Advantages and disadvantages of dropshipping
What should you keep in mind when choosing a dropshipping model for your online business?
Dropshipping is an e-commerce model in which you sell products for the storage of which you do not need to have a warehouse. You also don't need to think about logistics, as your dropshipping service provider makes sure the product is sent directly to the customer. What you mainly need to take care of is product marketing and customer relations. As soon as you receive an order, you provide the necessary information to the supplier and so the goods are sent directly to the end customer.
How does dropshipping work?
If you take care of all the processes related to e-commerce yourself, then you will have to devote time and additional resources to the organization of deliveries, storage of products, arrangement, collection and packaging of goods.
This is why many retailers choose the Drop shipping model. In it, the trader buys the goods from a third party seller, who sends the goods directly to the customer. In fact, if you want to sell, you don't have a product inverter.
In fact, when you work with a dropshipping model , the product does not arrive to you and you do not need to think about its storage, sorting and shipping. This way you can really save a lot of money and time.
- Advantages of dropshipping
- Starting costs are lower
When you start your online business there is always the risk of having too many unsold goods and buying too much or too little inverter. To a large extent, this is a matter of divination, especially if it is a product with which you are not well acquainted.
If this is the case for you, dropshipping can solve this problem, as you can sell a product even if you do not have its inverter.
- You can offer items almost immediately
Do you want to get started as soon as possible and not wait until all the product is available to you to start advertising it?
The advantage of using dropshipping is that you can start selling a product on your site almost as soon as you select them.
- You can offer a wider range of products
What most retailers strive for is to offer the widest possible variety to their customers. If you run your business in the traditional way, you will need a lot of storage space and you will need to regularly monitor what is available in your warehouse. Fortunately, dropshipping can make it extremely easy for you, simply because you have the freedom to list all the available colors and models offered by the seller, and the supplier to take care of the rest.
- Testing new products without risk
Do you want to regularly offer something new to your customers, but not take risks by investing a lot of resources in a new product? You can do this without worrying that testing will cost you dearly. Just announce the products you want and see what your customers are interested in.
- You save valuable time
Imagine how long it would take you to organize and prepare each order. Even if you don't do it personally, hiring staff is engaging and also generates additional costs for the company.
When you trust a professional dropshipping service provider , you will save valuable time and resources. Instead of dealing with the many details of deliveries, you will be able to focus on developing your business.
- Disadvantages of dropshipping
No matter how many advantages a business model has, it is good to be informed about the potential disadvantages. Let's see who they are for dropshipping.
- Processing of your orders may be delayed
If you work with different wholesalers, be prepared for the fact that each of them will most likely have different requirements for order processing, invoicing and delivery.
As the process of sending the order is not directly up to you, you should be aware that delays may occur.
- Lack of all product information can be problematic
Because the products you sell do not arrive directly at you, you have no real idea in what form they will arrive at the customer.
There are cases when the manufacturer does not provide detailed information about the product and you may find yourself in a situation where you fail to answer all customer questions. You will then need to forward the questions to the provider, and this may lead to a delay in communication with the customer. These inquiries are usually related to the weight, size and use of the product.
You've probably heard how important it is to provide the most comprehensive and unique content for your product in order for your site to rank well. The lack of such information and experience with the product can negatively affect SEO optimization.
- Possible customer service issues
Lack of information can also slow down your communication with customers once they receive the product. If there is a problem with the received item or you need to answer additional questions, you will need to contact the supplier again, and this will take time.
- Competition with other retailers
Even if you find the most suitable products to offer, keep in mind that you will probably face a lot of competition.
High competition often requires you to maneuver with prices and monitor the market. Therefore, the margins of dropshipping products may be too low.
As you can see from the benefits and potential problems, choosing dropshipping is an option that you should consider carefully.
The problems that arise can often only be solved by carefully planning and making contact between the seller and the supplier, as well as betting on a well-functioning online platform .
With enough thought, shortcomings can be largely avoided!
Whether you are in the advanced or early stages of planning your e-commerce business, we can help you design your business strategy. BigArena Fulfillment offers the business consulting service for more sales , which we have created for the benefit of all start-up or established traders who want to gain knowledge from leading experts with many years of experience in each unit related to online and offline trade.
BigArena fulfillment marketplace is the place where you can successfully develop your dropshipping business model . You can have all the available goods without the need to invest any funds in goods or store such. Our team has established experience in e-commerce processes, so you can rest assured that all products on our platform are ready to be sold, packaged and sent to your end customers. We deliver all over Europe at competitive prices, and at the same time you can take advantage of the wholesale price for single pieces of available items. For more information fill out our survey and you will receive a proposal from us on how to develop your business together.