- LESS CAPITAL IS REQUIRED
- EASY TO GET STARTED
- LOW OVERHEARD
- FLEXIBLE LOCATION
- COUNTLESS PRODUCTS
- EASY TO SCALE
Less Capital Is Required
Probably the biggest advantage to dropshipping is that it’s possible to launch an ecommerce store without having to invest thousands of dollars in inventory up front. Traditionally, retailers have had to tie up huge amounts of capital purchasing inventory.
With the dropshipping model, you don’t have to purchase a product unless you already made the sale and have been paid by the customer. Without major up-front inventory investments, it’s possible to start a successful dropshipping business with very little money.
Easy to Get Started
Running an ecommerce business is much easier when you don’t have to deal with physical products. With dropshipping, you don’t have to worry about:
- Managing or paying for a warehouse
- Packing and shipping your orders
- Tracking inventory for accounting reasons
- Handling returns and inbound shipments
- Continually ordering products and managing stock level
Because you don’t have to deal with purchasing inventory or managing a warehouse, your overhead expenses are quite low. In fact, many successful dropshipping businesses are run from a home office with a laptop for less than $100 per month. As you grow, these expenses will likely increase but will still be low compared to those of traditional brick-and-mortar businesses.
A dropshipping business can be run from just about anywhere with an internet connection. As long as you can communicate with suppliers and customers easily, you can run and manage your business.
Because you don’t have to pre-purchase the items you sell, you can offer an array of products to your potential customers. If suppliers stock an item, you can list if for sale on your website at no additional cost. Wonify, for example, has over 15,000 products available to sell!
Easy to Scale
With a traditional business, if you receive three times as much business you’ll usually need to do three times as much work. By leveraging dropshipping suppliers, most of the work to process additional orders will be borne by the suppliers, allowing you to expand with fewer growing pains and less incremental work. Sales growth will always bring additional work – especially related to customer service – but business that utilize dropshipping scale particularly well relative to traditional ecommerce businesses.
All these benefits make dropshipping a very attractive model to both beginning and established merchants. Unfortunately, dropshipping isn’t all roses and rainbows. All this convenience and flexibility comes at a price.
Understanding Dropshipping – What are the Benefits?
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the merchant purchases inventory as needed from a third party – usually a wholesaler or manufacturer – to fulfill orders.
The Supply Chain & Fulfillment Process
“Supply chain” is a fancy term describing the path a product takes to go from conception through manufacturing and finally into the hands of a customer. If we were talking with hard-core supplier chain gurus, they’d insist a product’s supply chain reaches all the way to the mining of the materials (like oil and rubber) used to manufacture an item. But that’s a little intense.
For the purposes of this guide, we don’t need to get quite that detailed. You simply need to understand the three most applicable players that make up the dropshipping supply chain: manufacturers, wholesalers, and retailers.
What is Shopify?
So where do I begin?
At Wonify, we have you covered. Whether you are looking for trending products for your current e-commerce store or looking for help getting your off the ground, we have the right solution for you!
Picking Products to Dropship
The biggest hurdle most new dropshipping entrepreneurs face is picking a niche and products to focus on. And it’s understandable – it’s likely the biggest decision you’ll make and has long-term consequences on the success or failure of the business.
The most common mistake at this stage is picking a product based on personal interest or passion. This is an acceptable strategy if being interested in the product is your primary objective, not necessarily business success. But if your #1 goal is to build a profitable drop shipping site, you’ll want to consider setting your personal passions aside when doing market research, or at least making sure they meet with the criteria discussed below.
What is Shopify
Our Ultimate Free 7-Day Dropshipping Course!