If you are an e-commerce owner, then you have probably heard the term “dropshipping” a few times. Dropshipping is essentially a way to open an online store without the usual hassles involved. There is no inventory to keep track off, no packaging to manage, and no shipping on your end. You just sit back and watch your profits roll in.
So does dropshipping work for e-commerce? Keep reading to find out.
Dropshipping is simply an order fulfillment method you can use that does not require your online business to keep any product in stock. You sell the product in your store online and pass the sale onto the third-party supplier you have chosen. It is the third-party supplier that ships the order to your customer.
While it may seem easy enough, it is important to approach dropshipping the right way so you can run a successful online store.
If you choose to only use dropshipping and you just started your e-commerce venture, then it certainly offers an easier and cheaper way of getting started selling online as you don’t have to hold stock or pick and pack orders.
You also have to keep in mind that with every sale you make, you have to pay the supplier. Because of that, you may have lower profit margins. It is also highly competitive, so some businesses may find they have to undercut and keep their prices in check to make things more sustainable.
If you choose to use dropshipping for your e-commerce business, make sure to do the research. At times, dropshipping can be used to mitigate the risk of trying new products. However, if it is not executed properly, you can end up pushing your customers into the arms of your competitors.