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Supply chain management oversees products as they travel through the process of conception, manufacturing, and wholesale distribution to the end user. A properly implemented supply chain ensures there will be an unbroken flow of supply of a consistent high quality product. It also eliminates or reduces lead times and stock holding so that costs are lowered and profits are increased.

For many people that take up an online business, one of the most challenging aspects is managing and stocking inventory. Storing products takes a lot of space and, if you are working from home, this can be a big problem. Keeping your inventory organized poses additional problems as well.

One solution is to hire external storage space, but the problem with that is that it is an extra expense, and one which has to be covered by being built in to your costs. This will of course mean that your selling price will inevitably increase, and this can cause problems for your product sales, especially if you are operating in a competitive marketplace.

Supply chain management is a whole area of business that has arisen to help wholesale and retail companies deal with these inventory problems. Small home based businesses in particular have a unique struggle and that is why drop shipping came to be and why it is so popular today.

Drop shipping can either be offered by the manufacturer itself through the use of its transport service or it can be arranged by a wholesale distributor that specializes in the drop shipping service. Even though there is a fee associated with it, drop shipping is still considerably less expensive than renting warehouse space.

In essence, what drop shipping does is that it allows you to instruct the manufacturer, (or your drop shipping service provider), to deliver the product direct from the place of manufacture to your customer’s doorstep. You can even arrange for the product to be shipped in anonymous packaging if you wish to keep the source’s name secret.

Drop shipping allows you to run a business from your own home without having to handle a single piece of inventory. There is no worry about finding storage space or hiring staff to receive, inspect, and redistribute the products.

Drop shipping also helps make sure the product your customer receives is fresh and in good condition. You may arrange with a wholesale distributor to buy flowers or food products that would degrade if they were sent to you for redistribution. When they are sent directly to your customer, they will arrive sooner and in better condition.

For many smaller businesses that can’t compete with large wholesale businesses when it comes to product storage and management, drop shipping can be a real life saver. You can simply plug into an existing supply chain management system and save yourself a lot of trouble and expense.

Jake Sabey is an Education Specialist at Doba. Doba’s proprietary software works with hundreds of wholesale suppliers to provide universal access to over 1.4 million wholesale drop ship products to online retailers.

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