Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.

In simpler words, this is how drop shipping works:

1)The customer places an order for a product on the retailer’s online store or website.

2)The retailer manually or automatically forwards this order and customer’s information to his or her drop shipping supplier.

3)The drop shipping supplier packages and ships the goods directly to the customer on behalf of the retailer.

Let's find out some pros and cons of drop shipping together!

Pros of drop shipping

1)Zero inventory risk

Unlike traditional brick-and-mortar business, drop shipping allows you to fulfill the order even without seeing the products you sold to your customers, which means you can start drop shipping with no goods, no inventory, no warehouse. That’s the biggest feature of drop shipping. You don't need to worry about the goods that are not so popular in your store. That will decrease your risk to a great extent.

Related: how to dropship on ebay

2)Low upfront fee

Thanks to no need to prepare inventory or rent a warehouse, you avoid the necessity to invest thousands of dollars in a start-up business. So your upfront capital is much lower than usual retail business. Plus, because of the simplicity of drop shipping model, your overhead expenses are very low, such as no charter money, no importing tax or employee costs.

3)Flexible Location

Actually, many successful dropshippers started their drop shipping business not even in the office but at home or somewhere else. With a computer and $3.99 per month to be a VIP in Chinabrands, it's possible to start and realize their dreams of starting a business by themselves.

4)Diversity of products

With the possibility of listing the goods to your customers without purchasing the items in advance, so you can list the whole array of goods at no additional cost. That can help you figure out which goods are the real hot sale, which are not.

5)Easy to start

To run a successful drop shipping store, you don’t need a background or experience in a specific industry. Because with drop shipping, you don't have to worry about: Packing and shipping your goods, Tracking inventory, Custom clearance process, Handling problematic returns.

6)Easy to copy

Once you had a successful store, you can create another similar store to sell the same niche. It means you can double or even triple your success easily. Also, you can sell this successful store to those who want to join drop shipping business directly. Generally speaking, the amount of money is much more than your upfront fee in the beginning.

Cons of drop shipping

1)Flexible margins

Perhaps the margin in drop shipping business is one of the biggest disadvantages because it can not be controlled very well. With so many outer factors that will make an impact to margins, such as the ability to deliver goods for suppliers, the logistic problems and the customer service and so on. Also, because it's easy to start, many people can set up stores and sell various of goods, which will increase the competition of drop shipping market. To scale the sales volume, every merchant will decrease their price at rock-bottom in order to gain revenue. Fortunately, not all dropshipper suffer these kind of troubles. As long as you choose a right and suitable niche and supplier under the direction of Chinabrands, you can overcome this problem finally.

2)Unreliable suppliers

Some people open up a drop shipping online store with the idea that they will be treated honestly by their suppliers to get win-win. In reality, however, drop shipping distributors often charge extra fees or tack the fees onto the quoted wholesale price. So, how to find reliable suppliers? Chinabrands will tell you the detailed information.

3)Stock issue

As a dropshipper, your responsibility is to renew your stock and tell customers the information they want to know. However, there appears a trouble. Because you hold no inventory, the relevant information about stock must can not so accurate. Once the items your customers ordered are in short supply, you will be the NO.1 to be blamed by them. While after receiving all the complaints from your customers, you still have no idea when the item will be in supply.

In my opinion, the best way to solve this problem is to find an advanced platform that can offer us the function of updating inventory automatically. I mean Chinabrands. In that situation, as to the goods that are temporarily out of stock, customers have right to choose weather to buy or not, and they take all the responsibility by them own.

4)Shipping complexities

Just imagine that you work with several suppliers at the same time in your store, so the products sold to your customers will from different regions, too. That will not only increase your separate shipping charges for sending each item, but also bring unnecessary troubles to your customers. But you can’t just work with one supplier, which will narrow your market in a large part.

How to deal with it? Chinabrands is a very good choice. There are thousands of suppliers and millions of quality goods in Chinabrands. Besides, 10000+logistics routes, customer service in 10+languages, and many customers around the world are indispensable premises to start your drop shipping business.

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