Dropshipping is a kind of business that you can start from the comfort of your home or from any other place that you find convenient. Indeed, there are many advantages of dropshipping that you cannot overlook.
In the year 2020, the dropshipping industry is geared to boom because many people are already becoming aware of the increasing opportunities that come with it. More so, the impact of the Corona Virus scourge has made it challenging for some business people, but the smart ones have been able to figure out other businesses to do even in the midst of the Corona Virus.
Now, if you are considering becoming a dropshipper, it is important that you understand the advantages of dropshipping because that will help you have more quests to go into it full-time.
What Is Dropshipping?
Dropshipping is a kind of business model whereby the seller doesn’t necessarily need to be the owner of the product. Instead, the “seller” in this case is more of an intermediary; someone that connects the buyer and the owner or manufacturer of a product.
It is what I call “drop the shipping”. It simply means that as a dropshipper, you don’t need to have any goods to sell. You don’t need to ship or send the products to the buyers. You are dropping the shipping in the sense that the manufacturer or owner of the product will be the one to facilitate the delivery of the product.
To illustrate this, let’s consider three characters or individuals. The first individual called John is the dropshipper. The second person by the name Maxwell is the owner or manufacturer of a product. The third person is Michael and he is the buyer.
Now, you (being John, the dropshipper) happened to discover that Michael (the buyer) has an urgent need for a product. You don’t have the product but you know someone that does. So, you tell Michael to hold on while you process the order for the product. You will then move over to Maxwell (the owner/manufacturer of the product) and furnish him with the details of the products and who it will be delivered to.
Once this process has been completed, the next thing is for you to chase after your profits. You can do that by adding some amounts of money to the original cost of the product before the buyer pays for it. Or you ask the manufacturer/owner of the product to increase the price and charge the buyer for it. Afterwards, you will be given the additional amount as your commission for initiating the sale.
So, as a dropshipper, you work is to connect buyers and sellers and make money from any product bought or any service rendered in the course of that connection.
What Are the Benefits of Dropshipping?
We have now come to the most important part of the article. What are the advantages of dropshipping? What are those things that make dropshipping worthwhile?
Below are some of the advantages of the dropshipping business model:
1. Low Startup Costs
If there is anything that catches the attention of prospective dropshippers, it is the fact that dropshipping requires little or no startup costs.
So, if you have been looking for how to start a business with little or no money, venturing into dropshipping can be the best option for you.
2. Flexibility When Working with Good Dropshipping Suppliers
In this time of the Corona Virus and in this age where people are looking for ways to simplify their tasks, it is pertinent that any business you must venture into should be one that is flexible.
To that end, becoming a dropshipping offers you the much-needed flexibility because you can now work from anywhere.
All it is for you to do are to locate the dropshipping wholesaler that will be offering your products at dropshipping rates, and then you will find the buyers to sell to.
3. Testing New Product Is One of the Benefits of Dropshipping
Aside from individuals that will be dropshipping, there is also the opportunity for product manufacturers and wholesalers to benefit from dropshipping.
In this case, we are looking at the benefits of dropshipping for manufacturers. Here, the wholesalers and manufacturers will be able to check the market demand for specific products judging by the number of orders they fulfill.
If the products are bought almost every day, it is an indication that they are in high demand. If they are not, it simply means that the products are either becoming obsolete or the target market doesn’t need them at that time.
By using this approach, you will be able to test new products. You will also have a better understanding of the products you need to have handy so that you don’t have an obsolete inventory that is filled with products that wouldn’t be bought anytime soon.
4. Reduced Risk
Undoubtedly, doing business is risky. From losing money to taking bad managerial decisions, you stand to lose a lot if you play the wrong card.
If you are looking to reduce the risks you have in business, you should consider becoming a dropshipper because dropshipping is one of the low-risk businesses you can start.
The reduction of risk herein comes in different forms. The first is the loss of little or no money because you aren’t actually doing the business with all the money you have. The second is that you can consider dropshipping dummies because it is a business anyone with some business background can handle.
5. You Get to Beat the Burden of Inventory
If you were to have a physical store, you will be handling many inventories. There may even be a time that you will hire some people to take charge of your inventories to keep them updated.
Now, one of the many advantages of dropshipping is that you wouldn’t have to go through the burden of handling an inventory. It is because you don’t have any product on the shelves, and you don’t need to have one either.
If there is an order for a product, all you need do is to contact the good dropshipping suppliers you have made acquaintances with. Get those suppliers to take and fulfill your order after which you will get your commission for initiating the sale.
How Much Does Dropshipping Cost?
In as much as dropshipping is one of the online and low-cost businesses you can start, you also need to be certain of the costs.
You can start with little or no money, and that is dependent on the kind of products you want to dropship.
Therefore, if you are dropshipping products that require some part-payment before they are sent out, you may need to have some (of your) funds to pay the bills pending when the buyer takes delivery of the goods and makes the full payment.
On the other hand, if you are simply taking orders for products from a buyer and sending the same to the wholesaler or manufacturer to fulfill, you may need little or no money to start it.
Dropshipping Has Many Advantages
Dropshipping is one of the cash cows and you don’t need to hesitate for long before you venture into the business.
Now that we have shown the advantages of dropshipping, you can be confident that you stand to make more profits than losses when you become a dropshipper.