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Dropshipping; the Pros and Cons

Thanks to the internet, it is more comfortable and easier to start a business. If in the past it was necessary to find a location, set up logistics and sometimes even hire employees to do so, nowadays things look different. It is quite possible to temporarily transform your home into a warehouse and simply open your website. Although it may seem easy on the surface, this option is not suitable for everyone. Opening a store in this way will mean that you will still have to invest, even if only purchasing goods. What if you can’t afford it? If like me, you don’t have the possibility, I offer you another option; dropshipping.

What is Dropshipping?

I explain it to you with a simple example. Company A wants to increase its sales, without hiring new specialists in the field or spending fortunes in terms of marketing and logistics to do so. To achieve its goals, the company proposes to all those who do not have enough funds to start their own independent business but wish to do so, to help them. The principle is simple. Company A makes its products available to them. They are free to set up their store in which they will put virtually all Company A’s products. From then on, all they will have to do is to promote their sites as independent companies. Each time a customer orders a product on their sites, he will do so indirectly on the site of company A, which will also take care of the delivery using companies such as CSA Transportation for shipments. Both parties benefit because company A sells its products faster. In contrast, the intermediary between the customer and company A gets a percentage of the sales. In short, the company benefits from the services of a salesman with expert Automated Material Handling Solutions and the individual works without the pressure of a company.

Advantages of Dropshipping

The first advantage that comes to mind is the financial aspect; you don’t have to go broke to start your dropshipping business. In fact, very communicative people with many friends can start with a bare minimum. I advise you to spend only the money to create a good, attractive website. I recommend you trust the “bush telegraph” for advertising the site. Friends and acquaintances must be good for something.

The second advantage concerns the logistics and the store launch. The most important task is to create a website. We can also add to the list of jobs worthy of interest, the choice of items that should be represented in the store. It is indeed important not to have a catch-all site. The ideal is to limit ourselves to a theme that we master and offer only this category’s products.

Launching the store thanks to friends and acquaintances doesn’t mean that one should leave one’s activities at their mercy. Once the first customers have appeared, I strongly recommend that you try to expand your activities. Those who can’t even rely on their friends and family to start their business should do it immediately. This depends on the capabilities of the parent company itself. For example, there is no point in finding customers in Italy if the original site only sells its products in the United States. Once you’ve chosen a product to sell, you should research transportation industry trends to work out how long delivery will take from the point of sale. If you underestimate the delivery time, customers can get angry.

Disadvantages of Dropshipping

The first and probably the most significant inconvenience is that it is impossible to control the quality of the goods oneself. We totally depend on the mother company, and we must trust it. In case of a problem or if the customer is disappointed by the quality of the received services, unfortunately, the site where the purchase was made handles it. That is why it is essential to carefully choose the site we cooperate with.

The second disadvantage is financial. Some suppliers leave the field open to the sites. They are free to put the price they want as long as the sales are good. Others set stringent limits, or worse, impose a minimum monthly sales limit. For someone with experience in this area, this is not a problem. However, those who take their first steps may eventually be disappointed.

Dropshipping is an excellent opportunity to gain a lot of profit. It is truly a golden opportunity to start a serious business. However, to avoid big disappointments, it is crucial to choose wisely the supplier.