Dropshipping – The Future of Retail

Dropshipping – The Future of Retail

Dropshipping is a retail fulfillment method where a store does not keep the items or products it sells in stock. Instead of this, when the store sells a product, it purchases the item from a third party – usually a wholA dropshipping business can be run from just about anywhere with an internet connesale dealer or manufacturer – and then has it shipped directly to the customer. As a result, the seller never sees or control the product. The biggest difference between dropshipping and the standard retail model is that the selling merchant does not keep the product on hand or own inventory. The concept of dropshipping business is gaining popularity as the seller does not need to keep any items in stock, nor do they have to take the stress of packing and dispatching.

Booming Opportunity with Less Capital Needed

One of the major benefits of dropshipping is that you do need to invest thousands of dollars in inventory up front and can launch an ecommerce store right away. Traditionally what happens is that the retailers have to tie up a huge amount of money when they have to buy inventory for their store. But with dropshipping model available, you do not have to purchase any product until and unless you have already made the sale and the customer has paid you the money. You have the possibility of starting a successful dropshipping business even if you have very little money.

Easy to Start – Easy to Manage

The dropshipping business is not only easy to start but also easy to manage. The ecommerce business becomes hassle free when you do not have to deal with any kind of product physically. When you are not dealing with the product yourself, you do not have to manage or pay for a warehouse to store your product.  There is also no need to fret about the packing and shipment of the orders that you receive. When you are having the third party deliver the goods, you do not have to track the inventory or handle returns and inbound shipments. You are even free from continually ordering products and managing the stock level.

Low Overhead 

As with dropshipping you do not have to deal with purchasing inventory or managing a warehouse, your overhead expenses are quite low. As a matter of fact, a lot of successful dropshipping businesses are run from a home office with a laptop. As a result, the money that you are going to spend is quite low. As the business grows, these expenses will probably increase but will still be low as compared to those of traditional brick-and-mortar businesses.

Flexible Location

 A dropshipping business can be handled from just about anywhere with an internet connection. As long as you can contact with suppliers and customers easily, you can run and manage your business. EBay has turned out to be dropshippers dream and has helped in developing their business. You can sit about anywhere with a connection to internet and find wholesale products to sell on eBay. As you do not have to pre-purchase the items you sell, you can offer a wide range of products to your potential customers. If suppliers stock an Product or item, you can list if for sale on your website at no additional cost. You can take bids from the customers and contact the wholesalers who are effective in dropshipping products for eBay.

Easy to Scale

With a traditional business, if you receive twice as much business you will usually have to do twice as much work.  By leveraging dropshipping suppliers, most of the work to process additional orders will be borne by the suppliers which will allow you to expand with fewer growing pains and less incremental work.  Sales growth will always bring additional work but businesses that utilize dropshipping scale particularly well relative to traditional ecommerce businesses.

Drop Shipping Has its Cons Too

  • Low Margins 

As with everything, dropshipping has some disadvantages as well. Low margins are the biggest con to operating in a highly competitive dropshipping niche. Because this kind of business is so easy to get started, with the overhead costs being so minimal, many merchants will set up shop and sell items at rock-bottom prices in an attempt to grow their revenue. As they have invested so little in getting the business started, they can afford to operate on infinitesimal margins. 

These merchants might have poor quality websites and even poorer customer service, but the customers will not be stopped from comparing their prices to the ones that you are offering. This increase in fierce competition will quickly destroy the profit margin. Fortunately, you can do a lot to mitigate this problem by selecting a niche that is well suited for dropshipping.

  • Shipping Complexities 

Most dropshippers work with multiple suppliers. As a result, the products on your website will be sourced through a number of different dropshippers which will complicate your shipping costs. When your customer orders various thing which are all from different suppliers, you will have to incur separate shipping charges for sending each item to the customer which in turn will make the customer think that you are grossly overcharging them for shipping. So often, in order to keep customers, you have to bear the additional cost yourself. 

Similarly, if the supplier makes an error in the fulfillment of the order, you have to take responsibility for that mistake and apologize. And mediocre and low-quality suppliers will cause endless irritation with missing items, botched shipments and low-quality packing, which can be responsible for damaging your business’s reputation.

  • Drop Shipping – Worthwhile Business

There are many dropshipping ideas for online business. You can sell fitness trackers, Bluetooth speakers and headphones, smart watches, muslin blankets, usb charging docks, baby carrier, security camera, anti-aging cream, beard oil, yoga mat, insulated bottles, massager, led lamp, sunglasses, calligraphy pens and so many more items. Dropshipping is not perfect but the once you address the complexities, you can run a successful business.

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