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Advantages of Starting a Drop Shipping Business

Advantages of Starting a Drop Shipping Business

Advantages of Starting a Drop Shipping Business

Drop shipping is a technique for execution of orders where the retailer does not keep goods in stock but reckons upon wholesale dealers or manufacturers who fulfil deliveries of goods to the customers. Drop shipping business is a direct shipment of goods, which in fact has a number of benefits that make it attractive for online trading and businessmen.

When a client orders goods online, the retailer gets a new paid-up order. Then the customer’s contact details and money for the product’s true value, if necessary, are automatically or manually transmitted to the wholesaler or manufacturer. They in their turn are obliged to deliver goods to the ultimate purchaser. The wholesaling firm or manufacturer delivers the ordered items and the retailer gets profit on the difference in prices.

There are at least five beneficial features of drop shipping business to consider it an interesting and important aspect of the e-commerce area.

1. Offers a wide range of products

Drop shipping business allows sellers to offer a wide range of products for sale, which you do not have to buy and store.

Imagine a seller who sells coffee or tea online and at a conventional store. Physical store has a constraint environment for storing coffee machines; therefore, it offers a limited number of goods. However, on the Internet the retailer has many opportunities for delivery mechanisms, online sale, without having it in stock (as a mediator). The same is with coffee machines; placing them in other premises - shops or offices - you get more opportunities and profit. A variety of alternatives will help in promotion and marketing as every product will have its landing page, which more and more target customers will visit.

2. Quick response to shifts in demand

This aspect may be a problem for some online retailers. However, making use of drop shipping technique you can update your list of products, adding new and deleting unpopular ones without troubling (well, you don’t have to liquidate them), quickly responding to demand without taking the time.

Drop shipping also offers a unique opportunity to start a business right now. You should just place your offer on a popular website, for example, eBay, or create your own online shop using popular CMS. Then there remains the most important thing, product promotion.

3. Explore new market niches

Drop shipping also gives you the opportunity to learn and master new offers.

For example, you retail swimming suits, but sometimes the online shop receives visitors on “swimming accessories” demand or something like that, that is, associated goods. That is why we instantly look for the supplier of these goods with drop shipment service and try to expand the products range. Then we see how often online customers order this product, i.e. how well these products sell.

4. Little investment

We should mention it once again that you will not have to purchase goods at your own expense. You will expend only on technical aspect of your business as well as marketing, so that you can considerably reduce assets or direct the remaining money on other issues solving.

5. More time

In drop shipping business the retailer doesn’t expend efforts on packing, shipping or delivery of goods. All these issues are time consuming; hence, we save it.

For example, when opening an online shop, at the initial stage you will have to be a packer, a delivery man, an accountant – all in one, and of course the secretary answering the phone. May be with huge investments in the womb of time, you will give such functions for outsourcing and will occupy with prospecting. However, it is up to you to decide.

The underside of the drop shipping business.

Any business has its merits and flaws. Here, for example, sometimes arise problems in customer service, and namely, order mess-up, stock in trade, difficulties with return and exchange, which you will have to take upon yourself.

That is why, be careful when choosing a supplier, specify all the peculiarities of your collaboration, money reward, commission fees, modes of delivery of goods to the customer, assurance, possibility of the product exchange or its servicing, availability of its constituent parts. Only your concern and professional approach will help to set up a streamlined internet trading business.