What is Dropshipping?
Dropshipping is a business model that does not require the store to have a physical product in stock or hold any inventory. It is a fulfillment process in which a store purchases a product from a third party vendor and have it shipped directly to the customer.
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The Pros
Dropshipping is a unique business model and it appeals to a large amount of people now. The pros are as follow;
- Low capital to start a dropshipping business. Capital ranges from $29 all the way to $779. A traditional brick and mortar business would take thousands of dollars to start just by purchasing inventory alone.
- Easy to start an online store. You are able to start an online store and get it running within minutes.
- No packing of orders. You do not have to pack the product.
- No shipping of product on your side. Shipping is done from the third party vendor.
- Build your store or brand. You only have to focus on your brand and growing the brand.
- Can be done anywhere in the world.
- Millions of products are sold online.
The Cons
Every ups has its down, this are a list of cons following this dropshipping business.
- Low profit margins. Depending on the niche you chose to start dropshipping, your competitors would charge lesser than your store to for an attempt to gain more revenue.
- Supplier and defect products. When a customer receive a defect product that they bought from your store, you are responsible to compensate them. One of the ways is offering a refund or having them to return the product to you.
- Supplier shipping rates. Rates may differ from suppliers.
Our Verdict
Dropshipping is a real a business and it would take time and energy to develop and nurture your store to its full potential. It is not a flawless system but a great platform to start to build a brand or to learn to start an online ecommerce business.
One platform that we recommend is Shopify as it allows you to start building your store in minutes. We are offering a 14-day free trial to start and explore more about this platform. Click on the button below to start building an online store.