Dropshipping a Beginner's Guide to Dropshipping How to Make Money Online and Build Your Own Online Business
By James Moore
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About this ebook
Perhaps the most essential advantage to dropshipping is that it's possible to launch an e-commerce store without the need to invest thousands of dollars in inventory to start with. Customarily, merchants have had to tie up vast amounts of capital when acquiring stock. But, this is unnecessary if you use dropshipping.
With a dropshipping model, there is no need to purchase a product without you already having made the sale, and having been paid by your customer. Devoid of substantial up-front inventory investments, it is very possible to begin a thriving dropshipping business without minimal financial backup.
It’s Easy to StartRunning e-commerce businesses is easier when you don't have to deal with handling physical products. When you dropship, you have no worries about
•Paying for, or managing a warehouse
•Packing and shipping your customers’ orders
•Tracking the inventory for accounting purposes
•Handling inbound shipments or any returns, physically
•Repeatedly ordering products and maintaining stock levels
•Needing a storage place to hold physical products
Low OverheadsBecause there is no reason to deal with purchasing any inventory or the management of a warehouse, your overheads and businesses expenses can be quite small. Many successful dropshipping companies are run from home offices with a single computer for less than $100 per month. As your business grows, it’s likely these expenses will increase, but nonetheless, they will still be low when compared to traditional brick-and-mortar companies.
Dropshipping businesses can be run from almost anywhere as long as you have an internet connection. This is vital to allow communication with your suppliers and your customers, both quickly and efficiently. Many successful online stores are run by people when they live outside of their home country, too.
Because there is no need to pre-purchase any items you sell, you can offer a broader array of products to potential customers. So, if your supplier stocks a certain product, you can list it for sale in your online store, or on the platform you use, at no additional cost.
With conventional business types, if you have orders for three times as much business, it is likely you'll need to perform three times as much work. With the leveraging of dropshipping suppliers, the majority of the work in processing additional orders is borne by your suppliers. This allows you to expand your business with fewer growing pains. Sales growth always brings some extra work. In most cases, this is primarily related to customer service. Companies that exploit dropshipping as a necessity, scale exceptionally well, especially when compared to conventional e-commerce businesses. All of these benefits make dropshipping an advantageous and efficient model to both new and established merchants, alike. Regrettably, dropshipping isn't always a bed of roses, though. All this convenience and flexibility comes with a few disadvantages. Let’s shed some light on these.
James Moore
James Moore is a professional writer who specializes in bringing to life forgotten aspects of history. His work has appeared in titles such as The Daily Express, Sunday Telegraph and The Daily Mirror and he is also the author and co-author of seven other books including Murder at the Inn: A History of Crime in Britain’s Pubs and Hotels, Pigeon-Guided Missiles: And 49 Other Ideas that Never Took Off; Ye Olde Good Inn Guide and History’s Narrowest Escapes. All have achieved widespread coverage in national and local media.
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Dropshipping a Beginner's Guide to Dropshipping How to Make Money Online and Build Your Own Online Business - James Moore
1
What is Dropshipping?
Dropshipping is a method of retail fulfillment where an online store doesn't hold its sellable products in stock. In fact, when a store sells an item, it will purchase this item directly from a third party where they have it shipped directly to the customer. Therefore, this method takes out the legwork involved in needing storage for products, the need for packing, and the time and products necessary for posting.
The most noteworthy difference between dropshipping and a standard retail model is that the selling merchant doesn't stock or own any inventory (a list of stocked goods). As an alternative, the merchant (you) would purchase inventory as is needed from a third party which is usually a wholesaler or manufacturer to fulfill their customers’ orders. This can be done via a website, a self-created store (like Shopify) or a platform geared up for merchants, like eBay or Amazon.
Manufacturers, Wholesalers, and Dropshippers: What’s the Difference?
A manufacturer is: the real producer of a product. As an example, Nintendo manufactures the Wii console.
A wholesaler: buys directly from a manufacturer and resells the products to retailers, adding on their gain to make money.
A dropshipper is: anyone who will ship an item directly to your customer on your behalf.
It is possible that both manufacturers and wholesalers might become dropshippers, too. If you can find a manufacturer who will ship their product directly to your customers (rare) then they will, in fact, be acting as a dropshipper.
Likewise, a wholesaler who will send products directly to your customers on your behalf is also a dropshipper.
Choosing suppliers for your dropshipping enterprise can be one of the most crucial decisions you’ll ever make. If your supplier makes mistakes, it’s up to your accountability to make sure your customer is taken care of, not theirs. You need to make sure your choice of supplier is someone who can (and will) have your back while working to make your partnership grow. Overall the dropshipping model has some benefits and some drawbacks. Let’s take a look at these now.
2
Dropshipping Benefits
Less Capital Is Required
Perhaps the most essential advantage to dropshipping is that it's possible to launch an e-commerce store without the need to invest thousands of dollars in inventory to start with. Customarily, merchants have had to tie up vast amounts of capital when acquiring stock. But, this is unnecessary if you use dropshipping.
With a dropshipping model, there is no need to purchase a product without you already having made the sale, and having been paid by your customer. Devoid of substantial up-front inventory investments, it is very possible to begin a thriving dropshipping business without minimal financial backup.
It’s Easy to Start
Running e-commerce businesses is easier when you don't have to deal with handling physical products. When you dropship, you have no worries about:
Paying for, or managing a warehouse
Packing and shipping your customers’ orders
Tracking the inventory for accounting purposes
Handling inbound shipments or any returns, physically
Repeatedly ordering products and maintaining stock levels
Needing a storage place to hold physical products
Low Overheads
Because there is no reason to deal with purchasing any inventory or the management of a warehouse, your overheads and businesses expenses can be quite small. Many successful dropshipping companies are run from home offices with a single computer for less than $100 per month. As your business grows, it’s likely these expenses will increase, but nonetheless, they will still be low when compared to traditional brick-and-mortar companies.
Flexible Location Possibilities
Dropshipping businesses can be run from almost anywhere as long as you have an internet connection. This is vital to allow communication with your suppliers and your customers, both quickly and efficiently. Many successful online stores are run by people when they live outside of their home country, too.
A Vast Selection of Products
Because there is no need to pre-purchase any items you sell, you can offer a broader array of products to potential customers. So, if your supplier stocks a certain product, you can list it for sale in your online store, or on the platform you use, at no additional cost.
Ease of Scalability
With conventional business types, if you have orders for three times as much business, it is likely you'll need to perform three times as much work. With the leveraging of dropshipping suppliers, the majority of the work in processing additional orders is borne by your suppliers. This allows you to expand your business with fewer growing pains. Sales growth always brings some extra work. In most cases, this is primarily related to customer service. Companies that exploit dropshipping as a necessity, scale exceptionally well, especially when compared to conventional e-commerce businesses.
All of these benefits make dropshipping an advantageous and efficient model to both new and established merchants, alike. Regrettably, dropshipping isn't always a bed of roses, though. All this convenience and flexibility comes with a few disadvantages. Let’s shed some light on these.