What are the differences between Dropshipping and Crossdocking?

Concepto de ilustración de negocio de dropshipping - Diferencias entre Dropshipping y Crossdocking vector

Nowadays e-commerce is one of the fastest growing sectors in Spain in recent years and this is due to changes in consumer habits at a time when they were not allowed to visit physical stores. That is why many companies and businesses have decided to take the leap and start selling online.

When deciding to sell online, it is important to choose the distribution model that best suits the characteristics and needs of your business or company. Dropshipping and Crossdocking are commonly discussed. But how do we know which is the right option for our online store?

Here are the definitions of both types of logistic distribution to understand the differences between Dropshipping and Crossdocking:

Dropshipping

Dropshipping consists of a type of distribution in which all the distribution and transportation of the products is carried out by the supplier or manufacturer instead of the business that sells on its own behalf. It should be noted that it is a very popular distribution model among small e-commerce because of its accessibility, since it dispenses with warehouses and all the management and expenses involved.

Crossdocking

Crossdocking is a type of distribution where the supplier or manufacturer sends the orders to the same seller or to a distribution center to be delivered to customers. It is certainly a distribution model recommended for stores with small warehouses where they can prepare orders.

Once the types of distribution are known, you should take a look at the following points that mark the differences between Dropshipping and Crossdocking:

Logistics costs

Undoubtedly, the most economical model for the distribution of orders to end customers is Dropshipping because it is not necessary to have available space to store all the merchandise. And this is because orders are shipped directly from the supplier's warehouses to the end user, without the need to go through so many intermediaries, which means that they also take care of the logistics costs except for reverse logistics.

However, Crossdocking is also a relatively inexpensive system because of the short time shipments spend in your inventory. That is, once the order is received from the supplier, you go to a carrier to pick it up and ship it to the end customer. Although it takes an additional day for the package to arrive, the inventory holding costs are less than the cost of a warehouse to store the merchandise.

Agreement with suppliers

It is worth mentioning that each supplier has its own preferences in terms of the type of distribution it offers to merchants and businesses. In general, Crossdocking is the most accepted system by suppliers and the most compatible with a relatively high volume of orders and more variety in the e-commerce catalog.

However, this does not mean that there are several suppliers that ship using the Dropshipping model, which is especially focused on small online stores, but they are limited. In this regard, choosing one type of distribution or another depends entirely on the products themselves and the volume of orders received by the online store. 

Mujer joven asiática vende ropa empresaria que trabaja en casa. sta - Diferencias entre Dropshipping y Crossdocking foto

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3 sectors that need to optimize their logistics in e-commerce

Do you know the sectors with e-commerce potential that need to consolidate their logistics operations? Discover them in this list.

We are already familiar with one of the key events that has affected the economy and most of the known sectors on a large scale: the confinement and restrictions due to the pandemic. With the impossibility of opening dispensable physical stores and offering face-to-face services, both large and small companies have had to reinvent their models against the clock to circumvent and adapt to this scenario.

As a result, the e-commerce sector is one of the sectors that is gaining more and more relevance due to the changes that consumers have made in the face of this abrupt change in their habits and are now accustomed to this way of consuming. However, there are important sectors that are not progressing as much in the e-commerce section as expected despite the demand to offer this type of business.

If you want to know some of the sectors with e-commerce potential that need to mature their services, take a look!

Pharmacy

According to this study, more than 75% of patients prefer to use the services of a telepharmacy or receive their medicines at home instead of going to the pharmacy in person, with 9%. However, pharmaceutical e-commerce in Spain has only experienced a growth of 2% compared to other countries such as Italy and Germany, which have had a growth in turnover of 34% and 10% respectively.

This is because infrastructures still need to be improved to ensure data protection on the part of patients and to enable them to use these services at home. Despite this, the pharmaceutical sector has had very good communication in the supply chain to cope with the health crisis and ensure the supply of several drugs.

It is worth noting that one of the solutions that has potential in the face of occasional drug shortages is FarmaHelp, a digital platform that allows a pharmacy to notify and contact other nearby pharmacies when a drug is out of stock and there are supply problems so that the patient can receive it in time. 

ilustración del concepto de dropshipping amplio. sectores con potencial en el e-commerce

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