Over the years, dropshipping has established itself as a flourishing industry for online sellers. With its enticing low startup cost and potential for substantial profits, many entrepreneurs have embraced this business model and achieved remarkable success.
However, in the dynamic world of eCommerce, it’s essential to explore new strategies to elevate our retail order fulfillment ventures even further. This brings us to the concept of hybrid dropshipping, an emerging trend that combines the best aspects of traditional dropshipping with other fulfillment methods.
In this guide, we will delve into the world of hybrid dropshipping and discover how it can enhance our eCommerce endeavors, offering a pathway to greater achievements.
What Is Hybrid Dropshipping?
Hybrid dropshipping is a variation of the traditional dropshipping model. Particularly, this business model has two ways to fulfill orders: warehouse stock fulfillment and dropshipping through third-party fulfillment.
Primarily, we can maintain an inventory of items in our warehouse, which we directly sell to customers. At the same time, it allows us to place customer purchases with a third-party supplier who fulfills the order and directly ships packages on our behalf.
All in all, hybrid dropshipping enables us to fulfill demands quickly and avoid stock-outs. It is a beneficial method of offering a wide range of products without needing a large inventory.
The Advantages And Disadvantages Of Hybrid Dropshipping
Before entering into hybrid dropshipping, it’s crucial that we consider its benefits and drawbacks to know if it’s a good fit for our business. With that said, here are the advantages and disadvantages of this eCommerce model:
Primarily, hybrid dropshipping offers flexibility regarding the variety and sources of products we sell. Plus, on-hand inventory of goods paves the way to a speedy fulfillment process, since we don’t need to wait until our suppliers ship the orders. Moreover, the option to maintain physical stocks enables us to brand our items and their packages easily.
On the downside, the complexity of this venture requires us to manage two order fulfillment methods concurrently. Since we fulfill demands using different means, inconsistencies in product qualities and shipping times may be an issue. Nevertheless, we can manage these impacts by streamlining our operations by incorporating tools like AutoDS, an all-in-one dropshipping solution, and sourcing from reliable suppliers.
Is It A Good Idea To Start Hybrid Dropshipping?
Yes, hybrid dropshipping is a promising venture to start. Generally, dropshipping enables us to test the waters by adding trending products to our online stores. At this point, we won’t worry about poor-performing items since we can eliminate them from our product listings without losing money.
Through constant testing, we’ll eventually find our winning products. By then, we can purchase stock and sell items directly from our own warehouses. Doing so gives us more control over inventories, shipping speeds, packaging, and more.
On the other hand, hybrid dropshipping requires a higher startup investment than the conventional dropshipping model since we’re purchasing stock. Still, we can regain our initial investment by getting massive profits.
Ultimately, the key is product research, and the best way to conduct it thoroughly is by starting with dropshipping from third-party suppliers. This way, we won’t lose money from the get-go, and we’ll gain a deeper understanding of what our audience is looking for.
Hybrid Dropshipping: Two Types Of Order Fulfillment
In hybrid dropshipping, we can fulfill customer orders in two ways:
Let’s discuss the overview of these order fulfillment methods below.
Warehouse Stock Fulfillment
One way to serve customer demands in hybrid dropshipping is through warehouse stock fulfillment. In this method, we maintain physical inventory readily shipped to customers. On that note, we can either ship customer orders from the convenience of our homes or ship through third-party logistics (3PL).
For in-house or self-fulfillment of orders, we store inventory, pack orders, print shipping labels, and in some cases, deliver orders by ourselves. Meanwhile, the 3PL method allows us to outsource the service of a logistic provider to accomplish these processes for us. Overall, the choice between in-house and 3PL methods depends on our preferred shipping times, delivery costs, and the bulk of orders.
In contrast, the dropshipping fulfillment method doesn’t require us to maintain products in stock. Instead, we source items from third-party suppliers, who take charge of the inventory and shipment of customer orders. Some examples of reliable suppliers include Walmart, AliExpress, Amazon, CJDropshipping, Etsy, and more.
Moreover, this business model works when customers place their orders in our online stores. Then, we buy these items from our suppliers and provide customers’ shipping details. Once the suppliers receive the customers’ information, they will deliver the packages directly to the buyers.
When To Start Hybrid Dropshipping: The Secret To Success
Notably, hybrid dropshipping is perfect for experienced dropshippers. In particular, here are the reasons why this eCommerce model is for existing online sellers:
- Established partnerships with third-party suppliers
- Selling in a niche
- Testing diverse products
- Integrating with different selling channels
- Higher brand awareness in the market
Since we’ve been actively selling in the dropshipping scene, we already know what works best for our business. Conclusively, the best time to start is when we start seeing our products consistently selling well over time. By then, we can invest in overhead costs, such as warehousing and storage, to jumpstart our hybrid dropshipping venture.
Scale Your Hybrid Dropshipping Business With Automation
Once we engage in hybrid dropshipping, we need to alleviate at least one part of our order fulfillment process. Remember that ensuring that customer orders are timely served by third-party suppliers and operating in-house fulfillment simultaneously can be challenging. Therefore, we need a reliable dropshipping tool like AutoDS to help us conveniently fulfill customer orders.
AutoDS provides two powerful features, Automatic Orders and Fulfilled by AutoDS, for the traditional dropshipping model. With Automatic Orders, the system leverages our buyer accounts to facilitate seamless purchasing from suppliers. This ensures efficient payment processing while also providing real-time tracking updates, keeping sellers informed about the progress of customer packages.
In the case of Fulfilled by AutoDS, the feature also offers real-time order tracking, ensuring complete visibility throughout the fulfillment process. Fulfilled by AutoDS simplifies the purchasing process by leveraging AutoDS’ accounts instead of our own buyer accounts, alleviating concerns about purchasing limits. Additionally, this tool extends managed shipping costs to AutoDS-supported suppliers, further streamlining the logistics and reducing operational complexities.
With automatic order fulfillment methods, we can bid farewell to the laborious task of manually purchasing items and inputting customer details. We are confident that customer demands are well served even while we sleep.
Besides the order fulfillment, here are other tools we can integrate for a more efficient dropshipping business:
- Quick & Easy Product Imports
- Price/Stock Monitoring
- Inventory Management
- Advanced Product Research Tool
- Automatic Price Optimization
- and more!
As an important note, AutoDS automates the dropshipping aspect of the hybrid eCommerce model and not the warehousing side. Nonetheless, combining these two excellent business models results in a powerhouse like no other.
Frequently Asked Questions
What Are The Benefits Of Hybrid Dropshipping?
Hybrid dropshipping allows you to choose between warehouse stock or traditional dropshipping fulfillment. Also, speedy fulfillment due to the readily available items benefits your business. Lastly, this venture allows us to easily incorporate our branding into products or packages.
Can A Beginner Start Hybrid Dropshipping?
Hybrid dropshipping is for those who have experience in dropshipping or are actively selling online. With that said, a beginner must first understand the basics of hybrid dropshipping, including the risks and benefits.
How Much Does It Cost To Run A Hybrid Dropshipping Business?
Generally, traditional dropshipping doesn’t need upfront capital. However, hybrid dropshipping requires us to invest in overhead costs, including storage, warehousing, and more. For some businesses, the startup costs can range from $100 to $500.
And, that’s a wrap! Why choose one eCommerce model when we can enjoy the best of both worlds through hybrid dropshipping? Through this venture, we’ll have the flexibility to run our business while multiplying our profit potential.
As we expand our hybrid dropshipping empire, we must incorporate automation tools to streamline our business processes. Similarly, we must continue testing best-sellers, helping us maximize dropshipping sales.
Ultimately, our knowledge and experience in dropshipping are essential keys to success. As such, here are some tips and techniques that will help us establish a lucrative dropshipping business: