Step 2: Select your value delivery method
That engine is the value delivery method you choose.
Value delivery refers to how you’ll connect your customers with the products you’re selling. It’s an important part of supply chain logistics; the process by which you source, store, manage, sell, brand, package, and deliver your products, all the way from the supplier to your customer.
Essentially, it’s how you’ll deliver the value you promise when your customer first hits that hallowed ‘Buy Now’ button. So… how are you going to do it?
The best value delivery options in 2020:
Drop shipping
Drop shipping represents the most hands-off approach to running an ecommerce business.
You set up a website, and a form of taking payments through that website. Simple enough. What makes it even more straightforward, though, is that you won’t have to store, handle, or pack any of the stock you’re selling. Orders made through your site go to your supplier, who then ships the product straight off to your customer.
Because you won’t handle any stock yourself, drop shipping is a handy way to sidestep the logistical side of things. However, it comes with risks.
If your supplier damages goods, ships to the wrong address, or loses an order, it’s on your head – and it’s your reviews and brand reputation on the line. Plus, when all your business’ packaging duties are handled by someone else, you lose control over your product’s branding, and are unable to implement your own quality control standards.
Wholesaling and warehousing
This approach involves having products shipped to your own warehouse, which you’ll use to store, package, and ship your products from. Wholesaling and warehousing offers a more flexible, dynamic alternative to drop shipping, and comes with superior profit margins to boot.
However, it’s more work, and there’s a greater initial outlay involved.
You’ll need your own warehouse space, and – as your business grows – a team of staff to run it, too. Plus, you’ll have to pay for all your inventory outright, from the word go – not to mention shell out for the costs of getting it shipped from the wholesaler to your warehouse.
That’s probably why many growing ecommerce businesses choose to outsource this particular step in the supply chain (known as ‘order fulfilment’), to a third-party logistics (3PL) provider.
Head straight to Step 10 to learn more about how these businesses can help you scale. Or if you’re short on time, let us know your fulfilment requirements, and provide us with a few details about the kind of ecommerce business you’re launching.
We’ll then match you with 3PL providers that cater to businesses and ideas such as yours, and you’ll receive quotes tailored to your setup. It only takes 30 seconds, and it’s free – you just need to be based in the UK to be eligible.
Private labelling
A private label solution involves engaging a manufacturer to create a unique product for your business to sell exclusively. You send your prototypes and product specifications over, it gets made, and then you elect to have it sent either straight to the customer, or back to you to be distributed.
Private labelling is best-suited to companies that have an idea for an innovative new product, but lack the equipment, the space, the funds (and the motivation) to make it themselves.
White labelling
This approach involves applying your own business’ name and branding to a generic product, purchased from an online distributor.
A good way to get started is to look at products already being sold successfully online. If they offer a white label solution, you can order a shipment of stock carrying your own branding – then market and sell it through your own sales channels.
The only issue with white labelling is that, because you’re buying in bulk, you’re stuck with the stock you’ve ordered. If you can’t sell it, you won’t be able to return it to the supplier.
Subscription
Subscription models rely on billing customers on a recurring basis. Amazon, Netflix, and Wix are all notable examples of ecommerce businesses successfully using a subscription model.
In more niche areas, startups such as Beer42 and Cornerstone demonstrate the extent of the public demand for the convenience that subscriptions provide.
via https://www.AiUpNow.com/ by Rob Binns, Khareem Sudlow
