Online merchants are starting to explore ways to integrate bitcoin into their transactions and business models. Drop shipping companies, which simply takes customer orders in and lets manufacturers and wholesalers take care of the actual transfer of goods, are also opening up to the idea of accepting bitcoin payments.
These companies can offer anything and everything – from fashion items to gadgets – as drop shippers typically have a low cost outlay and focus mainly on marketing the products. Other overhead costs, such as storage and shipping fees are shouldered by the wholesaler. Drop shipping businesses generally profit from the difference between wholesale and retail prices.
Drop Shipping Companies and Bitcoin
With the value of a bitcoin not tied to a particular asset or managed by a central bank, lower transactions fees are also associated with accepting bitcoin payments. This perhaps is the feature that most online companies are drawn to, as this means lower overhead costs compared to accepting payments in debit or credit cards.
Drop shipping companies generally make use of a third-party service to facilitate bitcoin payments, such as Bitpay Gateway. These companies generally convert the bitcoin amount to cash for the merchant or the customer.
For instance, Australia-based Shop with Bits offers different types of online payment options, namely PayPal, BitPay, and POLi internet banking. Another example is BitcoinCommodities.com, which sells gold bars or silver coins that are drop shipped in exchange for bitcoin payments.
The unique feature of the bitcoin is its blockchain, which serves as a ledger of transactions for that particular unit. Anonymity and security are generally associated with this feature, as the latest transaction is updated to the bitcoin blockchain.
Larger drop shipping companies have yet to integrate this mode of payment as part of their usual transaction options.