You may have heard a lot about dropshipping. But what is it actually? And is it really easy to make money with dropshipping as advertised on the internet? Well, don’t worry. We will find the answer in today’s article. So let’s scroll down and see!
What is dropshipping?
Dropshipping is an online retail model where you don’t have to keep your products in inventory or handle the procurement process by yourself. When a customer orders on your store, you will forward the information to your supplier. Then they will be in charge of the rest for you from sourcing products, fulfillment, packaging, and shipping the products directly to your customers. You even may get paid before paying your supplier.
Advantages of dropshipping
Dropshipping is obviously a wonderful business model for you, even you don’t have any experience. In fact, it has huge advantages as below:
1. You don’t need big capital to begin with
This is the biggest advantage of dropshipping model. Normally, lacking capital is the main reason that stops people from starting their own businesses. For other models, you will need a big amount of money to start with. You have to rent a warehouse, physical store, hire staff to handle stock and shipping, and so on.
But for dropshipping, you don’t need any of that. You just need a laptop and internet access. Of course, you will need a fair amount of money to run ads. But it mainly depends on you. If you have little money, then just start with little money.
2. It’s simple to start
As this model is quite simple, you don’t need to spend much effort in the procurement process. And that will free you from most of the troubles. You just need to focus on your marketing and sales campaign. For the other things, you will have your supplier or dropshipping agent to take care of.
3. Fewer risks for you
As you don’t have to handle inventory nor buy the products in bulk, you face fewer risks. If you cannot sell the products in your store, you can easily switch to another one. And because you begin with little money, you are less afraid to lose money.
4. You can work anywhere in the world
Dropshipping is an online business model, so you can literally work anywhere. You can drop ship to any country as long as you can handle your business there.
5. Huge product category to choose from
You can choose whatever to sell. Of course, you will need to find what you like and do research. But literally, you can sell anything from home decor items to electronics. Just remember to find a good supplier who you can trust.
Drawbacks of dropshipping
Though dropshipping model is so great, it also has some drawbacks as below:
1. Small profit margins
This is probably the biggest drawback of dropshipping. When you sell something you would expect to earn a lot of money. For this retail model, you need to be patient. Because it takes not much to start a dropshipping business, dropshippers normally can offer a very cheap price. It’s very competitive in this market also. But it doesn’t mean that you cannot get rich with dropshipping. You can still make big money with it, as long as you make sure your sales are good.
2. Shipping time
This is another disadvantage of this online business model. Shipping time is usually long. But you can solve this by working with a good agent who can offer many shipping methods for you and how can solve problems quickly.
3. Lack of control
As most of the procurement process will be handled by your supplier, you will have little control over this. The solution is that you should choose a good supplier. And once in a while, you can do a test order to check if your partners are still trustworthy.
5. Little chance for branding
Branding can be a little challenge for dropshippers. But you can partly manage this. You can choose to work with one agent instead of multiple suppliers. In doing so, you can request your agent to prepare the same packaging style, add thank you card or print your logo on the package to make your branding consistent.