If you looking to start a business with investing a single penny from your pocket? Then you are in the correct place. Let's just look how to earn just by doing Dropshipping.
Currently, most of them have realized that a 9 to 5 job will not helps to achieve our dreams. So most of them are searching on "How to make passive income without investment." So there are lot's of jobs out there but most of them are scam. Among that Dropshipping is a good choice to invest your time.
The term 'Dropshipping' is an online business model which require a little investment at the start. This will be a good choice for the "Begginer Entrepreneurs". Let's see how does dropshipping works and what are advantages and disadvantages involved in dropshipping.
What is Dropshipping?
Dropshipping is exactly an online eCommerce model where a drop shipper can directly ships the product from the supplier's inventory to the customer address with his own business name. This eliminates the need for inventory management and logistics management. By this method, the drop shipper only needs to focus on "How to reach the customers?".
The actual market process works line Manufacturers-->Wholesalers-->Retailers-->Customers. But the dropshipping models work either liker Manufacturers-->Dropshipper-->Customers or else Wholesalers-->Dropshipper-->Customers. This reduces the cost of the product by eliminating the middlemen.
In Short, Dropshippers gets a single product at a wholesale price and sell to the customer by adding up their margin. If an order received in his Store, they direct it's to the supplier and pays the wholesale price. The supplier dispatches the product to the customer address in the drop shipper.
How does the dropshipping store works?
When an order was fulfilled by a third-party such as a manufacturer or wholesaler or even an eCommerce store. The drop shipper gets a product at wholesale price for ₹200 and he sells it to a customer for ₹250 and keeps that ₹50, in which he needs to build his store.
Advantages of dropshipping:
1. Easy to Start:
Anyone can start a dropshipping store by having an idea and can make it come true. All they need to do is create an e-store and find Suppliers and can sell their products.
2. Low Starting Capital:
Actually, you don't need to pay for the inventory or warehouse. Still, you just need to get a domain and hosting services to have your e-store live. And you don't need to worry about the losses, as you don't have inventory.
3. Easier to Scale:
As you don't have to worry about the storage of the products, the store can be easier to scale. If one product doesn't go well you can try another product in your store. You don't have the pressure to clear your stocks.
4. Work from Anywhere & Anytime:
You don't need to have a dedicated office space and there will zero commitment. You just need to decide on the working hours of yours. You can work from anywhere as long as you have a laptop and a stable internet connection
5. Low Risk:
Even if there is no sale still there is nothing to lose, as you don't have to manage the inventory. You don't need to load a large number of stocks, due to this the risk will be lower to nothing.
Disadvantages of dropshipping:
1. Finding a Reliable Supplier
The major drawback of dropshipping for newbies are finding supplier for dropshipping. Most of the suppliers in India don't know the term dropshipping and some of them won't supply.
So finding a supplier will be major drawback. You can search dropshipping suppliers in listing pages.
2. No Control
You can only control the price and kind of products to sell in your store. For Example:
- Shipping: You can't assure the time of delivery (This is for the dropshipping who wants to dropship from china).
- Packing Designs: Most dropshippers take control of everthing on their own. So that you can't control the packing design.
3. Stock Shortages
Most of the dropshipping dealers don't provide inventory updates regularly. As we said above you don't control over lots of things.
So if a products from your store is doing really well and your dealer can't provide you then you're stuck.
4. Less Profit
As you're not taking any stocks in-front so the price you pay for the products will be higher compared to the large inventory items. So due to this the profit will be low.
The wholesaler would sell their products in bulk, Where else a dropshipping suppliers sells you a single product every time when a customer orders from your store.
This involves the cost for managing, organising, storing the products and the other expenses like paying their staffs for packing and processing single products.
5. Quality Control Issues
You're doing dropshipping business, where most of the times you don't see or feel the products personally.
If you don't see the products may be there will be a quality issue which you don't know until you receive comments or reviews from your customers.
6. Can't Combine Orders
As a dropshipper has lots of suppliers for their store, and if a customer orders multiple products from different suppliers, here comes the most difficult part. Where you need to pay shipping charges to all the supplier and customers all receive their products one-at-a-time.
Conclusion:
So now you get to know about dropshipping and pros and cons of dropshipping.
Every business has its drawbacks. All you need to know about the flaws and need to solve those so that you and you're business will get succeed.
The pros and cons mentioned here was the major one. There are lots of pros and cons in dropshipping. I will cover those in my future posts.
If you have any other questions regarding dropshipping or you have any pros and cons to be mentioned in the post kindly comment below I will be responding for all the queries and comments.
