What Is Dropshipping?
For those people who don’t know what Dropshipping is, I want to give you a short explanation.
In basis, Dropshipping is a way for individuals or businesses to sell products without having any product. Let me explain, you taking someone else staff and selling them by yourself with your price. When a client comes to your site and buys a product, your site ordering the product from another seller who actually has the product, and sending it to the buyer.
Let’s say you want to open an online store selling baby toys, but you don’t have any money for inventory, or you don’t want to deal with keeping stock and shipping products by yourself. So you find a company that offers Dropshipping, ask them for a list of their products and add them to your online store.
When a client places an order from your store, you redirect this order to Dropshipping company, and the company is sending it directly to the customer. You don’t need to have any contact with the product, because it’s sent straight to the buyer from the dropshipper.
The most important thing is to find a reliable Dropshipping company. If you do that, you start to earn money from the first day. The client pays you first, and you are making an order using the buyer money. You don’t need to have any money at all except paying for hosting and domain for your website/Shopify fee, to get started.
It’s a win-win!
Dropshipping has many advantages apart from not having inventory. Let’s take a look at a few of the most significant benefits.
You don’t need any money to start your business. The most apparent benefit of using Dropshipping is that you don’t need to pay for your inventory upfront. You can start your business even if you are on a shoestring budget. Don’t forget that if you have your own inventory, you must have space to keep that inventory. Lot’s of stores renting warehouses for their inventory, even if you keep all the products at your home, you will need to set space for it. You will need to buy shelves to store all the inventory.
Less work needed. In every store, you must keep all the products and store them somewhere. You must remember to restock them for seeing you run out. You need to handle packaging and shipping, and not forgetting about returns, and much more. In our case, you just pass the order, and your work is done.
Flexibility – You don’t need to be in a specific location; you can manage your store from anywhere. You can do it from home, beach, plane or anywhere else. As long as you have your computer, you can do it from every place you can dream off.
Disadvantage of Dropshipping
Of course, nothing can be perfect 100%. Like anything, in Dropshipping there are also disadvantages. I will show you the biggest problem you might challenge using Dropshipping.
The most common problem in Dropshipping is delivery issues. That one of the reasons I told you before that it is essential to find a good company to work with. The shipping can be delivered not in time, or they ran out and didn’t tell you about in time. This can severely hurt your reputation because they bought from you. The buyer doesn’t care who sent him his products. He knows the place where he buys from. You must to apologize, take responsibility and offer compensation or even a full refund to your customer.
Dropshipping isn’t perfect, like all other businesses you have work to do. I don’t think there is such a business without any work, maybe only in a movie. With Dropshipping is much less work involved, and the income can be significant.
You can find more information about Dropshipping in my book Internet Money.