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Transportation and Logistics

The rise of the small e-retailers

Gone are the days of stock-piled inventory and warehouses full of products. E-retailers are making use of a new method to get their goods directly to the customer.

These days, 'going Christmas shopping' doesn't require putting on your shoes and coat, and heading out into the crowds. For many of us, it's a case of firing up your Internet browser of choice and clicking your way through your shopping list.

As the trend has shifted from shopping in person to shopping online, online shops have changed too. Though you'll still find your favorite big brands with digital aisles and carts, you'll also see more and more e-retailers making up a large portion of the web space.

Whereas having a small online store used to be just as precarious an investment as a bricks and mortar enterprise, the new way of making an e-store work has changed the game. What can we thank for the rise of the e-retailer and their bespoke, wide-ranging offerings? Dropshipping and competitor collaboration – and here's how they work.

Collaboration is the key

Small online retailers often don't have the budgets and resources that the bigger players can lean on. That goes for fulfilment space, right through to trucks and staff for delivery. But as the saying goes, many hands make light work. Co-loading is the 'ride-sharing' equivalent to freight delivery. If only used by one company, the full capacity of a truck could easily be wasted. However, when several companies share one vehicle through this method of horizontal collaboration, there's less pollution from a fleet of half empty trucks, plus shared fees and running costs.

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In the e-retail world, it seems that a competitor can easily double as a collaborator.

Dropshipping 101

The basics of this model are that a retailer doesn't hold their stock directly – no warehouse, stock room, no box under the dining room table. As such, nor does the retailer personally handle fulfillment or shipping. All of that is handled by the supplier.

So, let's say I'd like to sell Swarovski crystal-embellished Christmas stockings from an Etsy store (stranger things have happened – trust me). First, I'd need to find a supplier, based anywhere in the world, that uses the dropshipping model. Next, I'd need to set up my Etsy store, or Shopify, or any online shopfront that's ideally free, to keep costs at zero. Lastly, I'd need to connect the online 'inventory' to my online store. When someone clicks 'Buy now' on my shopfront, the order goes directly to my supplier, who'll pick up the item, package it and send it out for delivery. Depending on the system I'd used, the customer's payment will be split, going to me and my supplier. And not once will I have touched those crystals.

Something for you and me

The benefits for the merchants are easily translated into benefits for prospects and customers too.

1. The cloud's the limit

Online stores have basically no limit on the range of products they sell. Seasonal stock – no problem. Testing out the latest trend? Easy. The greater range of offerings means the greater the potential for revenue, but also more options for the customer.

2. No stock, no problem

Remember the last time your size in your would-be new shoes, were sold out, and it'd take a week before you could get your hands on them? Dropshipping means no stock room, no stock delivery trucks on the road contributing to congestion and pollution, and no waiting for replenishments.

3. Barriers down

For the first time, there are now zero cost-barriers to setting up a brand, creating bespoke products and serving a community. As long as you have an internet connection and a compatible device, you have all you need. Cost and time saving aside, one of the quiet yet powerful benefits of this movement is that people can be empowered to become entrepreneurs. Folks with no money for even the dream of having inventory can start today. People with a rallying cry for their community need only design the flags or t-shirts or buttons, and their community can find each other.

4. The bigger picture

Saving you cash is wonderful, giving entrepreneurs a platform is great. Even better? Taking some of the pressure off the environment. This new model saves on power to keep shops warm and lit, saves on fuel and energy for each shop's inventory needs, and saves on the packaging to send products from warehouse, to the shop, then back out to the customer.

Now more than ever, the e-retail world is your oyster. If you were to start your own dropshipping company, what would you put in your store? Comment below with your ideas.

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