What is Dropshipping?
Dropshipping is a kind of order fulfillment in which a product distributor ships items directly to the end user on behalf of the ecommerce website owner or retailer. It is viewed to be an attractive option to many (especially those who are just beginning their business and are strapped for cash) because it helps minimize risk and cost while being easy to use.
Dropshipping Provides a Low Risk Opportunity for Entrepreneurs
- No money is spent upfront on inventory, which means that initial costs are significantly lower when compared to a business that is required to stock up on inventory before a sale can be made.
- Businesses that use dropshipping are less likely to suffer from changes in consumer trends and product seasonality as they do not have to be concerned with liquidating excess inventory.
- Enables ecommerce store owners to offer a wider product range since financing and storage of inventory are not necessary.
Dropshipping Makes For Low Overhead
- Shipping costs can be lower as large drop shippers often have access to special shipping rates that small and new business owners will not.
- Less loses on damaged products and inventory as products sold generally go directly from the drop ship company to the end user.
- Warehouses or other storage space for items is a non issue as you carry no physical inventory. This could translate to huge savings as a business grows.
Dropshipping is Convenient
- Shipping and handling is a non issue.
- New items can be added easily and at anytime without risk.
Dropshipping is a Practical Solution
- Products which are not feasible for many to store (due to bulky size, special storage requirements, shipping logistics, etc’) turn into a viable option for the ecommerce store owner.
Keep in mind that most drop shippers allow the retailer to use their own address and company information on the item’s packaging, so shoppers will in fact not even be aware that you are using the services of a drop shipper. Make sure to take advantage of this feature as having your business information on the package will help the customer in identifying it as well as help your cause in winning their repeat business.
** Also, for related information, take a look at this post on dropshipping clubs and why to avoid them.
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