Why Does an Ecommerce Business Need to Be Involved With Dropshipping?
A dropshipping business is more complicated than a traditional wholesale business. In a dropshipping business, an individual seller has a list of dropship sources to provide products for their online store to sell and make money from. But instead of the store owner holding the inventory, like with an online or an Amazon FBA venture, a third party manages all of the logistics and shipping for them.
A dropshipping business can be highly profitable. Because there are no overheads to maintain, the seller has more significant profit margins since they do not have to pay rent, payroll, or taxes on their inventory. Dropshipping your own brand This gives the seller the ability to pass on significant savings to customers. But there are also some costs that eCommerce sellers face that drop shipping companies avoid.
The most significant expense of a dropshipping business comes from shipping supplies. It’s not cheap to ship merchandise from one location to another. Dropshipping services make it easy to ship products quickly and inexpensively to many locations. The cost of shipping boxes to different locations can add up quickly. And because e-commerce sites sell digital items, tracking your inventory is essential. Knowing if you have enough of a particular item in stock and can quickly get it to a customer is vitally essential to earning a profit.
Another expense of dropshipping is supplier fees. Many drop ship websites use an intermediary or wholesaler to handle the seller’s inventory and shipping of products. Those fees add up quickly and can become quite expensive. Using a dropship website makes it easy to keep tabs on your inventory. You can enter the numbers and know immediately whether you have enough of a particular item in stock.
In those instances, you may wish to contract with actual suppliers who can provide the items you need. Dropshipping agreements with these suppliers can be drawn up quickly and are generally much less expensive than the flat prices quoted by drop shippers. It’s also possible to arrange to deliver products directly from the drop shippers to your customers. It’s often worth it to have the product on hand and ensure that your customers receive it promptly.
If you want to find an actual supplier to work with, look around online for suppliers who offer dropshipping services. SaleHoo, for example, offers thousands of low-cost items for dropshipping. Other directories also carry a list of dropshippers and their available products. If you go with a dropshipping directory, you may have to pay a membership fee, but that’s only a nominal amount compared to what you might spend on advertising. Furthermore, you won’t need to spend a lot of time researching the suppliers because most are reliable and reputable.
Many eCommerce entrepreneurs think about dropshipping as a substitute for hiring a supplier, but in fact, using dropshipping is often a better option. Also, you don’t have to have a large inventory or plan on selling a lot of products. You can sell just a few items at any one time. Finally, you don’t have to worry about order fulfillment or payment because the supplier takes care of those aspects for you.
One of the reasons why dropshipping is preferable to other options is that you don’t have to pay extra for storage space. With dropshipping, you can keep your inventory at a minimum. You don’t have to keep checking on the stocks so much, and you don’t have to pay for packing and shipping fees. Also, you don’t need to do a lot of inventory management since your supplier will handle that for you.