Drop shipping can be a wonderful business model to take part in if you don’t want to worry about physically shipping or storing products. But, there are some issues you should watch out for too. It’s not all a simple hands-off dreams come true. As long as you’re careful, though, you can build a great drop shipping business.
Drop Shipping Pros:
No Stocking Inventory
One of the drawbacks of selling any item is when you have to worry about stocking inventory, keeping track of inventory, and even taxes related to having inventory. When you use a drop shipper you don’t have to worry about anything but your income and expenses.
Get Started Fast
Once you find the supplier you want to use, you can usually get a website up and start fast. This is especially true if you use a website like Shopify which helps you find drop shippers too.
No Storage Needed
You don’t have to have a warehouse, nor have your garage and house stuffed with supply. Not only that, some areas aren’t zoned for housing inventory, so having a home business might preclude you having inventory in your home depending on where you live.
Hands-Off Business Model
Once you get it set up, you should only have to concern yourself with marketing your business and not finding the inventory. That part should take care of itself with the right drop shipper.
Drop Shipping Cons:
It can be hard to tell what’s real and what’s not out there. If you do a Google Search on drop shipping you’ll find a ton of information but much of it is erroneous and even downright illegal scams. Do your due diligence and research. Check on any company you want to do business with, ordering test products to check service and quality before putting them into your store.
Lack of Quality Control
When you use a drop shipper, there is always the potential that quality can go down without warning. It’s important to keep a firm grip on the quality, rate of returns, and other issues with your customers, because they’re not going to be upset with the drop shipper – they’ll be upset with you when something goes wrong.
Confusing Fee Structures
If you choose the wrong company, you may end up making no profit or losing money. There can be so many fees that it is hard to keep track of what is happening to your money, even if you’re making sales.
High Shipping Fees for Your Customers
If you stock your website with items from more than one supplier, your customer may have to pay pretty high shipping fees when they order multiple items. The reason is that they’ll come from different places instead of being lumped together into one shipment to save money. This can turn off customers.
The advantages and disadvantages of drop shipping are clear. It’s important to do your research in advance to avoid most of the downsides of drop shipping. Having done that, drop shipping is a viable business opportunity that can help you work from home quickly.