If you have been thinking about starting a new business online but have minimal cash to invest, then I have great news for you!
You can start a business with nearly no upfront costs with a process known as dropshipping.
When you think of a physical store, what do you imagine? Perhaps an interesting storefront, catchy colors and logos, and everything that goes along with it (i.e. lots of people). The truth is that many brick-and-mortar stores are closing down due to poor economic conditions over the past few years.
However, there is one type of store that has seen an immense amount of success: online 'drop shipping' stores. So what exactly is dropshipping?
Dropshipping involves selling products by having third-party suppliers ship the items directly to your customers. You are basically creating an online store that is nothing more than a front for dropshippers.
There are some upshots and downfalls of dropshipping; however, it can be very profitable if you know what you are doing. For example, with dropshipping, there is little time spent on shipping or labor costs (both of which can be considerable) and sales tax issues are significantly reduced.
This reduces overhead expenses significantly. However, some difficulties come along with this - you don't have full control over inventory, prices may fluctuate on products without notice, and customer service is also not as straightforward as in brick-and-mortar stores (for example, if a customer does not like an item they ordered, returns may be difficult).
Now that we understand what dropshipping entails, let's go over how to actually get started. Fortunately for you (and me!), there are plenty of tutorials online on doing just this!
However, it is important not to get overwhelmed by all the information presented - start small and work your way up. For instance, don't try to create a massive website with a million products just yet.
Instead, gain real-world experience in building a smaller store first and then move onto something larger once you have a better grasp of all that is involved.
Dropshipping can be an excellent option for anyone looking to start a business that costs little upfront, especially if you are the type of person who prefers to have more time for other aspects of their life.
One great thing about dropshipping is that you can spend more time on marketing and customer service instead of worrying about inventory or handling shipping yourself.
However, there are some downsides to dropshipping as well. Some of these difficulties include not having full control over inventory, prices fluctuating on products without notice, and customer service being more complicated than with brick-and-mortar stores.
Now that we understand what dropshipping is and how it works in practice, start with a smaller project to gain real-world experience in building a store. Then you can move onto something bigger once you have a better grasp of all that is involved.
Dropshipping has its pros and cons, just like anything else. Some of the downsides to dropshipping include not being able to have full control over inventory, prices fluctuating on products without notice, and customer service being more difficult than with a traditional brick-and-mortar store.
However, one great thing about dropshipping is that you can spend more time doing things like marketing and customer service instead of having to worry about inventory or shipping.
Many online retailers are starting to use dropshipping as a way to boost traffic and increase revenue. A study done in the UK found that using dropshipping, on average, increased annual sales by 52%.
For companies that sell their products through Amazon Marketplace, this is an opportunity to have their products featured on Amazon's "Frequently Bought Together" page. This can be beneficial when it comes to being seen by customers.
Some stores may decide that it is more profitable for them just to become a dropshipper instead of an actual store owner who has inventory and customers coming in-store.
This way they have no worries about needing product at the right time or shipping orders out quickly - since their store will simply be a front for shoppers, they can take a cut of the profits. If you are interested in starting your own store but don't want to deal with inventory, this might be an option for you!
Dropshipping can be helpful if you want to try out selling online before investing too much money into it. For example, you could set up a store on Facebook or Shopify and run it for free before upgrading later on down the road once you figure out what works best for your business.
Some stores may decide that it is more profitable for them just to become a dropshipper instead of running an actual store.
If you are interested in starting your own store but don't want to deal with inventory, this can be a great option!
It's important to know the positives and negatives of dropshipping before making a decision on whether it is right for you or not.
The main pros of using dropshipping include being able to have more time for other aspects of your business, spending less money upfront, and having access to customer service without having to run an actual store.
However, there are also downsides to drop shipping such as not being able to have full control over inventory or prices changing without notice.
Leave a Reply