Dropshipping is a common term in the eCommerce world, but our customers have been asking more about drop surfing lately. So, we wanted to explain the concept and why it might (or might not) make sense for you.
Here’s a quick refresher on dropshipping, a dive into the two types of drop surfing, and some thoughts on how to make it all work for you, your eCommerce fulfillment, and your customers.
What is dropshipping?
Dropshipping is an order fulfillment strategy for businesses that don’t want to carry and store their inventory. These eCommerce businesses get purchases shipped to consumers directly from the manufacturer or wholesaler. It’s a common starting point because you don’t need much capital, thanks to not holding any inventory.
Essentially, the business operates as a third-party seller so that:
- They take orders from a customer for a product
- After the customer’s payment processes, the dropshipper sends the order to the maker or supplier of each product and buys it
- The supplier ships the product to the customer
- The dropshipper provides ongoing customer support
The bulk of a dropshipper’s profit comes from places where they can A) reduce costs compared to traditional retail supply chains or B) places where they can increase product pricing. Dropshipping costs are primarily associated with marketing and sales instead of product development, which can help keep overhead down. We’ve got a complete guide to dropshipping available here if you want to learn more about it, dispel a few myths, and see if it’ll work for your eCommerce shop.
What is drop surfing?
Depending on who you talk to, there can be a couple of meanings for drop surfing. They go hand-in-hand, so we’ll cover each definition to help you understand why it might help your business.
The first drop surfing method is when you run a dropshipping business, but you use multiple suppliers for the same products. This means that when someone buys from your store, you then look at multiple manufacturers or wholesalers to see which is the best purchase option for that specific customer. There are a few reasons to do this:
- The businesses may charge differently for the product’s flat rate
- Some might offer flat shipping while others variable pricing, so it can be useful to compare each order
- You can reduce shipping costs by finding a supplier who ships slower but still delivers on-time, or by finding one that is located closer to the customer (reducing shipping zones reduces cost)
- You can negotiate better based on your order volume, and spreading orders out helps you meet multiple minimum thresholds to maintain these deals
- You have a backup just in case something goes wrong (like COVID-19)
Many customers do this on Amazon and other marketplaces where multiple vendors sell the same products but differ on pricing or delivery. For businesses looking to find products for this type of drop surfing, you can discuss with wholesalers directly or head over to marketplaces like AliExpress with specific dropshipping support.
Surfing the trends
The other definition that some people use for drop surfing involves using all those marketing dollars and expertise you have to determine which products will be big next month and get them on your store this month. Instead of having a consistent catalog, your store is always rotating inventory as you hope to pick the right trends and land sales based on what’s popular.
This can be more lucrative when you get it right, but it’s also time-consuming. Not only do you need to spot the hottest trends, but you’ll also need to find products that fit them and a partner willing to ship those for you.
If you’re considering this option, it might be best to start looking for related trends so you can eventually build a brand around specific product categories. That helps customers remember to come back to your store when they want something next time.
Are these competing models?
It should be pretty clear by now, but drop surfing is simply a type of dropshipping business. Instead of working with a small set of vendors and products to dropship, drop surfers are always changing. The business is more dynamic and comes with more significant risks, but you might get lucky and have a big payout.
What should my eCommerce business use?
Your eCommerce business should choose the model that best fits you as an entrepreneur and the relationships you can create. Plus, think about the time you have to spend on the shipping part of your business.
Traditional dropshipping establishes longer relationships with suppliers and customers. It can be a slower buildup, which can feel tough due to the low margins you’re competing for with each sale. However, it gives you time and practice to grow your business and help you establish a core set of customers for any products you launch.
Traditional dropshipping with a small set of partners can also be heavily automated. You can set systems to automatically place orders with partners as soon as your customer’s payment clears. This leaves you to focus on marketing for your established products.
Drop surfing is more of a gamble because you’re generally not creating long-term relationships with people or other businesses. You spot a trend, try to find a product that fits, and then create marketing. Or you’re working with multiple vendors for each product and continually trying to get them to underbid one another.
It’s difficult to automate either of these drop surfing models. You’ve got to hunt down new products manually after a trend is found. And for your supplier price comparisons, you’ll often have to manually compare based on each order and then make your selection product by product. Once your business scales to many orders per day, this can create a considerable time investment.
The ultimate goal for your dropshipping business is to grow large enough to have a sturdy base of customers and partners. Eventually, many start to create and sell their own products. You can then bring fulfillment in-house and increase your revenues (because you’re buying in bulk), or outsource it to a partner like Red Stag Fulfillment, who can generally offer you more affordable fulfillment rates than if you had to hire your own warehouse team.
Always build with an eye toward the future, and you can make dropshipping and drop surfing work as the foundation of a robust eCommerce business.