Are you are bothered by high inventory costs and the strain of order fulfilment? In that case, dropshipping is an option which you could consider. Here, the inventory is held by a dropshipping supplier who completes the entire order fulfilment on your behalf. Ultimately, the customer is not aware of the supplier’s involvement while receiving the product. Thanks to the low capital involved you can expand your catalog with multiple products. Curious to know how? Then simply go through this article, compiled just for you! Today, we present to you, an introduction to dropshipping.
How It Works
The first step is to finalise on a dropshipping supplier. After receiving an order you pass order details and customer details on to them. Following that the supplier begins the order fulfilment process. Then they ship the order to the customer. Throughout this process, you must maintain constant communication with the supplier to ensure all the steps are going smoothly. Like every other form of fulfilment, it has its pros and cons. Let us look into them.
Benefits Of Dropshipping
As you can see, there are a few obvious benefits. The first and most important one is that there are very less costs involved. This is the main reason why sellers prefer dropshipping. Since you do not hold inventory, you can list more products. As a result, your store will be more attractive. And you can do this without being affected by costs.
Consequently, this resolves you of managing these two parts of your operation as well. It gives you flexibility to work from any location. This implies that you are free to focus on other aspects of your store’s growth.
Risks Associated With Dropshipping
The supplier sending damaged products is one of the biggest risks associated with dropshipping. You must ensure that this does not happen. How can you? Through constant communication product verification whenever possible. Also, keep in mind that suppliers will charge you for all the costs involved. As a result, do not expect high margins initially.
Keep in mind that customers are not aware of the supplier’s involvement. Therefore you will face the consequences of any mishaps or delays. It will have an impact on your reputation. There will also be high costs and multiple processes involved with rectification of these errors, so you must be ready for them as well.
Things To Keep In Mind
While dropshipping, your name has to be mentioned in all slips. All the information which a customer receives regarding to the seller, has to be yours. Keep in mind that all selling related records must be yours and yours alone. Else, it might lead to ownership problems in the future. Which is why, you must keep a check on these all little things.
As you can see, dropshipping is a not a perfect solution and has a few risks with it. However, these can be resolved with constant communication and maintaining good relations with the dropshipping supplier.Ultimately it offers you the scope to increase your listings at the least cost possible. Which is why you can consider dropshipping if you face a lack of funds while trying to grow your online business. Good luck!