dropship

Topics: Drop shipping, Marketing, Supply chain management Pages: 9 (2928 words) Published: April 25, 2014
1.0INTRODUCTION
Nowadays, if there is a desire to venture into business but feel worried and anxious, then a dropship business should be one of the options that should be considered. With dropship method, anyone can become a businessman and businesswomen without having to bother thinking of capital, business premises, business hours, security, and other things that can discourage an entrepreneur to start a business. Dropship trading is a popular transaction in a business model in the world but it is new business in Malaysia. Dropship actually defined as a one of the branches of the internet business easy and simple way. The buying and selling transactions involving two or more parties known as a trading. Dropship trading is about a business that sells a product without stocking. In other words, it a mediator between the buyer and the seller. Dropshipper uses the anything platform for promote the product to a consumers such as in blog, facebook, instagram or else. The most of dropshipper use facebook for promote their product because nowadays there are a lot of people using facebook in the world. So, the dropshipper can get the buyer based on the advertisement on facebook. Furthermore, there are three parties involve in the dropship which are dropshippers, suppliers, and buyers. The dropshipper will advert or will promote the product to the customer in online and any person who is interested online consumer or buyer can contact the dropshipper to order the product. The buyer will transfer the money to dropshipper if agree to purchase the product. Then, supplier will send the product to the buyer. For instance, A as a company selling honey products. Mr. B wants sell honey as well but there are no products, so he became an agent dropship for the company A. Mr. B makes a sale and others to get the customer. When there is a customer (Mrs. C) who want to buy honey, Mr. B will ask Mrs. C is for bank-in to Mr. B. Then, Mr. B paid to company A at the next dealer and a company will post the honey to Mrs. C. So, Mr. B as a middleman to sell and earn income through honey dealer price from company A. In this situation, dropshipping is a company A and dropshipper is Mr. B. In a nutshell, dropship considers is one of the best methods for online business. This is because it can sell a product without capital, without the risk and do not need to buy and store stock but just need a time to promote a product.

2.0 EXAMPLE OF DROPSHIP

2.1 Humaira Boutique

Humaira Gift and Muslim Collections is boutique shop that under the management of Syarikat Mutiara Muslim Enterprise (MME) owned by Hj. Johari Rasmani’s family in Muar, Johor. Humaira Boutique is one of the supply chains when dealing with dropship model. The company provide intermediaries which are wholesaler and dropship to distribute the product to the customers. Other than that, Humaira boutique also accepts the order from customers in bulk for scarf and women clothes. Dropship is open to everyone that interested to make a business. For this company, the dropshipper not have to issue the capital but to promote Humaira Boutique’s product and receive an order by the customers. To be a dropshipper, the registration is free but there is some condition that should be followed. Dropshipper should collect the order at least three clothes to qualify them get discount agent from 15% to 25% (based on the quantity). In order to other product price, the commission is different based on the types of the clothes and dropshipper can request to Humaira boutique because of the design of the products. Figure 1

The normal instruction that dropshipper must follow. Firstly, when the customer decides to buy a product, the dropshipper should check from the boutique either the product is available on the stock or sold out. Secondly, if the stock available, dropshipper should ask the customer to make a payment. After that, the dropshipper...


References: 1. David King, Deborrah Turban, Efrain Turban, Jae Lee, Ting-Peng Liang. 2012. Electronic Commerce 2012. United States. Pearson.
2. Chan Kah Sing. 2004. Electronic Commerce and Supply Chain Management. Singapore. Thompson.
3. Bernard J. Jaworski, Jeffrey F. Rayport. 2002. Introduction to E-Commerce. Americas, New York. McGraw-Hill.
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