Introducing How To Develop Iphone Apps Without Any Programming Knowledge

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Tuesday, 18 October 2011

The Advantages and Disadvantages Of Drop Shipping

The Advantages and Disadvantages of Drop-Shipping

Although drop-shipping today is a very hot topic being discussed among many retailers, and it does have many benefits, it may not be the best option for every business.  However, in this chapter we will take a closer look at some of the advantages, as well as disadvantages to be had from running an online dropshipping business.

First, if you are just starting out in setting up an online business, and do not have much operating capital, then this may be the best option for you to go with.  The great thing about this particular type of business is that you do not need to hold vast stocks of the products that you are selling. Instead, this is all done for you by the dropshipping supplier you have gone into partnership with.  This results in you eliminating a significant cost in order for your business to be set up and to get it running.

The site you set up can be produced very quickly, and so be providing the product to those people you are targeting.

As you are getting the customers orders before you actually order the goods from the supplier, this means that you have little or no initial investment to make.

Because you are not actually holding any of the inventories yourself, then you do not need to pay either for storage facilities, or having to invest in expensive merchandise which you may not in fact sell. 

Setting up an online dropshipping business provides you with the chance to diversify what you are actually offering to your customers.  In fact, you will only be limited by not being able to find the right dropshipper for the product or items that you wish to sell.

Although there are plenty of advantages to setting up a dropshipping business, there are many disadvantages as well.

First, as you do not own the inventory that you are selling, then you will usually find that you have no control on how the product is packaged.  Also, you will not be able to include any coupons or offers in to the package which can help in increasing the amount of return business you get.

Every company which offers their dropshipping services will have a different fee structure, so carry out as much in depth research as possible.  In fact, you do not want to end up with high shipping costs, as this will only make people less reluctant to purchase their goods from you.

With dropshipping, because you are only ordering one item at the time rather than bulk amounts, then you will not expect to get the same kinds of discounts.

If you decide to sell multiple products that are supplied by multiple dropshipping companies, then you will also see a significant increase in the fees that you pay to the dropshippers, which, in turn, will need to be passed onto your customer in order for you to make a profit.

There are many suppliers who will be able to provide you with dropshipping services that you can use to integrate their products into your website.  However, you may find that you will be charged a fee for using a particular service through them, so be sure that you carry out your research thoroughly before opting for one particular dropship supplier. 

One major drawback to be had from setting up a dropshipping business is that not all manufacturers allow for dropshipping.  This is because they will need to employ more staff (extra costs) in order for them to process these individual orders, and could result in delays in their normal shipping and receiving system.  There are other companies who will only supply in bulk, so this means that it is impossible for smaller outlets to get custom orders provided for them for select numbers of items. 

However, when dropshipping is available, certainly many small as well as internet based businesses find that it can solve many more problems than those it may create. 

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