Major retailers are using a fulfillment method known as "dropshipping" that enables them to list products on their websites without buying inventory.
These pressures have led retailers to rapidly expand their online inventories and streamline their shipping logistics. To do this, nearly every retailer has turned to dropshipping. With dropshipping, "all retailers do is focus on marketing and sales," Saba Mohebpour, the CEO of a dropshipping marketplace called Spocket told Business Insider. "Retailers are saved from holding inventory which is really costly."
Pfeiffer said she consults with retailers who are looking to build out their online assortment as quickly as possible, as well as from brands or suppliers who are looking to find more platforms for their products, especially as stores have closed. "It's no longer taboo, it's table stakes," Pfeiffer said.For retailers who use dropshipping, the biggest advantage is flexible expansion.
But the downside is some loss of control over the experience. Retailers don't actually see or handle the products they're selling, which could lead to customer satisfaction issues. And the retailer is the one managing customer service. But the downside is that all of the risk on inventory falls to the supplier. "They have to decide what to make, what to bring in and have in stock, they have to do a really good job of keeping it in stock if it happens to sell well, and then they have 100% responsibility for it, if it doesn't," Pfeiffer said.
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