If you are hearing this term for the first time, you might think about transferring shipments by airplanes or even jumping from a helicopter into the sea (actually one of my friends thought that!). But Drop shipping is a term that describes a retail selling method where the store doesn’t have the products it sells in stock. Instead, it purchases the products from a third party store and ships it directly to the customer. But why would some stores follow this policy instead of buying and selling traditionally? The answer is simple: It’s easier and cheaper. Drop shipping has many advantages that help people to establish their own business safely and straightforwardly. That’s why it’s one of the most growing industries in today’s finance.

Advantages:

Small Capital: This is the most critical advantage of Dropshipping. As you don’t have to rent or buy a warehouse to stock your goods and you don’t have an actual store, you can save a lot of money in the beginning. All you need is a good laptop, in-depth research and some knowledge of the online marketing techniques.

Flexibility: If you have a store, then people have to come to your place to buy your products. But in drop shipping, you can reach customers all over the world easily and simply. That means more customers and more orders if you provide the right product at the right price.

Another advantage is that you can handle things from anywhere and at any time. This means you are available for customers 24 hours a day. This can increase your selling a notch above.

Easy Handling: In Drop shipping, one of the most attractive features is that you don’t need to deal with the annoying details of warehouse capacity, tracking the shipments, ordering new products, packing or any of the other information that regular retail shops worry about. This means less fuss for you.

Anything to sell: In real shops, you are limited to 1, 2 or even 3 categories of products, unless you offer a wide variety of products, then you need a huge store. But, in drop shipping, you literally can sell anything without worrying about the storage space or warehouses or any of these confusing details.

Advantages and Disadvantages of Drop Shipping Business Model

Disadvantages:

Low profits: Of course this is the main downside of Dropshipping. As you only work as the middleman between the store and the customer you don’t get to earn a lot of money, especially if are starting your business and want to earn customers trust and loyalty.

Fierce competition: Everyday more and more people are entering this field. This means you have to deal with a lot of competition. Sometimes even sell with no profits at all. But the good news is that with time only the smart and determined sellers can continue and gain more profits.

Storage and shipping errors: Not being in control of the warehouses and the shipping means fewer things to worry about, but sometimes it means taking the hit for something that is not your fault. If the store shipped the wrong product, the shipment company had difficulties in finding the address, the shipment was damaged, or any other problem happened you’ll find an angry message at your email or Facebook page. It’s not easy to handle this sort of things. You have to be very patient and have the talent to deal with angry customers without losing their trust in you.

If you’re looking for a new business that won’t cost you much to start and doesn’t give you a headache when dealing with all the details then maybe drop shipping is the right thing that you are looking for. Do your homework and research before you get started.

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