Most of you must have heard about Dropshipping but some are still confused about what is it and how it is relevant to online and e-commerce shopping. Well, to put in simple terms, Dropshipping is a particular business model enabling companies to function without having or maintaining any kind of inventory, owning a warehouse for storing products, or shipping the products to customers themselves.
Frankly, it works in such a way that the retailer partners with the dropship supplier that is manufacturing or those warehouse products, packaging products and then they ship them directly to the customers of retailers on the behalf of the retailer.
So, in simpler terms, the Dropshipping works in the below ways:
- The customer will place for an order on the online store of the retailer
- Once the order is placed, the retailer will manually or automatically forward that order and details of the customer to the Dropship supplier.
- The Dropship supplier will pack and ship the order directly to the customer but in the name of the retailer.
Such kind of business model is very much attractive. It will remove the requirement of the store owner to have a physical business location like a warehouse or office space. Rather all he or she would require a laptop and network connection.
Difference Between Standard Shopping And Dropshipping
The biggest difference among the standard retail model and Dropshipping is that the selling merchant won’t need to stock or even own the inventory. Rather, here the seller will make the purchase of the inventory as required from the third party, which might be a manufacturer or wholesaler which will fulfill the order.
Advantages Of Dropshipping
With regard to the business model, Dropshipping provides various aspects that make it beneficial like:
- Easy To Setup
Here to start a Dropshipping, it doesn’t take a whole village as there are only three major steps. First, it is to find a supplier, create a website and then begin selling goods. For certain individuals who are new to the e-commerce industry, this kind of business model is very much easy to understand as well as implement.
- Cost Of Setting Up A Dropship Business Is Less
If you check out in the traditional business model, the whole or majority of the cost was involved in setting as well as running the retail operations like buying inventories. Now as Dropshipping removes this step, the only cost you have is associated with running the website.
- Don’t Worry About Exorbitant Overhead Costs
Unlike most of the traditional business methods, here the business owner won’t have to buy inventory, so the cost of buying or renting the office space or warehouse and other various substantial costs like phone bills, electricity, etc; will be less. The only thing business owners need to worry about is the fixed cost of running the website.
- Less Business Model Risk
Here if the business is not selling any product, it won’t incur any loss. So, there is little or no pressure for it to sell its inventory.
- Business Operation Runs Anywhere
Just think about it. With Dropshipping, you won’t need an office, warehouse or employees. So, there is no hassle. The best part is that there is no commitment to having any kind of physical space. Therefore, it means you would be sitting on the bench, having mojitos, and your business would be making profits. So, all you need is a laptop and good internet connectivity.
Disadvantages Of Dropshipping
Similar to all the things present in our life, certain disadvantages come with Dropshipping. Some of them are:
- Lesser Profit Margin
Compared to the manufacturing or wholesaling business, the margin of profit you earn from the Dropshipping business is less. Based on your niche, requirements or location, vendors and suppliers might charge higher prices for the Dropshipping products. This can easily eat into your business’s profit margin.
- Whole Liability
Now as the customer is purchasing the product from the website of the retailer, if the supplier messes up with something, the whole fault lies with the retailer. This is because the brand face of the retailers is the one that gets affected. Now, this makes it important to select the best and right supplier.
- Lower Level Of Control
If you check out customer satisfaction is commonly linked with details like the branding of the shipped products, personalized packaging, and notes accompanying the order. But with the Dropshipping model, it won’t provide the opportunity to take control of how the brand is presented during the delivery and the fulfillment procedure. This is because the supplier is the one who is shipping the product.
It is great if you are opting to go with the Dropshipping business model. However, the popularity and attractiveness of this model mean there would be more and more retailers present in this segment as well as niche. Now the competition will lower only if the retailer is catering to a particular business segment or niche. Dropshipping is a great online business for those looking to operate light and who know how to drive traffic. Along with affiliate marketing people that can drive traffic whether that be through social media, seo, email marketing, or whatever method can be a great online business. Adult affiliate sites like https://HookupDatingReviews.com create content with reviews of sites like XMeets and other dating sites along with promoting them and receiving commisions.