Earn money by drop shipping and know how it works.
Dropshipping has become one of the leading business models in the ecommerce world and is estimated to generate up to $476.1 billion (ENG) by 2026.
The difficulty is that where there is money, there is also competition, so it pays to stand out, have trustworthy partners, and carefully prepare your strategy. This tutorial will teach you all you need to know about dropshipping in order to launch a successful ecommerce business.
That means that anyone can run an online shop without having to worry about:
- Finding and maintaining storage space
- Purchasing or renting equipment for production
- Product development
- Investing in inventory and having to manage it
- Managing orders
- Shipping the orders
To put it another way, your wholesale partner (or dropshipper) handles the logistics while you handle the marketing, payment processing, and customer service.
As a dropshipping business owner, your tasks would include opening and setting up the shop, closing sales, and using marketing methods to expand your brand.
Because dropshipping companies handle the logistics, you have more shop management options than you would with traditional retail. You won’t have to look for warehouses or pay employees to make or prepare things for shipment this way.
With current technology, you can simply build up an online shop that functions as well as any retail brand and manage it from anywhere: your house, a coworking space, the beach, or while on vacation.
The biggest advantage of dropshipping is its simplicity: you only put the products provided by your supplier in your online shop and you take the profit margin you choose when you price the products yourself!
Become a successful dropshipper with our help.
The great thing about all this is that there is no limit to your profit margins as long as your products are perceived as valuable by your niche – you can generate as much profit as you want from each online sale! But be careful, because the higher the price, the higher the quality and exclusivity your customers will expect.
Pros and cons of dropshipping
Now that we’ve gone over what dropshipping is, you might ask yourself: “And if dropshipping is so good, why don’t all digital entrepreneurs use it?”
It’s true that dropshipping is efficient in terms of time and money, but the traditional marketing model is still going strong and is still very much alive and well.
To determine if dropshipping is the right business model for you, let’s look at the pros and cons.
Pros of dropshipping
One of the most attractive factors for entrepreneurs is that dropshipping requires no previous ecommerce experience. Knowing a few tricks for running a business can help, but if you don’t, you won’t be at a great disadvantage either.
All a dropshipping business needs is a digital space to sell (your online shop) and a company name (your brand) under which to sell your products. You can avoid the arduous experience of having to manage everything on your own by using the dropshipping concept.
Starting your own company can be intimidating at first. The following are the most common complications:
- Putting a lot of money into it (with no guarantee of payback).
- Personnel recruitment
- Purchasing and stocking merchandise
- In other words, unlike a typical firm, you will not lose money if the business does not prosper using this business plan.
Dropshipping also adapts rapidly if you decide to change the path of your business based on market conditions. You can totally alter your product catalogue with just a few clicks and no further financial commitment.
You can easily experiment and add new products to your online store since you do not need inventory. And if they don’t perform as well as you had hoped, you can remove them from your shop without having to deal with surplus stock.
Cons of dropshipping
There are also some weaknesses to such a successful business model. Let’s see what they are.
Low profit margins
While dropshipping can make you money, it also takes effort to succeed. Because it is such a simple business model, many companies will compete with you, so you may have to adjust your prices, especially if the products you sell are available to other shops.
Lack of control over production
If you want to be in control of every aspect of your business, outsourcing the management and logistics of your orders means you won’t be able to oversee absolutely everything. If you set up a dropshipping business, a large part of your business will depend to a large extent on the quality of your supplier’s work.
If their delivery times are long, their products arrive faulty or their customer service is not good, this will reflect directly on your business.