There are several benefits available to businesses that want to pursue a drop shipping business model. Before we tackle that though, let’s first clarify how drop shipping functions:
The short version: You buy products from a wholesaler who will ship the products directly to your customers.
The long version: If purchasing large inventories is not plausible – whether it is due to monetary or warehousing reasons – drop shipping allows you to partner with a drop-shipping supplier and list their items for sale. You will forward any orders you receive to your supplier. The wholesale supplier will then ship the product from their warehouse and inventory, and charge you for the price of the shipped item.
Sounds pretty nice right? There are several advantages to the drop shipping business model:
- Low investment: The great thing about adopting the drop-shipping model is that you do not need to invest in a large warehouse or inventory. The only time you have to purchase a product is when you have to fulfill an order that you receive from a company.
- Offer more products to your customers: Because you do not have pre-purchase inventory, you can offer your customers a larger number of products immediately. You are only constrained to the products that your drop-shipping suppliers offer.
- Less Risk: Because you do not have to invest in a large inventory, you are not stuck with the problem of having a large inventory to sell at a loss.
- Business Flexibility: Drop shipping does not constrain you to a single location – no worries about a warehouse or fulfillment. You can run a drop-shipping business from any location.
Tell us about you drop-shipping experience or what business model you prefer.