What Is Dropshipping?
By now, you’ve probably already heard about dropshipping (in fact, it’s been a popular buzzword for quite a few years!)
But what is dropshipping really? Simply put, dropshipping is an order fulfillment method, where the store itself doesn’t actually keep or handle ANY products they sell. Instead, the shop purchases inventory on an as-needed basis, from a third party, such as a wholesaler or manufacturer.
Obviously, the KEY difference here is the fact that dropshippers do NOT own their own inventory. Instead, they act as a middleman.
As a result, they don’t have to deal with sticky fulfillment details, or pay massive amounts of upfront costs for a product.
This makes it easier and more accessible to start a dropshipping business.
Want to learn more?
Keep reading for all the details on dropshipping (and whether or not it’s a good fit for you and your business!).
How Exactly Does Dropshipping Work?
To start with, dropshippers need to find good quality suppliers who offer their products at affordable rates, for you to resell.
You can do a manual search, or you can use an app like Zendrop to find high-quality suppliers with fast dispatch times and great reputations.
Finding a quality supplier is absolutely key to a successful relationship with your customers and the success of your business.
Once you have found a supplier and listed your product, you’ll need to handle the fulfillment process. With Zendrop, fulfillment is completely automated, which streamlines the process for you- especially when you are just getting started.
Benefits Of Dropshipping
It’s no secret dropshipping has been around for a while! It’s accessible and easy for business owners to get started, without a lot of upfront capital.
Here’s a few of the KEY reasons dropshipping is a great choice for starting a business online.
1. Low Upfront Costs
Starting a business comes with its fair share of costs (especially an ecommerce business!)
But when you use the dropshipping model, you don’t need vast amounts of inventory just to launch your business. In fact, you can start a successful dropshipping business with a reasonably lean budget and still grow and scale.
In addition, there’s less risk to you if your products don’t take off in the market, as you’ve not invested thousands into inventory.
2. Quick And Easy To Get Started
Dropshipping is reasonably easy to get started with, especially when you are not struggling with physical products, inventory, packing your orders and inbound shipments. Plus, apps like Zendrop make it easier to deal with fulfillment and sourcing products, which makes the whole process even easier.
3. Low Overhead Costs
Without inventory and warehouse costs (not to mention the costs of a brick-and-mortar business), the overhead costs are reasonably low. Many dropshipping apps, like Zendrop, have many different plans to choose from, to suit your business growth- so you never have to worry about inflated overhead costs.
4. Flexible Working Location
With a dropshipping business, you can work from anywhere in the world. As long as you have an internet connection, you’ll be able to communicate with your customers and suppliers- and run a successful business.
5. Thousands Of Products To Choose From
With dropshipping, you’re not limited by storage and stock limitations- so you can choose from millions of products! When you work with a partner like Zendrop, you’ll get access to hundreds of thousands of products (and be able to effectively monitor trends)
6. Low-Risk Testing
When your dropship, you can test a range of different items in your store and refine what you sell over time before committing to buying a large amount of inventory. This not only saves costs, but helps your business grow and keep up with changing trends more effectively.
7. Scale Easily And Efficiently
Traditional ecommerce businesses are hard to scale, simply from a fulfillment perspective. The more products you scale, the more work that’s involved! As a dropshipper, it’s easy to scale your business with minimal stress and cost.
Cons of dropshipping
While there are many benefits to dropshipping, it’s not perfect! Here are a few problems to consider if you’re thinking about dropshipping.
1. Lower Margins
When you’re not manufacturing your own products (and getting them straight from the source), you obviously run the risk of paying a little more for your products. Additionally, with other stores competing for the same market, rock-bottom prices are often the norm.
One way to combat this is by working with a good dropshipping partner to help you find good quality products at the lowest price (without bloated middle-man costs).
2. Inventory Issues
One problem that occasionally happens is when your suppliers have low inventory. As inventory can change quickly, you might find out that your supplier is out of stock when a customer orders from your website.
Luckily, it is possible to monitor inventory, and sync with your suppliers through several different apps on the market.
3. Shipping Costs
When you work with several suppliers, you might find elevated shipping costs become an issue when your customer orders several products at once. Typically, it’s wise for you to factor in these costs and absorb them into your business margins- but it can be complicated and time-consuming to calculate this efficiently.
4. Supply Problems
If your supplier makes a mistake (or they provide low quality products), the responsibility falls on you.
One way to avoid this is by partnering with quality suppliers. At Zendrop, we work hard to ensure every single product on our site is well-reviewed and well-made, so you’re never caught out with unreliable shipping of sub-par products on your site.
Have you ever been blamed for something that wasn’t your fault but had to accept responsibility for anyway?
5. Limited Branding Options
When it comes to branding your business, dropshipping can be tough. Most suppliers don’t offer customization or branding options, so you are not able to add these premium touches for your clients.
Unfortunately, if you want to go custom, you’ll often have to make a minimum order upfront, which can be problematic for dropshippers just starting out.
Fortunately, Zendrop offers premium branding options on several of our plans- so you can cultivate a strong brand image from day one!
Ready to get started on your dropshipping journey? Click the link below to claim your FREE trial of Zendrop Plus and start building your ecom empire today!