What is Dropshipping?
Have you heard about dropshipping? Dropshipping has been one of the most tempting business practices so far. It is a type of business wherein the retailer can sell and ship different products, that he doesn’t own and stock himself.
It is the suppliers, manufactures, or wholesalers who warehouse and ship these goods directly to the consumers. They perform this activity on behalf of the business owner and in his/her name.
The process of dropshipping is quite simple:
- The owner receives orders from consumers
- He forwards the purchase order to the supplier
- The supplier, manufacturer, or distributor will directly ship the order to the customer on behalf of the retailer
You see, in dropshipping, the seller doesn’t keep any inventory or stock of goods with him. It is the reason, over 27% of the online sellers have opted for this business model. Many businesses are finding this concept quite interesting and profitable.
Moreover, dropshipping ads also allow them to capture a larger market share. Let us have a look at the different aspects of this business, its benefits, and its process.
Here are some solid reasons why a retailer should consider stepping into this domain:
- Small Startup Cost
You see, around 82% of the business entities fail down due to cash flow problems. Apart from this, startup financing is also a challenge for these startups. For a dropshipping business, all you need is:
- Platform including a hosting and domain name
- Internet connection
- Smartphone, PC or desktop
- Suppliers data
- Automation apps
- No Inventory or Stock
You see, retail business needs stocking up necessary inventory for supplying. Small retailers generally take loans to meet these funding requirements. Thankfully, with dropshipping, they don’t need to maintain any stock or inventory physically. However, specialized apps can help them with updating virtual stock.
- No Need of a Warehouse
There is no need to maintain a warehouse when a third party manages the supplies. Dropshipping can help in saving:
- Warehouse rent
- Warehouse software
- Warehouse employee salaries
- Energy bills
- Minimum Running Cost
Operating a dropshipping business is quite easy. A laptop or smartphone is enough to finish all the crucial functions. The retailer can save a substantial amount on staff salaries, hiring, staff disputes, and retirement plans. In other words, dropshipping allows the retailer to invest capital where it matters the most.
The best part about dropshipping is, you don’t need to share space with any other person. The retailer will be the sole authority and entirely responsible for all the business outcomes. All the losses and risks are to be borne by the retailer only. In other words, dropshipping can be a combination of a daunting and exciting experience.
- Work from Anywhere
If you are a travel freak and looking out for a business option that is operational from anywhere, dropshipping can be the right choice for you. A dropshipping retailer can work from any location in the world. All he needs is a laptop and a decent internet connection. He can take orders sitting in California, get it shipped from Chicago, and deliver it in Washington DC.
- Wide Range of Options
Right from suppliers to platforms and products, there are hundreds of options to pick. Apart from this, there are multiple niches like babies, maternity, automobiles, toys, cosmetics, and so on. It indicates that the retailer has enough room to experiment with different options and combinations.
How to Go About it?
You see, besides having a positive attitude, practising good work ethics, and a zeal to accomplish goals, there are some other essentials to starting this business. They are:
- Products to sell
- A supplier, manufacturer, or wholesaler to ship the product
- A digital platform for taking orders and offering products for sale
Here are some simple steps of starting a dropshipping business:
- Choosing the Right Niche
It is the first step in entering this business. Retailers must do extensive research about the profitable niche prevalent in the market. Here are some tips:
- Go with your passions and interests
- Research about the well-established players in the market
- Identify consumer issues and resolve them with your products
- Go for a profitable option
- Choosing the Suppliers
The suppliers are a crucial part of the dropshipping business. They are the ones that stock goods, take orders, and supply it on time. How to find a reliable supplier?
- He/She can be a drop-shipper himself
- Facilitates quick shipping
- Charges affordable order fee
- Have relevant industry experience
- Stock quality products
- Develop an E-Commerce Website
The fastest and easiest way to enter in this business is by undergoing a youtube dropshipping course. This course will help you in setting up an e-commerce website along with relevant operational knowledge.
- Develop Consumer Acquisition Strategy
A consumer acquisition strategy is a must to attract the maximum number of consumers to the business. It will facilitate smooth cash flows from the beginning.
- Analyze and Revise
Analyzing and revising the business plan is an effective way to maintain the momentum of the business. A retailer should try to improvise his/her strategies as per the latest market trends and business needs.
With minimum capital investment and zero shipping worries, dropshipping business seems to be a great opportunity for budding entrepreneurs. If you also aspire to make it big in the dropshipping business, make sure you have all its essentials in your kitty.