What is Dropshipping?
Dropshipping can be described as an e-commerce business model or a retail process where a business owner has no inventory of products in their possession. Instead, they purchase a product ‘on demand’ i.e., when a customer places an order.
For any entrepreneur who’s setting out, it’s always a secure option to begin with dropshipping strategy.
In conclusion, the retailer doesn’t immediately take care of the product, just facilitates it for delivery. More than often, their principal involvement would be interacting with the customer- right from purchase, assisting them with any queries, or addressing complaints.
The Dropshipping Process
We can break down the key steps related to drop shipping into 4.
Step 1: A customer places an order in your store, usually online.
Step 2: As a dropshipper, you transfer the order & product details to your wholesaler. It could be a single merchant or you could have a network of suppliers.
Step 3: The wholesaler/supplier processes the order and proceeds for package & shipping.
Step 4: The order is directly delivered to the customer
Advantages of Dropshipping
1. Low Investment is Required
One of the prominent merits of adopting drop shipping as your retail approach is the low investment associated. Setting up and maintaining an inventory of products can be an expensive affair, particularly while scaling up. It even reduces the running costs because the business can be operated with a mere PC and an internet connection
2. Flexibility and Convenience
You can set up and run an eCommerce business anywhere across the world. The physical location of your store has nothing to do with the location of your suppliers. Dropshipping business provides you the ease to operate from one corner and sell to the other corner.
3. Diversity of Products
Since you don’t have to pre-purchase the items you sell, there’s a higher scope to include a multitude of products and make your inventory diverse. Dropshipping allows you a wide range of niche options to pick from. From health and wellness to toys, from pharmacy to automobiles, anything at no additional cost.
4. Easy to set-up
There are many tools and platforms out there that help you set up your online store easily and can completely automate your e-business. These platforms help you stay connected with suppliers effortlessly and maintain tabs on the status of each and every order as well.
Disadvantages of Dropshipping
All the advantages we cited make dropshipping a very appealing model for anyone getting commenced with an online store. But there’s another side of the coin too. Dropshipping needn’t always be a dreamy affair for everyone.
Here are a few drawbacks to consider:
1. Low-Profit Margins
You started with minimal investment, yes. And, you earn a profit from every order you deliver to the customer. However, this margin isn’t considerably impressive since the majority of the income goes to the supplier.
2. Unstable Inventory
The suppliers you sync with will most probably have a handful of other dropshippers who offer similar products as yours. There might be days wherein the stock runs out and it could impact losing a visitor and a potential order. Furthermore, it could be a challenging task to keep an eye on the availability and quantity of products before transferring the information to your customers.
3. Supplier Errors
There must be a possibility of the supplier sending the wrong item or doing nothing at all, but you have to accept responsibility for their mistake anyway.
Even the fine dropshipping suppliers make errors fulfilling orders—errors for which you have to take responsibility and apologize.
How is Dropshipping worth it with Bikry?
With over 200k products to choose from you can make your online store within 30 seconds. Through the application’s catalog builder, you can create sophisticated, professional-looking catalogs and share them with your customers via WhatsApp. With just a few clicks you get your own website, a smart catalog builder, your own business card, and banners for your website. Signing up on the app is free and simple with a big advantage of pan India delivery via 40+ delivery partners. It offers instant settlement on the same day within 4 minutes.
Bikry is an end-to-end solution provider which makes it the best app to successfully establish your E-commerce business!