Drop shipping is a retail business model. it differs from traditional business to modern business. Before in traditional business the owner only purchases product from a vendor when an order has been placed by a customer. This eliminates the need to own or store inventory and opens up a wide range of opportunities for entrepreneurs. After launched Drop shipping process has been changed. In this process products ship directly from supplier to customer, rather than shipping to the business itself first, thus streamlining the process. The benefit of drop shipping is that it saves time and resources. When you don’t pack and ship your own products, you can apply resources to other core business processes.
Before running off with a new dropshipping business idea, you’ll want to make sure you set yourself up with success by choosing the right eCommerce software. You’ll need to be able to perform market research, procure products, share order data with suppliers, and more. This will also help you build the most accurate drop shipping business plan.
How Does Drop Shipping Work?
The drop shipping model is relatively simple. It consists of the following steps:
A customer can place his order with an online business.
The business receives the order and forwards it to the drop shipping partner.
The drop shipper packs and sends the products in the order directly to the customer on behalf of the business.
The customer receives the products ordered.
Pros and Cons of Drop Shipping
Apart from the central benefit of eliminating costs associated with storing, packing and shipping products, here are some of the key benefits of drop shipping:
Wide product select option: Because it gives you access to new products, niche items and best-sellers, Collusion says that drop shipping “can effectively increase the variety of products your online business sells.” E-commerce incubator A Better Lemonade Stand also points out that it is easy to diversify inventory by only adding new items to your store.
Lower capital requirement: Due to the nature of the business model, by utilizing drop shipping one can reduce typical business spending. It’s a cost saving way to start a business because it keeps startup costs low. It can do with inventory management practices, typically one of the most prohibitive costs for new businesses.
Flexibility: Dropping shipping allows you complete location independence. That means you can operate from anywhere, only you need an internet connection instead of worrying about storage space.
Reduced business risk: Without drop shipping, businesses take on a great deal of risk when purchasing inventory due to the potential for excess inventory or under-ordering, rotation notes. Drop shipping frees you from purchasing items you may not be able to sell.
Scalability: You can easily scale your business up and down because you don’t have to manually fulfill each order. Selling 10 or 10,000 units requires roughly the same amount of work.