drop shipping is

Get to know “Drop Shipping” with Pros and Cons

Drop Shipping is a new retail fulfillment method , kind of third-party where a seller doesn’t have to keep the products in stock. Instead, when a seller sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.

So, what is the big different between drop shipping and standard retail model? It is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.

And of course, drop shipping model has numbers of pro et contras and contras are as follows;

pro et contras:

Easy to Get Started

You can run an ecommerce business easier when you don’t have to deal with physical products by yourself. With drop shipping. You don’t have to worry about warehousing, inventory, packing and shipping orders, handling fail shipments and managing stock level. What you have to do is sell products to customers and send orders to third-party.

Don’t need to invest

The biggest advantage to drop shipping is that it’s possible to launch ecommerce store without having to invest a lot of money. You don’t have to purchase a product unless you already made the sale and have been paid by the customer. Which mean you can run a business with very little money.

Flexible Location

You can run drop shipping business everywhere you want to. Where ever you are, you can run and work on it. One thing you only need to have is Internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business smoothly too.

Contras:

Supplier Errors

Have you ever been blamed for something that wasn’t your fault, but you had to accept responsibility for the mistake anyway? Even the best drop shipping suppliers can make mistakes fulfilling orders like missing items, botched shipments and low-quality packing, which can damage your business’s reputation. Mistakes for which you have to take responsibility and apologize customers firstly. And mediocre and low-quality suppliers will cause endless frustration.

Inventory Issues

If you stock all items in your own inventory, it’s quite simply to keep track of which items are in and out of stock. But when you’re sourcing from multiple warehouses, which are also fulfilling orders for other merchants, inventory changes on a daily basis. While there are ways you can better sync your store’s inventory with your suppliers’, these solutions don’t always work seamlessly, and suppliers don’t always support the technology required.

Low Margins

Even drop-shipping is niche but there are in a highly competitive drop shipping niche. Because it’s easy to get started and the overhead costs are so minimal. Many merchants will set up shop and sell items at rock-bottom prices in an attempt to grow revenue. They’ve invested so little in getting the business started so they can afford to operate on small margins.

As we initially mentioned above, drop shipping isn’t way too perfect or stress-free way to build a successful business. The model has some definite advantages but comes with numbers of built-in complexities and problems you’ll need to handle. Drop shipping is a type of business that much suitable for people who are a starter to run business, more than people who want to stress to build a successful business.

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