Benefits of E-Commerce Dropshipping
What is Dropshipping?
Dropshipping is a big business that is becoming more popular as time moves on. A unique way of operating, you set up your website and then integrate with a dropshipping organisation. They allow you to easily upload their products directly on to your website. They then supply all the products purchased directly to your customer. Does it sound too good to be true? Well you might be surprised to hear that it is not. It is an impressive new business model that is benefitting business owners and customers alike. It is a business model that is worth considering.
If you are thinking about beginning a dropshipping business, then it is important to be well informed. Understanding the benefits that dropshipping could give you is an important consideration. Our guide pulls out all the main benefits for you as a business owner. You will get an insight into what it could do for you. Then you will have the ability to decide whether it will work for you. It is not suitable for every single business. You might however be surprised, at just how many industries it can work for.
Easy to Do
The key thing about dropshipping is its ease of use for you. It is set up to be as easy as possible and work in a professional way. You just list your products and go. They integrate with your own website with the most up to date information. Whether you have ten or a thousand products, the process is the same. Dropshipping companies want to make the process as simple as possible. This way you will want to keep working with them and creating more business for you both. They are dealing with businesses across the world, so make their processes as user-friendly as possible.
As many things are fully set-up for you, like product descriptions and photos, there is little to do. Compared to sourcing and buying a full inventory, photographing and listing, it is incomparable. It is in the interests of the dropshippers to offer you high quality options. After all, these will be highlighting their products on your site. Therefore you only need to invest a very little time and money in any aspect, but especially set-up. This is vital in getting a business off the ground quickly and efficiently.
Often when someone sets up a new business, there are multiple problems. These can be far ranging, from supply to demand and cash flow. The simplicity of dropshopping is that many of these issues are no longer relevant. One of the main improvements is a vastly increased cash flow. Many new businesses spend a lot of money in their first couple of years of work. Many do not see an investment return for the first few years. Others get into large amount of debt along the way while attempting to build the business. These issues are removed to a great extent with dropshipping, for the benefit of all involved.
One of the main things that dropshipping will do, is to save you a huge amount of cost. Your investment footprint is relatively small. You pay out little in advance as you do not purchase any products. With a traditional store, you have to buy the products you want to sell. They sit in your store until they sell. That could mean reducing the item cost multiple times. You might need to strip it back to the warehouse price or even lower with no profits. It could become out of date and need to be discarded, which wastes money. There is no need to do this with dropshipping, so the costs are minimised.
As you do not outlay any costs on the products, you can launch as often as you like. If you would like a monthly product collection, that is fine. You have the power to reimagine your products as often as you would like. If your dropshipper begins offer new product lines that link to the theme of your store, sell them. Add and remove things as often as you like. Keep up with the latest trends with no issues at all. Try some products that are not to your tastes. You need have no concern that you will be left with them in a year’s time.
Dropshippers work with a huge number of smaller businesses. They ship the products for you directly from their warehouse to your customer’s personal address. They are handling a huge number of orders. To this end, they have great shipping rates, much better than you personally could get. As they are packing the products, they are able to buy packaging in a huge bulk order. This leads to reduced packaging costs for you. You do not have these small outgoings either, which all add up. Therefore, the reduction in costs versus a standard business is massive.
A huge factor in dealing with a dropshipping business is the amount of time you can save. Businesses are extremely time consuming. With both internet and physical shops, you need to go through many processes. You need to choose, order in and pay for all the products you choose. You need to carefully consider and arrange to get an appropriate number of each product. You need to be in for deliveries of the products you order. You need to take in, unpack and store all the products appropriately. You need to take the orders then pick and pack the items for each order. Then you need to ship the parcels, either taking them somewhere or waiting for pick up.
In terms of time with a physical shop, add to that staffing the store itself. If you consider the time taken for each order from start to finish, it can be hours. That is without any time you might spend liaising with the customer. It is a massive amount of time spent on running your business. With dropshipping, they do virtually all of that work for you. The onus on you is so limited, which has to bring so many time benefits. This does create an excellent process that saves you taking time to do them.
As a huge amount of time is saved in the process, time remains to do the things that will help your business. You can choose a much wider variety of products for customers. You might have been willing to buy 50 products and keep them in stock previously. However, there are no limits to your inventory with dropshipping other that what they sell. If you sell vitamins, you might have the 25 most popular vitamins and supplements for sale. However, you might lose out where a customer wants something a little less popular. They might have decided to get it from a bigger store before. Now you will have the space and time to stock everything you want to.
Unless you have a business with an extremely small footprint, you will not be able to sell from home. Even things like coffee packets, vitamins and crafting equipment that might seem small, are not collectively. Not when you have 30 different product lines and 10 of each in stock. These are going to take up quite a sizeable space, let alone storages boxes and buckets. With dropshipping there are absolutely no costly storage facilities to account for. All products are held centrally by the dropshipper’s own warehouse. This makes a dropshipping business far more practical and sensible.
A dropshipping business gives you the space to explore new lines without finding room for them. Often physical businesses need to wind up a certain product line before they consider a new one. The cost of storage and the need for an ever bigger space can be an obvious burden. With dropshipping you can change your offerings overnight with that all-important unlimited inventory. The only limit on what you offer is how cluttered you want your site to be. If you set out products in sub-categories though, your customers will appreciate the additional choice.
Have you considered that with dropshipping, truly impractical products can be sold? Do you have the space to store products that are very large? Small businesses do not often consider selling furniture, as it is a storage burden. However, this is no burden at all when it comes direct from a dropshipper to your customer. Delivered to them, without you ever seeing it, it is the ultimate solution to an obvious problem. So, even unusual items can form a part of your business.
It is the same for selling items that are perishable. Even items that have a storage life of 6 or 12 months are a risk to a small business. If you have these products among your product line, it could be disastrous. In some scenarios, you might need to physically throw away products. Not only do you miss gaining any profit, but you lose the money you paid for it originally. Do this too often and you can end up in a precarious financial situation with ease. With dropshipping, your dropshipper takes the strain on any out dated products. You simply benefit from any sales.
Greatly Reduce Risks
As has been touched on, there can be a high level of risk in business. One of the risks is spending money on products and not seeing a return for a long time. Most people do not have money sitting around to be able to wait a long time for a return. This impedes cash flow and can lead to financial difficulty. The dropshipper takes the risk out of this situation. No money is taken from you, unless you pay a monthly fee. Therefore, there is nothing you can lose out on. You only get payments once the customer has paid, so the risk is diminished.
The risk of trends is so high that it can damage businesses when the trend is over. A kid’s craze such as Loom Bands, net retailers high profits. Over in less than a year though, it damaged those who had a lot of excess stock. It simply became impossible to sell. The same happens the entire world around with trends. If it is popular one moment, it can be gone the next. You can ruin your business buying the wrong kind of apparel, headphones or water bottles. With dropshipping, you just remove that product from your site. Then go to the next trend and try your luck with that instead. It’s insanely simple and clever, with low risk.
Whatever you are selling, there will always be popular and less popular versions of it. That is irrelevant with dropshipping though. You can offer low and high volume products side by side. You might have one very high cost product and many of a lower price. You can afford to sell products you could not afford to buy to sell. As the risk is with the dropshipper, you can choose what to sell and when. You will have the choice of a huge inventory. The difficulty will be in working out what will work for you as there is so much choice.
It is you that will choose the price to sell the item at. This is great as you will see the base cost of the product, plus the dropshipping fee. Then you can make the choice of how much profit to aim for. You might see high value items you can make a big profit on. You have the freedom to do this your own way, and make it work for you. You can try some items at higher prices and if they do not sell, you can reduce it. This will not be cutting into costs you have outlaid, as you have not paid in advance for the item. Therefore, the risk is highly minimised.
Benefit for Customers
Customers will love your dropshipping model. If offers them so many benefits that dealing with a small company sometimes does not. One of these is when you have a personal issue that crops up. You may have a close family bereavement, or you might get ill. You still have to fulfil orders at this time, or close down your business. People who know you will be understanding, but internet customers will not. With the dropshipping model, business can basically continue as normal. It will leave you just to carry on and do the things you need to do. You will not be worried about the consequences of not fulfilling your orders.
Your customers still liaise with you direct for excellence in customer service. You can give the kind of service you want to without relying on a third party. You can still operate your website in the same way as a traditional one. From order confirmations to follow-up emails, these extras are all under your control. This is why dropshipping is the best of both worlds and allows you to maintain high standards. The dropshipping company will have set processing standards too. Therefore, this gives you a truly unique operation that is all set out in advance.
With your own web business, you take time to build up your customer base. You go the extra mile, but without fresh offerings things can get stale. If you are always trying to sell the same 5 handbags, it gets boring for customers. If your nail polish is in the same 8 colors all year round, they might feel disinterested. Your customers will feel invigorated by a changing inventory. When you introduce far more choice, they will respond to that. This increases the value of your customers to you. It keeps your customers returning and constantly looking at what you have to offer.
There are a few issues with dropshipping, that you need to consider. There will be charges and you will have to factor those in. However, products in the dropshipping chain are bought in huge bulk. So, overall they might be well be far cheaper per unit than you would expect. Returns can be an additional issue to consider. There are also many different dropshippers and some will be better than others. Some will offer better dispatch times. Some will have lower charges. Do your research and find one that works well for you. By taking the time to get this right, your experience will be enhanced. In turn your customers will benefit in the long-term and be happy customers.
There are so many benefits of the dropshipping model that it is hard to capture them all. Start up in the right kind of business area and there can be huge benefits. From food, supplements, equipment, furniture, furnishings and household items, the options are plentiful. Whatever kind of business you want to move forward with, you can. The minimal time and flexibility you get are well worth the effort you make. You will be providing a wonderful service for your clients. Remember to keep your offerings fresh and they will keep coming back over time. The combination of ease for you and excellent customer service is bound to make it work.
At Speedy Pros, we can guide you through this process of becoming an entrepreneur. For more information, contact us, we are ready to help you develop your business.