What is Dropshipping?
Dropshipping is the most common supply chain management technique in which you don’t have to store goods, but the order is taken from the customer directly to the wholesaler or the manufacturer, who ships it to the customer directly. The retailer gets benefited from the difference in the amount of the wholesale or the retail price. To set a Dropshipping Business you need to find the suppliers who are ready for the tie-up and ready for delivering the products directly to the customer.
There is no need to maintain the stock, the dropshipping seller displays the product they are selling and their details on their website. The dropshipping seller provides the package to the customer with the labeled detail of your own label before delivering the product.
With the booming of the e-commerce industry, there has been a lead rise in dropshipping companies. Dropshipping is more common among small business owners who sell the products in smaller quantities but have a larger customer base. People are prone to get fascinated towards the dropshipping business because of the little investment it involves plus the low business risk. Also all the main activities are handled by your dropship supplier.
Pros of Dropshipping Business
- In the usual buying and selling business, you need to stock all the items first and then sell. However in the case of dropshipping you sell the product before actual purchase from the wholesaler. This process helps in maintaining a positive cash flow as the seller is paid only in case the purchase is made.
- In normal business, the model works better when the purchase is made in bulk and then only you receive a good discount, apart from this you have to bear cost fo0r distribution, storage, and warehouse handling. Whereas in the case of dropshipping it eliminates all such costs and you gain more profit on per unit orders.
- In Dropshipping you can pay more attention to the storage and handling of the stock.
Cons of Dropshipping Business
Every business has few cons that are associated with the supply management technique. Hence here are some of the cons that dropshipping sellers go through:
- Sometimes some of the products are out of stock and the seller takes the orders when a dropshipping owner forwards the customer orders and the seller just takes very long to deliver the product. Hence, this causes a negative impact on the credibility of the retailer.
- Sometimes dropshipping leads to scam as the customer details passed to some of the sellers leads to scam while getting the orders.
Ideal for Beginners
Dropshipping gives a platform to many of the beginners who want to start their own business. Unlike a brick and mortar business, a dropshipping business can be set up just in a day, you just need an e-commerce website and sell goods and deliver them anywhere in the world.
Therefore, when planning to start an e-commerce website there are WordPress Plugins that will help you out to run your website smoothly.