Dropshipping is a new supply chain model that has really come into prominence in recent years owing to the interconnected global supply chain and the rise of e-commerce. The advantages are simple — users don’t need to concern themselves with technical and logistical details, and there’s little initial cost to speak of. Due to them not needing to hold stock and hence have contracts with storage and transportation companies, the running cost is also fairly low. These low barriers to entry are why it’s such a popular medium for small retailers who wish to sell products without holding tonnes of stock. However, when the global supply chain that dropship is so reliant on faces problems, it has ramifications down the road as we will see in the case of Brexit.
The obvious impact of Brexit is, of course, the increased complexity of sending products from the UK to the EU. It’s never easy to dropship products across regions and indeed countries — but the incidence of red tape and paperwork has vastly increased, meaning even experienced dropship suppliers may struggle. Besides the problems of complex tax regime, there are multiple rules and regulations faced by importers into the EU. All this has a cost that needs to be factored in to the final consumer price — causing a very direct problem for the consumers of these dropship retailers. Thus, it’s become more important than ever to work with a dropshipper with knowledge of this new system and experience of solving logistical concerns as they arise.
The other large problem has been the impact of shipping from Asian countries, especially China. A huge proportion of products being dropshipped in the UK originate from these regions, with this being especially true in certain industries such as accessories, clothing and jewellery. The bottlenecks caused by Brexit and accentuated by the pandemic have increased shipping times by a significant factor and also raised costs. The former affects supply chains and means stock do not get refilled as frequently as they used to, while the latter ensures a pinch to the consumer wallet in already expensive times. There is little to do for dropshippers but wait for the International supply chain that feeds dropship to right itself, and to absorb a proportion of the rising costs themselves.