What are the pros and cons of dropshipping?
For today’s creative entrepreneurs, the eCommerce industry has seen a modernization. Dropshipping is what we call it. Dropshipping is gaining popularity in India.
Dropshipping allows an eCommerce seller to take over the management of the orders, including manufacturing and delivery. The seller simply needs to notify the manufacturer of an order. He/she will prepare the order on-demand, pack it, and deliver it to the customer. The seller does not even have the opportunity to touch the product.
It sounds so easy for sellers to make a living selling. It’s strange, but it is true that dropshipping takes away a lot from the main character and allows for plenty of time to plan strategies and market the business to get orders.
Dropshipping is a new trend in Indian eCommerce. However, there are still many things to learn and adapt. Each has its advantages and disadvantages. Let’s take a look at the major benefits and drawbacks of this new ecosystem before you enter it.
The Pros
No need to stress about inventory
A regular eCommerce store will need to have a large inventory. They must also manufacture/prepare products in bulk, and then fulfill orders. Dropshipping has made it possible to get rid of all these headaches.
Here, the term “Inventory” is not used. It doesn’t matter if you have to accumulate the products in large quantities and worry about their damage over time. It’s not necessary to keep track of your inventory, which can take up a lot of time and resources. Instead of worrying about the products you don’t currently have buyers, you can focus on growing your business.
Business with a low budget
For any business in India, especially eCommerce, entrepreneurs have to have a huge budget in place which they use for manufacturing/preparing the product, packing it, maintaining the records, delivering it to the customer and also managing returns and refunds.
Dropshipping is a great way to reduce the overall cost. Until the order is placed and paid by the customer, the seller doesn’t have to invest in anything. This reduces the risk significantly. The money required to market the business and pay taxes to India is very small.
Many products and types
There is one thing that makes Indian eCommerce websites successful: they offer variety. Dropshipping is a new way to sell products in India. People are more willing to shop online for the right product and then search for variations so they can find something that suits their needs.
The seller has the flexibility to offer a wide range of products, with no inventory limits and low setup costs. You can easily add many other products to your eCommerce website without worrying about overhead. This is a fantastic opportunity for any creative person who wants to become an entrepreneur.
High risk
Dropshipping is an online store that does not have any background activity that could cause harm. Normal retail online stores have inventory that is constantly moving. Otherwise, the products will become useless. It’s a shock to the seller if this happens as all the money is lost when inventory is empty.
Dropshipping is where the seller does not buy inventory. In fact, he only pays for the product when he receives an order through his online store. Dropshipping is a secure and safe system that puts the seller at no risk. He doesn’t have any obligation to pay anything if he isn’t able to market his product effectively or doesn’t receive orders. It’s, therefore, a safer option.
Location independent
Today’s entrepreneurs have one dream: Work from anywhere! Dropshipping has the advantage of not caring where the seller is located unless he has bad WiFi.
A seller can travel with his laptop to build and scale his dropshipping eCommerce shop. He only has to take care that there’s no broken communication with his customers and manufacturers/suppliers, and this business can thrive easily.
The Cons
No control
Dropshipping is a business where all activities are managed by third-party suppliers. It’s a game of uncertainty. While you can trust them, they can’t be held responsible for their actions. They will not be responsible for any mishandling of any order. The seller will assume all responsibility for any order placed by the customer through his website.
Little profit margins
It is very easy to set up a dropshipping eCommerce shop. This trick the seller into accepting a low profit per order. The supplier company is entitled to the full amount due to the work they have done. If the product is sold at a higher price, and the seller market it so well with beautiful websites and great product options, then the seller will be able to quote the customer a lower price. This will increase the margins.
Unfortunately, sellers who fail to take it seriously will try to make a living with a poor online presence. They have to accept very small margins.
Unsteady demand management
Dropshipping sellers don’t keep track of their inventory so they could lose out if there isn’t enough product at the supplier. Orders are not predictable. If suddenly there is a demand for any product, the seller will not be able to tell that stock isn’t available. It will take longer.
Third-party suppliers do the same thing for many sellers, making it difficult to monitor scarcity. All these suppliers don’t support updating sellers on their inventory. This becomes a problem for sellers.
Poor suppliers management
Shipping can be a problem if the seller uses more than one supplier. Even if the customer has placed multiple orders, the seller must ship the products to the customer separately. The customer will not receive all orders at the same time and will need to pay shipping costs for each product separately.
This is unfair for the customer and will cause you to lose your customer service. It is possible to solve this problem if all the suppliers are kept in sync. This is difficult. You can also find a supplier that can handle all orders for the products you sell through your dropshipping eCommerce site. This will reduce confusion and customers will only pay one shipping cost.
Dropshipping with Amazon
Dropshipping is a simple concept that doesn’t change when the idea is transferred to Amazon. However, you must take into account the peculiarities of Amazon. Let’s not get into the details of what makes dropshipping so special, but let’s take a look at some of the benefits and drawbacks to dropshipping on Amazon.
Pros for Amazon
- You don’t need to worry about the details of selling and buying, as we have already mentioned. You can forget about ordering, stocking and shipping and focus on getting the order to the supplier.
- With no products to store, you’ll have less overhead and be able to afford much more.
- Shipping costs will be reduced because you don’t have to.
- Because there is no order fulfillment to worry about, time will be more abundant. You can instead focus on expanding your business in other areas.
- You don’t have to worry about a limited product stock because you can present a wide range of products by collaborating with multiple suppliers and manufacturers. This can help you expand your reach.
- Dropshipping on Amazon allows you to access their marketing tools and search engines so that you can benefit from the work of other sellers.
- Amazon’s sheer number of customers gives you immediate access to an enormous audience.
Amazon’s Cons
- It can be very costly to have to pay an automatic 10-15% seller fee for every item (Amazon rules, not the seller) especially if there is a small profit margin.
- You might be charged an additional fee by the seller to use their services. This could reduce your profit margin.
- Amazon’s requirements for a product to be eligible for marketing and advertising control you don’t have any control.
- Because you are now dealing with two parties, the supplier and the buyer, rather than just the buyer without dropshipping, it might be more difficult to provide customer support.
- Buyers won’t care about what’s going on at the supplier/manufacturer’s end; you’re their only point of contact, so you’ll have to reassure them, even if your supplier/manufacturer is having the issues.
- Because of your restrictions, you can’t develop a lasting or warm relationship with your customers.
What are the Pros and Cons of Shopify Dropshipping
Dropshipping can be a great way to start ecommerce. Dropshipping has many advantages that are not available to other business types. Dropshipping is made easier by Shopify’s advanced ecommerce functionality and user-friendly interface.
Let’s look at the pros and cons to dropshipping on Shopify, so you can understand what you’re getting into before you launch your store.
SHOPIFY DROPSHIPPING PROS
- Low risk and investment Dropshipping is very cost-effective and has low risks. Shopify is an ecommerce platform that costs $29 per month. You can host your online shop using Shopify. You don’t have to worry about inventory you paid thousands of dollars for if no one orders from your site.
- Shopify provides seamless support for dropshipping providers: Many of the top dropshipping companies integrate seamlessly with Shopify. Shopify allows you to download the app of a supplier and easily add products to your website with just a few clicks.
- Automated: Shopify allows you to automate a lot of the fulfillment processes that would otherwise take a lot of time. You don’t have to pick, pack and ship every order. Instead, use one of the many Shopify dropshipping apps. The supplier will take care of everything.
- Dropshipping is a low-cost business model. There are usually not many expenses associated with dropshipping. Your ecommerce platform, domain, dropshipping application, and any additional apps you add to your store are the only expenses. This is a lot cheaper than starting a business that requires you to buy equipment and pay staff to run it.
SHOPIFY DROPSHIPPING CONS
- More difficult to use page builder. The Shopify page editing interface is less user-friendly than Wix. A Shopify app such as Shogun or Pagefly can make designing high-quality websites easier.
- Low product margin Dropshippers are less likely to receive the best price for their products. This means that the average margin for each item is lower. Dropshippers do not buy items upfront so they don’t get bulk discounts like brick and mortar retailers like Walmart.
- No branding Dropshipping is a business where you don’t have any control over branding. Anyone can sell the exact same products as you do. Dropshipping is difficult because many dropshipping suppliers do not support custom packaging.
- Logistics issues Dropshipping is a way to make it difficult for you to receive your orders. If the supplier has a problem with an order, they may not be able to notify you immediately. If the supplier’s data feed does not keep up to date, you may lose control of inventory and end up selling out of products.
Why should you use Shopify for dropshipping?
Shopify is the most widely used ecommerce platform today. Shopify powers 21% of all online shops, just behind WooCommerce. It’s an obvious choice for anyone looking to start a dropshipping company.
Shopify’s advantage over other ecommerce platforms in dropshipping is its ease-of-use and advanced ecommerce functionality. An open-source platform such as WooCommerce allows you to add features and customize the design, but is difficult to use for beginners. Wix, which was initially designed to be a page builder platform, is extremely easy to use but doesn’t provide all the commerce functionality that you might need to manage your store.
Shopify combines the best of both worlds. Shopify is intuitively designed to make it easy for you to manage all aspects of your store. Shopify allows you to add products, track sales and manage inventory from one place.
Shopify has an app store that offers thousands of apps to help you add more features. These apps allow you to connect to the top dropshipping companies. This is an essential part of your dropshipping business because it allows you to ensure accurate inventory levels and eliminate the need to place every order manually with the supplier.
Dropshipping on Shopify FAQs
HOW DOES SHOPIFY DROPSHIPPING WORK?
Dropshipping with Shopify is done by connecting with dropshipping suppliers and then adding their products on to your website. Shopify integrates with the most popular dropshipping providers, so you can easily add products in a matter of seconds. To start making sales, you must drive traffic to your website once you have created your store and added products. Dropshipping platforms make it easy to pay for orders and send customer information to suppliers.
HOW MUCH CAN YOU MAKE DROPSHIPPING ON SHOPIFY
There are many factors that will affect how much you can make from dropshipping with Shopify. It all depends on the product price and margin. You will need fewer sales to sell high-ticket items that have a large margin. To make significant profits, you will need to sell more products if your net profit is only $10 per product.
The amount you spend on marketing will determine how much dropshipping with Shopify is possible. You’ll be able to make more money if you invest in campaigns that are profitable.
Is SHOPIFY good for DROPSHIPPING
Shopify is the best ecommerce platform for dropshipping. Shopify is affordable, simple to use, and has tons of integrations that allow dropshipping providers to make their products more efficient. If you market well, it is easy to get up and running quickly.
IS DROPSHIPPING VALUED?
Dropshipping is a great way to start your own business. Dropshipping is risk-free and you don’t have to invest in inventory. You don’t have to ship or pack orders. This makes it easy to manage. It is easy to plan, research, set up a store, add products, and market your business.
