Do you want to open your own online store, but there is no start-up capital to purchase goods? And you don't need to! Dropshipping allows you to sell directly from a supplier, leaving you with a trade margin.
Dropshipping is an intermediary sale, when one person brings a supplier and a buyer together, and as a reward has his own markup on the supplier's price. In fact, this is the sale of goods without prior purchase.
How to organize dropshipping
To do dropshipping, you need to find a good supplier in whose product you can be confident. To begin with, it is recommended to make a trial purchase for yourself. This will allow you to evaluate the quality, appearance of the purchase, the design of the parcel, as well as the duration of delivery. If the goods arrive of inadequate quality, then all claims are sent to the direct seller, i.e. to you. Pre-purchase will allow you to hedge against surprises.
Then you need to make an electronic platform for the sale of goods. It can be your own website or a group on social networks. Photos and descriptions can be taken from the supplier's website. The price is indicated with its own margin.
As soon as the buyer places an order and pays for it, immediately a similar order is made from the supplier, but in the name of the buyer. It turns out that the supplier himself sends the order to the buyer. The intermediary is left with instant profit.
Pros and cons of dropshipping
The benefits of dropshipping are clear. In order to sell a product, it is not at all necessary to purchase it. This allows:
- save on renting a warehouse;
- you can specify a wide range;
- all delivery costs are borne by the supplier;
- higher income compared to earnings from affiliate links.
If you plan to open your own online store, then dropshipping helps to expand the assortment and earn additional funds for the development of the site, increase profits, without increasing working capital and additional investments.
But there are also significant disadvantages:
- the order can come in several parcels, incl. from different suppliers;
- the parcel may contain other people's advertising materials, there is no way to attach your own;
- high competition.
As already mentioned, all claims from the buyer will be directed directly to the seller and not to the supplier. Therefore, it is important to think in advance what to say in case of various complaints, how to return money for a low-quality product, than to argue for a long delivery (up to 2 months instead of 2 weeks), etc.
Another important point is that the real value may be indicated on the parcel. Therefore, the buyer often leaves to the supplier in the future, rather than staying on the store's website. In any case, dropshipping allows an online store to develop when investments are very limited, but it is better not to consider it as a permanent form of earnings.
