Two models dominate ecommerce logistics: the asset-light drop ship business and the brand-centric 3PL warehouse model. But which one builds a sustainable business?
What is Dropshipping?
Dropshipping meaning: A retail method where you don't keep products in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer.
Pros
- Low startup capital required
- Easy to test new products
- No inventory risk
Cons
- Low profit margins
- No control over shipping speed
- No custom branding/packaging
The 3PL Advantage
Using a 3PL (Third Party Logistics) provider means you buy stock in bulk and store it in a local fulfillment center.
Pros
- Higher margins (bulk buying)
- Fast 1-2 day shipping
- Full brand control (custom boxes)
Cons
- Upfront inventory cost
- Storage fees apply
The Verdict
Dropshipping is great for testing. 3PL is essential for building a brand. If you want recurring customers and 5-star reviews, controlling your logistics via a 3PL is the only path forward.