Drop shipping and its advantages will give you an overall idea of it and help you to find its worth. So, what is drop shipping? It’s nothing but a retail fulfilment method. Here, the store doesn’t stock any products; instead, it just acts as an intermediary that buys products from a third party and sells them directly to the customer. Here there is no need for stocking, because it will take an order and then it will order the products from the third-party company and directly process the order for the customer. So that the seller doesn’t have to handle the products. This is the major difference between drop shipping and retail business models. These sellers can process the products through wholesalers or even directly from the manufacturers at the current rate of that product.
In the case of retailers, they have to stock products so that they have land resources and should choose perfect business locations, manpower, and management teams working for hours, and especially they have to balance the increase and decrease in the rate of the product. For example, to put it in a nutshell, If I say I am running a retail model business and I have stocked the products which I bought for 100rs and the same after a few days, when its rate decreased to 50, I couldn’t sell them for 50rs or more because it would result in a loss. So, I will be in some trouble. But in drop shipping, you can stick to the current rate and trend and there is no need for resources like land, manpower, etc. So, this is the major advantage we have in drop shipping. We will invest less capital, which can be easily started by an individual, and you will be able to be flexible in terms of location.
You can run your drop shipping business from anywhere on the internet if you are flexible with your location. If you are in Delhi and a customer orders it from Chennai, there is no need for you to pack your product from a retail place and ship it to Chennai. With drop shipping, you can contact a manufacturing company anywhere in or near Chennai, and you only need to pass that order along. Many people, including many homemakers and students, are taking up this drop shipping business and doing it successfully. Another advantage is that you can have a wide range of products in your catalogue. Drop shipping and its advantages are not enough to find its real worth. You should also consider the disadvantages. When we look into its disadvantages, the first one is its low margin. To overcome this problem, you should select a niche that is best for drop shipping.
When the major part of your business is shipping, there will be shipping complexities. When a customer orders 3 products, and if the availability of those 3 products can only be fulfilled by different suppliers, it will turn out to be a very complex task to manage. The charge will be thrice, and you cannot demand these charges from the customer. On the next one, you have to take up the entire responsibility, even for the fault that you were unaware of. Because the customer has only had contact with you, if there are any issues with the shipping, the entire situation will revolve around you. And you could not make any innovations to improve your branding. There is just one formal method, and that is to ship products. So, before you start your drop shipping business, you should consider all of these factors and begin by selecting a perfect niche, conducting additional product research, locating a reliable supplier, and developing your online store. Make a better analysis before you start your drop-shipping business.