After all, would you rather buy from Amazon at a lower price or pay more to buy from an unknown shop? While I would never start a pure dropshipped store today, there are many ways to use dropshipping to your advantage. Then, you can use this shop to conduct market research. Based on which products sell well, you can pick and choose the most successful products to buy inventory for and enjoy higher margins.
Dropshipping is best used as a vehicle for product validation or for fleshing out an online store that is sparse in certain categories. Unless you are a brand new entrepreneur on a budget or an online store owner who is exploring new products, dropshipping is generally not a good choice for seasoned shop owners. After all, there so many aspects of your supply chain and your customer service that are beyond your control. For example, you have no control over the customer unboxing experience because more often than not, your product will arrive in an unmarked brown box with zero branding.
You also have no control over inventory. In a nutshell, your dropshipped business lives and dies with your suppliers. Therefore, if your goal is to build a brand , then dropshipping is not the way to go. It really depends. Arguably, the time that you save in not having to deal with inventory and fulfillment will be spent dealing with customers unless you have a reliable core of dropship distributors. What this means is that you may not be alerted in real time whether a particular product is available for sale or not. Therefore if an item is out of stock , you will have to interface with the customer to let them know when they can have their items.
With dropshipping, you are trading off not having to deal with fulfillment logistics with having to deal with more customer headaches.
Dropshipping – Does It Really Work And Can You Make Money?
And depending on your personality, this may or may not be a wise tradeoff. Many people have been successful with dropshipping as it works very well with small niche stores but my personal opinion is to avoid it if you can. In this 6 day mini course, I reveal the steps that my wife and I took to earn thousand dollars in the span of just a year. Best of all, it's free and you'll receive weekly ecommerce tips and strategies!
Thanks for this information. In the world of location independence, dropshipping is often touted as a great way to set up an online business so that you can travel. It really does come down to selecting your drop shipper s very carefully. Not all drop shippers charge a per item fee. If you are a legitimate business you can source your products at true wholesale prices. True wholesale suppliers. Most drop ship and or offer light bulk sales. What wholesaler do u use? Obviously u have found a good one. Plz respond because I am seriously considering starting an online store.
For any of the readers who have had dropshipping success, would be great to hear what works for you.
The Ultimate Guide to Dropshipping
My guess would be, as Steve mentioned, a narrow niche with few SKUs…. Though I do a lot of my own order fulfillment, some of my vendors are drop shippers. They are all small businesses and I have closer relationships with all who I work with. Its rarely left up to chance because of the close relationships I have, but I do understand how it can be a disaster. In terms of the costs of shipping, you are absolutely right. For me, the appeal of drop shipping is more of the upfront COST not necessary the perceived ease and convenience.
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I use Gooten for my dropshipper and it sounds way simpler than what you described in this post. Hey Tanya is it possible for you and I to connect to have more conversations about your knowledge and experience with Shopify? Interesting article with a number of robust things to consider when determining if drop-shipping is the most appropriate means to deliver product to customers. We have found there are many instances where the benefits of drop-shipping someone else deals with logistics of fulfillment can be combined with the benefits of handling it yourself lower costs, increased customer service, better information control, increased profits by using a fulfillment company.
There are fulfillment companies that focus on small to medium size businesses, particularly those ready to make the step away from a drop-shipping model. I meant to mention that I agree with you Steve.
What Is Dropshipping: Drop Shipping For Beginners (Updated: )
It is a lot of hard work and you definitely have to find the right drop shipping company. Nice article.
I found your blog some days, and most of your articles are great. I always avoid an affiliate business model making money for a product owner and getting peanuts. Thanks for the dose of reality. My husband and I had a dropshipping business on eBay back in Back then, everyone only talked about the pros of dropshipping. But from personal experience, I can agree with all the downsides you mentioned. Looking forward to hearing from you. Very great information! Im curious, you mention that the time you save with drop shipping is replaced dealing with customers. What he means I think is that you dont have control of nearly anything yet you still have to deal with customers instead of the manufacturer.
Sure, you would have to deal with customers either way, but at least if you controlled things, you could possibly reduce customer issues.
If you have a good drop shipper to work with, this is less of a problem from what other people say, but this means it comes down to who you are working with, so learn and be careful. Dropshipping is not easy. Just to add to Jasmines comment — I like dealing with customers as it lets me stay connected with the truth and understanding from the people who pay the bills what they actually want. Lets face it Drop shipping is a great way to leverage and scale a business however comes with the traps listed in this article.
Great read about drop shipping. You bring up a lot of good points. Though drop shipping can be tough if done right can certainly be worth while. Finding a quality wholesaler is a key player in success.
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One downfall many have is trying to create a website built upon too many products from several drop shippers without any niche in mind. Great article about dropshipping…finally someone reveals the truths. I was a dropshipper for over 5 years pretty profitable after about 2 years until my main supplier went out of business, leaving me no choice but to close my business. All points in this article are very relevant and anyone considering dropshipping should take them to heart.
I was the only customer service and while I liked having the interaction with my customers, it mainly came down to not having control over shipping that created so many headaches. I had to get into contact with my suppliers about missing orders, damaged orders, etc.
One time in particular almost sent me out of my mind. The Today Show did a televised segment on a Saturday for one of the products I was selling and the orders began streaming in faster than ever before. I thought it was an error until I realized the orders were legit. I was constantly dealing with customers wanting to know where their orders were. It was a true nightmare although in the end the profits were exceptional :.
There are all-in-one websites out there i. Volusion that you can start with, but I found after being with them for about a year, the cost was cutting into my profits too much and I decided to design my own sites, I have experience with this, but that is not an option for many. And if you have more than one supplier, you will more than likely have more than one shipping company.
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I have to say at this point after my business has been closed for about 1 year I have been looking into products that I can stock and ship myself, knowing that having control will offer me the ability to offer my customers exceptional customer service from start to finish. Thanks so much for this great post. I think drop shipping business is relatively new and innovative type of eCommerce. If you would read more, I did this post that shows you the drop shipping business process in action.
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