What is Dropshipping?- A Detail Guide to Dropship
Dropshipping Services is a fulfillment strategy that allows business owners to engage with a third party to handle and ship their products. It is like a helping hand to those people who want to run their businesses without any inventory.
What are Dropshipping Services?
Dropshipping services is an online order method that allows eCommerce businesses to outsource product procurement, storage, and shipping to a third party—typically a vendor.
The dropshipping business model is popular among entrepreneurs seeking efficiency and reduced overhead, but it does have a cost. The retailer becomes a profit-making third party by marketing, selling, and providing customer service for the drop shipper’s goods. You set the selling prices in this arrangement as the retailer, so the final margins are up to you.
How Does It Work?
The process of dropshipping services work is completed in 3 steps:
Order placement: Dropshipping services work starts when a customer places an order on any ecommerce website. When the customer places an order, the seller confirms it by checking the stock of the listed product. He now placed an order at the dropshippers window. Whenever the order is placed, the dropshippers passes the order request to the fulfillment center who stores the product.
Order Confirmed: As soon as the customer makes a purchase or orders a product , a confirmation mail is landed on the customers’ mailbox from the seller’s side. The seller also sends a mail to dropshippers that the order is confirmed and now they have to ready the order. Dropshipping services works as a bridge between the customer and the seller. Dropshipping services work is to successfully fulfill the demand of both the customer and the seller.
Delivery: The delivery process is the same as a normal ecommerce delivery. Dropshippers packs the product from the warehouse and delivers it to the customers. After delivery of the product a confirmation mail by the Dropshipping services company is sent to the seller. The seller then sent delivery confirmation mail to the customer.
Advantages of Dropshipping Services Business Model
1.Dropshipping Business requires Low Overhead cost
To start a Dropshipping services business, you don’t require a large amount of money as you are not going to do everything on your own. You just have to maintain your online store. Your offline store will be managed by the dropshippers. They will store your products, pack them on their own and also deliver them.
2. Dropshipping Services Made you Geographically Independent
Dropshipping services allows you to operate from anywhere without being worried about the warehouse ,your store location or the fulfillment center. As a result, the dropshipping business model is popular among digital nomads and frequent travelers.
3. Dropshipping Services Work does not requires an Office
You can run your entire business just by a laptop. Their is no need to take office and hire a team for your business or a high level of investments. You just need to spend on advertising your product only. The overall business cost is much more less than the traditional business.
4. Dropshipping Services work has Low risk
Your financial risk is low because you do not own expensive inventory or dedicated facilities. You just have to store your product there, the rest of the workload is for them. You just have to take care of your ecommerce account.
Disadvantages of Dropshipping Business Model
1. Dropshipping Services leaves you with Low Profit Margins
Dropshipping services business generates lower profit margins as compared to traditional ecommerce services. This happens because you are paying to the supplier for the fulfillment of the order with wholesale product price.
2. Dropshipping Services work has Inventory Issue
If you are storing your product on your own, then you should be aware about the product which is going to be out of stock. But when you take services from other sources who are also managing inventory of other merchants then it becomes difficult to manage. This can lead to miscommunication & order cancellation. These practices can spoil the brand image and customer experience with your brand and services.
3. Shipping errors
You have no control over order selection, packaging, or shipment when a dropshipping services business handles the fulfillment process. You have to bear their mistakes and apologize to customers. They have other merchants also like you , and they were in so much hurry that they did not take care of the packaging and safety of the order which damages your brand image.
Who benefited from Dropshipping Services ?
Dropshipping is not for everyone and it’s not a get rich quick scheme. It is an attractive scheme for many sellers.
1.Entrepreneurs : As the initial investment is quite low, it is best suited for them. Unlike traditional business you don’t have to put much investment to start your business. Since storage, shipment and product ownership is managed by suppliers, most of the cost for dropshipping services business comes from marketing.
2.Part Time Retailers: Those who are working professionals and lack time , they can opt for dropshipping services as it is available on weekends also.
3. Beginners in the e-commerce World: Those who want to step into the ecommerce world can choose this service. If you don’t have enough knowledge of managing inventory or shipping processes then this service suits you best.
Conclusion
Dropshipping can be a highly gambit when applied successfully. All the important things one should know before starting is explained correctly. It’s now your call to roll up your sleeves, accept the degree of difficulty, and engross yourself in it.
You may have come across the fear of failure but at some point of time you will become a successful business in the ecommerce world.
If you are facing any issue regarding ecommerce business then Pinnacle is here to help you.