What is Dropshipping? 9 advantages and 6 disadvantages of dropshipping

Business through dropshipping is one of the best ideas to start in 2021. Here dropshippers are either manufacturers of the products or warehouses or another retailer. Seller takes customer’s orders and supplies their information to the manufacturer of the product or another retailer etc. They provide the desired products to the customer.

The role of the seller is to attract the customers and receive orders and publicize the product to get more orders. In it, the seller does not have to bear manufacturing cost, packaging cost, shipment cost, or storage cost.

Detail knowledge on dropshipping:

Before you jump into dropshipping you have to see its terms throughout. We can’t start anything without seeing its advantages and disadvantages. So we bring to you detailed knowledge on dropshipping as it is not known to many.

Advantages of dropshipping:

Dropshipping provides you many advantages. These advantages are in details below:

1.Dropshipping is a low-cost startup plan:

You can start any business without any prior investment. You only have to purchase a domain name then set up a website and manage it to sell products online.

2.You can offer a wider range of products:

Every business wants to offer a wider range of products to customers to have a larger customer base. In dropshipping as a seller, you can offer a wider range of products without worrying about the size of different products or the storage places of these products. You can offer low-selling products with big-selling products to gain more profit, which is a great advantage of dropshipping that you can use.

3.More flexible location:

You don’t need any fancy building or storage place to run your business, you can manage this at your home or any comfortable. So dropshipping provides you flexible work locations this is the advantage of dropshipping which cant be neglected at all.

4.Low finance risk:

You don’t have to bear manufacturing cost or packaging cost or storage cost or storage cost in dropshipping or any shipment cost. If these expenses are excluded then all you have is product advertisement and customer service expenses. Even if your one type of product doesn’t sell you don’t have to face that much financial loss as faced by the manufacturer.

5.Testing of new product at low risk:

When you run any store with dropshipping you can test new products in your store sidewise at a small level to see their performance. Thus, you can test new products at low risk.

6.More free time:

When you run an online store, you don’t have to worry about other things like product storage or production problem then you much free time to take into consideration the profit you have and making smarter decisions to expand your business.

7.Wider range of selection of products to sell:

From thousands of products, you can select what you want to sell in your store. You don’t have to do advance payments for the product. So, you can add in your store any product you want to sell.

8.You can offer products instantly:

When selling products, on market demand you can add any new product instantly in your store because you don’t have to make a production plan as you don’t even have to manufacture the product or store it.

9.Timing saving:

When you don’t have to manufacture a product and nor you have to store or ship them then you have a lot of free time. So, it saves you more time to invest in other profitable things.

Disadvantages of dropshipping:

As you can see from the advantages above don’t just jump into it. Everything has advantages as well as disadvantages. Dropshipping has disadvantages which you have to read below carefully before making any other decision:

1.Customization and branding is limited:

When you chose to have a product from another then you don’t have control over customization. You don’t have any product of your brand or related to your name. When your customer places a customized order then you have no control over it. Some suppliers can cooperate with you on product changes, but mostly you don’t have control over customization, which is the main disadvantage of dropshipping.

2.Not having full information of products:

As you don’t manage the product physically then you don’t have any information about products. When customers ask for product dimensions like length, weight, and height, etc., you will be not able to answer their query on the spot. For this information, you have to ask the supplier. So, you will solely depend on the supplier to provide you information regarding the product and it will make a delay in providing information to customers which will leave a bad impression on customers.

3.Vast competition:

Dropshipping seems an easy way of earning money. Due to this, there is vast competition in this field. So, you have to face many competitor’s new tricks and overcome them which can be mentally exhaustible for you.

4.Less profit:

Dropshipping has a vast competition, due to this, you will have to lower your selling price to overcome the competitors. If your competitor sells the same product at a cheap price but with low quality, still your product’s price will be compared with the price of that low-quality product. Which will provide you low profit as you expected.

5.Customer service issues:

You don’t have to worry about the shipment of products. But you will not get to know about when the product will be delivered neither why it is late or if it is at fault when delivered. If the customer inquires about the delivery of the product you most likely will not have any information regarding it. If customers have a bad product, firstly they will approach you. But to solve the customer’s problem you will have to approach the supplier and wait for their response. This may make you lose customer loyalty.

6.Fraud:

As you will get your payment when the product is delivered. It is much likely that you will receive fraud. It commonly occurs that famous suppliers do this type of fraud with newcomer sellers.

We have let you know the advantages and disadvantages of dropshipping. You should keep your eyes and mind open to make the decision. If you decide to do this, then you have to work hard to achieve your goal in life and business.

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