What is the difference between cross-border distribution and drop shipping? What are the advantages and disadvantages of each?

Cross-border distribution and drop shipping are both methods used by cross-border sellers. So what are the characteristics of cross-border distribution and drop shipping? Let's take a look now~

The difference between distribution and drop shipping:

1. In terms of purchasing methods, drop shipping is purchasing from manufacturers in the form of consignment. The goods are placed in the supplier's warehouse, and the manufacturer will ship them directly to the end consumer when needed; while distribution is similar to bulk purchasing. After purchasing goods from the manufacturer to its own warehouse, they are shipped through sales or directly delivered to consumers.

2. In terms of delivery methods, drop shipping usually means that the seller places an order on a specific website platform and the supplier directly ships the goods, and the platform automatically splits the accounts; distribution usually means displaying and selling goods in one's own outlets or physical stores, and then shipping the goods or directly trading them to buyers in the store.

3. In terms of product ownership, drop shipping sellers do not have ownership of the products; distributors own the products after purchasing them.

4. In terms of inventory, the inventory of a drop shipping seller is equivalent to the inventory of the manufacturer; the inventory of a distributor is the amount of goods he purchases.

Advantages and disadvantages of cross-border distribution:

Advantages of distribution:

1. Manufacturers can focus on the quality and improvement of their products without having to worry about sales. All sales are concentrated on the distribution platform, which reduces the pressure and makes it easier to create popular products.

2. Distributors do not need to worry about product sales, they only need to focus on product selection, sales skills and promotion.

3. Distribution can effectively control costs, without the need to purchase large quantities of products and requiring less capital investment.

4. There is no inventory pressure, and the goods are stored directly at the manufacturer.

5. For manufacturers and distributors, they can improve the efficiency of their business activities and focus only on their most important links.

Disadvantages of distribution:

1. It is difficult for distributors to distinguish excellent, first-hand manufacturers. Once the wrong choice is made, their business activities may not be able to continue.

2. It is often necessary to help manufacturers consume some unnecessary goods in order to maintain the relationship with the manufacturers. This part may increase costs or reduce reputation.

3. Unable to grasp inventory in real time. When the distributor has completed all promotional activities, the manufacturer may be out of stock. In this way, the initial promotion investment is made, but the profit and cost are not recovered.

4. Pricing is not flexible enough and is limited by the manufacturer's price protection.

Advantages and disadvantages of drop shipping:

Advantages of drop shipping:

1. Sellers can open a store without having inventory backlogs, which saves the cost of stocking and reduces the risk of inventory backlogs.

2. The prices on the Internet are very transparent, so sellers can compare prices from different stores without having to run around, choose the purchasing channel with the most suitable price and quality, and purchase goods directly through the Internet.

3. Avoid the wholesale model and do not desperately increase the purchase quantity in order to lower the retail price.

4. The operation is convenient. If you want to open a store, you can register an account, copy the manufacturer's supply information, and start selling goods.

5. Using the manufacturer's pictures and introductions, lazy sellers can start selling goods directly without having to pose for products themselves in the early stages and rack their brains to think about how to introduce the advantages of the products to attract buyers' attention.

Disadvantages of drop shipping:

1. Since the Internet is not face-to-face, it is possible that when sellers purchase goods, they will be blocked by the supplier’s backlog of inventory, that is, goods that no one wants.

2. To put it bluntly, drop shipping is to make a profit from the price difference by taking advantage of the information gap. However, information is so transparent nowadays, and the speculators on the website are not necessarily the real manufacturers, so there is no advantage in terms of price and quality.

3. Quality is difficult to control. Now sellers basically have to buy a sample first and confirm the quality before they can continue to sell, because buyers now have higher and higher requirements for quality.

4. The supply of goods is unstable, because the manufacturer you choose may be a middleman, and frequent changes in the agreement may lead to out-of-stock, so all the previous publicity will be in vain.

5. The competition is fierce. You purchase goods from this company, and others also purchase goods from this company. It is no longer the era when people will buy as soon as you put goods on the market. Buyers will compare the same item with countless sellers. You must rack your brains to stand out.

The above is the content about cross-border distribution and drop shipping in this issue. If you want to get more knowledge about cross-border distribution and drop shipping, please pay attention and we will continue to answer you~