Advantages and Disadvantages Of Dropshipping

Do you plan to venture into a dropshipping business and want to know if it is profitable or not? In this post, you are going to find out if dropshipping is the best online business for you to venture into. We have listed the advantages and disadvantages of a dropshipping business below.

Advantages of Dropshipping

Some of the advantages or pros of dropshipping are: 

1. It does not require a huge amount of capital for a warehouse in order to store products. The only capital that you may need is the money to create a website. However, there are free web builders that you can use like Shopify or WordPress.

2. You do not need a warehouse in dropshipping business. 

3. You do not use your money to buy products. Yes, you can read it again. As a dropshipper, you only order products when a buyer of the products that you ordered has paid you for the products. 
Read Also: What Dropshipping is

4. Your money is not tied down by any product, unlike in retail stores where you have to buy products first and if there is no buyer, your money is tied down by the products. 

5. You are at liberty to test different products to know which one attracts a larger audience and has higher sales. 

6. Dropshipping business is a freelance online business that does not take much of your time and it is not limited by location. You can stay anywhere and run the business effectively. It enables you to have time for other things. 

7. You do not need to overwhelm yourself with keeping inventory of products supplied, shipping, handling returns, and warehouse maintenance. 

8. You can sell a variety of products on your dropshipping website without spending a dime. All you need to do is to do research and list all the latest and trending products on your website.

Disadvantages of Dropshipping

Listed below are some of the disadvantages or cons of dropshipping business that you should know about before venturing into it.

1. There is too much competition. Since dropshipping business is easy to startup and the running cost is very small, alot of people tend to venture into it as a result making the business more competitive unlike other businesses. You will see so many competitors offering lower prices for a particular product. 
To overcome this disadvantage, it is important to do research for a good niche, identify the weaknesses in the niche, and improve on it in order to attract more customers and make lots of sales. 

2. Suppliers can make mistakes, which may put your reputation at stake. For example, you may place an order for a black shoe in size 40 on behalf of your customer, and the supplier might end up sending a different shoe color and size. This is one of so many mistakes that could occur. 
To overcome these mistakes, it is important to work with the best suppliers who have good ratings or higher rankings. You can also buy test products from the supplier before you go ahead and buy products for your customers. 

3. You do not have control over branding of products. Most suppliers have a minimum quantity of products which you must buy at a time before you customize the products to bear your brand logo or name. There are also some charges you need to pay for the branding to be done. Since most of your customers may be buying one or two particular types of product at a time, it may be difficult to brand the products. 
To overcome this challenge, you can as well ignore the brand of a thing. All that customers need is good value for their money. As long as you deliver good quality products to customers, they will always come back to your website in order to buy products.

In summary, dropshipping sounds like the ultimate business opportunity—selling products with no risk and minimal capital required. But if you are to succeed at dropshipping, then you will need to understand all of the advantages and disadvantages involved in order to capitalize on the best opportunities and minimize the risks involved.