Business Marketing

What is dropshipping and is it worth it?

Dropshipping is a hot topic in the e-commerce market. It is mentioned as one of the dynamically developing trends that both small and large online stores use this model. Check what dropshipping is and whether it is worth!

The essence of the logistic model, which is dropshipping, is the omission of storage of products in the online store. In practice, this means that every order placed by customers is sent directly from the warehouse. Thus, the owner of an online store does not need to have a warehouse or employ staff who will take care of packing individual orders. Dropshipping will, therefore, be a great way to save time and money – especially for beginners in the e-commerce industry.

drop shipping

Twofold understanding of dropshipping

We can meet with a twofold understanding of dropshipping, which introduces considerable confusion in determining the seller’s obligations towards the customer and the settlement of income obtained from this activity. Dropshipping in the broad sense is considered as:

  • Sales that can be observed, for example, during dropshipping of goods from China. The income then includes the percentage set with the supplier of the turnover of his commodity, and you do not become its owner.
  • Shipment of goods from the warehouse directly to the retail customer, which is offered by many online stores. The income obtained in this way depends on the margin for individual products, which you determine. In addition, you remain the owner of the goods (as in the case of a classic shipment from the warehouse) and you are responsible both for its return and exchange. The wholesaler is only a co-worker who has been obliged to pack and deliver goods to individual clients.

The second of the models is used by both new online stores and those that focus on the constant development of their offer enjoys popularity and significant amenities in the sale of all types of products.

Is it worth starting dropshipping?

Dropshipping is a valuable model worth paying attention to. The advantages of dropshipping include:

  • Low cost to start an online store (you can do it with software).
  • No need to buy goods before selling them. Goods are paid in the warehouse only when the customer orders them.
  • No monthly rental costs for warehouse space.
  • Less time dedicated to handling orders.
  • The ability to run an e-store with a very wide range.
  • Dropshipping should start at any time when running an online store.

You can start dropshipping at any time while running an online store. At the beginning of the operation, it will allow us to start the business without incurring the risk of stocking up. E-stores that have been operating for a long time will expand the assortment and inspect the market before purchasing larger quantities of new products for their warehouses.

What do you need to know before you start dropshipping?

Although the use of dropshipping in the online store brings many benefits, it is not a flawless logistics model. Relying completely on the warehouse in terms of the shipment is associated with:

  • The possibility of delay shipment to your customers, eg during the holiday season, when the wholesalers handle an increased number of orders.
  • The necessity of sending purchase confirmation via email, because it will not be included in the parcels from the warehouse.
  • Lack of recognizability of packages associated with your brand.
  • Use of inventory that may not be updated. Here you should take care of the frequent updating of information reaching your store.
  • Beginning with dropshipping, remember that you work the same as usual. Initially, you acquire goods and then sell them to customers.

Starting dropshipping is not difficult. All you have to do is find the warehouse you want to cooperate with and make sure it offers this shipping model. Further activities will be limited to the introduction of products on virtual shelves, eg with the help of special software, as well as the promotion of individual products.

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