How to start your e-business in dropshipping ?
You want to start an e-commerce without investing in a stock? You might be interested in dropshipping. This mode of distribution consists in selling products of a supplier and letting him deliver the buyers directly.
The business model of dropshiping
The principle is simple, you expose on your site a product and once an order is passed, you send all details of the sale to your supplier who then ships the item on your behalf. Your profit will be the difference between what you charge your customer and what the supplier charges you.
You are therefore a simple intermediary, the fact of having no stock to manage or shipments to carry out, you can focus 100% on your marketing strategy.
This business model, like any model, has various advantages and disadvantages.
The main benefits of dropshipping
– The initial investment is very small, it is mainly the creation of a website or a market account at a marketplace like ebay and marketing companions;
– No stock to manage or storage costs;
– A speed to find the niche market;
– A wide range of products to be offered on the website;
– Positive cash flow at all times.
The main disadvantages of dropshipping
– Low margins: you don’t benefit from the lever of economy of scale;
– The availability of products;
– Quality control of products;
– Difficulties in managing the return or exchange of products.
To conclude, dropshipping is very interesting to start an activity as well to find the niche market to exploit. But once the orders multiplies, dropshipping quickly reaches its limits, however the warehouses can constitute a solution without going through the storage.