Pros and Cons of Dropshipping
What is Dropshipping
Wholesale dropshipping is a very popular way to source your products because it allows you to pay only for the items that you sell. First, you find a supplier offering dropshipping services you may need to email them to find out and then you set up an account. Most dropshippers have different ways of setting up an account. But, in most cases, you can choose to credit your account, or you can simply leave the account empty and pay for each item as you sell it.
Once, you have created your account, all you need to do is take the dropshippers provided photos and the product description for the items you wish to sell and list them on whatever site you will be selling on.
After you make a sale and receive a payment login to your suppliers site and select the product you have just sold and take it through the checkout and pay for the enter the buyer’s address details and the supplier will packsge it up and ship it.
Pros of dropshippers
- Low startup costs one of the advantages of dropshipping is the low startup costs. Because you’re never carrying inventory you have no inventory costs.
- Low risk – Since you don’t actually purchase your inventory upfront you aren’t taking the risk of having items you can’t sell.
- Streamline sales – the dropship option is convenient and efficient so you can manage your business.
- While your dropshippers will pick and pack and ship your product for you.
- No minimum order- you don’t need to have alot of cash to get started.
- For new sellers the main advantage of dropshipping is the lack of risk.
Cons of dropshippers
- A common problem sellers may have with dropshipping is a sudden stock shortages. The dropshipper may have a sudden large order which may cause him to sell out. Which may cause a problem for you if you have alot of orders to fill. Then you would have to refund your buyer because your supplier is out of stock.
- When you dropship items, you will be paying for$2 to $5 dollars more per item compared to sellers who purchase in bulk. This can make it difficult to compete on marketplaces like Ebay, especially if you are selling popular items because you will pay more for the same item that other sellers are buying in bulk and therefore getting a bulk discount.
- Lack of control can be a problem and if your dropshippers slack off you will be held responsible by the buyer.
- So, you just need to make sure that the prices you source for products from suppliers actually match up on Ebay or another marketplace and allow you to make a profit.
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