If you have been in the ecommerce world for a while, you must be aware of the word Dropshipping. If not, we are here to guide you through this trendiest topic getting a lot of attention in the industry.
What Is Dropshipping?
In easy words, dropshipping is a type of order fulfillment method where you have a store without buying any products! Unlike traditional retailers, a dropshipper doesn’t purchase an inventory before selling it. They act as a channel between the supplier and the customer. A retailer saves the cost and time spent buying products, storing them, and shipping them to the customers through this method.
You must be wondering, then, what does the retailer do? The retailer creates an online presence for the product through research and marketing skills. Instead of exhausting their resources on inventory, they focus on building a solid customer market.
How Does Dropshipping Work?
The process is very straightforward. First, you select a product you want to sell through market research and need analysis. The next most crucial step is finding a credible supplier. You need a supplier that provides the best quality at an affordable price. Once that is figured out, you set up an online store and market your product to attract customers.
If a customer places an order, you forward the requirements to your supplier. The supplier has to arrange the product and ship it to the customer. Easy, no?
The Pros and Cons Of Dropshipping
Before jumping on the bandwagon, it is essential to understand if dropshipping will suit your business or not. We have compiled a list of pros and cons for you to make a better judgement call.
Low Startup Cost
Dropshipping saves up the cost spent on purchasing merchandise and storing it. For businesses in their initial stage, this helps in using the resources in setting up an online store and researching the products they want to sell. You also save up on the cost of a warehouse and money spent on carefully storing products.
Dropshipping lets you experiment with your product line. Since there is no upfront cost for the suppliers, you can test different products by putting them up in your store. If they don’t sell well, you can always take them off without losing. This allows retailers to expand their product line without the risk of spending too much on new products.
Less Quality Control
You have little control over your product quality as it is in the hands of the supplier. If the customer doesn’t receive the best quality or gets a damaged product, the responsibility is on you.
The dropshipping market is highly competitive. There are chances that someone is selling the same product at a lower cost. Secondly, sometimes suppliers can be expensive, narrowing your profit margin.
To sum it up, dropshipping is an attractive option for businesses. However, it is vital to work with a sourcing agent who can source your product and ship it correctly. Having a sourcing agent like Dropship Agent limits the shipment and quality issues you may encounter while working with suppliers.