When you open the store the traditional way, you take on a lot of risk. It’s risky to buy and store stock without any orders being made for your products. It’s risky to spend money and time on building your site and marketing it, as you won’t be 100% sure that the product will sell.
Drop shipping, on the other hand, will minimize the risk that you take on when launching an online store. It’s simply an order fulfillment method. You find vendors that are willing to drop ship their merchandise, and you come to an agreement with them. A customer orders a product through you, and you pass that order to the vendor. You collect payment upfront, and the vendor delivers the product to the customer.
If you are an entrepreneur who wants to launch an online store, drop shipping can be the best option. This post will explore the various reasons why.
You don’t need mountains of cash to get started
If you are not rolling in money , then drop shipping is a godsend. Remember, you don’t have to purchase merchandise from your pockets. You purchase merchandise from an actual order, and you pocket the difference. Raising significant capital for the online store will be unnecessary, as you can get started with very little cash. You don’t have to worry about shipping costs or holding onto stock, and that will drastically reduce the risk that you take on. In traditional retail, failing to sell products can quickly kill a business. If a product doesn’t sell, then you’re stuck with all of the stock that you bought. And that stock will have to be stored somewhere, so you’re most likely paying for that as well. With drop shipping, you’re just passing orders along.
You can get started quickly
All of the points mentioned above still hold true. Paying for merchandise and storing it will not only be expensive, it will be time consuming. You cannot come to the market quickly; launching your store will be a slow process. With drop shipping, as soon as the site is set up, and you find reputable vendors, you can start selling immediately.
You can test out different product lines and brands
You can test out different product lines as quickly as you want. A traditional store will only have so much money and space for their products. If you’re selling TVs and you’ve invested money into the product line, then you can be stuck with it. You may not have storage space for any other product offerings, and paying for other products can be a fool’s game if you haven’t proved that the products can sell. Inventory is a nightmare in traditional retail stores, and you bypass all of that with drop shipping. Instead of offering 1 or 2 product lines, you can offer hundreds or thousands. You are not limited by what you can handle, since you are just fulfilling orders to the supplier.
You can spend your time on other areas of the business
Handling inventory will consume your time like nothing else. With drop shipping, you can use the time that you would have spent managing inventory on other things like marketing. Regular ecommerce startups have to worry about various aspects of the online store, which detracts from their availability and time. If you can spend more time on, say, gaining traffic to the site, or if you can focus on providing stellar customer service, you can make a great deal of money in the drop shipping business.
These are the main advantages of drop shipping. If you want to come to market rapidly, with very little investment or risk, then drop shipping should be a very attractive form of online retail. Don’t just read or daydream about it; get to work on creating your online store.