Let’s face it. Efficiency and convenience can make an e-commerce business thrive.
For one, customers opt to buy online because they no longer want to queue for hours just to pay for an item. They would rather wait in the comfort of their homes for their purchase to be delivered.
Meanwhile, you want to ensure that you are shipping the right product on time. Otherwise, this can lead to cancellation and returns, which can be costly.
But what if you want to start an online store but do not have the budget or space to store your inventory?
Perhaps starting a dropshipping business is for you.
What is Dropshipping and Why Should You Give it a Try?
In a nutshell, dropshipping is selling products online without the need to manage an inventory. Instead, you send your customers’ orders to a supplier or manufacturer, who will be responsible for the fulfillment.
How do you earn from it? Well, you get it from your markup.
Say the product you are selling costs $15 per piece from the manufacturer. You can mark it up and sell it to your customers at $20, and you can keep the $5 difference to yourself.
This explains why dropshipping can be a cost-effective way of starting an e-commerce business.
But other than that, there are other reasons you should give this business model a try:
Lower Startup Cost
You may have heard somewhere that starting an e-commerce business is one of the most affordable ways to become your own boss. After all, it eliminates the need to have a brick-and-mortar store to start selling.
But with dropshipping, you do not need to rent a warehouse and hire employees who will manage your employees, either. All you need is a functional e-commerce website, secured and automated POS, and a trustworthy supplier.
Broad Product Offering
Another pro of dropshipping is that you can offer as many or as few products as you like. And you do not have to worry about where you will stock them since your suppliers have that covered.
However, we suggest that you search and partner with a manufacturer who can provide various products. That way, you can ship multiple products in one go. Doing so provides convenience and makes shipping more affordable for your customers.
Otherwise, sourcing multiple products from different suppliers can be costly. And it can impact your pricing and shipping fee.
Since you do not have an inventory to manage, you can conveniently receive bulk orders. As such, you are encouraging your customers to start their own business and have you as their supplier.
Meanwhile, you can offer your products at an affordable price since you are sourcing them straight from the supplier. And the more bulk orders you receive, the higher the average order value that you generate. Plus, it allows you to maximize advance shipping rules, as the more items you buy the more affordable the shipping cost can get.
Hence, this can be beneficial both for you and your customers.
Manage Your Business Efficiently
As mentioned earlier, efficiency makes an online business thrive. That’s because you can save time, money, and effort in running your e-commerce store.
How is that possible?
For one, you do not have to house your inventory. That means you do not have to spend money on renting a warehouse. You do not have to hire employees who will pick, pack, and ship your products, either. That’s because your supplier can handle it for you.
Instead, you can use that budget on promoting your products or improving your inventory management system.
When you manage your e-commerce business efficiently, it means that you are incurring fewer errors. That’s because mistakes can be costly.
That said, it would be best to work with a trustworthy supplier that can handle product returns efficiently. And by “trustworthy supplier,” we mean a logistics partner that delivers the right products on time.
Keep in mind, however, that no business is perfect. But that does not mean that you should be complacent. Instead, it would help if you could check your supplier’s return policy.
If they are convenient for you and your customers, you can rest assured that your supplier can provide customer satisfaction.
The best part is that it reflects in your online store.
Another great thing about dropshipping is that it can be flexible. This means that you can opt to cater to wholesalers only, become an online retailer, or do both.
After all, you do not have an inventory to manage. What’s important is that your supplier can provide such service.
In addition, starting an online store means that you can earn from anywhere, anytime. You can do so even while you sleep! That’s because all you need to do is ensure that your e-commerce site and automation are up and running.
Aside from choosing what business model you would like to embark on, dropshipping allows you to test products with less risk.
Imagine this: You would want to know which among menstrual cups and menstrual pads would sell more.
You can spend the same marketing budget on promoting these products and see which of them will bring in more sales. From there, you can drop one and sell more of the other.
But what’s fantastic about it is that you do not have to worry about how you will clear out everything. That’s because you do not have an inventory to manage. This reduces the risk of wasting space and money on a product that will not sell well for your target market.
Being able to multiply your time, money, and an effort is a form of leverage. And dropshipping can give you that.
For one, zou do not have to spend long hours scouring through your inventory and doing the fulfillment process. That’s because your supplier can do it for you.
Second, you do not have to spend a significant amount of money renting a warehouse or hiring employees.
Lastly, you do not have to pick, pack, and ship the products yourself. Instead, you can send the order details to your suppliers and let them handle the shipping.
On the other hand, you can focus on promoting your products and holding the customer satisfaction fort.