What are the Consequences of the Rising International Shipping Prices (on Dropshipping and Ecommerce) Due To Coronavirus Pandemic?
The coronavirus pandemic has affected the world economy in ways no one anticipated just three months ago. Businesses are feeling the heat, and this is not peculiar to brick-and-mortar stores alone. Ecommerce businesses are affected too, and many dropshippers are shocked by how far the virus has affected their businesses. One of the most spectacular things about dropshipping is that entrepreneurs don’t need to handle the products they are selling. They need no warehouses and will generally have little or no worries about how the products will be shipped to the buyer. While a lot hasn’t changed in that aspect, the rising cost of international shipping is shaking up the market. Here, we will discuss some of the prominent consequences of this problem and how best entrepreneurs can respond to them.
Delayed Order Fulfillment
One of the prime consequences of the rising cost of shipping is delayed fulfillment of orders. Since some shipping companies are not operating at the rate they use to operate due to restriction and other factors, most orders take longer to be fulfilled. While some customers understand the problems, some are not so considerate and may resort to conflict. It can be helpful to remind customers that order fulfillment may be delayed due to the pandemic and rising costs of international shipping.
High Costs of Selling Products
Dropshippers are spending more to sell as COVID-19 continues to cause havoc across the globe. In addition to the rising cost of international shipping, a few other factors contribute to this problem. When it costs more to sell products, the ripple effects will affect everyone in the circle. There is hardly anything the dropshipper can do in this case than to sell at a price that will keep the business sustainable.
Lower Profit Margins
To make sure that customers are getting their essential needs during the coronavirus pandemic, dropshippers, and other ecommerce entrepreneurs are making sacrifices in many ways. Selling at a lower profit margin is one of the major consequences in this case. With the rising costs of international shipping, the total costs of getting an order fulfilled increases. Dropshippers can keep things a little more stable by sacrificing a portion of their profits to keep the process going smoothly. It is crucial, however, that dropshippers don’t incur loses while trying to alleviate the plight of the consumers as that can be detrimental to business success.
Depending on who the supplier is, who is shipping, and how long it will take to get products to the customers, pricing is a little too difficult for most dropshippers. Many will need to adjust their pricing structure more often to reflect the reality on the ground. This can be viewed suspiciously by some buyers, and that will be a bad thing for the dropshipper. Unsteady pricing due to the problems of uncertainty caused by the pandemic can be enough headache for the dropshipper. It is best to keep adjusting mildly and maintain a relatively healthy profit margin.
Online selling has become a little bit more competitive, as COVID-19 continues to cause lockdown in many cities. People are turning to online marketplaces more to get things they need, even as international shipping prices continue to rise. Many dropshippers are trying to gain more market share, and those who can get shipping done at a lower price due to where their suppliers are based are getting ahead. Many dropshippers will have to look elsewhere for suppliers that ship faster at a lower cost as that will be necessary to stay competitive.
Increased Headache from Returns
With international shipping become more expensive by the day, the problem of returning products is more hurting than ever. Since dropshippers have zero control over the quality of the products, they are also bearing the headache of customer’s dissatisfaction in the shipped product. Shipping back defective products to the manufacturer is harder at the moment, and the complications can make dropshippers lose loyal customers. It is always advisable to dropship from reliable suppliers with a strong reputation. In instances where a customer decides to return, dropshippers should offer all they can to make the experience easier for the customer.
While some products are selling faster because of the coronavirus menace, others are not doing so great. The higher cost of shipping and other complications it has created has discouraged people from buying things they don’t consider essential. With fewer orders, dropshippers make fewer sales and even less profit when they attempt to cushion the effect of the shipping costs for the customers. Some products will continue to receive fewer orders until the coronavirus pandemic is resolved. Adjusting prices to attract more customers may not turn out to be the right idea.
COVID-19 has changed the world economy as we know it, and no business model has been spared. The rising cost of international shipping is just one way it has hit the dropshipping market, and the consequences are being felt by everyone from suppliers to dropshippers to customers. Entrepreneurs are advised to tread carefully to remain strong and competitive now and after the epidemic.
Contact us today at Fulfillman to know more about our services. We specialize in providing excellent Drop Shipping services, Warehouse fulfillment, China sourcing, Third Party Logistics, and so forth. Our dedicated experts will be available to speak with you and discuss the options available to you. We guarantee you get quality and excellent services that gives 100% client satisfaction.