What are the benefits of dropshipping?

With drop shipping, there’s no necessity to store inventory on hand, which saves your business the (time, labor and monetary) and expenses of manufacturing and organizing the products yourself and managing your own storage facility property to stock them. Even though you only drop ship a few of your products, you’ll be maximizing resources for the products that need extra attention. It even enables you to provide items that would typically be hardly possible to ship due to your location’s restrictions, like extremely large or perishable goods. You can be based anywhere in the world, and your items will still be delivered to your customers!

Another advantage is that your drop shipper deals with the entire order fulfillment, from packaging and shipping your products. For many entrepreneurs, packaging, shipping and fulfillment is a huge logistical inconvenience. Drop shipping practically outsources that aspect of the business and makes it somebody else’s responsibility. Because drop shippers are often large businesses working with several orders on a daily basis, they may even have negotiated shipping rates that are lower than the ones your small or medium business can acquire. Drop shipping can also decrease losses from damaged products, considering that shipments are directly taken from the storage facility and delivered straight to the customer.

Along with eliminating the demand for the physical inventory storage, drop shipping can also avoid logistical frustrations. You don’t have to stress over overstock or shortages on your end, nor is your company as vulnerable to the threat of shifting trends, resulting for certain products to suddenly fall in or out of favor. And if you ever need to broaden your selection to new items, many drop shippers have a wide variety of goods to provide. from incredibly niche items to popular or classic sellers. Between the ability to expand and the versatility to decide on your company location, drop shipping naturally encourages scalability.

Ultimately, the most significant benefit of drop shipping is that the store owner only buys the product when the customer does. Instead of investing in thousands of products to get bulk pricing and paying for the storage of those goods, business owners instead get to invest their resources in other parts of the business. This diminishes the gamble of acquiring products that has less possibility to sell and brings the up-front cost of the product to zero. For businesses that are striving to adhere to a lean cost structure or would like to start up without having huge funds, drop shipping is the answer. As a matter of fact, if you really wanted to, you could actually launch a business for as low as a hosting fee (and time, needless to say).

Similarly, drop shipping is an ideal practice to check out latest products or ideas. If you’ve been speculating which type of t-shirt or which variety of jewelry would be an in-demand seller on your site, drop shipping grants you the chance to carry out the market-testing in real-time, without having to spend money in testing the market pre-launch. If the item doesn’t sell, you can change tactics in an active way until you reach the magic formula that works for your store.

Next lesson, What are the pitfalls of dropshipping?