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Is Online Drop shopping worth it?

Official

27-July-2020

If you are reading this, you probably know what drop shopping means. However, even if you do not know, let me just explain it to you in simple words. Drop shopping is an online business model. In this, you are practically running an online store without holding anything in your inventory.

You would be taking orders on behalf of another retailer or a manufacturer. Whenever you receive an order, you would direct it to the concerned authority who will handle the shipping of the product to the customer. Storage of stock, shipment, and delivery will not be your concern anymore.

Online drop shipping works in a triangular manner. The success of this model depends on effective communication and execution between the three key players i.es Seller(You), Manufacturer, and the Buyer.

The process of setting up the store, updating the product inventory, and marketing of the products lies on the Seller. The manufacturer has to ship the orders to customers, and claim warranty in case it is required. Setting up the cost which includes all the expenses and your profit is the responsibility of the Seller. It is one of the most profitable business models of all because it strips you of the shipping and handling charges.

Advantages of Dropshipping:

Dropshipping is a successful business model that can help you earn a decent income working from home. However, as many people think, this is not another getting quick rich scheme. As your investment money is not large, the profit margin is not very high. But, as your reputation increases, you will start to gain more out of it. Here are some advantages of online drop shipping.

Easy to Start You can start and run up an online store in no time. You do not need any physical stock, storage unit, a shop, or workers. 

There are no such hassles involved in starting a dropshipping business. However, the real struggles lie in maintaining it and satisfying your customers.

  • Low investment

The initial investment required at the start is almost none. This is because you do not need to buy a whole stock of items for your inventory. Dropshipping saves you this expense of buying the stock and avoid the risk of unsold stock altogether. 

You can easily focus on other important things such as attracting a customer base and building trust for your brand. 

  • Work from Home

The drop shipping model gives you a good chance to be your own boss and start earning from home. You can work on your own desired timings and days as per your convenience. 

All you need to do is keep your customer service at its best.

  • Time and Effort Saving

Dropshipping is a time as well as effort saving business model as compared to owning a traditional online store. 

After you made a sale, your work is over. You do not have to spend time on the packaging of that item and then shipping it to the customer. That part is going to be handled by the manufacturer. 

This saves you from a lot of hassle and gives you more time to boost your brand and build your trust online. 

  • Offer a wide range of products

Another big advantage is that you are not limited to a specific product that is in your stock. As you not keeping an inventory and working directly with the manufacturer, you can sell anything that the company offers and is willing to ship to the customer. 

All you need to do is decide a profitable price and put it in on your store. It helps you grow your customer base and making more sales means you will be earning more profit. 

Disadvantages:

Nothing comes without some negative points. Although a widely acclaimed successful model, dropshipping also has some disadvantages that are listed below.

  • Competitive Market

This is the age of the internet. People are looking for ways to earn from home and almost everything is accessible on the internet. More and more people are learning about dropshipping and trying their luck in this field. That means you will be earning a small amount of profits as a beginner. 

Anyone can start dropshipping as it requires a very low initial capital cost. So, the market is flooded with drop shippers and you need to work hard to make a name for yourself. 

  • No control over the supply

As you are not personally maintaining the stock, you have no control over the supply chain. You are solely dependent on effective communication with the manufacturer. 

In case of any issues with the product, the customer service takes a hit too because the product comes to you and then you send it back to the supplier. This cycle makes the process slow and hard to cater to. 

  • Lack of individual growing potential

No one remembers the middleman. As a drop shipper, your role is like a middleman acting as a bridge for communication between customer and manufacturer and earning profit for a sale. 

If the product is good, the customer is not going to remember your name. The credit of the product goes to the manufacturer. The logo on the product is all that matters in the end. 

The potential of growth as an individual and as a brand is very limited in dropshipping.

Is dropshipping worth it?

It is a tricky question to answer. The advantages are lucrative, but this is not another quick rich scheme. You will need to invest time and effort in order to build your brand. You need to look for smarter ways to have effective communication and avoid errors that make you lose customers. 

It is usually said that drop shipping makes sense for an already established brand and not the new ones. But the important thing is that every established brand was once a new brand in the market. It is hard work that makes or breaks anything. You are the one who decides!!!