What is Dropshipping?
Dropshipping is an order fulfillment model in which sellers take orders from shoppers and then have those orders fulfilled by a third-party supplier, usually a product distributor or broker. Sellers do not need to store, handle or ship any products and earn the difference between wholesale and retail prices.
What are the advantages and disadvantages of dropshipping?
Dropshipping Advantages:
1. Rapid scalability and more product options
2. Save time and not be restricted by location: When you receive an order, you can deliver it to the supplier through the computer for processing. You do not need to pack or ship the goods yourself, you only need to monitor the fulfillment of the order.
3. Reduce investment and lower costs: Before you know whether the goods can be sold successfully, you don’t need to purchase a large amount of inventory first. Therefore, you don’t need too much capital when starting up and the cost is relatively low.
4. Increase repurchase rate
Dropshipping Disadvantages:
1. The accuracy of the delivery date cannot be guaranteed: You cannot update the supplier's inventory status in real time, and you cannot know whether the supplier can ship the goods smoothly after the order is placed, whether the product packaging is firm, whether there are any defects, whether you can choose the logistics yourself, etc.
2. Small profit margin: You invest a lot in advertising costs and get orders, but the profit from the orders may not be enough to cover the advertising costs. Low margins mean you have to make a lot of trades to get a good profit.
3. Unable to ensure product quality
4. Need to deal with subsequent after-sales issues
This is the end of our knowledge on Dropshipping. If you want to get more information about Dropshipping, please pay attention and we will continue to answer your questions~
