Friday, 27 January 2017

What are the pros and cons of dropshipping? – Part 1

Before getting involved in dropshipping, it’s important to know the pros and cons. By being educated you’ll be able to see if dropshipping is the best choice for your business.  Today we’re focusing on the pros.

Less Capital – One of the main pros to dropshipping is less capital. You can launch your business without a large injection of capital as you don’t have to buy the stock up front or pay out for warehousing and staff.  You don’t have to make a single purchase until you receive the first order. The main cost involved is setting up your website, but there are even platforms out there that let you do this for free. However, it’s better to pay for a more professional set up than using the free versions.

Easy to Get Going – You free yourself up from having to rent or buy warehousing, managing the warehouse, packing orders and shipping orders. You also don’t have to worry about tracking inventories for accounting, handling any returned items or deal with inbound shipments. It’s a lot easier to simply start selling to your customers without spending time or money on the areas we’ve just mentioned. Anyone can do it!

Low Overheads – Expenses are kept to a minimum as you don’t have to buy storage space or any stock. Lots of people simply use a laptop to run their business and have very low overheads to cover each month. It’s a lot cheaper than having a brick and mortar store and even a traditional eCommerce store.

Flexibility in Location – You can sell your products from anywhere in the world. The only thing you need is an internet connection.

Better Product Selection – Customers can be provided with a larger choice regarding stock and variations as you don’t have to purchase any stock up front. You can add any products your supplier has to your website and not have any costs to worry about. You’re able to be a lot more flexible than an eCommerce store that has to hold and ship their own stock.

Easy Scaling – You’re able to scale your business a lot easier than when compared to traditional eCommerce stores. The reason for this is because the level of business isn’t directly related to the work you do. You don’t have to worry about spending time dealing with shipping or customer service so they extra work doesn’t increase at the same rate when using dropshipping.

Return on Monday when we’ll be looking at the cons of dropshipping.

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