First of all, before starting a dropshipping business. You must understand what is dropshipping and how its work. So, let’s start our article with the meaning of dropshipping. Dropshipping is an online business where the orders are fulfill in retail without keeping the products in their store. Instead, of keeping the products in the store, it’s purchase from the third party and directly ship to the customer.
How Does Dropshipping Business Works ?
Let understand its work with an example. Damon place a watch order in Designerwatch.com, and the watch is shipped to him. Here, for Damon its just like any other online retail transaction.
In actually, Damon goes to Designerwatch.com and buys a watch. But Designerwatch.com is a drop shipper who doesn’t actually have any inventory to ship to Damon. So, Designerwatch.com places a duplicate order with their supplier, BestWatchSeller.com. BestWatchseller receives that order and ships the Watch to Damon.
In this process of dropshipping, the drop shipper never sees or handle the customer. And, the supplier doesn’t deal with the customer. The customer doesn’t have any idea about the shopping. They are not known the two companies were involved while fulfill the order.
Steps While Selling though Dropshipping Business :
- Add a product in your online store
- Customer check and order the product
- Customer pay to you for the product and shipping
- Drop the order to your supplier
- Supplier ship the order to your customer under your business name
Those are the steps that should be follow while drop ship.
Benefits of Dropshipping Business:
1) Easy to start business and manage a business. You just need a website for showing the product and find the trust able supplier and start dropshipping the product. you can purchase a perfect theme for dropshipping from CodeGear Themes.
2) Less capital requires for dropshipping. It is one the biggest benefits for the people who is financial week and have an interest in dropshipping business.
3) Low overhead cost because, you need not worry about the warehouse or a store to keep the product. The online store does not need any space to keep the products.You can run a business from the home office.
4) Do not worry about the flexible Location for business. As long as, you have an internet connection to connect with the supplier and customer your business go well.
5) Low risk business. As you need not to worry about the inventory selling, if you don’t sell a product you don’t have to bear any loss.
6) Wide selection of product.You don’t have to pre-purchase the item you sale, you can offer any product that is available with your supplier.
Drawbacks of DropShipping Business :
1) Low margin profit. Because it’s so easy to start the business with a low cost, many merchants will set up the shop and start to sell the product in high prices for higher revenue.
2) Inventory change in the daily basis. If you are sourcing from the multiple warehouse, which are also fulfilling the orders for merchants other. Then, it is difficult to know about the items. Items may or may not be in the stock. Which leads to the Inventory issues.
3) Shipping cost issue. If you are selling from the multiple supplier, the product on your websites will be sourced from a number of different drop shippers. Sometime this may complicate your shipping costs.
4) High Competition. It is simple to start the business with low cost. Many people are attracted towards this business. You have to provide some special offer or an attractive price to your customer to stand in this business.
5) Responsible for supplier mistake.If there is any mistake from your supplier then, you have to be responsible for the mistake. As your customer purchase the product from you they don’t care about the supplier works and mistakes.
In every business there are some benefits and drawbacks. The success of the business depends upon your ability to handle the business in the right way. Best of luck for your business.
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