A survey says 33% online store use dropshipping business model. It is nothing but retail fulfilment method. In this method, rather than stocking the products, store purchases products from a third-party vendor and deliver it directly to the customer. The merchant will not order the full inventory. Instead, third-party vendors take care of merchandise.
Dropshipping is different from the traditional retail model and useful for startups and entrepreneurs. Inventory management, storekeeping, warehousing services etc. not required for Dropshipping.
How Dropshipping Works?
In Dropshipping, the primary responsibility of the merchant is to gain the customers and process the orders. It is like working as a mediator. However, you earn a significant amount of profit by just bridging the gaps between the customer and the third-party vendor.
Dropshipping on Shopify is very popular and easy to handle. It connects suppliers to customers on a single click. You can import your products on your Shopify store smoothly.
Once the customer orders the product, the product is delivered to the customer directly. Today, a lot of entrepreneurs and startups are using this dropshipping model.
What are the Benefits of DropShipping?
It is a great business opportunity for entrepreneurs with a unique business idea.
Easy to start with less capital
It is the main advantage of the dropshipping model. You can start your store with less money. Dropshipping is easy to start; no need to have standard business knowledge. You can start your store with minimum capital and fewer processes.
No need to worry about:
- Warehouse and inventory management
- Shipping and packing the orders
- Tracking inventory for accounting
- Returns management
- Managing stock level
Dropshipping is easy to operate and grow
Dropshipping business model is easy to operate with a fast rate. Extra efforts are required for attracting the customer and promotional front. No headache for salaries and money management for huge working staff.
Also, the overhead expense is too low; you can even start a business for your home. A big shop, warehousing facility, number of workers are not required to manage the dropshipping.
No location constraint
Dropshipping can be operated through the internet and phone so that you can work from the place of any location.
Large range of Products
In dropshipping, you can offer a variety of different products with different patterns. No need to manage the stock. You can get an online catalogue to share with your client, effortlessly.
Fewer margins, lack of control over the product management and critical customer care services are some of the fewer points about dropshipping. However, it is the best suitable option for a newcomer in the world of business.
Is DropShipping Good for me?
- No higher investments required
- No Warehouse Required
- No inventory management
- No location constraint
- No Returns management
- Low profit margins
- Highly competitive
- No control over supply-chain
- Legal liability issues
- Difficult to build a brand