Ecommerce Positives and Negatives

Too often I hear from vendors and suppliers of all the benefits of Ecommerce and rarely hear of any negatives. If you've ever owned an online store then you know that there are some for sure...

Inventory - While drop shipping can be of great benefit by keeping shipping costs down, when carrying inventory or stock is required online stores don't have all the beneifts that a brick and mortar has. For instance, if my rv accessories etail store decided to inventory 100 rv covers and for some reason they didn't move in 6 months I wouldn't have the luxury of 'including' them with some RV's that I sell to get rid of them. There are other outlets for 'dumping' product online, but it just isn't the same.

Supply Chain - Drop shipping has quickly become a way to decrease shipping costs and increase profit margins. However, if drop shipping is your only method of merchandise delivery then you might have a rocky road ahead. When your supplier 'runs out' of product you are sunk with no inventory to help you through. So, before running any specific product marketing campaigns be sure you have the goods to back it up!

Now for a positive...

Payment - If you do drop ship product then your cash flow is readily available for vendor/supplier payment. Say a customer places an order today, you process the credit card, and send the order to your supplier. They ship it out tomorrow and send you an invoice. By the time the invoice arrives the money from the customer is already in your bank account and you can write a check or EFT a payment to the vendor. You might be able to get your current supplier to drop ship if you promised Net 10 or 15!

Until next time...