December 6, 2023

Post: 3 Advantages of Dropshipping Over Retail

Image Courtesy of Pixabay

Dropshipping has become one of the fastest and most lucrative business models of the modern age as it lends itself very well to the way e-commerce and the internet work. The model is quite simple; receive an order, forward the order, get paid, and all of this is done hassle-free usually through a music website that you have set up in order to process orders of a particular album, for example.

While dropshipping is relatively simple, only around 10% of dropshipping websites become successful and the failure of a dropshipping enterprise mostly comes down to inexperienced marketing or trying to sell too many products on one platform.

Despite the high failure rate of dropshipping, the model does have some major advantages over operating a traditional online retail storefront or establishment such as: 

  • Quick and easy transactions
  • No storage
  • Low startup cost

Ease of use and customer experience is at the forefront of successful online retailers and e-commerce websites while no storage space is required since you don’t actually have any inventory and a website can be set up relatively cheap and quickly.

If You build It (Well), They Will Come

When anyone uses a site for purchasing anything, what they want is a good customer experience that allows them to shop, select, and checkout albums or merch without any hassle. A prominent UX survey found that 88% of customers are unlikely to return following a poor user experience on a website and even more if not optimized for mobile.

The most common experience of an e-commerce site is to select products and then accept credit cards from your browser in easy steps that facilitate a transaction but as simple as this sounds, it can be tricky to configure. One of the most common methods is to use platforms such as WooCommerce which facilitates online payments or through the use of plugins as is common with WordPress sites.  

No Need to House any Wares

One of the key benefits of dropshipping is the fact that you don’t have to deal with an inventory. Because of the way dropshipping works i.e. someone else owns the stock and you sell it, means that someone else takes care of all the storage of the items that you are selling. Suffice to say, dropshipping is popular because all it really requires is a computer and an internet connection for marketing products.

For example, you may be selling the latest sensation in rock on behalf of a certified record label or manufacturer. The manufacturer or possibly an intermediary owns the stock and you are tasked with selling the albums on your website. You haven’t purchased this stock but you are going to be paid for selling it as if you have the stock, and because someone else owns the stock they also have to deal with picking, packaging, and shipping.

Start from Nothing and Make Capital Gains

Not actually holding inventory saves a lot of money when it comes to dropshipping as does the non-requirement of shipping. One of the largest costs to a wholesaler and a retailer is the cost of inventory, and as a dropshipper you don’t have to input any initial startup money in order to purchase stock to sell.

As mentioned, all that is required to start a dropshipping business is a computer and an internet connection, both of which are very cheap these days. You will eventually need to pay for a website but initially many web builder companies offer free trials or free domains while you get up and running, some of which are quite generous and this can be done essentially for free if you already have a PC and internet.

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