Hybrid Dropshipping: Business Growth, Benefits, and Order Fulfillment
Defining and Explaining Hybrid Dropshipping?
As of 2023, 66% of online shoppers buy from a company that offers multiple shipping options as it becomes very convenient for people. Moreover, the ecommerce retailers who opted for dropshipping earned 50% more than those who relied on onsite inventory. Dropshipping has been a win-win in the year 2023 and will continue to rule in the coming year.
Dropshipping is evolving in all directions and the sellers are looking for more shipping options which is a part of hybrid dropshipping. By the year 2025, the dropshipping business is expected to soar $372.47 billion. In this detailed blog, we will learn about how we can use hybrid dropshipping for business growth. We will also look at the benefits and strategies of hybrid online fulfillment.
What is Hybrid Dropshipping?
Hybrid dropshipping is a business model that combines traditional inventory stocking with dropshipping. In this model, businesses keep some products in their own warehouse or store, while other items are shipped directly from suppliers to customers. In other words, combined with traditional dropshipping, hybrid dropshipping is flexible and controlled with self-fulfillment.
Understanding Hybrid Dropshipping
Given the advantages of dropshipping, hybrid dropshipping follows an approach that allows retailers to have control over their inventory. Whereas in traditional dropshipping, the retailers are mediators between customers and suppliers. Traditionally, the retailers have the job of promoting the products using different marketing techniques, and the inventory management, shipping, and order fulfillment would be taken care of by the supplier.
- Hybrid dropshipping is a self-fulfillment process in which the retailers have to manage the inventory shipping process and storage. Although this process offers control over quality, quantity, branding, and availability, it comes with additional costs.
- It offers a balanced approach as the retailer has control over the stock and inventory management also having the benefits of traditional dropshipping like efficiency and convenience. Combining traditional and hybrid dropshipping, the business owners have the advantage of streamlining operations, increasing profit margins, and enhancing customer experience.
How Does Hybrid Dropshipping Work?
The advantages of traditional dropshipping with self-fulfillment give hybrid dropshipping. Following is the step-by-step process of its working:
Selecting the Products
Careful selection of products is very important. Retailers select the products they choose to have in-house fulfillment and dropshipping and these are based on profit margins and popularity.
Integrating the Suppliers
Integration partnership of retailers is done with dropshipping suppliers that manage inventory, shipping, and packaging for products.
Retailers manage their individual stock for internal fulfillment, guaranteeing punctual delivery to customers.
Upon receiving a customer’s order for a dropshipped product, the retailer transmits the order details to the supplier to facilitate fulfillment.
When managing in-house fulfillment for products, the retailer oversees the entire fulfillment process, retaining control over both packaging and shipping.
Irrespective of the fulfillment approach, the retailer delivers exceptional customer service by handling inquiries, managing returns, and ensuring overall satisfaction.
Hybrid dropshipping provides an adaptable and scalable business model. This is because of the combination of dropshipping and self-fulfillment.
How to Implement Hybrid Dropshipping to Grow Your Business?
As a business owner, you can go beyond the new dimensions of business by implementing hybrid dropshipping. This can be done by having a strategic approach that combines the advantages of self-fulfillment and dropshipping. To implement hybrid dropshipping in your business growth, one must understand the principles of dropshipping products, types of order-fulfillment, and how to set up hybrid dropshipping in your business.
How to Find Dropshipping Products?
You decide to build a business and have a list of products in mind that you plan to sell. What is the first thing that you will do when putting up the products for sale? The choice is very clear, you will ensure that the products you have selected are hyped and popular so you gain a good profit margin when you sell them. Keep the following aspects in mind while selecting products for dropshipping:
Understanding Target Audience
Having a specific mindset on what type of audience you are planning to serve will help a lot in the selection of products. For example, if your target audience is women of the age group 18-50 then you can have products related to beauty, health and wellness, apparel, footwear, and jewelry. This will align with the needs and desires of the target audience.
Use keyword research tools that will help you find the right keywords to target the right audience. Targeting keywords and phrases that your target audience is searching for will bring more visitors to your online store. By doing this, you will be able to gain insights into trending products. Having a grasp on the keywords, you can frame optimized product details and descriptions.
Just like you, other businesses are selling the same products. How will you differ from them? A thorough competitor research will help in setting up the plan. Note the performance of the products on the competitor’s site. While doing that, you can also identify the gaps in reviews and ratings.
Supplier Directory Survey
Well-known supplier directories like Inventory Source, AliExpress, SaleHoo, and other worldwide brands are resources to look for. Look for aspects like the quality of the products, shipping options, customer reviews, and pricing options just to make sure that you have a smooth partnership.
What are the Types of Order Fulfillment of Hybrid Dropshipping?
There are 4 hybrid order fulfillment models and a thorough understanding is needed to know which one will suit your hybrid model.
Handling of picking and packaging, inventory management, and warehousing along with shipping operations is in-house fulfillment. This type usually requires a highly skilled staff to make sure that the process is streamlined. It also requires ample space with proper equipment. If you have a business that requires a huge inventory, large order volume, great control over logistics, and the ability to process all incoming orders by yourself, then this model is for you.
3PL fulfillment involves delegating order fulfillment operations to an external service provider. This third-party fulfillment partner oversees various functions, including warehouse management, inventory control, order processing, packing, and packaging, streamlining the logistics process for businesses.
With dropshipping, your business’s manufacturer or supplier directly ships orders to customers, alleviating the need for you to handle operations like inventory management and shipping. While this method removes the opportunity to personally oversee shipping and related processes, it provides a stress-free alternative, particularly beneficial for businesses in their initial stages or those facing constraints in terms of space and capital for managing inventory and shipping logistics. Inventory Source will be your dropshipping partner.
Hybrid Order Fulfillment
This is a type of fulfillment when you want to go ahead with more than one fulfillment model and process your orders under it. In a way, you can use the benefits of 3PL fulfillment along with dropshipping. If you are opting for in-house fulfillment then you should consider outsourcing a portion of your inventory to 3PL fulfillment providers, guaranteeing timely order delivery for that specific region.
The Benefits of Hybrid Order Fulfillment In 2024.
When you are offered flexibility in order fulfillment then you go ahead in creating better fulfillment strategies. You have the flexibility to determine the most suitable order fulfillment method for each SKU, allowing you to process orders accordingly. This flexibility contributes to enhancing your overall order fulfillment process and enables quicker deliveries to your customers.
The ability to fulfill more orders in a shorter time period with different fulfillment methods will be beneficial as you will be able to tend to more customers hence faster growth of your online channel. Occasionally, a dropshipping model proves beneficial for select SKUs, while a 3PL fulfillment model may be more fitting if your customer base is dispersed across various geographical locations.
If you are planning to start a new product line then you can choose a hybrid fulfillment model to know which is more efficient in fulfilling orders. Sometimes the product is good but the fulfillment model is not with hybrid dropshipping, some factors can be considered for your product supply chain.
Often, this can assist you in cost optimization by leveraging multiple fulfillment methods, thereby reducing shipping and delivery expenses.
Hybrid Dropshipping is a Fast and Flexible Solution for Business Growth.
Is it Good to Start Hybrid Dropshipping?
Running your business with a dropshipping partnership brings good profit margins and a start to your business. If you are planning to switch to hybrid dropshipping then it is a promising venture to start. Dropshipping helps to test the market by using trending products and if the product fails to perform, there is no problem in pulling it out from the market without losing money. Once you have the hold on winning products you can stock up on your inventory and have more control over shipping, inventory management, packaging, and more.
What is the Good Time to Start Hybrid Dropshipping?
If you are an experienced dropshipper then hybrid dropshipping is for you. If you fall in the following reason category then your business model is ready for hybrid dropshipping:
- You are at a stage where you have an established partnership with third-party suppliers.
- You have been selling a niche product.
- The integration is successful with multiple selling channels
- You have a higher brand awareness in the competitive market.
What Business Types Would Be Benefitted by Hybrid Fulfillment?
It would be an understatement to say that hybrid dropshipping would not rule the market in the future. The main question that arises is about the companies or businesses that would be making it work. The following businesses will benefit from hybrid fulfillment or dropshipping:
- Any large ecommerce venture or company that requires the fulfillment of multiple orders.
- Businesses that are rapidly growing and expanding.
- Online businesses that sell fragile yet big items that require challenging transportation.
Embracing hybrid dropshipping presents an exciting prospect for businesses aiming to streamline their supply chain and broaden their product range. By adopting this model and applying the suggested strategies, businesses position themselves for growth and triumph in the ever-evolving realm of e-commerce. This innovative approach amalgamates the benefits of conventional dropshipping with in-house inventory management, enabling businesses to capitalize on cost savings and diminished inventory risk, all while maintaining control over their supply chain.