If you are seeking an online business opportunity, but you don’t have much income to do it, you can’t miss Dropshipping. It allows you to start your online business with a small amount of startup capital and some sweat equity. 

 

What is Dropshipping?

Dropshipping is a business model that allows sellers to start an online business and sell products to their buyers, but they don’t need to keep the products in stock. Instead, when the seller sells an item, they can purchase the item from the supplier and the supplier will ship the package to their customers directly. And the dropshippers earn the price difference.

Dropshipping is also a straightforward business model that requires store owners to work closely with their distributors. The partnership between the supplier and the dropshipper is what makes dropshipping different from other business models. What the dropshippers need to do is build an online store and make sure the fulfillment process is running smoothly.

 

Benefits of Dropshipping

1. Less capital is required
With dropshipping, you don’t need to deal with the purchasing inventory or managing a warehouse. Traditionally, the retailers have to tie up huge amounts of capital purchasing stock. But with dropshipping, you don’t need to stock products in your warehouse. 

2. Easy to get started
It is much easier to start an online store when you don’t have to deal with the physical products. With dropshipping, you don’t worry about managing your warehouse, packing and shipping orders to buyers, tracking inventory, ordering products and managing stock level.

3. Dropshipping is flexible
You can work at home with a laptop device, and you can work at the times that are most convenient for you. Dropshipping is also flexible in that it gives you a lot of room to make decisions that work for you. 

4. Simple to manage
You don’t have stock in the warehouse and hire staff, you can manage everything with your laptop. What you need to manage is creating your stores and promoting your products. To sourcing products from other suppliers, there are multiple 3rd-party tools, for example, BigSeller. It allows you to scrape products easily with one click.

 

Disadvantages of Dropshipping

1. Low margins
Low margin is the biggest disadvantage to operating in a highly competitive dropshipping niche. It is easy to get started, many competing stores will set up stores and sell products with competitive prices. 

2. Complicate order processing
If you scrape products from multiple suppliers, each supplier may use a different shipping solution, it may bother you and your buyers. If your customer purchases several items in one order, you need to purchase from several suppliers and your customer will receive several packages from different locations instead of receiving one package. 

3. Inventory issues
If you stock your own products, it is simple to keep track of which product is in and out of stock. But if you source from other suppliers, inventory may change on a daily basis. If you current supplier is out of stock, you have to find another supplier when you get orders.

4. Limited customization and branding
Dropshipping doesn’t give you a lot of control over the product itself. Usually, the product dropshipped is designed and branded by the supplier. More customers are willing to purchase products with a brand.

 

Conclusion

There are many benefits of dropshipping business, but the dropshippers also meet some challenges. You may start small at the beginning with uncertainty and perhaps fear of failure, but all successful businesses used to be at the same starting point. Just draw up a strategic plan and make up your dropshipping business!