13 min read

What Is The Difference Between Drop Ship vs. Direct Ship?

With platforms like Shopify, WooCommerce, Wix, and BigCommerce, starting an ecommerce business is easier than ever. Building an online store is very practical, but there are many details that you need to take into account beforehand.

Drop ship and direct ship are two different distribution models. However, especially in recent years, the drop shipping model has become extremely popular over the traditional distribution model, direct shipping.

But what is the difference between a drop ship and a direct ship? It might be vital for you to know in order to determine what you want to do. If you are starting an ecommerce business from scratch, It’s important that you determine which one is better for you considering key features.

Let’s dive into both of these models’ details together!

What is a Drop Ship?

colorful containers which are being shipped

Drop shipping is a retail fulfillment model in which a store does not keep goods in stock. Instead, when the customer places an order, the store purchases the item from a third party. The store only pays for the item once it has been sold to the customer.

When explaining this concept briefly, it can be said that businesses that use a drop-ship model sell the products they don’t actually own.

Advantages of Dropshipping:

  • Drop shipping allows you to sell products without having them in stock.
  • It is an effective way of offering customers a wider range of products without having to carry all of them in stock.
  • You can focus on marketing your business while someone else handles order fulfillment, freeing up your time.
  • It allows retailers to offer products with lower overhead costs than traditional brick-and-mortar stores. So stores offer items at lower prices than they would if they had to pay full retail price for every item they sold.

Disadvantages of Dropshipping:

  • The main disadvantage of drop shipping is that it requires more work on behalf of both you and your suppliers.
  • You have to search for new suppliers who will sell at wholesale prices and then monitor their stock levels so that you can restock quickly enough when necessary.
  • You’ll have to pay extra fees on top of what you’re already paying for each sale.
  • There might be issues with supplying certain products when they are out of stock.

Dropshipping Websites You Can Use

a man working with a laptop and viewing a zyro website

1. DSers AliExpress Dropshipping: It is an online marketplace where you can find dropshipping suppliers. Aliexpress offers over 100 million products so that you can find any product you want to sell on your ecommerce site. Considering that it has many products and suppliers, you can find more than one supplier for your store.

2. SaleHoo: SaleHoo can be used as a supplier directory if you want to get involved in dropshipping. It includes many dropship suppliers and distributors, so you can find the suitable one for your business.

3. Doba: In Doba, you can find the mainly USA and China-based suppliers in under five minutes. Also, it offers fast shipping features, which can significantly increase sales of your dropship-modeled ecommerce business.

4. Spocket: It is a plugin that can be used in a Shopify store. It allows you to browse products and drop ship as an order fulfillment service. You can create custom invoices for your brand with this platform as well.

5. Wholesale2b: Suppliers in this platform are mostly based in Canada and USA. It has a Shopify app that allows you to pull incoming orders from your Shopify store, making the dropshipping process much easier.

6. Inventory Source: Being a dropshipping website, it also has an order management tool that can be helpful in organizing your orders. Dropshippers and their suppliers can collaborate thanks to this platform and sync their products easily. In addition, it integrates with your ecommerce platform seamlessly and does not charge extra fees.

What is a Direct Ship?

a stack of colorful containers which are being shipped

Direct shipping is a shipping method in which an item is shipped from the seller to the customer. This means the item will be sent directly from the seller to the buyer instead of going through a third-party distribution center.

Advantages of Direct Shipping:

  • It gives you more control over how your product is handled and shipped
  • It provides customers with faster delivery times and more control over their packages.
  • It eliminates some of the costs associated with third-party distribution centers and allows sellers to offer lower prices on products.

Disadvantages of Direct Shipping:

  • You’ll be responsible for handling any returns or exchanges on your own.
  • You need to employ more people to deal with the shipping process.

Main Differences between Dropshipping and Direct Shipping

It may not be much of a difference for customers for sure, but business owners need to know the differences between these two concepts. The main difference between dropshipping and fulfillment models is how the goods are transported.

As we have explained both of these models separately, drop shipping is a retail method in which a retailer does not keep goods in stock. But instead, it transfers the customer order and shipment details to either the manufacturer or a distributor, who then ships the goods directly to the customer.

Direct shipping is when a seller has physical possession of their products and ships them directly to customers without using any middlemen or third parties. You send your products directly to customers in a direct shipping situation. This means that you are responsible for all aspects of the transaction.

two cardboard packages on top of the other

The main difference between dropshipping and direct shipping is that a drop shipper doesn’t keep any inventory but relies on third-party vendors to fulfill orders. A direct shipper, by contrast, has its inventory and often fulfills orders from its warehouses.

The second difference between dropshipping and direct shipping is pricing. Dropshipping can be inexpensive because it doesn’t require additional overhead costs for stocking inventory or paying employees; instead, these expenses are covered by the warehouse or fulfillment center that owns them.

Direct shipping has higher overhead costs because the seller must pay out-of-pocket expenses before they can begin selling their products online. This means they’ll need more capital upfront before they can start making money this way! There might be supplying and shipping costs in dropshipping applications as well.

Which One is Right for Your Ecommerce Store?

But which one is better for your ecommerce business? Whether you should use direct or drop shipping depends on different factors.

In drop shipping, you have many competitors, so focusing on improving other parts of your business can be easier since you’ll have more time for that. Drop shipping can decrease the costs of entering a new business because you don’t have a warehouse and pay extra money to ship products.

Direct shipping is the practice of shipping directly from a factory to the customer’s home. While this has its advantages, it comes with some disadvantages. It would be better to plan everything and pinpoint the difficulties that might come up.

a man preparing a cardboard package

Consider that you might have problems with your suppliers with drop shipping. Because of these issues, your brand reliability may decrease. Also, product information in this distribution model may not be sufficient.

There are also drawbacks to direct shipping that must be considered before deciding whether or not to use this distribution option on your ecommerce business.

For example, some people prefer having options like free returns or exchanges when shopping online, so they don’t have to deal with issues like damaged goods or incorrect orders if something goes wrong with their order.

You can include options like this to avoid brand unreliability. So issues that might occur because of shipping from one place to another across state lines or even internationally can be resolved later on!

In Conclusion….

To conclude, we explained what drop ship and direct ship mean and their differences. Drop shipping is when you have a store that sells products but doesn’t stock them. Instead, you use suppliers to ship your products directly to your customers. When someone orders an item, it gets shipped directly from the manufacturer or distributor without going through your warehouse.

Direct shipping is when you have a warehouse where you keep all of your inventory so that it can be sent out directly to customers as soon as an order arrives. You might choose this route if you have high volume sales or don’t want the hassle of managing multiple vendors.

It depends on the business size and needs for sure. You can choose one of them when planning to build an ecommerce store.

Please share your thoughts with us in the comments section! Since it is a controversial issue, it would be better to hear your thoughts after reading this post! 🤓

Frequently Asked Questions

Is Dropshipping Better Than Direct Shipping?

It can be said that drop shipping is easier since you don’t have to deal with a warehouse to store all of your products. Apart from that, you need to focus on everything from shipping to return orders in direct shipping. But it may vary depending on your business size and expectations.

Is Dropshipping a Passive Income?

Dropshipping can be considered among the most used passive income sources. Even if you are not planning to build an elevated ecommerce business, you can start dropshipping to earn more money apart from your job. Since you don’t have to own a warehouse or office to store everything, you can also work from home as a freelancer.

What is the Downside to Drop Shipping?

Finding suppliers and processing orders might be hard at first in dropshipping. Also, dealing with returns and out-of-stock items can be a challenge in this distribution model as well. However, you can reduce its downsides by finding more than one supplier and preparing a strategy for these issues.

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