How can dropshipping benefit you?
There's no gimmick to dropshipping. It is essentially a operational/logistical service extended to our resellers for their benefit. It is a shipping model operated by most Online Retail marketplaces. There are distinct benefits to using dropshipping for your online retail business:
- Lower Capital Expenditure
This is honestly the golden halo of dropshipping. Because you don't spend thousands of dollars procuring your stock and filling your inventory up-front, you effective save on large amounts of your capital liquidity invested into your inventory. By lowering your capital expenditure, you immediate improve your entry into the market. Using the dropshipping model, you only pay the supplier the cost of goods after your customer has made the purchase. So its highly possible to begin a dropshipping business with very little money.
- Start Your Business Faster
Speed up your go-to-market by passing on a large part of the fulfillment process to the wholesaler. You essentially:
- Save on warehousing
- Packing and shipping your orders
- Tracking your inventory
- Managing returns and inbound shipments
- Manageing stock levels
- Lower Overheads
By passing the fulfillment process to the wholesaler you save on hiring personnel to do the work for you. You can significant reduce the operational cost needed to run your business compared to traditional brick-and-mortar business.
- Flexible Location
As you do not require a fixed location to house your inventory, you are essentially free to run your business anywhere. All you need is a way to communicate with your suppliers and customers. Since the tools are widely available through the Internet, you are no longer tied to the limitations of typical brick-and-mortar businesses giving you a certain advantage.
- Variety
Variety is the spice of life. Since frees you from the limitations of your capital outlay, you are able to list a larger selection of goods on your storefront. Without having to pre-purchase stock in order to list, you can now list as many items as the supplier/wholesaler.
- 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.