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What is Dropshipping and Major Risk associated with it

Today in the world of online business, Drop-shipping has now become a key requirement. If you purchase any items from online store or Retailer, then you might have encountered the term “Drop shipping”.

In Drop shipping, a product is being purchased from a third-party supplier and then it is shipped directly to the end customer. So, the problems like storage and maintenance of the product is not an issue. And that’s what, some Online businesses do.

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In this way, the Merchant need not to fulfill the inventory items, instead the product are given in good condition directly by the third party supplier.

Is Drop-shipping useful?

Drop-shipping is much more effective, as compared to the Traditional Retail method. In Traditional Retail method, first the goods are taken from supplier and then stored in some warehouse space and after that the product is delivered on order basis, to the customer. Hence, Dropshipping is useful for entrepreneurs, as it does not require Traditional Retail method.

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Drop-shipping is economically feasible, in other words, this requires less investment to start the business. Also, you can make large profits, as you are directly getting the cut from customer. Major Big Companies like Flipkart and Amazon, do Dropshipping. But the seller have choice for oneship and inventory based model (basically the stock of items).

Advantages of Dropshipping

  • Less investment required to start
  • Easy to Begin
  • Easy to handle the business
  • Ensure growth of business, if service is satisfactory
  • Flexible to demand

Dropshipping is very easy to start, you don’t need to learn everything or doing some Masters in it. You can learn many things as you go along with it. However, getting some basic idea about business, could give you a good knowledge about the business.You can start dropshipping by today itself. Only good resource and some basic knowledge is enough to know.

The main advantage in drop-shipping is the flexibility. As you don’t need a fix or promise date for delivering the product. However, you must also consider the customer’s interest for the product.

Major Risk Associated with Dropshipping

  • You need to have control over the product, as it can become difficult to manage all the orders.
  • Tight Margin are present over Price and quality of item.
  • Risk is associated with delivery of product, as for any tampering your brand might be blames.
  • You need to have good Customer Service
  • Processing all the Orders can sometime become complicated or too much to handle properly

Dropshipping can become difficult to process, as each supplier uses a different method for shipping the item, which could either delay the shipment and thus could trouble your customers. Sometime cost can increase unexpectedly. Billing and processing the item is another problematic, that may arise. Hence, you need to have great conversation with the supplier for proper procedure.

You don’t have much control over the product, as your supplier is doing everything for delivery of the product. The lack of control over your product, can sometime impact your Brand , and hence you must be careful while dealing with it.

Customer service can also become hectic, as you have to keep informing them about the product related services, issues and updates with it’s shipment. Even if anything goes wrong, then you will are blamed for it. And if everything is going right, then your supplier might raise an issue to your product. Hence, communication become very necessary.

Can I earn from Dropshipping?

The answer is YES , many successful dropshipping business merchant are earning over multiple 6 digits money. At first, you might earn small amount. But don’t worry, with increase in customer’s trust and increase in sale of items, your profit can go sky rocket.

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Dropshipping

Also you need to maintain good relation with Customer and Suppliers, as they are the Key Agent for Business. Hence a great Customer Service, could rise your Brand name, trust and values.

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