What are the Pros and Cons of Dropshipping?

Dropshipping is becoming one of the most popular categories of e-commerce but can you make money at it?

To being, dropshipping means that you list and sell a product online that somebody else ships to the final customer. For instance, you list and sell an Acme product at Amazon, but Acme packs and ships the product from your vendors fulfilment centre – in other words, fulfillment is done by your vendors.

In detail, Acme makes money by charging you to pack and ship the product. Meanwhile, you make money if the amount you charge exceeds the amount Acme charges you.

How Dropshipping Works

Moreover, there are services like Power Day Sale that will sell and ship your merchandise for you. There are a lot of Dropshippers who are working with AliExpress too.

The difference between a full E-Commerce company and dropshippers is the supply of merchandise. For instance,when a client buys the products from you then your vendor will ship those items to the customers.

With most dropshippers; however, you never see the products. Instead, the merchandise gets shipped directly to the customers.

Pros and Cons of Dropshipping

Like any business, drop shipping has its pros and cons. Thus you will have to research the pros and cons carefully to see if dropshiping is for you. Dropshipping is popular because it offers a lot of advantages over traditional online businesses.

The Advantages of Dropshipping

Some of the Pros of Dropshipping include:

• You will do far less work. The drop shipper takes care of most of the work. For example, you will not need to pack orders.
• No hassle of mailing or shipping. There is no need to drive to the Post Office to ship, and no need to deal with UPS, FedEx etc.
• There will be no storage issues. For instance, you will not need to rent storage space, store items in your home and keep supplies on hand.
• Fewer Operation Expenses. There will be no need to spend money on packaging, tape, etc for shipments.
• You can establish a store quickly without waiting for inventory to arrive.
• There are none of the hassles and expenses of establishing a physical business. For instance, no rent, no signs, low advertising costs, and no licenses and local business taxes to deal with.
• Plus there is no need to hire extra labour to handle chores like packing or shipping.
• Moreover, dropshipping costs are low because the vendor handles the inventory.
• Consequently, start-up capital requirements are lower with drop shipping, all you need is listings, a credit card, and a good internet connection.
• You will take fewer risks because the overall capital goes down and risk is limited only to expenses for markeitng.
• There will be lower incidental costs such as insurance, business licensing, etc.
• Generally, dropshipping gives you plenty of time for your job, other business activities, family, hobbies, etc. Hence, dropshipping can be a great side-hustle.
• Dropshipping will teach you important business skills including marketing, advertising, search engine optimization, customer service, and order fulfillment. These skills will help you do a better job at all your online activities even if you quit dropshipping.
• Finally, there will be no need to rent extra space, or room for your business. Thus, real estate costs are non-existent with drop shipping.

The Dsiadvantages of Dropshipping

Dropshipping is not as easy or as foolproof as you might think. It has some serious disadvantages that can make it hard to make money.

The Cons of Dropshipping

• Competition online is intense which keeps prices low. Hence, it is often hard for dropshippers to charge enough to make money on transactions.
• Finding unusual or unique products to dropship can be difficult. For instance, finding popular items that others are not selling can be difficult.
• Dropshipping can take up more of your time than you think. You will have to create listings, advertise items, create your own online store, etc. In addition, you will have to approve every order. You can always outsource it to us, who will do it for you at a much cheaper price.
• Dropshipping fees are high so they can eat up your profits fast. In particular your prices will need to exceed fees by $10 or $15 for you to make money. Which is why when you get it from Power Day Sale’s wholesale program, it’s FREE and no hidden cost along with world-wide free shipping.
• You will need to pay close attention to the niche. In particular, your market can disappear overnight if Amazon decides to compete with you. But, if you already have a loyal consumer base, your niche will be protected. Focus on creating loyalty.
• You will have to understand marketing and be good at it. That means you will need to spend a lot of time researching and studying marketing before you begin.
• You will be dependent on the vendor. Thus, your business will suffer if the vendor fails to do its job. Hence, it is important that the vendor that you find is great.
• You could have to pay fees to both the drop-shipper and online storefronts like Shopify, Amazon or eBay. In fact, eBay and Amazon charge fees every month whether you sell or not. By moving to WooCommerce and Self Hosted WordPress, it will reduce your cost dramatically.
• You have no control over order fulfilment. Instead, employees at the vendors handle all orders. Hence, you will ship according to their schedule.
• Customers will blame you if something goes wrong. Unfortunately, most customers do not realize how little control you have. Thus, they will blame you if the order is late, not delivered, or wrong.
• You are liable for refunds. Note the first rule of online retail you must learn is that you have to refund money.
• Thus you need you enough cash or credit in your accounts to refund several orders at any given time.
• Establishing customer loyalty can be nearly impossible online because of all the competition.

How to get Started Dropshipping

The only way to understand dropshipping and learn if it is right for you is to try dropshipping. Fortunately, experimenting with dropshipping is far easier people realize. For instance, Gnosys Digital will setup a Dropship Website enables you to set up a simple e-commerce business in just two weeks, this include doing everything, vendors, products, fulfilment etc.

Such a business lets you explore and research dropshipping while letting you make a little extra money. More importantly, you can learn the basics of online retailer including customer service and marketing as you build the business.

Since start-up costs are low, this enables you to explore dropshipping and determine if it is for you with little risk. Instead, you can shut the business down at any time if you don’t like it.

Best of all you have no unsold inventory, unused supplies, employees, or rented space to deal with. In fact, all you need to do is turn off the listing and quit.

How WooCommerce can Help you Build a Business

On the other hand, if you like dropshipping, WooCommerce will provide the tools to build a bigger business. WooCommerce keeps the cost low as compared to likes to Shopify. For instance, WooCommerce can help you establish and maintain a dropshipping store. The advantage to a dropshipping store is that you will keep more of your profits because you will not pay fees to Shopify or Amazon or eBay.

In addition, there will be less competition because Amazon or eBay and thousands of sellers will not be competing with you. Instead, your products will be all the customers see. Which means your clients will always be your clients. You can build your client list with WooCommerce.

Finally, you can suspend or close the dropshipping store anytime you want. Thus, you can cease operations quickly in an emergency or close up for vacation almost instantly with no worries.

Why you Should Experiment with Dropshipping

Understanding the pros and cons of dropshipping can help you establish a business and make more money for your family. Dropshipping is not for everybody but thousands of people are making a good living or extra money from it. Moreover, dropshipping will teach you important skills like marketing, merchandising, and customer servicing.

Therefore, experimenting with a Dropshipping is one of the smartest moves that you can make. You can have fun, learn e-commerce, and make some extra cash through such a plan.