider, is a business that provides fulfillment services.

They take care of the logistical elements of selling products that you don’t want to and/or have the resources to accomplish.

Fulfillment service providers are also significantly distinct from dropshipping services.

Drop-shipping services both manufacture products and fulfill the orders for those products.

As the business owner, you’re simply acting as a salesperson for the drop-shipped product.

Third-party logistics providers, on the other hand, do not manufacture any goods of their own.

They exist to help you fulfill orders on goods you have acquired or manufactured.

The Best Fulfillment Services of 2022

There are several fulfillment services on the market today.

We’ve compiled the top 15 companies so you can compare their core features and plans.

1. ShipBob

ShipBob is a globally-operational third-party logistics provider and omni-fulfillment solution.

Over seven thousand brands trust them to ship orders all over the world.

ShipBob offers high-quality supply-chain services, fast shipping, and memorable customer experiences.

Our Pick

ShipBob is a globally-operational third-party logistics provider and omni-fulfillment solution.

Over seven thousand brands trust them to ship orders all over the world.

ShipBob offers high-quality supply-chain services, fast shipping, and memorable customer experiences.

Visit ShipBobRead ShipBob reviews

Best For:

ShipBob is an excellent choice for business owners with lots of customers in the continental U.S. (due to their 2-day Express Shipping Plan).

Its distinctive pick and pack pricing model (wherein the first four picks are free) makes it perfect for companies that receive several small orders of four items or less.

The company’s strong emphasis on robust data analytics also makes it a great option for sellers that want to collect as much data on their shipping processes as they can.

Notable Features:

• 2-Day express shipping plan
• Inventory management tools
• Data reporting and analytics

Pros:

• Wide reach of global fulfillment centers
• Unique, customized unboxing experiences
• Ability to customize your fulfillment operations
• Guaranteed two-day shipping for specific clients
• Wide variety of e-commerce integrations

Cons:

• Customizability also entails complexity
• Pricing model may work poorly for some companies

Is ShipBob Hard to Use?

No, it’s not hard to use.

The firm has taken care to maximize ease of use on all its platforms.

Once you get used to its system, it’s a breeze to navigate.

Pricing & Plans:

ShipBob is open about the pricing for their core features.

They charge a mostly flat rate for inventory receiving – if your items take two hours or less to receive, you are charged $25.

Beyond that, you’re charged $40 per man-hour.

Their pick and pack price structure are very interesting – the first four items in a given order are free, and then they only charge $0.20 for every pick after those.

This is on the extreme low end, but that’s mostly because they internalize those costs in the storage and receiving fees.

Our Take:

ShipBob is one of the best fulfillment services out there due to its low prices, high customizability, quick shipping potential, and focus on data.

2. Amazon FBA

Fulfillment by Amazon (also known as FBA) is one of the best options for sellers on this list, with extensive reach and high-quality service.

Runner Up

Amazon FBA is great for all sorts of sellers.

It has a broad base of appeal, which allows it to be excellent for most people, but doesn’t offer many opportunities for customization.

Visit Amazon FBARead Amazon FBA reviews

Best For:

Amazon FBA is great for all sorts of sellers.

It has a broad base of appeal, which allows it to be excellent for most people, but doesn’t offer many opportunities for customization.

Notable Features:

• High-quality customer service
• Access to Amazon returns
• Amazon Prime qualification

Pros:

• High rates of customer satisfaction
• Vast logistical reach
• High shipping accuracy
• Guaranteed quick delivery to Prime members
• Very low requirements

Cons:

• Very little capacity for customization
• Sales focused on Prime members
• Muddy and unclear fee structure

Is Amazon FBA Hard to Use?

Amazon FBA is probably one of the easiest providers on this list, due to the straightforward options they provide.

Pricing & Plans:

This company is one of the more expensive ones on our list, but its pricing structure is too complex to outline here.

Our Take:

If you’re looking for a simple order fulfillment service and don’t want to have to think too much about it, Amazon FBA is the way to go.

3. Deliverr

Deliverr is an excellent partner for a small business that focuses on e-commerce platform integration.

Also Great

This firm is best for smaller operations that focus on selling through existing marketplaces like eBay, Walmart, Amazon, and Shopify.

Visit DeliverrRead Deliverr reviews

Best For:

This firm is best for smaller operations that focus on selling through existing marketplaces like eBay, Walmart, Amazon, and Shopify.

Notable Features:

• Two-day shipping for 95% of the continental US
• Algorithm-based inventory management
• Trusted seller shipping badges on several marketplaces

Pros:

• Simple, fixed-rate pricing.
• Unique shipping badge program increases sales
• High levels of e-commerce marketplace integration
• Guaranteed two-day shipping

Cons:

• No international fulfillment centers
• No returns processing
• No employee account functionality, which makes delegating challenging

Is Deliverr Hard to Use?

It depends on how big your team is.

If it’s just you, Deliverr is very easy to use.

Due to its lack of support for employee accounts, it can get very challenging as your team grows.

Pricing & Plans

This firm is known for its simple, fixed-rate pricing structure that consolidates all prices into “fulfillment” and “shipping” categories.

You can choose to pay more for quicker shipping, but the fulfillment costs only depend on size.

Our Take

This is a relatively new and burgeoning company, and we’re excited to see where the years take them given their distinct takes on pricing and inventory management.

4. FreightPros

FreightPros, now known as Nolan Transportation Group, focuses on rail freight shipping, and is geared towards smaller businesses.

FreightPros, now known as Nolan Transportation Group, focuses on rail freight shipping, and is geared towards smaller businesses.

Visit FreightProsRead FreightPros reviews

Best For:

This firm is best for enterprises seeking an easy process without wanting long-term warehouse storage.

Notable Features:

• Cold and temperature-controlled shipping
• Discounted freight shipping
• Partners with independent truckers

Pros:

• Cheap, flexible less-than-truckload shipping
• Easy to use and navigate
• Serves all major railheads and ports
• Unique and high-quality last-mile solutions
• Affordable

Cons:

• Limited long-term warehousing
• Not focused on individual customer orders
• No order processing support

Is FreightPros Hard to Use?

No, it’s quite simple to use.

Pricing & Plans:

NTG does not provide public information on their pricing, but they do bill themselves as affordable, and customer reviews attest to this.

Our Take:

This company works very well for small businesses looking for point-to-point shipping capacity.

5. Falcon Fulfillment

Falcon Fulfillment is a high-volume fulfillment provider that focuses on the beauty, health, and wellness industries.

Visit Falcon FulfillmentRead Falcon Fulfillment reviews

Falcon Fulfillment is a high-volume fulfillment provider that focuses on the beauty, health, and wellness industries.

Best For:

This is best for sellers of beauty, health, and wellness products that send out high amounts of products each month.

Notable Features:

• Two-way inventory management services
• Customized packaging
• Advanced data reporting

Pros:

• Industry-specific specializations
• High volume requirements can lead to lower prices
• Order editing through their order processing service
• Cutting-edge and proprietary management software
• Return management and processing

Cons:

• Extremely high monthly minimum of 4,000
• No global distribution centers
• Requires Shipstation to fully use its integrations

Is Falcon Fulfillment Hard to Use?

If you don’t operate in their focus industries, some things can be challenging to translate over to their system, but it is by and large not challenging.

Pricing & Plans:

They have a $1500 set-up and onboarding fee, they charge $17.50 for every line item in inventory receiving and charge $18 per pallet per month.

They don’t disclose a pick and pack price.

Our Take:

Falcon Fulfillment has a niche, and it fills it with excellence.

If you happen to be in that niche, you will not find many better options for your business.

6. WhiteBox

WhiteBox is a dropshipping, fulfillment, and communications support system that seeks to integrate several aspects of contemporary business life.

WhiteBox is a dropshipping, fulfillment, and communications support system that seeks to integrate several aspects of contemporary business life.

Visit WhiteBoxRead WhiteBox reviews

Best For:

WhiteBox is best for Amazon sellers who move lots of products but still want to expand their listings, as well as for businesses that want to explore dropshipping.

Notable Features:

• High-quality Amazon integration
• Dropshipping capability
• WhiteBox Growth Agency provides marketing consulting

Pros:

• Unified system that covers several features
• Easy to add dropshipping
• They market your Amazon products
• The Growth Agency brings further success to your operation

Cons:

• Monthly order minimum of 1,000
• No pricing transparency
• No bulk or special-care information

Is WhiteBox Hard to Use?

WhiteBox is not hard to use.

Pricing & Plans:

WhiteBox does not offer public pricing information.

Our Take:

This company has some drawbacks, but it fills its niche so effectively that it’s certainly worth it for those who fit it.

7. Simpl Fulfillment

Simpl Fulfillment is a small-scale provider that tries to maximize the streamlined simplicity of the fulfillment process.

Visit Simpl FulfillmentRead Simpl Fulfillment reviews

Simpl Fulfillment is a small-scale provider that tries to maximize the streamlined simplicity of the fulfillment process.

Best For:

Smaller businesses that can’t afford high fees.

Notable Features:

• Efficient custom packaging
• Advanced data reporting
• Subscription box support

Pros:

• No monthly order minimums
• Very affordable
• Multichannel integration with Amazon, eBay, and Walmart
• 2-day shipping for many customers

Cons:

• Only one warehouse
• Due to their lack of monthly order minimums, they may not have the capacity to deal with clients who move a large amount of product.

Is Simpl Fulfillment Hard to Use?

No, all reviews we found indicated it was easy to use.

Pricing & Plans:

This company is quite cheap – no set-up or receiving fees, very low pick and pack fees ($0.25 per item after the first three)

Our Take:

Simpl Fulfillment is an excellent third-party logistics provider and is especially well-suited to smaller enterprises working on a budget.

8. FedEx Fulfillment

FedEx Fulfillment is the logistics-focused arm of the shipping giant FedEx.

Visit FedEx FulfillmentRead FedEx Fulfillment reviews

FedEx Fulfillment is the logistics-focused arm of the shipping giant FedEx.

Best For:

Companies who want to take advantage of FedEx’s massive, reliable shipping operation.

Notable Features:

• Advanced Order Monitoring
• Custom packaging
• Address verification

Pros:

• Walmart and eBay integration
• Lower shipping costs in-house through FedEx
• Returns processing
• Trustworthy and reliable international reach

Cons:

• No Amazon integration
• Limited to Fedex’s shipping operation
• Inconsistent customer service, according to some client reviews

Is FedEx Fulfillment Hard to Use?

Some customers have reported some challenges in navigating the interface.

Pricing & Plans:

FedEx has relatively high receiving and pick and pack fees, but relatively low storage fees.

Our Take:

FedEx Fulfillment is, if nothing else, reliable.

If that’s your priority at the end of the day, they’re an excellent option.

9. Red Stag Fulfillment

Red Stag Fulfillment is an e-commerce fulfillment company based out of Kentucky focused on reliability and effective handling of sensitive goods.

Visit Red Stag FulfillmentRead Red Stag Fulfillment reviews

Red Stag Fulfillment is an e-commerce fulfillment company based out of Kentucky focused on reliability and effective handling of sensitive goods.

Best For:

If your business deals primarily or significantly in fragile or especially large goods, there’s no better place to go than Red Stag, since their whole operation is built around those.

Notable Features:

• Same-day fulfillment options
• Video monitoring of inventory
• Guaranteed fulfillment time-frame

Pros:

• Extremely high accuracy ratings
• Specialized in fragile, oversized, and special-care products
• Includes a Prime-eligible badge when selling through Amazon
• Low monthly order minimums
• No forced long-term contracts

Cons:

• Needlessly expensive for sellers without special care products
• Only two fulfillment centers
• No dedicated account manager

Is Red Stag Fulfillment Hard to Use?

Many customers have found their user interface not to be user-friendly.

Pricing & Plans:

Red Stag Fulfillment has relatively high prices due to its special care capacity, but for a full outline, you will need to get a quote from them.

Our Take:

If you deal in high-care items, Red Stag is one of the best fulfillment providers you can use.

10. Whiplash

Best For:
Large enterprises looking to deftly shift between different business levels will be hard-pressed to find a better company than Whiplash.

Also, if you want to exercise significant control over the fulfillment process, Whiplash has several tools for you to do that.

Visit WhiplashRead Whiplash reviews

Whiplash is one of the top third-party logistics providers on the market.

Best For:

Large enterprises looking to deftly shift between different business levels will be hard-pressed to find a better company than Whiplash.

Also, if you want to exercise significant control over the fulfillment process, Whiplash has several tools for you to do that.

Notable Features:

• Rules engine for granular inventory management
• Dropshipping capability
• Supply chain mapping capacity

Pros:

• Wide variety of fulfillment types supported
• Large number of global and US fulfillment centers
• Returns processing capability
• Amazon, Walmart, and eBay integration
• Custom packaging and subscription box support

Cons:

• High monthly order minimum of 2400
• Very little public pricing information
• Limited customer support hours

Is Whiplash Hard to Use?

Whiplash has several features that give it complexity, but we did not find any reviews claiming it was hard to use.

Pricing & Plans:

Whiplash does not offer much pricing information to the public, but they have a minimum monthly storage fee of $250.

Our Take:

If you’re a large-scale operation that wants to have a significant hand in determining how the fulfillment process takes place, Whiplash is excellent for you.

Smaller enterprises or ones that do not want to take advantage of its unique benefits will likely be better served elsewhere.

11. RedHawk Global

RedHawk Global, now known as RedHawk Logistics, is a freight-focused supply chain management company that competes frequently with Nolan Transportation Group.

Visit RedHawk GlobalRead RedHawk Global reviews

RedHawk Global, now known as RedHawk Logistics, is a freight-focused supply chain management company that competes frequently with Nolan Transportation Group.

Best For:

This firm is best for businesses that have a complex supply chain to manage and don’t need to be handheld through the process.

Notable Features:

• Web-based transportation system
• Automatable route decisions
• Warehouse with an ideal location

Pros:

• Highly specialized route management and advice
• Well-reviewed customer service
• Access to more than 70 discounted shipping carriers
• Provides shipping insurance
• Capacity to move massive and complex items

Cons:

• No individual order fulfillment
• Complex for new businesses
• Only one warehouse

Is RedHawk Global Hard to Use?

Like many complex platforms, RedHawk Global can be easy once you get the hang of it, but it may prove challenging for many customers to get to that place.

Pricing and Plans:

Redhawk is a freight brokerage company, so prices vary too much between shipping needs for them to provide public pricing information.

Our Take:

If you’re looking for a place you can closely manage your supply chain and work with experts to optimize your logistics processes, RedHawk Global is an excellent choice.

12. eFulfillment Service

eFulfillment Service is a third-party logistics provider focused on fulfillment of e-commerce orders.

Visit eFulfillment ServiceRead eFulfillment Service reviews

eFulfillment Service is a third-party logistics provider focused on fulfillment of e-commerce orders.

Best For:

Smaller businesses looking for an easy, streamlined fulfillment process.

Notable Features:

• Proprietary order fulfillment software
• Refund-backed shipping guarantees
• Advanced inventory management

Pros:

• No volume or inventory requirements
• Maintained an A+ rating with Better Business Bureau for 20 years
• In-house IT team
• Focus on ease of use
• Smart packaging

Cons:

• No Walmart or UPS integration
• No public pricing information
• Not helpful for large volume enterprises

Is eFulfillment Service Hard to Use?

No, it is not hard to use.

Pricing and Plans

This company does not provide public pricing information.

Our Take

EFulfillment Service is a good choice for its niche – simple, reliable, small-scale e-commerce fulfillment.

13. Ships-a-Lot

Ships-a-Lot is an e-commerce fulfillment brand geared toward highly specialized “white glove” service for its customers.

Visit Ships-a-LotRead Ships-a-Lot reviews

Ships-a-Lot is an e-commerce fulfillment brand geared toward highly specialized “white glove” service for its customers.

Best For:

If your business has a lot of fulfillment needs and is focused on brand-building around selling small, direct-to-consumer products on Shopify and/or Amazon, Ships-a-Lot is likely the partner for you.

Notable Features:

• Limited number of clients
• Shopify specialization
• Fast shipping guarantees

Pros:

• Limited number of clients means high-quality customer service
• Integrations with several e-commerce platforms
• 24/7 customer support
• Guaranteed 24-hour turnaround for client shipping
• Effective returns management and processing

Cons:

• Unclear pricing
• Limited client numbers means they reject many requests

Is Ships-a-Lot Hard to Use?

Ships-a-Lot does not offer much public information about its platform, but we have found no negative reviews of its ease of use.

Pricing and Plans:

The company does not offer public pricing information.

Our Take:

While this firm isn’t very clear on what its niche is, if you happen to fit it, it appears to be an excellent choice.

14. Rakuten Super Logistics

Rakuten Super Logistics focuses on doing the simple things well – operating to deliver products quickly and reliably in the US.

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Rakuten Super Logistics focuses on doing the simple things well – operating to deliver products quickly and reliably in the US.

Best For:

This firm is best for mid-sized businesses that want a fast and reliable US shipping network.

Notable Features:

• Lot tracking services
• Xparcel program that maximizes shipping efficiency
• Custom project support

Pros:

• Over 15 US fulfillment centers
• Shipping within 1-2 days to most US customers
• Return management and processing
• Wide network of carriers and warehouses that ensures low prices

Cons:

• Monthly order minimum of 250
• No international fulfillment centers
• No public pricing information

Is Rakuten Super Logistics Hard to Use?

It is unclear if their platform is hard to use or not.

Pricing and Plans:

This company does not publish its pricing information.

Our Take:

Rakuten Super Logistics does not have many unique features to offer, but you don’t always need distinctiveness – fast and reliable service is often more than enough.

15. ShipMonk

ShipMonk is a full-service third-party logistics provider that works to make their clients’ experience as smooth as possible.

Visit ShipMonkRead ShipMonk reviews

ShipMonk is a full-service third-party logistics provider that works to make their clients’ experience as smooth as possible.

Best For:

This firm is best for businesses that primarily sell through Etsy and/or Groupon and who don’t have to deal with too many special product needs like oversize loads and health regulations.

Notable Features:

• Technologically optimized warehouse experience
• Advanced subscription box functionality
• Etsy and Groupon compatibility

Pros:

• Extensive ecommerce integrations
• RFID-empowered warehouse technology
• Highly customizable packing and kitting experience
• Returns management and processing
• No onboarding costs

Cons:

• Poor accommodation of oversize and unusual size products
• No storage insurance
• No FDA-certified handling for FDA-regulated products

Is ShipMonk Hard to Use?

No, ShipMonk is not hard to use.

Pricing and Plans:

The firm has no onboarding or receiving costs, but compensates for that with high-end pick-and-pack prices.

Our Take:

If you’re an Etsy or Groupon seller, there are few better options for you than ShipMonk.

How Do Fulfillment Services Work?

Effectively, these services work by you sending them your products to store in their warehouse space.

When someone places an order, you notify them.

The order fulfillment company then begins the process of fulfilling orders by picking the items in question off the shelf and shipping them off to the customer.

What Is the Process of Fulfillment?

This depends on how challenging a logistical problem you have before you.

Shipping orders can use multiple fulfillment centers throughout a supply chain in getting the product from one place to the next.

What Is Included in Fulfillment?

Order fulfillment describes the transition between an item that you want to sell and the customer you’re trying to sell it to.

What Do Fulfillment Services Cost?

Cost can vary significantly across services, depending on pricing models and the quality of the work.

But generally, there are four aspects of pricing here:

• Reception of inventory
• Item storage
• Picking and packing
• Outbound shipping

Services charge for the labor involved in receiving the inventory you send to them.

There are a couple of different ways to handle inventory receiving that impact cost.

This will often cost between $25 and $45 for every hour it takes to obtain and categorize your products.

Then you need to pay for storage.

These are the costs behind keeping your inventory stored at the fulfillment service’s warehouse.

Typically, you will find prices between $8 and $40 per pallet per month.

Once you have an order, the fulfillment service engages in the pick and pack process, where a laborer picks out the right product and packs it to ensure it’s ready to be shipped.

These vary significantly, between 20 cents per item and $13 per item.

The cost of shipping the product will likely be your largest one.

This cost varies significantly depending on destination, weight, and size.

That said, fulfillment companies can often ship things 10-30% cheaper than standard shipping companies.

On top of those costs, some fulfillment services also charge a one-time onboarding fee, account management fees, inbound shipping receiving fees, and return handling fees.

Further, some have additional optional services you can request, like order processing and custom packaging.

What is Ecommerce Fulfillment?

Ecommerce fulfillment just brings the concepts of fulfillment services generally to the world of web-based commerce.

Frankly, most fulfillment services deal primarily in e-commerce these days – there are few needs for them outside of internet sales.

How To Choose an Ecommerce Fulfillment Service Provider

Each e-commerce fulfillment service provider brings a unique set of services, pricing models, and styles of business operations to the table.

It’s important to do your research before choosing the one for you.

What’s the Best Ecommerce Fulfillment Service Provider?

There is no clear best among these firms.

Each one has significant advantages and drawbacks, and the best one for you will depend on the features and goals of your specific business.

Benefits of Fulfillment Services

Partnering with one of these firms is an excellent decision for many operations that want to take their business to the next level.

Extend Your Reach

First and foremost, a fulfillment service will help you extend your products’ reach in the world.

If you’re trying to run a small e-commerce business from your home or a storefront, you will encounter so many obstacles if you start being successful.

At the end of the day, you can only pack so many boxes yourself.

Free Up Your Space

No one has unlimited storage space.

Storage constraints are often more significant for small businesses than they are for larger competing businesses.

Are there rooms in your house dedicated to storing inventory?

Do you miss having a break room for employees at your store since it’s been dominated by boxes?

Fulfillment services solve this problem by allowing you to store products in their warehouses.

Improve Customer Service

This is one of the unexpected (yet significant) benefits that come from using a fulfillment service.

It helps with customer service in three ways: increased efficiency of product delivery, freeing time for you and your employees to provide better customer service, and direct customer service impacts from the company itself.

Typically, these providers can process and ship orders more efficiently than you will be able to do in-house.

That means lower wait times, which improves the customer experience a great deal.

Improve Scalability

Contracting out shipping and logistics processes allows for greater scalability of your business model since this field relies primarily on fixed costs.

Lower Shipping Costs

Often, third-party logistics providers have discounted shipping rates.

Even with the costs that you’ll pay, most businesses will save big on these costs.

Customizable Packaging

If you’re running your packing operation in-house, chances are you’re using boring packaging – plain cardboard boxes and the like.

Some providers offer you the capacity to customize your packaging.

This practice allows you to make the experience of receiving and opening packages into something both brand-building and enjoyable for the customer.

Wrapping Up

As you can see, the shipping fulfillment industry is a challenging one to engage with, but research yields much fruit.

Don’t choose a business partner without looking into them – there’s a lot of information out there, and there are so many niches that different firms fill.

With so many options, it can be hard to know which to choose.

Still confused about fulfillment services?

Let us know below!

Diving into the world of dropshipping can be an exciting avenue for business owners interested in simplified eCommerce.

Instead of handling and storing products on your own, you work with third parties to supply your customers.

There are plenty of interesting factoids to consider when becoming a dropshipper, which we’ll explore here.

What Is Dropshipping?

The simplest way to understand dropshipping is to look at it as a fulfillment method.

Instead of an individual store stocking its products, the store uses a third-party supplier.

Basically, you purchase products from this supplier, which they then ship directly to the customer.

Small business owners can often prefer this process, as you don’t need to worry about warehouse space.

Also, you won’t be responsible for managing to ship your products, which many find to be more convenient.

It’s usually recommended for businesses searching for a more hands-off approach to selling.

Entrepreneurs are most likely to find dropshipping to be advantageous because of its simpler business model.

Your primary responsibilities will be attracting new customers and processing orders, reducing your workload.

However, you will still be able to reap the majority of the profit from your sales, which can make it rewarding.

With that said, there are plenty of advantages and disadvantages to dropshipping, as with any business model.

Many entrepreneurs boast about all of the advantages, but there are plenty of hard truths to consider.

What Are the Benefits of Dropshipping?

There are several positive outcomes of starting a dropshipping business, which is why they are as popular as they are.

Let’s take a look at some of the most noticeable advantages you are likely to come across.

Easy Startup

Compared to other entrepreneurial ventures, it is incredibly easy to start a dropshipping business.

As long as you can learn and understand the basic tenets of the process, anyone can do it.

You won’t need to worry about renting a warehouse or paying for a team to manage products.

With that said, it does not mean that dropshipping is something you can start doing in seconds.

You must learn about the most valuable tools to help you get started.

For example, you need to know how to find third-party suppliers, manage orders, maximize outreach, and more.

Impressive Scalability

As you won’t have to worry about the hands-on aspect of managing products, scaling your dropshipping business is simple.

Unlike other business ventures, this avenue allows you to allocate the same amount of time and effort over the coming years.

You will likely have to focus more on marketing as your business gets more prominent, but managing products will stay the same.

Another considerable contributor to the scalability of dropshipping businesses is their limited costs.

Even as companies get larger, you won’t notice a significant increase in your overhead.

However, traditional brick-and-mortar stores will experience higher costs.

For example, you might have to purchase larger warehouses and hire more employees to manage your own inventory.

As a dropshipper, the most you will have to worry about is ensuring you find a supplier with enough inventory to meet demand.

Lower Immediate Investments

If you were to ask any dropshipping professional why they got started, their first reason is low capital.

It is unlikely you will need to come up with tens of thousands of dollars to get started as a small dropshipper.

Most entrepreneurs start their venture from their personal laptops without requiring significant investments.

Then, even as time goes on, the amount you put into your business will stay the same.

The significant advantages of lower direct investments are prevalent when comparing dropshipping to traditional business models.

Incredible Flexibility

When you own a traditional brick-and-mortar business, your hands will be tied in every area of the company.

You’ll have to manage marketing, inventory, selling, customer experience, shipping, and more.

Even with a team, it is likely you will feel like your hands are full of responsibilities.

Dropshipping, on the other hand, helps improve your flexibility as a business owner.

The majority of the day-to-day inventory tasks are managed through the third-party supplier.

This process allows you to focus more on marketing and outreach, growing your consumer base.

Another significant advantage of its flexibility is that you maintain complete control over your time.

Business owners can come up with strategies without needing to double-check with other owners.

You also have the opportunity to automate the majority of your processes, allowing your business to run itself over time.

The Hard Truths About Dropshipping

Now that you have an idea of the benefits of dropshipping, it’s important to consider the disadvantages.

As with any business venture, it is not the perfect model for everyone looking to make a liveable wage.

Let’s take a look at a few of the most discussed issues with a dropshipping business.

Lower Profit Margins

The most significant issue with dropshipping is that your profits are likely to be considerably lower.

It is important to note that although third-party suppliers streamline processes, they also need to be paid.

Every product you sell will have a percentage going to your supplier and the rest you use for yourself.

A chunk of your profit will also need to be reinvested into new products with good business practices.

Likely, you won’t be making a significant amount of money when you first start your business.

When working in highly competitive niches, such as affordable electronics accessories, profits are even lower.

There are several components that you need to consider when it comes to calculating your profits.

You will need to account for additional expenses, cut your profits that go to the third party, and competitive prices.

This point is crucial within competitive niches, as other sellers can quickly undercut your costs.

Many dropshippers suggest that the discounts you get from wholesale products make up for your loss of profits.

However, it is likely your discounts will be less than 20%, which isn’t considerable enough to make a difference.

Also, as most of your sales come from direct site traffic, a lot of time and money must be invested in online marketing.

Highly Competitive Avenues

You can guarantee you are not the only person in the world who has ever considered dropshipping.

In fact, it is one of the fastest-growing eCommerce industries in the world.

With that said, most products that you think are an excellent idea for dropshipping are highly competitive.

Not only are you competing with sellers in your immediate area but around the world as well.

It is easy for first-time entrepreneurs to get overly excited about the low overhead of dropshipping without considering competitiveness.

You will need to offer competitive pricing, an easy checkout experience, and high-quality products simultaneously.

Also, you will be competing with dropshipping companies with established, loyal audiences unlikely to jump ship.

The larger your competitors are, the easier it will be to reduce their pricing to stay at the forefront.

As a small startup, you are likely to have higher prices, limiting your competitiveness in top-tier niches.

Lack of Control

Business owners who prefer to have a hands-on approach to their business aren’t suited for dropshipping.

In fact, if you want to maintain control over the main aspects of business, it’s not the right avenue for you.

You will have little say in fulfillment speeds, the quality of your products, or even return policies.

All of these aspects are the responsibility of the third-party supplier, which can be challenging to manage.

This point is significant to consider if you use international suppliers.

You won’t be able to visit the warehouse for in-person appointments, and there are often significant language barriers.

The most that you can do with the majority of suppliers is register complaints with the company.

You will then be at their mercy to hope that they improve their efficiency or product quality without assurances.

Relying so heavily on another company can be disastrous, especially if product quality is a significant concern.

Customer service is a significant part of eCommerce, and with poor consumer experiences, your reputation becomes worse.

Knowing how vocal customers are, you might begin incurring negative reviews before getting a handle on the issues.

This reason is why some of the best dropshippers work with local wholesale manufacturers rather than international options.

Forced Accountability

Another considerable disadvantage to dropshipping that’s often overlooked is accountability.

Remember, your company is not responsible for manufacturing, packaging, and shipping the product.

You are simply connecting consumers with another company’s items that you’re selling and taking a cut from.

With that said, any issues consumers experience with products will feel like your direct responsibility.

If a customer has an issue with quality control, it will be seen as your fault.

Products that arrive late due to poor shipping efficiency could also result in negative reviews.

In these cases, you will not only have to accept responsibility as the merchant, but you’ll also have to rectify the situation.

If this does not seem like something you’re interested in, then dropshipping is a business practice to avoid.

How to Make the Most of Dropshipping

As you can tell, there are plenty of pros and cons you’ll experience with dropshipping.

Having top-tier business practices can help make the task far more enjoyable and streamlined.

Let’s take a look at some of the key tips dropshipping entrepreneurs suggest you take into account.

1. It’s best to make dropshipping your side job.

Although it can be tempting to throw a bunch of money into a new venture, quitting your day job isn’t ideal with dropshipping.

Once you establish a solid customer base and start acquiring more income, transitioning to full-time work could be possible.

While it is a source of consistent income for many beginners, the profits are likely to be small at first.

The most important thing to consider with a side hustle is to ensure your primary employer doesn’t have restrictions.

Ensure you didn’t sign a non-compete agreement and ask HR if there are any guidelines about side businesses.

If you are in the clear, it is a great way to make a few extra dollars on the side to build a good nest egg.

2. Take a lot of time to source high-quality suppliers.

One essential task for any dropshipping business is to make sure they work with quality suppliers.

Not only will you want a manufacturer with good products, but one that also has sound business practices.

Avoid companies that use trademarked logos and slogans and those that pay unfair wages to their employees.

It is also important to find suppliers with many years in the dropshipping industry, ensuring they’re prepared for anything.

They should have an efficiently streamlined packing and shipping process as well as inventory management protocols.

The better your supplier manages day-to-day operations, the less of a headache the process will be.

3. Always maintain an open line of communication.

There’s no doubt that you will need to contact your supplier regularly to manage inventory and sales.

It should be easy to contact the business if you have any questions, concerns, or updates.

Dropshippers recommend finding manufacturers that have more than one method of contact.

By keeping an open line of communication, resolving issues will take significantly less time.

The more efficiently you can rectify concerns, the happier your customers will be, resulting in better reviews.

Ideally, choose a supplier with email, phone, and online chat support for quick access during business hours.

4. Don’t forget the importance of online marketing.

It’s important to remember that, with this business venture, all of your sales will be due to internet traffic.

Unlike brick-and-mortar businesses, dropshipping is an entirely online process.

As such, you’ll want to invest the majority of time and money into marketing, attracting more customers to your brand.

Once you’ve developed a good audience, you can then impress them with the quality and efficiency of the buying process.

The more positive experiences you provide, the better your reviews and reputation become.

Final Thoughts

Knowing what is dropshipping can open many doors if you want to get into eCommerce.

You just need to find the perfect supplier and focus on online marketing to start a user-friendly business.