Dropshipping is one of the trendiest things to do online. However, not everything that glitters is gold. Similarly, dropshipping with all its raving reviews and impressive rationale, still has loopholes. There's no doubt that dropshipping can be a good alternative for businesses who have little capital to begin with. This can prove to be a smart way to enter the retail world.
If you are fascinated by this business technique and wish to give it a try, read the pros and cons first and then move forward. It pays to know where you are headed to and what hurdles you might encounter in between.
Pros of Dropshipping
· You need no inventory.
· You can start with very little capital.
· You can launch your website as soon as you enter this business.
· You can sell small consignments to the retailer according to their requirements.
· You can list multiple items and, later, concentrate on the one that sells best.
· You can sell infinite number of products, provided you can manage them.
Cons of Dropshipping
· Be ready for a lot of competition.
· There are many scams lurking on the internet. You need to distinguish between the authentic and the fake.
· Due to absence of inventory, it gets tough to control packaging because you depend on others for this. You can also not utilize the benefits of coupons or offers to promote your business.
Dropshippers charge fees. This is an indispensable cost in this business.
· You need to strive to keep your shipping costs friendly to the customers, especially on sites like Amazon and eBay.
· Doing business with multiple suppliers may shoot up your shipping cost. You need to take care of that to stay competitive in the market.
In a Nutshell …
Dropshipping is a great way to make money online. You can, of course, work around the cons to ensure that you're least affected by them. A smart approach can increase the number of pros of dropshipping. For instance, you know that a particular item is selling like hot cakes online. A prudent thing to do is keep some stock of that item at your home, in case the supplier runs out of it. This will give you something to fall back upon in times of shortage. A smarter way is to sell the item during shortage at a price higher than the usual! Use your imagination and make dropshipping a success.