Have you always wanted to start an eCommerce business? Many businesses have failed to come to fruition due to insufficient capital and difficulties in dealing with warehouses, inventory, and shipping. Fortunately, there’s a more convenient and attainable alternative – dropshipping. Find out if dropshipping is the right choice for you!
What is Dropshipping?
Dropshipping is a form of eCommerce where all fulfillment of orders is taken care of by third-party suppliers. This means that digital store owners don’t need a warehouse, keep inventory, and deal with shipping. Online store owners are mainly responsible for marketing and customer service. This makes online dropshipping attractive for many entrepreneurs since less capital is needed. However, dropshipping has gained a negative reputation over the years due to poor management and customer service.
How do Dropshipping businesses make money?
Dropshipping online business owners find reliable third-party suppliers to provide the best dropshipping products to market. By helping potential customers find, review, and purchase the right product with marketing strategies, dropshippers will mark up the price of products offered by third-party suppliers. For dropshipping to be profitable, business owners need to factor in the time and money involved in successfully encouraging customers to buy a product through marketing and customer service strategies
Advantages of Dropshipping
Dropshipping is a great way for entrepreneurs to enter the business scene. Here are the main advantages of dropshipping:
- Easy start-up: Launching an eCommerce business doesn’t have to involve thousands of dollars.
- Less risk involved: You won’t have to rent warehouse space nor invest in products you aren’t sure customers will buy.
Running a dropshipping business means that you don’t have to deal with:
- Managing and tracking inventory
- Renting a warehouse
- Handle returns or inbound shipments
- Constantly replenishing stocks
You only need to find reliable third-party suppliers that you can launch your store with. Start honing your marketing skills, and you’ll start raking in customers.
Running a dropshipping business offers work flexibility.
As long as you have a stable internet connection, you can successfully get in touch with suppliers and customers to run your business.
Low overhead costs
Testing out business strategies will likely have little consequence and low overhead costs as your only investment are your time, laptop, and internet connection.
Wide product selection
Dropshipping businesses can easily ride the wave of viral and trending products. Once you find a supplier that stocks these products, you can add them to your online store listing without spending anything.
The bulk of additional work involved with higher demand will fall mostly on your suppliers. While you will still need to research and stay up-to-date on the latest trends, this will give you more time to develop your brand image rather than developing products.
Disadvantages of Dropshipping
If anything goes wrong down the supply chain, you will still be liable for any mistakes in fulfilling orders. On your part as an online retailer, you will have to accept responsibility and apologize to your customers. Low-quality and unreliable suppliers can lead to endless frustration when it comes to unsecured shipping, packaging, missing items, and damaged products.
Limited branding and customization
With dropshipping, there is little room for personalization that can drive up customer satisfaction, a vital component for a thriving business.
Lower profit marrgin
Most online stores will sell products at low prices. To remain competitive, you must match your prices to the market. Even though you have low overhead, your profit margin may be much lower.
Getting started with GoShip.com
If you are thinking of getting started in eCommerce, dropshipping is a cheaper, easier, and more profitable way to begin your entrepreneurial journey.
By trusting in eCommerce logistics experts like GoShip.com, you can further enhance and streamline their fulfillment process by connecting them to the leading freight shipping carriers in the US.
With GoShip.com’s innovative tools, including instant online quotation, booking, and customer assistance and support, your dropshipping business can reach new heights in record time.