There are many online retailers who are taking advantage of the low overhead costs and are selling their products at rock-bottom prices to grow their client base and revenue quickly. You are not the only person looking at taking this route. Convenience, flexibility and price are all great attractions, but you must also consider the shortcomings of this method. The drop shipping model is not perfect however. Meaning less growing pains for you as you scale your business. Yes to get those sales will require work, but if your business unexpectedly doubles, your workload will not. With drop shipping the majority of the work falls on the suppliers. If you have the time to list them on your site, you have the ability to sell them. When you purchase inventory it is easier and cheaper to buy a small number of items in larger quantities, however with drop shipping you can ultimately sell as many different items as you want, at no extra cost. As long as you have an internet connection, a good relationship with your suppliers and are able to communicate with your customers then you have the freedom of the open road.ĭiversity. Each of these things will save you time and money.įlexible Location. You do not need to handle returns or track inventory. There is no need to monitor and maintain stock levels. You do no need to pack and ship your orders. You do not have to find, manage and pay for a warehouse to store your products. When you do not have to deal with a physical storefront, it’s easier to start your business. This means low start-up costs and reduced risk. Physical storefronts need large amounts of money before even opening their doors to purchase inventory, however with the drop shipping method you do not buy the product, until a customer has made a purchase. One of the biggest attractions to drop shipping is that it’s possible to launch a store without having to invest thousands of dollars in inventory in advance. There are many benefits and drawbacks to this business model, here are just a few: Benefits of Drop Shipping They in return, ship the product to your customer on behalf of your company. It means that you can set up an online store, include a mark-up price, and sell products to clients and forward the order to your supplier. The main concept is that you’re selling products you don’t actually own. Wikipedia defines drop shipping as, “a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly”. Which is where drop shipping comes into play. As online shopping continues to grow in popularity, entrepreneurs are increasingly looking to ecommerce to create a high profit, low investment businesses.
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