The popularity of online shopping is rapidly increasing. Many individuals are ready to use their phones and laptops to order the products. However, none of us knows that from where the products are delivered. The only concept we have is that the retailer has stored the items somewhere in his warehouse and he is going to ship them to us. However, there is another method used for delivery of products known has Dropshipping.
What is Dropshipping?
Dropshipping is a fulfillment and sourcing model in which the retailer does not own the inventory. It is a technique in which the retailer acts as the middleman. He will pass your order to the manufacturers or company and they will fulfill your demands. The benefit of Dropshipping is the difference in what retailer charge for the products and what the company charges him.
How does Dropshipping work?
Dropshipping is a simple and straightforward and here is an overview that will help you understand it better.
- The visitor arrives at the online store and place his order
- The retailer will accept the order. He will manually and automatically forward the order to their Dropshipping partner.
- Drop shipper will pack and deliver order to the customer on behalf of retailer.
Benefits of Dropshipping
There are many individuals that are ready to start the Dropshipping business but they are doubtful whether it would be beneficial for them or not. Here we have some of the interesting benefits that you will get from the process.
The biggest benefit of Dropshipping is that you will not have to invest millions of dollars in buying the inventory. You will get associated with the company and you will only have to buy the items once the customer has placed the order. It means that there is no need to invest in the warehouse or the products. Most of the business owners have to waste the inventory they bought because customers were not interested in the items. With Dropshipping you will not have to worry about wasting even a single penny. With little money, you can start the Dropshipping business because there is no need for the up-front investment.
Easy to establish
Establishing the ecommerce business is perfect when you do not have to physically deal with the products. Here are some of the interesting advantages you will get from the process.
- There is no need to manage or pay for the warehouse
- You will not have to pack or ship the orders to the customers
- For the accounting reasons, there is no need to track the inventories
- Managing the inbound investments and returns
- There is no need to manage the stock level or deal with continuous ordering the products.
With the proper management of the Dropshipping, all you will get is the profit. The reason is that when you will not have to deal with any outside costs, the money you get from selling the products will be all yours. The only amount that you will have to pay is to the manufacturers for the products that have to be delivered to the customers. The rest of the expenditures will be done by the company that is delivering the items. In this way, it will help you to save a decent amount of money that you can invest in your business.
Locations are flexible
When you have other types of businesses you cannot leave your location because the customers can place the order anytime and you will have to deliver the products. With the Dropshipping business, you will not have to deal with any of these issues.
All you need is your smart device or laptop and a strong internet connection and you are good to go. You can manage your business from any location. With the successful Dropshipping business you can even earn while you are on a vacation and you will not have to worry about how the products will be delivered to your customers. It will give you the peace of mind that you can go anywhere without stress.
Selection of products is wide
One of the best things about Dropshipping business is that you can offer as many products to your customers as you like. All you need to know is what your customers are looking for and find a reliable manufacturer who is ready to do business with you.
Once you are done you can show your customers the products you are offering and within days you will offer something new on your store.
Easy to scale
When you have a traditional business, you have to work harder as your business enhances. You have to assure that you deliver the best to your customers and, so you will have to supervise everything. In case of Dropshipping business, you will not have to deal with such issues. As your business grows your stress will be relieved because you will know you are going in the right direction. It will be easier for you to find out when you are not doing good and so you can easily improve your services to assure that your customers are satisfied.
Dropshipping has some disadvantages as well and it is important that you know a few of them. The biggest issue with the business is that it is easy to get started and so competition is high. It is hard to find the manufacturers today because most of them have their own online platforms and they do not need any partners.
With Dropshipping you might not have to deal with the inventories and other delivery related issues. However, there have been inventory problems and unsatisfied customers. So you cannot say that it is a stress-free technique. In order to keep your customers happy, you have to assure that the inventory delivered to the customers is similar to what you have claimed on the platform. If you will not pay attention to what the drop shippers are delivering you might lose many customers.