Dropshipping is a business model that came to life more than a decade ago and people back then made a ton of money. But is this business model still profitable and worth starting?
Well, let’s find out.
What is Dropshipping?
First of all, we need to understand the basics of dropshipping in order to come up with some kind of conclusion. Dropshipping is an online business model where you only have an online store that sells someone else’s products.
The idea behind dropshipping is starting a business with low capital. Dropshipping allows you to start a business that has huge potential with only a few hundred dollars.
Every time someone places an order on your website, you buy the product from your wholesaler (usually in China) and ship the product directly to their address. This means that you don’t have to worry about storage, logistics, and paperwork.
Sounds great, right?
Well, let’s see the bigger picture before coming up with conclusions.
Disadvantages of Dropshipping
Even though the eCommerce market is rising and there are now more people shopping online than ever before, there are some disadvantages that can make everything go downhill.
The first problem is shipping. Since you are not handling any logistics, it is almost impossible to know whether your customer received the package or the package design. This means that your entire reputation lies on the shoulders of your supplier. If he sends out the wrong product or makes a mistake in the shipping address, you are the one that customers would blame.
Another problem is combining a few products in one order. Most people choose to get their products from different suppliers, which means that if a customer orders two or more products they will arrive in different packages and with different shipping dates.
Then we have the quality control issue. Since most people add products to their website without seeing them in real life, it is hard to know what kind of product the customer will receive.
Last but not least, we have a competition. Since dropshipping is a commonly used business model by many people, it is very hard to find a niche that has low competition.
Advantages of Dropshipping
Since we got the disadvantages out of the way, it is time to focus on some positive things.
The reason why dropshipping is so popular is its affordability. You can start an online dropshipping business only by buying a domain name and making a website that is even lower than $100. Even though it is a low investment, dropshipping businesses have huge potential for making big bucks over time.
Another important advantage is the “no inventory” option that is important for people that don’t want to invest a lot of money in their business. If you decide to run a traditional eCommerce business, you need to purchase your products, store them, and then sell them. This is a complicated process, especially if you choose the wrong products and they don’t sell well.
The best thing about dropshipping is simplicity. You don’t have to worry about logistics, packing, and sending out products. Your only job is to advertise your products and make an order from your supplier that will be shipped directly to your customers. This is great for people who don’t have a lot of time to run a business, and they see it as a side hustle.
Also, a dropshipping business technically can be launched in minutes, although you’ll need to invest a lot of time into research and finding the right products and suppliers.
Even after all that time, dropshipping is still profitable in 2021. All you need is to choose the right idea, find the winning products, and have more advanced knowledge about social media marketing since it is will be the main source of the traffic to your store.
You can check out Shopify guidelines on dropshipping and download helpcenterapp.com to know more about the pros and cons of this business model.
After all, there is little you can lose so why not try your hand at dropshipping?