Home / A Look At Drop Shipping – Pros and Cons

A Look At Drop Shipping – Pros and Cons

The Internet has changed the way people shop. Consumers now use the Internet for more purchases than ever before. The convenience of shopping from home when you have time instead of running to the mall on your only day off is just too hard to pbad. Because of this, more people are building online retail centers than ever before. 

Not everyone has the opportunity to open and stock a full retail store for online sales. But that does not mean that there are no opportunities available. Drop shipping has become one of the most popular side hacks available because it meets the demand of shoppers while having a really low start-up cost. 

If you are considering starting a drop shipping business, there are many good and bad things you must know about this type of venture. 



The Pros of A Drop Shipping Business 

Drop shipping has many benefits for people looking to start a side business or who have limited funds to invest in starting a business. Some of the many advantages include: 

• No Inventory. With drop shipping, you are selling the product for another company. This means that you do not have to take the risk of stocking inventory. This means that you can offer more products, more varieties of each product, and cancel products without having to invest a dime into them. You have absolutely no risk of having old stock in your storage or being stuck with off sizes. 
• New Products. Trends change quickly, especially in the fashion industry. When you work as a drop shipper, you do not have to worry about having “last seasons fashions” in your storefront. You can change your products and add new ones at any time. 
• Low Investment. Many drop shipping services charge a monthly or yearly membership fee. This fee will vary with each service, and you should familiarize yourself on the costs badociated with the program you select. You may also have a small start-up cost for starting your own website to promote your products. However, eBay and Amazon will allow drop shipping, and you may be able to forego starting a site at first while you are learning the business. 

The Cons of Drop Shipping 

As with any business, there are also some drawbacks to working as a drop shipper. Some of these drawbacks may include: 

• Shipping Times. Consumers have come to expect fast shipping when they buy online. If you are working with a drop shipper that is outside of the country or has an extraordinarily long shipping time, you may not build an excellent reputation for your business. You must look into the shipping methods and timing of the company you chose for drop shipping. In the end, it will be you, not them, that gets terrible reviews if it takes too long for the products to arrive. 
• Product Replacement. If an item comes damaged or the consumer does not want to return the product, you must know the policies for this from your drop shipper. You may be required to provide a full refund to the consumer yourself and wait for a credit from the drop shipper. Again, familiarize yourself with all of the drop shipping companies’ policies before joining their organization. 
• Low-Profit Margin. You must remember that you are not the only one out there selling this product or selling it from the same drop shipper. Competition can be very stiff, and you cannot always get the MSRP for any product. You must stay competitive with your pricing, and this could mean lower profit margins. However, if the profit margin is too small, you may want to seek out a different product altogether. 

If This Makes You Uncomfortable – There Are Other Options 

Drop shipping is a great way to make money from a side hack. However, if you are uncomfortable with the risks, there are many other options available to you. You can start with a small dropship business while you are investigating other side hacks like freelance web design or blogging. 

The Internet is more than a place to shop for the best deals or to reconnect with old friends. The Internet is also a place of great opportunities. There are many ways that you can use the Internet to your advantage to make some money on the side or to start your own business full time. 

The most important thing to remember is that when you venture into online sales or businesses, you have to take the time to make them successful. You have to do the research, make the connections, and learn how to market to an audience that will be interested in what you have to offer. Once you have accomplished this, anything that you start online, from a drop shipping business to a how-to video series, will be a success.