In this blog post, I will be explaining what drop shipping is.
In short, drop shipping is a retail fulfillment method where a store doesn’t keep the products it sells 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. As a result, the merchant never sees or handles the product.
I will also be teaching you how you can make money from this this unique model too
With the drop shipping model, you don’t have to purchase a product unless you already made the sale and have been paid by the customer. Without major upfront inventory investments, it’s possible to start a successful drop shipping business with very little money.
EASY TO GET STARTED
Running an ecommerce business is much easier when you don’t have to deal with physical products. With dropshipping, you don’t have to worry about: In this article, I will also teach you how to find drop shippers.
LESS CAPITAL IS REQUIRED – Probably the biggest advantage to dropshipping is that it’s possible to launch an ecommerce store without having to invest thousands of dollars in inventory up front. Traditionally, retailers have had to tie up huge amounts of capital purchasing inventory
Because you don’t have to deal with purchasing inventory or managing a warehouse, your overhead expenses are quite low. In fact, many successful dropshipping businesses are run from a home office with a laptop for less than $100 per month. As you grow, these expenses will likely increase but will still be low compared to those of traditional brick-and-mortar businesses.
A dropshipping business can be run from just about anywhere with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business. WIDE SELECTION OF PRODUCTS – Because you don’t have to pre-purchase the items you sell, you can offer an array of products to your potential customers.
If suppliers stock an item, you can list if for sale on your website at no additional cost. EASY TO SCALE – With a traditional business, if you receive three times as much business you’ll usually need to do three times as much work.
By leveraging dropshipping suppliers, most of the work to process additional orders will be borne by the suppliers, allowing you to expand with fewer growing pains and less incremental work. Sales growth will always bring additional work – especially related to customer service – but business that utilize dropshipping scale particularly well relative to traditional ecommerce businesses.
All these benefits make dropshipping a very attractive model to both beginning and established merchants. Unfortunately, dropshipping isn’t all roses and rainbows. All this convenience and flexibility comes at a price.
LOW MARGINS – Low margins are the biggest disadvantage to operating in a highly competitive dropshipping niche. Because it’s so easy to get started – and the overhead costs are so minimal – many merchants will set up shop and sell items at rock-bottom prices in an attempt to grow revenue.
They’ve invested so little in getting the business started so they can afford to operate on minuscule margins. True, these merchants often have low-quality websites and poor (if any) customer service. But that won’t stop customers from comparing their prices to yours. This increase in cutthroat competition will quickly destroy the profit margin in a niche. Fortunately, you can do a lot to mitigate this problem by selecting dropshippers that are not retailers well suited for dropshipping.
So do your homework, research and gather as much information as possible. But then make the best decision you can and move forward despite your hesitations and fears. If you wait for all uncertainties to be resolved with “the perfect market,” you’ll never get started.