Recently we had a chance to sit down with a drop shipping teen guru Luke Sran. Luke has quickly become a success story at the mere age of 13. Luke was born and raised in the Central Valley. While many teens dream of running a drop shipping empire. Luke has been dropping shipping various items for 11 months now and has exceled leaps and bounds over experienced veterans. Drop shipping is an e-commerce supply chain method popular among new entrepreneurs looking to make their foyer into the online retail game without a heavy investment of capital to circumvent the risks typically associated with traditional retail. This is made possible by drop shipping’s supply-chain method, in which the “supplier,” or the person or company who is selling the product to customers, never actually interacts with the product itself, and simply serves as a digital middleman between the manufacturer and the customer. Luke Sran states “this is done by not keeping any inventory and sending all orders to the manufacturer, who then ships it to the customer”. Thus, the drop shipper’s only responsibilities are advertising, coordination, and customer experience. As e-commerce grows increasingly popular, so, too, does the prevalence of drop shipping as new entrepreneurs begin to form small online businesses without the need for massive investments and the threat of huge losses should they be unsuccessful.
Luke Sran states, the major benefits of drop shipping come with its relative ease and low risk to the business owner. Keeping inventory can be incredibly expensive, as there is an overhead cost to any sale made, meaning that failure to sell any one item is a loss incurred. This puts a much greater responsibility on the owner, as they must accurately predict how much of a product they are going to sell and order each time inventory begins to decrease. Luke Sran goes further to states, with drop shipping, there is no need to pre-order, so there are no inventory overheads, and all costs go directly into customer outreach and advertising. However, without the physical inventory under the control of the business owner, the product is controlled entirely by a third party, so product autonomy is severely decreased. One major issue with this is the potential for products to go out of stock without notice to the owner, as there are often multiple companies buying from the manufacturer. This can lead to serious supply issues for the business and damage customer satisfaction. Luckily, there are many apps that can give real-time updates from manufacturers to drop shippers, allowing them to keep up to date with their products and manage their store accordingly.
Additionally, because of the relative ease associated with starting a drop shipping venture and the typical reliance on niche occupation for the success of a store, many drop shippers are threatened by copycat stores that arise to mimic the store’s success. Because a drop shipping store’s profit margins are typically very thin, as they must cover the wholesale cost of their product, advertising, and the continual maintenance of their store’s UI and potential issues with shipping, stores that attempt to occupy the same niche without spending the same time and money on marketing and other customer outreach tactics can sell the exact same product much closer to cost, threatening the original store’s ability to compete with the price. While this can be combated by good customer service and a high-quality UI, it is often exceedingly difficult or near impossible to decrease the price anymore because of the already razor-thin margins states Luke Sran.
Luke Sran closes with; while drop shipping can be an extremely useful and potentially lucrative business model, there are many risks that accompany the rewards, and it should not be viewed as an easy-money gig that requires no effort. There are definite advantages to drop shipping, but the lack of control over the inventory that brings those advantages also brings several risks that must be considered before beginning a drop shipping venture. This 13-year-old phenom is starting to receive national recognition. We all wish Luke Sran the absolute best and look forward to future interviews with this successful, young teen, sensation soon.