One of the most common things you hear when it comes to running an online business is the fulfillment option. It is an essential part of 

running a business because you want to go from suppliers or manufacturers to warehouses, and finally to customers.

The most promising fulfillment option is direct shipping, as it can help new businesses avoid higher management costs and improve efficiency 

at the beginning of the business. So, what is direct sales? How does it work, should you start or shouldn't you start? Let's answer these important questions in this article.

What is Dropshipping?

So, what is direct sales? This is a form of fulfillment service where you outsource logistics work to a third party. This third-party logistics company (3PL) 

will be responsible for the remaining work. This job will involve purchasing from suppliers/manufacturers/vendors and storing them in regional warehouses. 

From there, the company will deliver the goods to your doorstep.

If you are a new enterprise or startup, this model will attract you because you do not need to pay any logistics expenses. In addition, as long 

as you deliver on time, you don't have to worry about when and how to ship.

How does Dropshipping work?

If you want to know what direct sales are, you will be surprised to find that it only has five steps. The following are the key steps of direct sales.

    Agreement - The seller or business owner will find and sign a shipper or logistics company to handle this process.

    Online Orders - One of your customers will visit your online store, place an order, and checkout.

    Order Receipt - Third party logistics companies will receive notifications to purchase products from suppliers/manufacturers, and then take 

the products to the warehouse for packaging and shipping.

    ● Shipping Notification - Once the order is packaged and ready to be shipped from the warehouse, both the customer and you (seller) will receive notification.

    Order delivery - Third party logistics will deliver the product to the customer's doorstep. Here, the customer signs and shares with the seller.

As a business, you only need to place a product in your e-commerce store and market it. The diligence of third-party logistics companies makes everything else automated.

The advantages and disadvantages of Dropshipping

Let's take a look at the pros and cons of Dropshipping.

The advantages of Dropshipping

    Sellers have minimal expenses and investments as they do not store or transport orders. This also has no maintenance cost.

    If the order is damaged or lost, no fees will be charged; This is either insured or the responsibility of third-party logistics.

    As a seller, you can use multiple channels to sell your catalog without having to use a single storefront.

    Wherever you are, all you need is an online store. Supply, warehouse, and scheduling do not depend on your location.

Disadvantages of Dropshipping

    If you use the direct sales model, there will be a lot of competition because many companies use it because it has the lowest investment and management costs.

    You are trapped by the brand you have chosen, while many other brands are selling, so there is not much uniqueness.

    The company will find it difficult to generate significant profits as many sellers are using the same product.

    If you use inexperienced or low-quality third-party logistics, errors may cause you to lose potential long-term customers.