Perhaps the most essential advantage to dropshipping is that it's possible to launch an e-commerce store without the need to invest thousands of dollars in inventory to start with. Customarily, merchants have had to tie up vast amounts of capital when acquiring stock. But, this is unnecessary if you use dropshipping.
With a dropshipping model, there is no need to purchase a product without you already having made the sale, and having been paid by your customer. Devoid of substantial up-front inventory investments, it is very possible to begin a thriving dropshipping business without minimal financial backup.
It's Easy to StartRunning e-commerce businesses is easier when you don't have to deal with handling physical products. When you dropship, you have no worries about
-Paying for, or managing a warehouse
-Packing and shipping your customers' orders
-Tracking the inventory for accounting purposes
-Handling inbound shipments or any returns, physically
-Repeatedly ordering products and maintaining stock levels
-Needing a storage place to hold physical products
Low OverheadsBecause there is no reason to deal with purchasing any inventory or the management of a warehouse, your overheads and businesses expenses can be quite small. Many successful dropshipping companies are run from home offices with a single computer for less than $100 per month. As your business grows, it's likely these expenses will increase, but nonetheless, they will still be low when compared to traditional brick-and-mortar companies.
Dropshipping businesses can be run from almost anywhere as long as you have an internet connection. This is vital to allow communication with your suppliers and your customers, both quickly and efficiently. Many successful online stores are run by people when they live outside of their home country, too.
Because there is no need to pre-purchase any items you sell, you can offer a broader array of products to potential customers. So, if your supplier stocks a certain product, you can list it for sale in your online store, or on the platform you use, at no additional cost.
With conventional business types, if you have orders for three times as much business, it is likely you'll need to perform three times as much work. With the leveraging of dropshipping suppliers, the majority of the work in processing additional orders is borne by your suppliers. This allows you to expand your business with fewer growing pains. Sales growth always brings some extra work. In most cases, this is primarily related to customer service. Companies that exploit dropshipping as a necessity, scale exceptionally well, especially when compared to conventional e-commerce businesses. All of these benefits make dropshipping an advantageous and efficient model to both new and established merchants, alike. Regrettably, dropshipping isn't always a bed of roses, though. All this convenience and flexibility comes with a few disadvantages. Let's shed some light on these.