If the pandemic has left you without a job, or just feeling like you could be doing something more with your spare time, you might have considered setting up your own business.
E-commerce is a lucrative industry with plenty of people taking the plunge and launching their own online store. But if you’re not sure on what product you want to sell, or can’t afford to buy stock, you’re probably considering dropshipping.
But what is dropshipping, and is it a good idea?
What is dropshipping?
Essentially, dropshipping is a fulfillment service that makes starting your own online store quick and easy. Rather than you filling up your dining room with stock, a dropshipper will provide the inventory, pack and ship the order to the customer so you don’t have to.
There is a huge number of dropshipping services available now, such as AliDropShip. Each has its own requirements with some needing a monthly subscription to access. It’s important to research your dropship service in depth before signing on, as these people will be in charge of providing your customers a great product and service, without you even laying eyes on the physical product.
The pros of dropshipping
– Fast start-up
Dropshipping is a popular choice for new business owners as it is a quick way to get started. Once you’ve built your website, or signed up to an e-commerce platform like Shopify, you can get uploading products within minutes. All you have to do is choose which products you want to sell and for how much.
– No start-up costs, less risk
Unlike other business ideas, dropshipping requires very little upfront cost. Even services that require a monthly subscription don’t cost a lot. By buying wholesale, you’ll need a nice lump sum of money to get started, so that you can provide your customers with a nice variety of product to browse.
In a similar sense, there’s much less risk when it comes to dropshipping. If a product isn’t selling, just delete it and try again. With wholesale, you’ll have already invested money into stock, and removing it from your site would cause you to lose a ton of money.
– Hassle-free shipment
Rather than organizing delivery every time someone orders, you can leave all the hassle to someone else. That means you have more time to find leads and get marketing.
The cons of dropshipping
– Low profit margins
It’s difficult to find the balance for pricing goods. The dropshipper will incorporate a small profit into their prices, and you’ll need to add your own onto theirs. With smaller goods this can make the price of a single item too expensive for consideration.
– No quality assurance
This is why researching your dropshipper is vital. As you never actually see or touch the products yourself, it’s hard to know what’s actually arriving to the customer. With this type of service, you have very little control over quality assurance, but you can guarantee you’ll be responsible when your customer isn’t happy.
There is a never-ending list of pros and cons for dropshipping. It’s important to do your own research and seriously consider your options for stock and fulfillment. If you can get your product range, pricing and marketing right, you could earn a pretty penny.