This is a method of retailing in which the products that are sold are not kept by the store selling them but are held by a third party. The store selling the product makes its purchases from an established third party wholesaler, who is also responsible for shipping it. If operating a business using dropshipping, you never come into contact with the products you sell to customers. Storage, stocking and shipping are the responsibilities of the third party establishment, relieving you the burden. Magento
How it Works
The first step when entering the dropshipping business is to develop your own online store. You can do this by utilizing the services of free online store builders such as Magento, Wix and WordPress. These offer free or subscription services allowing you to build your online store within a short period of time. Once your store, website or blog is set up, the next step is to search for a certified dropshipping wholesaler. Certified means that they offer free dropshipping services and you are not required any fee to start offering the dropshipping service. After acquiring the dropshipping service and identify a suitable third party and/or wholesaler, you can move forward and pick the products to sell online.
Benefits of Dropshipping
The amount of capital required for the startup is generally small; setting up the online store can be done using free trial versions of Wix, WordPress and Magento blog, store and/or online website builders or subscribing to the cheapest services provided. You have no inventory costs; don’t own a store, which adds to low overhead costs. You make sales then purchase the product, which is dropshipped directly to the customer by the third party making it generally easy and fast to start or operate an online store. In addition, you are not limited in terms of the location of running your dropshipping business, have a wide range of products to sell at your disposal, the builders offer maintenance and technical support for your store and you are free to scale your products as you desire.
Limitations of Dropshipping
This is a relatively easy way to make money but it does not lack challenges and problems faced in the process. The competition from large companies that can offer discounts makes it quite competitive to sell products. This is also affected by the fact that you cannot keep track of what is in stock and sometimes the Dropshipping suppliers make mistakes delivering the wrong product and you have to deal with the customer complaints.
If planning to sell online using dropshipping retailing service, it is important to examine the cons and pros of the business. Similar to other start-ups, it has its own challenges but which business doesn’t? If you think you can pull it off after assessing the feasibility and studying the market, why not? Learn more Magento