Is dropshipping dead? Which is the best choice if I want\u00a0to 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.\u00a0As an experienced dropshipping fulfillment agent, flashleopard worked with many drop shipping companies, so we\u00a0got to know there are pros and cons for dropshipping.\u00a0Advantages of dropshipping are like bellowing:<\/p>\n
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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.<\/p>\n
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So it seems perfect to open a dropshipping store, and\u00a0work on it as\u00a0part-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:<\/p>\n
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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.\u00a0So, to reflect in price, we can find that, dropshipping profit margin is not high, most dropshipping stores get between\u00a010-30% gross margins\u00a0whereas most traditional shops that carry inventory have\u00a050% gross margins. It\u2019s a huge difference!<\/p>\n
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Because your wholesale prices are higher\u00a0than a traditional store, you will not be able to compete as effectively on price unless you take a good sized profit hit.\u00a0In addition, lower margins will\u00a0inhibit your ability to advertise\u00a0on sites like Facebook and Google. Not only that, but less profit per sale also\u00a0makes customer service problematic.<\/p>\n
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For example with online store,\u00a0our 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.\u00a0Because our margins are so high,\u00a0we can afford to take the hit. But with dropshipping, the convenience of not having to fulfill orders\u00a0comes at a cost.<\/p>\n
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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\u00a0deal with your customer base.<\/p>\n
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You have to be the one\u00a0to apologize when an order doesn\u2019t arrive on time, especially when you are using several different dropship distributors, getting the entire order to the end customer can be a\u00a0logistical nightmare; All distributors will have\u00a0different shipping times\u00a0and will be shipping from completely\u00a0different locations.\u00a0If a customer orders products across 3 different distributors, they will end up\u00a0receiving 3 different packages at varying times.<\/p>\n
If an order is particularly time sensitive\u00a0and needs to be rushed, you will have to make sure that all of your distributors can deliver the product on time.<\/p>\n