Pros:

a. Lower cost requirement. It can understand that you don’t need so much costs requirement in the beginning of drop shipping business. For example, as you are running your alibaba dropshipping business, you don’t need any production or manufacturing costs unless you want to make something by yourselves. The cooperation with a drop shipping platform should be helpful for deal with most of supplying issues because almost each drop shipping platform are cooperating with suppliers.

b. No inventory requirement and lower risk. Drop shipping model allows people do not need to carry any inventory to start their drop shipping business. During the process of drop shipping business, once customers place the orders online, suppliers should directly deliver merchandises to end-customers which means sellers may not carry any inventories. Moreover, it should be more safety to do drop shipping business because sellers are not able to plagued by excess inventory.

c. Doing jobs from home. It is possible to do drop shipping business from home because most of business decisions can be made at home if you are cooperating with a reliable drop shipping platform. It can believe that you can use your PCs and smart devices such as smart phones and tablets to finish most of jobs from home, it include inventory management, order fulfillment, product selection and so on.

d. Wider variety of product selection. It can find that sellers can do a wider variety of product selection because they only have few inventory to carry. Sellers can try different categories of products for selling, in order to figure out what is the most potential niches in the current drop shipping market.

e. Better price control. As the development of current drop shipping market, most of sellers can do product pricing freely, which means they can decide the space for profits. However, due to the competitive drop shipping market worldwide, sellers used to set the prices at a safe level to make profits stably.

Cons:

a. Lower profit margin. As one of the features within drop shipping business model, it allows sellers to buy a single unit of product individually, and then suppliers should deliver it to end-customers. It is a biggest advantage in the drop shipping business model, but it also limit profit margin because the single unit delivery costs should be higher. The higher costs means sellers may get a lower profit margin which means make fewer profits.

b. Difficult to do quality control. It can clearly understand that drop shipping business model allows sellers do not need to carry inventories, and suppliers should deliver merchandises directly to end-customers. This can be a benefit for sellers, but also can be one of the problems because sellers may have no chance to do a quality control to the products that they are selling. A damaged or broken product may directly influence the sales of the store in the future development.

c. Strong competition among sellers. As the rapid development of drop shipping business in the world, it can understand that the competition among sellers are quite strong. Moreover, it can be trusted that there are so many sellers are focus on the same hot niches, it may causes the market is become saturated.

d. Poor communication between sellers and end-customers. As we discuss in the previous description, once the order placed by end-customers, suppliers or manufacturers should deliver it directly to end-customers. That means sellers would have few opportunities to communicate with their end-customers. Sellers cannot receive enough feedback or suggestion from end-customers which is not helpful for improving dropship home decor business.