Seasonsway.com was first the company to introduce dropshipping bussiness in India in 2012.This vision of Seasonsway was actual portrait to frame on 2012 by introducing drop ship module in E commerce online shopping website in India.
What are the pros & cons of Drop shipping?
Dropshipping is a business model that allows companies to operate without manufacturing or maintaining their own inventory, owning a warehouse to store that inventory, or physically shipping orders to their customers.
Drop shipping can occur when a small retailer who commonly receives a single large order for a product and sells small quantities to customers. The retailer arranges for the goods to be shipped directly from the supplier's manufacturing facility to the customer rather than route the shipment through the retailer store.
Many sellers on online auction sites also drop ship. Usually, a seller will ship the item directly from the retailer or wholesaler to the highest bidder.
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5 Steps of Dropshipping
- Contact drop shipping wholesalers. Most of them will ask for a business EIN number and a copy of your sales tax and/or resale certificate.
- Choose the products from the wholesaler's catalog
- List the products on the website
- Collect the payment from buyers
- Order the products from the wholesaler at wholesale cost. Use the customer's shipping address
Benefits of drop shipping
- You don't have to worry about storage since you don't hold actual stocks of the products/items you have available for sale in your store
- Drop shipping has a low start-up cost
- You don’t have to worry about your items being unsold since you only fulfill orders when you have customers/buyers. Therefore, you only pay for the stocks you have successfully sold
Some Downsides to drop shipping
- Stock shortage is something that some drop shippers encounter especially if they only rely on one supplier/manufacturer. Always check on the availability of your products
- Since you yourself don't personally handle your products/items, you have no control of your inventory. For example, you aren't aware if your product/item is of good quality, how it's packaged and shipped. That is why it is important to have a reliable and trusted supplier
- Even if you don't personally handle your inventory/stocks, you will still be responsible for any delays, mishandling of products, poor packaging quality and so on. Again, partner with a reliable and trusted supplier to avoid such situations.
Pros of Drop shipping
Starting a drop shipping business is simple enough. You find a suitable drop shipping supplier, set up your website, and begin selling. The overhead cost is low compared to other business models. Since you don't keep an inventory, use a warehouse, or ship products to your customers, you're afforded the following benefits:
- You can run your business from anywhere with internet access.
- You don't need to worry about the cost or space needed to store inventory, so you can sell however many products you want
- There's a lower chance of orders being lost or damaged because products are only shipped once-from supplier to customer
- You aren't committed to your inventory. If a product isn't selling, you can stop selling it without worrying about any leftover stock. If you want to test a new product, all you have to do is find a supplie
- Time saved from not physically handling your products can be spent improving and scaling your business.
Cons of dropshipping
A lot of what makes dropshipping appealing can also be problematic. In particular, high levels of competition and less control can be tough to overcome. Here are some things you should be aware of before adopting a dropshipping model:
- Your margins can suffer. Your dropshipping partners do the heavy lifting for you, so they expect a significant cut of your profits
- There's a lot of competition. Since suppliers produce the same products for thousands of merchants, your selling proposition may not be unique
- You need good connections. While it's easy enough to Google "dropship supplier," it's important to make sure you're working with someone reputable and trustworthy
- Things can get quite complicated and overwhelming. Keeping on top of multiple products, suppliers, and customers takes a lot of work
- It can take even more work to establish your brand's identity. You have significantly less, if any, control over how your brand is presented throughout the shipping and order fulfillment process. If you want to brand your packaging, that's another potentially complicated step