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Dropshipping and its advantages and disadvantages

dropship


In this article we want to give you all the information so you know that dropshipping is not impossible.

There are some tricks that you can apply to fine-tune your distribution and shipping network. These applications allow you to access thousands of suppliers like HyperSKU with inventory for dropshipping; and also advice on how to carry out your supplier research, since when working with suppliers, a lot of communication is needed so that your orders flow and you can deliver in a timely manner.

What is dropshipping?‍

According to an article by Forbes, dropshipping is a variant of electronic commerce, also known as e-commerce, in which it is not necessary for the seller to have the products in stock, but to promote them through the web and is the supplier himself who sends it directly to the customer. ‍

Continuing with the Shopify definition, “when a store sells a product, it buys it from a third party and they send it directly to the customer. With this method, the store owner never sees the product, much less come into contact with it. It only serves as an intermediary. ”

Sounds magical right? Dropshipping is a really easy way to start in the eCommerce sector, as it has quite a few benefits, however, it has some disadvantages, which is why the dropshipping issue is controversial among digital entrepreneurs.

Note: The fact that you do not have to manage inventory does not mean that dropshipping is easier than managing your own products, it means that you must become a digital sales and marketing expert to sell a product that you may not have tried, which according to sales experts, it’s a cardinal sin.

Advantages of doing Dropshipping:‍

As we already mentioned, the main advantage of dropshipping is that you do not have to maintain a warehouse full of products, which you must sell yes or yes. Dropshipping gives you the opportunity to sell different products and discover which product sells the best according to your target audience in Facebook and Google Ads without fear of being stuck with your investment.

Something like what happens to the character of Will Smith in the movie “In Pursuit of Happiness”, where he gets stuck with his investment in X-ray machines and must sell them anyway to get his money back (we still have the little tear from remembering that movie).

Another advantage is that getting started is really simple and cheap, you only need to create your website, buy your domain, pay for hosting and start with Facebook advertising to attract people to your site. Sure, for a millennial this is simple, but today we have Google to ask anything and Uncle YouTube so that someone can teach us step by step how to make a web page. This is how it is to start your own business, you apply what you already know and learn what you don’t.

It is much more profitable to learn to create an online business than to pay for electricity and rent for a physical premises, even more scalable, since, as your sales grow, you do not have to worry about getting more inventory. Customer service work does increase, but most of the order processing will be done by your supplier.

Disadvantages of Dropshipping:

One of the biggest disadvantages of dropshipping with suppliers is communication and order management. There is still a lot of ground to cover in the supplier aspect to evolve towards the digital age; Some companies are already starting to handle programs like SAP and others continue to use Excel tables, but the vast majority are still stuck in the era of pencil, paper and telephone to manage their inventories (some even continue to handle faxes).‍

On the other hand, some suppliers will hardly have the organizational structure for online order processing, so you should do a good research before assuming that your supplier is ready to fulfill your demand. This is also a disadvantage even with more established suppliers, since you do not keep track of the inventory, and if you receive an order, but your supplier ran out of product, you will look bad with your customer.

So you do need reliable suppliers like HyperSKU, which is directly in communication with factories to secure stock. Always remember to negotiate the terms well with your supplier and maintain constant communication to be aware of the inventory and not to announce those products that are about to run out in your supplier’s warehouse.



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