If any of you are like me, you had no idea what drop shipping is, nor that it even existed before you saw this article. So what is drop shipping when it comes to the field of business?
- Drop shipping is a Business model type.
- Drop shipping allows for owners of a business website to receive a low quantity of product orders and then send it to a manufacturer who in turn ships the product that the customer ordered.
Like many business model types, drop shipping has a number of advantages. The first advantage is that drop shipping allows a web business to cut out the need for inventory. Due to the fact that you don't ship the product, you also don't store the product. Due to the fact that you don't store the product you also cut out the time some businesses spend in worrying about inventory, shipping and delivery.
What is the downfall though? While cutting out the time spent in doing inventory and shipping; at the front end of the business you have to spend more time in finding a manufacturer that you can trust to ship your product. If you choose a shipper who isn't reliable, sends damaged product etc. you end up paying the price literally and socially in the terms of credibility of your business and the product it delivers.
So when considering using drop shipping for your business think about things like this:
What are the advantages of drop shipping:
- Better prices for buying high volumes of product
- Greater Profit Margins
- More product flexibility: the ability to sway with the markets demands
- No inventory
- No shipping
What are the disadvantages?
- Finding a reliable manufacturer
- Handling Fees
- Chargebacks
Will Drop shipping be worth it for you?
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