Dropshipping is creating quite a buzz in the eCommerce scene that seems to be working positively for online stores and subsequently their clients. Dropship offers a different feel to how online businesses conduct their day to day and their interaction with their clients. Although it is a new concept and a daring one so to speak, many businesses have adapted to it, and a good number of them can see the difference.
From using few resources to producing less waste, the list of advantages everyone gets from the whole idea is endless, and that is what’s so appealing about dropshipping. It offers something for everyone.
Dropshipping might seem like a daunting, tedious and intimidating idea for anyone who is yet to grasp it. But, it is not quite as much work as people would like to believe or have been made to think.
Wholesale plays such a significant role in what drop shipping was initially made to achieve. Clients who purchase goods in bulk require them after a certain period after the order, and hence drop shipping is the best option to go with as the online store might not have a vast physical warehouse to store the goods before delivery.
This way, nothing gets lost from the manufacturer and the online store does not have to take up so much space for storing goods. It is a win-win situation for everyone in the chain- and yes, dropshipping is a supply chain from the retailer, manufacture to the customer.
How about we discuss everything you need to know about dropshipping? From what it is, to how much you can benefit from it, the pros and cons of using this supply chain, and how you save up more with drop shipping than you can with other supply chains.
What is Drop Shipping?
Change is inevitable, and that is what drop shipping is providing for many businesses. With global warming becoming a constant growing monster, everyone must play a role in controlling the amount of damage they put in the world. So, what is dropshipping in simple words?
Well, dropshipping is a type of chain supply where retailers do not store products or keep inventory. Online stores (which is where dropshipping thrives), do not stock the products they sell and instead send customers’ orders and shipment details to a manufacturer, wholesaler, or retailer.
You will realize with drop shipping, you only have to take orders from your clients, and the rest is handled by the dropshipping suppliers you decide to choose for the order.
Here is a simple breakdown of what drop shipping actually is:-
- The online retail or wholesale store takes an order and shipment details from the client.
- The business forwards the details from the client to the dropship supplier, including shipment details.
- The dropship supplier prepares the order as received and ships them directly to the client with the name of the online retail store.
This is one of the most cost-effective ideas business can decide to conform to. In fact, it is the best option online retailers have to eliminate overhead.
A physical warehouse means there will be a lot of costs that cannot be explained and hence, continually having to face loss. Dropshipping allows businesses to operate without having to incur extra charges on shipment, packaging, rent and many more, which is more than anyone can ask.
It is also crucial to understand that physical warehouse is not always the best option since items can get lost, the spaces are quite expensive, clients’ carbon footprint increase due to driving to the warehouse, wasting space due to parking, and many more.
Looking at all these, it just makes sense to get into dropshipping sooner rather than later.
Benefits of Drop Shipping
Apart from the apparent advantage of eliminating overhead, there are quite a number of benefits that a drop-ship business gets. Here is a list that you might want to review while considering the idea:-
Requires Less Capital
Starting a dropshipping business is quite the catch because it requires less capital to start and even fewer resources to manage. Unlike physical stores, dropshipping online retailer stores do not stock inventory, and therefore one expense is cut. The business will also not have to ship the products to the clients which mean no money spent there.
There Are No Risks Involved
Unlike operating other businesses, dropshipping has no risks. There is no risk of someone walking into your shop and pointing a gun at you, neither do you have to worry about stocking up particular products rather than others. And interesting enough, if the business is not making sales- there is nothing to worry about because it is not losing anything anyway.
With drop shipping, whether you are doing it as a retail or wholesale store, the whole idea fosters creativity. You are allowed to sell whatever you want since the business is not limited by inventory or resources. Although, a business is highly advised to choose a niche that they can specialize in – to reach a wider market and to allow clients to associate one particular thing with the business.
If you are selling wigs and costumes, then do not compromise by adding natural oils into the mixture because then- the business will not and cannot flourish.
No Limitations by Location
The beauty with drop shipping just like with any other online job these days is you can work from anywhere. Yes, unlike physical stores where you have to show up every morning to make sales- dropshipping allows you to work from anywhere in the world without anything going amiss.
Less Damaged Goods
Deadstock- every physical business owner will confirm they have a pile of dead stock in their store. It gets even worse if the goods are perishable. Dropshipping allows businesses to have less to no damaged goods in their business which means less loss and more profit. With orders heading straight to the clients from the dropshipping suppliers – there are no instances where the business will experience hiccups or in this case, have damaged goods.
More Time to Dedicate to the Business
Dropshipping allows business owners to get more time, which they can dedicate to the business by getting more clients and even improving their website. These actions naturally enable businesses to grow beyond what it already is.
Is DropShipping Worth it?
The next important question after one might ask, after what is drop shipping, is how do you make a profit, or is dropshipping worth a try?
The answer is a resounding yes, dropshipping business happens to be one of the most lucrative online business ideas that one might have. Interesting enough, for people who are interested in creating an online retail store for dropshipping- this is the time to do it because the business is not swamped, and there more opportunities for you to start and grow as a business.
This is the time to get into the dropship wagon and make some profits out of it. There is less competition and more opportunities. Plus, research indicates that businesses might make a profit of not less than 45% for certain goods and even more than 100% for others. If that is not enough reason, then nothing can be.