Dropshipping is a type of retail fulfillment method. Instead of a store stocking products, it purchases the products from a third-party supplier. The products are then shipped directly to the consumer.
For the store, this is a mostly hands-off process. The merchant doesn’t have to order inventory or fulfill the orders in any way. Instead, the third-party supplier takes care of the product itself.
Dropshipping is great for entrepreneurs because it doesn’t demand as much as the traditional retail model. You don’t have to open a brick-and-mortar store, pay overhead, and stock products. Instead, you open an online storefront and buy wholesale from suppliers who already have products and warehouse space.
Easy to start. You don’t need to be a business guru to get started. In fact, you don’t even need any prior business experience! If you take some time to learn the basics, you can get started quickly and learn the rest as you go along. It’s surprisingly hands-off, especially once you get going.
Easy to manage. Since it doesn’t require you to make many commitments, you can manage everything with little hassle. Once you’ve found suppliers and set everything up, you’re mostly only responsible for your online storefront.
Easy to grow. As you scale up, your business model doesn’t have to change very much at all. You’ll have to put more work into sales and marketing as you grow, but your day-to-day will stay more or less the same.
Flexible. This is one of its biggest benefits. You get to be your own boss and set your own rules. It’s by far one of the most flexible careers that anyone can pursue. You can work from home with little more than a laptop, and you can work at the times that are most convenient for you. This is ideal for entrepreneurs who want a business that works for them.
Doesn’t demand a lot of capital. Because starting a dropshipping business requires so little, you can get started with minimal funds. You can build an entire business right from your laptop, and you don’t need to make any high-level investments. Even as your business grows, your costs will be fairly low – especially when compared to traditional business expenses.
Dropshipping is great for entrepreneurs because it doesn’t demand as much as the traditional retail model. You don’t have to open a brick-and-mortar store, pay overhead, and stock products. Instead, you open an online storefront and buy wholesale from suppliers who already have products and warehouse space.
Advantages of Dropshipping
Easy to manage. Since it doesn’t require you to make many commitments, you can manage everything with little hassle. Once you’ve found suppliers and set everything up, you’re mostly only responsible for your online storefront.
Easy to grow. As you scale up, your business model doesn’t have to change very much at all. You’ll have to put more work into sales and marketing as you grow, but your day-to-day will stay more or less the same.
Flexible. This is one of its biggest benefits. You get to be your own boss and set your own rules. It’s by far one of the most flexible careers that anyone can pursue. You can work from home with little more than a laptop, and you can work at the times that are most convenient for you. This is ideal for entrepreneurs who want a business that works for them.
Doesn’t demand a lot of capital. Because starting a dropshipping business requires so little, you can get started with minimal funds. You can build an entire business right from your laptop, and you don’t need to make any high-level investments. Even as your business grows, your costs will be fairly low – especially when compared to traditional business expenses.
Disadvantages of Dropshipping
Slim margins. One of the disadvantages of dropshipping is that you should expect low margins initially. That’s not to say it can’t be profitable, but you should be aware that the product margin in some niches might be small.
Can make order processing difficult. Dropshipping seems straightforward: The customer orders, you process, and your supplier fulfills. And for the most part, it is simple.
However, if you’re sourcing products from multiple suppliers, you might run into some problems. Each of your suppliers might use a different shipping solution, which presents a problem for both you and your customers. Costs can get high, and shipping multiple products can be problematic. Different suppliers will also have different structures in place for processing and billing. Since you have to manage the interaction with your suppliers, this can get tricky.
Makes customer service more challenging. This is another problem that happens when orders go wrong or suppliers fail. Because you’re just the storefront and don’t have a lot of control, it can be difficult to sort out orders and handle customer support.
One of the most unfortunate disadvantages of dropshipping is that you have to take the blame when your customers complain. You could be doing everything right and still run into problems if your suppliers have issues.
Doesn’t give you a lot of control. One of the disadvantages of dropshipping is that you don’t have much control over certain aspects of the dropshipping process such as stocking products, order fulfillment, and shipping. You have to rely on your suppliers to do everything right and work seamlessly. This lack of control can be off-putting to some entrepreneurs, but it usually isn’t a problem.
This just means that when something goes wrong, it can be tricky to manage. While supplier problems can sometimes cause customer retention issues, you can mitigate them and keep customer churn to an absolute minimum with the right damage control.
Learn more:
0 Comments