I been doing research on the ‘drop shipping’ recently, looking at the opportunity to sells online without having to stock or having huge warehouse to compete with all my big brothers around!! There are always advantage and disadvantage when come to Drop sipping business
What is Drop Shipping?
Drop shipping is a supply chain management in which the seller does not keep goods in stock; however the seller will transfers the customer orders with shipment details to the wholesaler and in some case to the manufacturer directly who will then ship to buyer (the customer). The profit make by the seller is that the different between the selling price and the purchase price (which payable to the wholesaler or manufacturer)
Advantages
You can start your Drop shipping business at a very minimal investment, by just having a basic functionality such as a website, a domain name, web hosting service and mechanism to process the payments (example credit card or paypal) if you serious about the business; without having to stock goods
For cheaper alternatively, you may list on Ebay or Amazon which already prebuilt with the required functionality, as well as huge customers base
Disadvantages
There are risks in business as well as Drop shipping business, many cases is that the items which sold ‘OUT OF STOCK’ and you need to backorder and delay the delivery to your customer. In this case, the chances of getting a ‘NEGATIVE’ comments on your store or website is potentially high which may ruin your business reputation
Time and effort to search for a reliable Drop ship partner, which able to deliver the items as per describe, products quality and others among the consideration
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