DropShipping – The Pros & Cons

Drop Shipping is the most common type of online store.

It is the simplest, cheapest and easiest online store to implement (this excludes Affiliate Marketing which does not entail the sale of your own products, since you refer someone else’s product and purchases are not done on your site).

Products are supplied and stocked by a 3rd party (vendor). When an order is placed by the customer to you the merchant/seller, the purchased item is shipped directly from the 3rd party supplier to the customer.

The #1 advantage is NO upfront purchase of products to sell – you pay for products after a customer places an order.

DropShipping - The Pros & Cons

For you the seller, you also don’t have the concerns pertaining to stocking inventory and shipping to customers.

Your responsibilities are, deciding which products you will sell, finding a supplier, marketing and taking orders.

What Is The Cost To Start?

The cost to start is dependent on your starting independently or within the framework of an e-commerce platform such as Shopify.

Optional use of Jungle Scout and Worldwide Brands will incur cost, but they save time in the lengthy process of determining profitable products to sell on Amazon and trust-worthy suppliers.

Independently ;

    1. Determine products to sell (can be done with deep research on Google &
      optional and for ease of research use Jungle Scout)
    2. Source A reliable DropShipper  ( can be done for free, risk of fraud and scams –
      optional use of a drop shipping provider for scam-free providers – Worldwide Brands)
    3. Obtain a web host (Bluehost)
    4. Obtain a template (option of free or paid)

Using Shopify ;

  1. Determine products to sell ( guides, webinars & 24/7hr support is provided, research still needs to be done, optional use of Jungle Scout to determine products which are selling on Amazon)
  2. Determine a reliable DropShipper (dropshipping apps provided, dropshipping guides offered, optional use of a drop shipping provider  Worldwide Brands for high quality, wider variety of products and scam-free suppliers)
  3. Obtain hosting
  4. Option of free or purchased templates

Shopify Comprehensive  DropShipping Guide

Examples Of DropShipping

There is a host of companies and websites (giant as well) who are present across the globe. Besides running their own businesses, these companies also become a platform for drop shippers.

In this way, both companies and whole sellers obtain great profits whereas the purchaser gets the items at the door step.

Amazon and eBay are the two main entities which set example worldwide. Additionally, there’s the option of creating your personal drop shipping store, independent of Amazon or E-bay.

Here’s a brief overview of both:

Amazon (Drop Ship Overview)

Drop shipping is facilitated with Amazon. You sell it, Amazon does the shipping. It has created one of the most advanced fulfillment networks in the world, and your business can benefit from their expertise.

With Fulfillment by Amazon (FBA), you store your products in Amazon’s fulfillment centers, and they pick, pack, ship, and provide customer services for the products. As a drop shipper for Amazon:

  • One must fulfill orders as per the terms and conditions.
  • Be the seller of record of each product.
  • Get him or herself identified as the seller of the products including other information.
  • Be responsible for accepting and processing customer returns.
  • Comply with all Amazon policies
  • Ensure you are from a U.S State or country which can sell on Amazon

eBay (Drop Ship Overview)

On eBay, Drop shipping is done like Amazon, but with following rules:

  • Selling using a product sourcing service is also allowed on eBay.
  • The seller must guarantee that the item will be delivered to the buyer within 30 days of the end of the listing.
  • Sellers who choose to sell using this method are responsible for the item and their buyer’s satisfaction.
  • If there is a problem, it’s the seller’s responsibility to work it out with the buyer.

On eBay, Drop shipping is just another way to sell items but comparatively different and difficult in some cases. A drop shipper who works with eBay may experience:

  • Bad feedback due to out of stock product.
  • Tricky payment systems.
  • Direct from the source competition.
  • Less profit margin.

Advantages & Disadvantages of Drop Shipping: (with Amazon, Ebay, Personal Online Store)

Advantages

There are some great advantages of doing business through drop shipping:

Selling via Amazon especially, automatically provides high traffic which gives the chance for higher sale volume.

✓ Low capital output – you don’t have to pre-purchase the inventory. You purchase the inventory from suppliers after a customer places an order, so you can begin a drop-shipping business with very little money. You can begin with as low as USD $100 monthly.

✓ Low overheads & Ease of operation – compared to a brick and mortar store or some other online business stores, you don’t have;

– To purchase inventory up-front
– Store/warehouse cost (rent/mortgage) – your website is your store
– No labeling, packing and shipping responsibilities and cost

✓ Global clientele & Business operation – you can operate your business from any part of the world, and anywhere, once you have reliable internet connectivity.
Likewise, your customer base is worldwide.

✓ Ease of Scaling up – Social media ads via facebook, Instagram, Google (Adwords) – are highly effective and low-cost, reaching hundreds for as little as $10. As your customer base and orders increase, your expansion will be limited to online upgrades to handle the increased traffic.

✓ A quick, easy and transparent cash flow occurs because the seller is paid when the purchase is made.

✓ Elimination of duplication of effort, since only one warehouse will pick, pack, and ship the product.

Disadvantages

Besides being super effective and acceptable worldwide, drop shipping also offers a few drawbacks as well:

✓ Several customer issues occur
-such as out of stock inventory (happens if your supplier doesn’t have an updated inventory stocking system)
-delayed shipping or arrival of ordered goods to the customer
-incorrect items sent

✓ Lower profit margins – Many a time, suppliers charge retailers a handsome margin on each item sold since it is more manual labor for them than if it was wholesale handling and shipping.

✓ Competitiveness – ensure you research your niche, know your market, obtain guidance/training, put effort into selecting your suppliers. This is especially an issue if dropshipping on Amazon or Ebay rather than on a personal online store.

✓ Limited control – if drop shipping with Amazon or eBay, you are run by a larger organization, whose primary interest is their business. You may be restricted by what you can sell, brands and customer interactions.

– Limited permissions for retailer’s customization in terms of branding and marketing.

✓ Risk of scams and fraud – hence Shopify’s apps and Worldwide Brands are recommended

Register For A Free Webinar: What Is DropShipping, The Advantages & Disadvantages, How to Quickly Start a Profitable Dropshipping Business, Questions & Answers…Webinar Registration

How Do I Start?

Before really starting a drop shipping arrangement for you, some points need to be considered in detail:

Find Your Niche

Go for the best and most demanding. Keeping in view your target customers, carry out a search – DropShipping product guide for finalizing your correct and suitable product range.

Ensure to use effective research tools such as Jungle Scout, which can save time during the research.

In seconds it scours the Amazon database and yields results according to filters you set for Amazon Best Seller Rank of a product, estimated sales (per month), estimated revenue (per month), number of reviews, weight and average user ratings.

Get a Reliable Supplying Source

See whether and how you can arrange a good and efficient supplier to carry on with the unbreakable supply chain.

Go Technical

No option is available to you without sufficiently adopting the suitable technology. Selecting products and a domain name requires homework. The website for your products must be designed in an effective and user-friendly layout.

Efficient Inventory Managing

Once you are into drop shipping, managing the inventory correctly becomes the important issue. Before triggering the supply chain, product range and descriptions along with expected ordered quantities and suppliers’ capacity must be calculated.

Documentation and Tax policy

All relevant documentation needs to be completed in an authentic way to avoid later complications. Different countries offer and apply different tax structure. Try to configure your tax details in correct perspective and details.

Payment Patterns

Last but the most important issue is to decide payment settings. A suitable, efficient and effective mode of payments is necessary.  People across the globe usually use PayPal (of course there are many others to select). Whichever you choose, ensure your customer’s credit card security is forefront.

With the great reliance of customers on electronic and smart shopping, Drop Shipping is a business network growing and expanding with a rapid speed. In fact, it is becoming day by day the name of the game.

The Next Step…

With the great reliance of customers on electronic and smart shopping, Drop Shipping is a business network growing and expanding with a rapid speed. In fact, it is becoming day by day the name of the game.

For more information or to start a drop shipping business, you can check Shopify – DropShipping the worldwide#1 E-commerce platform.

Or check our guide on how to Launch Your Online Store With Products In 1 Day for $100

They provide training, information, webinars, 24hr customer support, beautiful website templates, expert help, and their implementation is simple without any prior knowledge of computer jargon.

Best of all there’s a 14 day free trial period – Shopify to ‘wet your feet’ and see if it’s the right fit for you.

Be Informed. Be Inspire. Be Motivated.

Drop Shipping- The Pros & Cons
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