What Is Dropshipping?

Added By Admin on 05 Mar 2019

Defining dropshipping 

Dropshipping Is a process which offers businesses financial freedom when setting up or running a smaller business. It works by essentially cutting out the middleman, the business owner. Products are sent straight from the third-party manufacturer/supplier to the customer.

Dropshipping is a business model that makes opening and running your e-commerce storefront accessible and easy to use.

Typically, when starting a new business, a substantial sum of money has to be invested in a stock which can be restrictive, especially when trying to find your feet in the business world. It can take a while for an entrepreneur to save up enough capital just to get their business off the ground. Dropshipping can take away this restrictive barrier and help you reach your business objectives in a shorter amount of time. 


The most significant difference to ordinary stocking methods is that inventory will be purchased if and when needed instead of in advance.


How to get started?

It’s simple:

  1. The drop shipper / online retailer (you) sets up an online store.
  2. The drop shipper imports and sells the products with no upfront costs
  3. When a customer buys an item, the drop shipper arranges for shipment directly to the customer through a third party, buy paying the wholesale cost price and keeping the profit—never touching the physical inventory.

This model means instead of going through wholesale suppliers, buying inventory upfront, and waiting for sales to come in, the drop-shipper ships products through the third-party supplier only as needed. The low risk involved and high profit to earn!


What are the benefits of the dropshipping model?

There are many benefits to dropshipping! For those just starting with dropshipping, the low overhead costs of launching their e-commerce site, working flexibility and stock collection are major fact appeals in running a dropshipping business.

Dropshipping comes with many benefits other than just reducing financial risk. These being;


  1.  Easy to get started:
    The advantage of not owning physical stock means you don't have to worry about packing and shipping your orders, handling returns, managing warehouses to keep inventory and continuously ordering new stock to stay on-trend. The supplier will deal with all of these, making running your business less time-consuming. 
  2. Low operating cost:
    The traditional business will have to pay out thousands of pounds for inventory and will have to purchase and manage warehouses to store and sort stock. With no inventory to move, no physical office to establish with dropshipping, you can keep your store up and running while shipments are moving as long as you have internet access. Costs may grow as the business takes off but will always remain low in comparison. This means money saved can be diverted to other avenues such as marketing needs to propel your business further.  
  3. Flexible
    Due to no commitment to a warehouse or storage facility, a dropshipping business can be run from home or anywhere with a good internet connection. You could take 12 months of holiday and still work from the beach while enjoying the beautiful view of the sea.
  4. Selection of stock 
    A selection of stock is an excellent benefit for a dropshipping company due to the nature of the process, and it allows you to pick a more extensive assortment of products. This means your business can stay up to date with incoming trends without losing any money on surplus stock. There will be no additional cost to offer an array of products, unlike traditional businesses.
  5. Finding your feet 
    The dropshipping business method will allow you to experiment and dabble in different styles/designs before you find what your customers prefer and what sells the best. Trial and errors are avoidable as nothing will be lost from testing new products. There is no stock commitment required with drop shipping. 


What makes a successful drop shipper?

The best dropshippers establish strong relationships with their dropshipping suppliers to ensure smooth and timely delivery to the end customer. Especially if you’re working on a platform like Amazon Marketplace or Walmart.com Marketplace and you’ve promised customers 2-day shipping, this strong relationship will keep your customer ratings high and help you grow your business.


Where can I set up my dropshipping business?

There are a variety of existing e-commerce platforms that are simple to launch a dropshipping business. eBay dropshipping can be very successful with more unique or hard to find products. Amazon Marketplace is a great universal platform for dropshipping. Walmart.com Marketplace is another large-scale platform. Of course, many of the best dropshippers set up their own Shopify stores and build out their online stores, too. 

Though it might seem intimidating, dropshipping is a simple business model to launch and scale once you start getting sales from your items. Many marketplace platforms have great analytical tools to help you understand your dropshipping business. Knowing the profit margins from your products, and developing an eye for reliable products, and maintaining excellent relationships with your dropshipping suppliers will help you grow your business quickly. Dropshipping is an excellent fit for first-time entrepreneurs looking to explore e-commerce or for experienced retailers to add more products without the risk of buying upfront inventory. 






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