Dropshipping is a retail fulfillment method where a store does not hold the products in the stock. Instead, when a store sells a product, it buys items from a third party and is sent directly to the customer.
There’s no need to keep products in stock, instead of that, you will only list those products either on your website or either on any other marketplaces such as Amazon, Flipkart, Shopify, .Once the order is confirmed from your customer, then you purchase the product from Dropshipping Company and they ship that particular product directly to your customer under your Brand name .
You here act as a middleman, your work is to introduce the products to the potential customer. And you close the deal, rest services like Stock and inventory management, packaging, delivery all must be taken care of by Dropshipping Company.
In more simple terms, dropshipping works like this:
1. A customer purchases an item from your store at the retail price
2. The order is forwarded to your supplier (you pay the wholesale price)
3. The supplier ships the item directly to the customer under your business name
4. This means that you – the drop shipper – don’t have to buy and store bulk stock, which saves you having to invest a lot of money upfront.
Now as you know about the fact what exactly is dropshipping, it sounds nice starting an online Business “Dropshipping” without any investment but before that let’s discuss its pros and cons and the Basics of How to start Dropshipping .
What are the Benefits of dropshipping??
For dropshipping you do not need to buy the product in bulk, you only purchase the product from dropshipping store once you received the payment from your customer
For Dropshipping you don’t need any warehouse, capital investment, human resources. It’s scalable depending upon your ability to market the right product to the right audience at the right time.
As you don’t stock the product you don’t need to worry about the money invested in the upfront stock. You are risk-free of excess in Inventory.
Wide Range of Products:
You can list a wide range and variety of product catalog on your store or either on marketplaces. Best part you will check online, hot selling products, and list them on your website. You don’t need to worry about inventory and stock as well.
No Need for Inventory and supply chain management:
Dropshipper doesn’t have to manage a warehouse or take care of the workflow of the supply chain, including the Packaging and delivering of products. Dropshipping is way better than other traditional E-commerce methods.
Disadvantages of Dropshipping
Sometimes the seller didn’t update their catalog and this thing happened, the customer ordered from your website and when you check that product in dropshipping website you found out that the product is out of stock. And due to the high demand for products the shortage in stock occurs.
Due to zero risk and zero investment required in this business, lots of people jumped into this and started dropshipping. Not only this fact is coming in the way of your business but also the thing is other sellers also sell the same product as you are selling. So, it’s really hard to stand out in the market and make your own identity.
The online market is too saturated, and customers loved to compare prices, as the same product you try to sell some other person also wants to sell, so competition arises.
So, to sell your product having the same aspects the same quality the same features is quite difficult so the only thing left is price so you need to compromise on your margins to offer less price so that your product must be sold.
Customer Service Issue:
The customer is the king we all know, and resolving their problem is the most important thing in any business. Handling your store and lots of customers problems at the same time is kind of difficult and if you don’t handle it in a good way your reviews go down due to which you are not able to stand In the market for long.