What is Drop Shipping?
Drop shipping is a retail fulfillment model where the seller doesn’t keep any products in stock. Instead, when a customer places an order, the seller purchases the item from a third-party supplier, who then ships it directly to the customer. The seller never handles or sees the product.
The drop shipping process works like this:
- A customer places an order on the seller’s website
- The seller pays the supplier for the product
- The supplier ships the product directly to the customer
Drop shipping allows businesses to sell products without investing heavily in inventory upfront. The main benefits are low overhead and startup costs since you don’t need a warehouse or pay for products until they sell. However, profit margins tend to be slimmer, and you rely heavily on the supplier.
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What is Drop Surfing?
So drop surfing takes drop shipping a step further by actively seeking out the absolute lowest costs and pricing trends. There are two main approaches:
- Price Shopping Across Suppliers
With this method, the drop surfer constantly monitors prices across multiple suppliers for each product. They place the order with whichever supplier has the lowest cost at that time, even if it means switching suppliers frequently on an order-by-order basis. This allows for higher profit margins. - Surfing Product Trends
This approach involves closely watching the market and quickly adding hot, trendy products to your store before they peak in popularity. Once a product’s demand starts declining, the drop surfer moves on to the next trend. Timing is critical to maximize sales.
Drop Surfing: Price Shopping Approach
The price shopping method of drop surfing can significantly increase profit margins compared to standard drop shipping. By leveraging arbitrage between supplier prices, you can source products at the lowest possible cost.
However, this approach requires closely tracking prices across many suppliers and being willing to switch vendors constantly. There are risks like varying shipping times, quality control issues when changing suppliers frequently, and the overhead of resetting supplier accounts.
Drop Surfing: Trend Surfing Approach
With the trend surfing model, the goal is to identify hot product trends and ride that wave of demand before it crests. You need to be able to quickly source trendy items and get them listed in your store.
When you catch the right trend at the perfect time, you can see an explosion of sales in a short period. However, you also need to be proactive about removing items experiencing declining demand.
The challenges include accurately predicting which products will truly take off, sourcing trending items rapidly, and managing frequent product churn in your store.
The Pros and Cons
Drop Shipping Pros:
- Low startup costs and overhead
- No need to invest in inventory upfront
- Easier to get started and manage logistics
- Wide selection of products to sell
Drop Shipping Cons:
- Lower profit margins compared to traditional retail
- Heavy reliance on the supplier
- Limited quality control and customer service
Drop Surfing Pros:
- Ability to maximize profit margins
- Capitalize on hot product trends and demand
- More independence from individual suppliers
Drop Surfing Cons:
- Requires very active monitoring of prices/trends
- Switching suppliers frequently can create issues
- Higher risk if you miss product trends
In general, standard drop shipping is best for sellers looking for a simple, low-risk way to get started. Drop surfing methods can potentially be more profitable but require more work and risk management.
Tools to Streamline Drop Surfing
To effectively implement drop surfing methods, sellers use a variety of software tools and services including:
- Price tracking apps that monitor costs across suppliers
- Supplier management dashboards
- Trend analysis tools for spotting hot product demand
- Automated inventory loading from suppliers
- Browser add-ons for quickly sourcing trendy items
These solutions help drop surfers efficiently juggle multiple suppliers, quickly pivot to new products, and streamline operations.
