Drop shipping is a business model that has been booming lately. It is a supply chain management technique in which the seller does not stock on up inventory, but transfers the orders taken from customers to the wholesaler or the manufacturer, who has the products shipped to the customers. By using this business model, the seller benefits from the difference in the wholesale or retail price.
The dropshipping business model does not require the seller to maintain a stock. As a dropshipping business owner, you will only have to put a few items on display and maintain a catalog of the product details.
However, drop shipping businesses just like any other business have their own perks and pitfalls. As perks always excite business owners, knowing the pitfalls or disadvantages can help businesses to stay wary:
- It is not a good idea to block your money in stock. Dropshipping helps you overcome this issue by having you sell the product before you can even buy it from the wholesaler or retailer. This positive cash flow cycle is one of the biggest advantages of drop shipping.
- As you must already know that businesses often provide discounts on bulk buying but the cost per unit still rises due to factors such as costs on distributions, storage, warehouse, handling, etc. Dropshipping eliminates this hassle and you get more profit per unit.
- Since you won’t be paying attention to storage and handling stock, you can pay more attention to the core areas of your business.
- Sometimes, a drop shipping business can have back ordered in which the seller accepts the request from the customer and has it forwarded to the retailer, only to learn that the product is out of stock. This leads to longer delivery time and impacts the credibility of the retailers.
If you a beginner, who wants to start your own business, dropshipping has made it easier for you. With drop shipping, you can open e-commerce in just a day and sell and deliver goods all around the world.
If you are trying to set up a dropshipping in Shopify or expanding your already existing business, visit our website https://shopifinds.com/. We post value-filled posts and articles on our website that can expand your knowledge about dropshipping.