Have you always wanted to develop your business in eCommerce? It is quite challenging to succeed in eCommerce due to insufficient capital and difficulties in dealing with warehouses, inventory, and numerous shipping operations. Fortunately, there’s a convenient and attainable alternative to start delivering your products in terms of online sales – dropshipping. Find out if dropshipping is the right choice for you!
What Is Dropshipping?
Dropshipping is a form of eCommerce where order fulfillment is taken care of by third-party suppliers. This means that digital store owners don’t need to use warehouses, keep inventory, and deal with shipping organizing. Online store owners are mainly responsible for marketing operations and customer service. This makes online dropshipping attractive for many new entrepreneurs since less capital is needed.
Is Dropshipping Business Profitable?
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 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 needed to encourage 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. Even if you don’t have any experience in selling your goods online, dropshipping will give you a chance to take off without extra expenses. Nowadays, when eCommerce marketplaces have become the major global shopping space, you won’t have to risk all your finances to enter it and find your target audience.
- Less risk involved. You won’t have to rent warehouse space nor invest in products you aren’t sure customers will buy. When managing the dropshipping business, you can run the demand forecasting to see if there are any changes in your buyers’ reactions to different products. Based on this data, it will be easier for you to define the most popular items and make them more available on eCommerce platforms.
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 control 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. This will also facilitate the buying experience for your customers as they will find many positions from their shopping lists gathered in one place.
The bulk of additional work involved with higher demand will fall mostly on your suppliers. While you 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.
Challenges of Dropshipping
It is better to be prepared for common challenging situations that may occur when managing the dropshipping business.
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 margin
Most online stores will sell products at low prices. To remain competitive, you must match your prices to the market. Even though you have a low overhead, your profit margin may be much lower.
Getting Started with GoShip
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, you can further enhance and streamline their fulfillment process by connecting them to the leading freight shipping carriers in the US. With GoShip innovative tools, including instant online quotation, booking, and customer assistance and support, your dropshipping business can reach new heights in record time.