Why is Dropshipping a Good Business?

February 11, 2020 eCommerce Tips

A business where the store or owner doesn’t keep the products it sells in stock. It involves purchasing the item from a third party and having it shipped directly to the customer. The third party here is the manufacturer or the supplier, the seller or store owner doesn’t need to handle the product directly.

If there’s any business we can call a good business, this business – dropshipping- is one of them.  Dropshipping is a low-risk business model with low start-up cost, and with many other goodies. Below are some reasons why dropshipping is a good business:

Easy to Set Up

From the definition, one must have known it isn’t so difficult to start this business. Remember, you don’t have to deal with physical products or inventories. You don’t really have to worry about managing or dealing with warehouses, packing, shipping, tracking inventories, handling returns, and some other things.

Most times, the supplier will be the one handling these things. You only need to do diligent work in finding the supplier, setting up your website, and start selling.

Low Set up Cost

Now, another exciting part of dropshipping that makes it a good business is the setup cost. You don’t need to invest thousands of dollars in inventory upfront. In dropshipping, the cost of setting up is almost zero.

Most times, the costs in other business models are related to setting up and running the retail operations, such as purchasing inventory. However, we’ve seen there’s no need for those in dropshipping, you only need to pay for things like theme, app, and few things for the proper running of your website.

Low Overhead Cost

Since you’re not the one handling the packing, packaging, inventory, or shipping of the products, you don’t have to worry about exorbitant overhead expenses.

In dropshipping business, the business owner is not required to purchase inventory, thus costs like renting or buying warehouses, electricity bills, workers’ wages aren’t an issue, as they are all on the supplier.

In fact, many successful dropshipping stores today are run as home-based businesses, requiring little more than a laptop and a few recurring expenses to operate. As the dropshipping business grows, these costs will likely increase but will still be low compared to those of traditional businesses.

Flexible Location

As mentioned earlier, you only need to find a good supplier. Also, many successful dropshipping stores today are run as home-based businesses, requiring little more than a laptop and a few recurring expenses to operate.

A dropshipping business can be run from just about anywhere. The only thing you need is a computer with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business.

You don’t need a warehouse, no employees, no office. Any place can be your office; it can even be a beach!

It Has Low Risk

Yes! When it comes to dropshipping, the risk is very low. Significantly lower than the traditional business models. Why is the risk low? Well, it’s an easy answer.

If you don’t sell any products, you still will not lose anything. Since you aren’t the manufacturer, there’s little or no pressure about having to pay for some things or selling inventory.

Wide Range of Products to Sell

In this business, there is a wide range of products when it comes to selling. There’s a supplier for almost anything that you would like to sell. You just need to search for the products and the suppliers.

You can choose to be niche-based, and you can also choose to sell several products at once, it’s all up to what you like.

Since you don’t have to pre-purchase the items you sell, you can offer an array of trending products to your potential customers. If suppliers stock an item, you can list it for sale on your online store at no additional cost.

You Only Purchase After Getting Paid

With the dropshipping model, you don’t have to purchase a product unless you’ve already made the sale and have been paid by the customer. This sounds good,  as it put you in a more safer place in terms of loss or risks.

You Get More Time to Scale Your Business

In traditional business models, if you want more profits, you have to do more work and invest that much more of your resource pool. However, with dropshipping, all you have to do is send more orders to your dropship supplier and then let them handle everything else while you earn the profit and are left with more time to develop your business plans and scale your business.

Reduced Losses on Damaged Goods

A part of the process flow of the dropshipping model involves the shipment going directly from the supplier to the customer only. This means when it comes to shipping; fewer steps are involved. This is a good thing as it will drastically reduce the risk of damaged items while moving from one place to another.

There you have it! Above are some reasons why dropshipping is a good business, and you shouldn’t have much problem trying it out. It is a low-risk business model with low startup costs. You only pay for products that you sell to paying customers. No overburdening with the cost of creating products, carrying inventory, costs of maintaining unsold inventory, and the cost of employees for packaging and shipping products.

In case you will like to know more about our services, contact us today at Fulfillman. We specialize in providing excellent and top class Dropshipping Services, Warehouse Fulfillment, China Sourcing, Third Party Logistics, and so forth. Our dedicated team will be available to speak with you. We will provide suitable answers to your questions and concerns. An amazing experience awaits you.