Is dropshipping dead? Which is the best choice if I want to start my online business with small budget? How to become a dropshipper? These are some frequently asked qustions in Facebook shopify dropshipping groups, or forums like quora and reddit. As an experienced dropshipping fulfillment agent, flashleopard worked with many drop shipping companies, so we got to know there are pros and cons for dropshipping. Advantages of dropshipping are like bellowing:
- You can start your business on a small buget: Dropshipping makes it amazingly easy to get started selling online. You don’t need to invest heavily in inventory, yet you can still offer thousands of items to your customers. So no inventory needed, no minimum order quantity requested. What you need to do is just choose a platform to buying a store or build your own online store, then list products into website, run ads to get sales. That would not be very costly, as an start-up online website.
- Convenience and efficiency: Successfully launching and growing an ecommerce business takes a lot of work, especially if you have limited resources. But for dropshipping, you can find chinese dropshippers, or local dropshippers to help process your orders. Not having to worry about fulfillment is incredibly convenient and frees up your time to concentrate on your marketing plan, customer service, and operations, future branding, etc.Once you have steady drop shipping manufacturers china, or dropshipping fulfillment Chinese agents working with you, you will find your business running so efficiently.
- Mobility: With all the physical fulfillment issues handled, you’re free to
operate your business anywhere you can get an internet connection. So you work for yourself, free man, free working style. Surely when your online business grow bigger, you may hire some virtual assistants, what we call VA, to work for you, help with order organizations, after sales, dealing with drop shipping wholesalers, and things like that.
- Mature business model that has been tested: Dropshipping is a relatively mature business model, has been proved to be workable. For plenty of online stores, or some major retailers, they are using droppshipping, so that they can offer a wider selection of products to their customers, without having to deal with increased inventory hassles. For new beginners on dropshipping. You can find so many coaching courses on Youtube, Facebook, cover a wide range of how to dropship and how to run an dropshipping business.Which makes things more easier, since the guru and experienced successors can help you a lot. That will save your time and money to test.
So it seems perfect to open a dropshipping store, and work on it as part-time or full time, but wait, dropshipping is not as easy and simple as you think, you may have the risk of failure if not aware its disadvantages, or hard to make a decent profit if not prepared for what it needs. Disadvantages of dropshipping are listed as bellowing:
- You may got lost on the products listing. Too many choices means no choices. Actually, dropshipping supplier can provide such a wide range of products to choose for, like dropshipping apparels, toys, dropshipping gadget, home décor, tools, dropshipping outdoor and sports items, etc. You may get lost in choosing the items you need to start with, a general store or a niche store? That is the most frequently seen questions you can find on Facebook group and topics about dropshipping from China supplier. And listing too may products without testing, means you can not focus, and its money and time consuming to test more products, make it harder to find a winning product. So, a suggestion to make here is, to sell something that you have at least interest in, so that you can stay with your passion in the days of low sales and at beginning period.
- You will not get the lowest price as you think.
Dropshipping is retailing, not whole selling business mode. So in most conditions, you will not receive the same wholesale price as you think, since dropshippers are buying in small quantity, and need to ship and pack each item individually, while wholesalers buy a large bulk quantity of products all at once to a store, then rest part, distuibutor will take care of it. So, to reflect in price, we can find that, dropshipping profit margin is not high, most dropshipping stores get between 10-30% gross margins whereas most traditional shops that carry inventory have 50% gross margins. It’s a huge difference!
Because your wholesale prices are higher than a traditional store, you will not be able to compete as effectively on price unless you take a good sized profit hit. In addition, lower margins will inhibit your ability to advertise on sites like Facebook and Google. Not only that, but less profit per sale also makes customer service problematic.
For example with online store, our margins are between 70-90%. As a result whenever we get an angry customer, we simply give them a refund AND let them keep the product. Because our margins are so high, we can afford to take the hit. But with dropshipping, the convenience of not having to fulfill orders comes at a cost.
- The dropshipping customer service is out of control.
We both know three things are most critical if you want grow dropshipping business bigger, and have better sales rate. That is: shipping time period; Product quality, and store customer service. Back to dropshipping reality, since you are asking dropshipping agents like aliexpress dropshipping vendor and other fulfillment agents, you may think dropship distributor is doing all the work, and you can sit back and relax. Unfortunately, you have to deal with your customer base.
You have to be the one to apologize when an order doesn’t arrive on time, especially when you are using several different dropship distributors, getting the entire order to the end customer can be a logistical nightmare; All distributors will have different shipping times and will be shipping from completely different locations. If a customer orders products across 3 different distributors, they will end up receiving 3 different packages at varying times.
If an order is particularly time sensitive and needs to be rushed, you will have to make sure that all of your distributors can deliver the product on time.
Still a little suggestion here, is to concentrate on one or two dropship distributors, who can process nearly all of your orders, and all your parcels can be sent out in one place, within one time scale. Flashleopard would be a suitable choice, and can provide overall processing fulfillment service! www.flashleopard.com
You have to be the one that answers all of the questions. When products quality is not good as described, when parcels are broken fully of partly during shipment, then clients want a reship or a refund instead. These issues will be critical for your store review, and your customers’ shopping experience, so, for the reputation of your online store, you need to keep an eye on your supplier, and keep up with customer service. Still, when your business grow bigger, you can eventually hire VA (virtual assistant), to help with the customer service part. To answer questions on pre-sales, shipment and aftersales. But before that, be patient to deal with all customer service is very important.
Customer service and your online reputation can make or break your business. With the worldwide web, social media and Twitter, news of a botched transaction can spread extremely fast so it is absolutely crucial that you maintain a great image for your online store. Word travels fast.
- Dropshipping is not less working at all.
As dropshippers do not need to deal with inventory and fulfillment, while still, you need to spend time on other things. You need to do products research, deal with technic problems of your website in the beginning. Then you need to put energy on your ads strategy and testing for winning products. Not to say to find reliable dropshipping fulfillment agents, and deal with them in the meantime.
What’s more, after you make sales, the customer service can be time consuming, and its very import that you make your customer happy, so you will need to spend time on these after sale issues.
When your sales is good enough, you can think about make your own brand to get some nature traffic, and get clients who want to buy from your shop again and again. This will increase sales, and reduce your ads cost.
Still, Right direction, and insist on your choice, you will make a success in dropshipping business!