What is Dropshipping?


what is Dropshipping

Now that you're all caught up and are a little expert in the world of suppliers and Alibaba (that's a fun word to say), it's time to dig into the neighboring world of drop shipping. For those that don't know, drop shipping is where you don't hold any products in your place of business. If someone were to order iPhone cases from you then you wouldn't ship it from your warehouse of iPhone cases, no, instead you would order the iPhone case from another manufacturer or supplier and have them ship it to that customer. You would be acting as the in-between component for the business transaction. There are entire companies whose sole existence is to be a drop shipping company. Taking orders and packing them, shipping them out. Of course, you would have to pay the
drop shippers and whether it's more profitable to store the
product under your roof and let a third-party company
handle it, that's up to you.
What it offers to you is the ability to have a warehouse of
whatever you want as it's not a physical warehouse, it's a
virtual one where customers do business in and once they
pay, only then it's shipped out of a physical warehouse.
The startup cost of building your own factory or warehouse
is monumental and isn't to be scoffed at.
Working with a drop shipping company gives anyone
around the world the opportunity to create their own
storefront. Where one person might only be able to carry backpacks, with drop shipping you could have a backpack in any color and sell kids' toys, vacuums, and trash bins—whatever you'd like to sell, you can. And it should be highlighted that unlike other places, you only buy a product from a drop shipping company if a customer buys that product. So long to the days of sitting with a garage full of talking kids' toys because you thought your Elmo ripoff was going to sell like hotcakes. Buy what you need.
As long as your connection to the internet is working and your cat doesn't break your computer then you can work as the manager of your business anywhere if you use drop shipping as the core pillar of your online business. The only thing you would have to do is, of course, vet the products these companies would be drop shipping for you. A topic we explored previously. Because you're not seeing the product like you would if it was under your workplace, you don't know what is being shipped to a customer. Mother great thing about the drop shipping model is the ability to scale when appropriate. If a school needs a hundred chairs, then you'll be able to deliver to them. If they need a thousand chairs then you can do that too. The ability to scale up and down with each order is monumental and only doable with the existence of the internet.
With all of that said, you should be aware of some of the downsides. As I mentioned before, the fact that you're not as close to the product is risky. Shipping out some poorly made shoes that didn't pass your eye can hurt your
business and damage it with poor reviews. You'll need to be as strict as possible and find a partner who will value your business. Drop shipping sounds good and isn't a secret. Everyone in business knows about it and they're doing it, feeding the appetites of customers with as much junk they can manufacture. This will make it harder for you to stand out if you're competing in the same space. If you can carve out a small niche of specialty products then you might have something going on that can last and be profitable. If you're a business creator on a budget then drop shipping is for you, giving you an inexpensive way to create a store when decades before would've taken hundreds of thousands of dollars, if not millions. Or let's say you wanted to test out a product, whip up enthusiasm from investors to give you seed money for your business, then what better way than to buy a bunch of products you didn't make, instead you had them drop shipped to you. If you're somebody who's looking to have as many flavors of products as you want, drop shipping is the game you want to play. Being able to stock as many different things is huge for you and your customers. Though remember you'll be competing with everyone and their grandma
when it comes to this space online.
Recently businesses have moved away from the wholesale
approach, trying a customer-first mentality as they follow
in Apple's footsteps. They build not just the product but
also the packaging, creating a seamless experience from
"Add to Cart" to popping open that phone box. Working
with drop shippers won't allow you this kind of precision.
Freedom? Yes, most definitely. But the most precision you will have is shipping your own products. If you want to maintain your brand's quality and not risk a customer missing a delivery date because your drop shipper ran out of stock, the fault will lie with you, not the third-party company you're working with. The customer doesn't care about them.

Be aware of the hidden costs of drop shipping. It looks easy, sounds easy but it will take a lot of money to make quite possibly a little bit of money. When you add the costs of paying the drop shipper, fees from PayPal or other outlets, shipping fees and elements like that, you'll be losing out on a lot of money. For some people, having an entire warehouse stocked with the product is not an option so drop shipping is not inherently bad, but it's important to be mindful of these things. If you're on a limited budget and you don't have a huge Twitter or Facebook following for your business then you can look into growth hacking marketing. It's a way of getting eyeballs on your product without having the wallet of the big companies. You can use your small size as a benefit versus as a detriment. Marketing will save your business so be aware of how to use it. You have other options besides buying ads, think of yourself as a value-creator. Create some value for people, make things on the internet people will like, and they'll follow you. From there you can lead them to your product.
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