Pros:
- Very little to ‘NO CAPITAL’ is required to start, the seller does not need a warehouse, or administration staff, or secretaries, or even an office in some instances.
- Very low running costs as rent and equipment are minimal; some Dropshippers run their businesses using a tablet with an internet connection.
- This means that if the circumstances are correct, they can manage their business from a laptop.
- A business can be started that boasts the inventory of thousands of products in hundreds of different categories without the financial outlay.
- Fast to start as all the work is already done and systems are in place including regulations and the third-party supplier/wholesaler will have documented their experience to guide and help.
- All stock, handling, packaging, shipping is already taken care of before you even begin.
- Can start the business from anywhere, examples would be: living in Europe, selling goods to Tokyo-Japan, shipping from the supplier’s warehouse in Sydney-Australia.
Cons:
- Shipping and Supplier obstacles. Items could be sent to the wrong address by either the supplier or the postal service or courier.
- Inventory can be a challenge, although suppliers tend to keep a large amount of stock, some sellers manage to sell a large amount of specific items that could diminish stock fast. Please insure that you use a supplier that regularly updates stock levels and inventory so that you remain up-to-date.
- Less profit, when one has their own stock, then they get to negotiate prices, but this also means that there are warehousing and management costs. When a third party manages inventory, handling and shipping, their products cost a little more so to remain competitive, sellers more often than not, need to accept lower profit.
Conclusion:
Dropshipping is a powerful starting tool to use, as it allows one to startup a powerful business without the need for outside investors. It has intricate details that you can only begin to understand once you start. This is the beauty of dropshipping: Although it does have its own sense of responsibility, having the ability to start and not be too concerned about monthly responsibilities such as bills and expenses, rather just the payments in the moment of the sale; it is comforting, especially for first time dropshippers.
Dropshipping is a very good start.
