What is Dropshipping on Amazon and eBay

What is Dropshipping on Amazon and eBay

Are you looking to start a new business of dropshipping? But it seems that you are too much confused about this. You have a lot of queries to ask. I will clear all your confusion about the drop shipping. I will tell you what is the real meaning of drop shipping and how does it work? What is a benefit if you are going to start a new business of dropshipping?



Nowadays, Many success dropshipping businessmen. A few years ago, they have also some queries and confusion regarding dropshipping but now they are well known for dropshipping and they are earning a lot of money. So be confident the next is you. I can understand, Why are these question striking in your mind? How much will be an investment? What will be the margin? What is the authenticity of the drop-shipper? These are a genuine question that is putting up in your mind.

You don’t need to worry, It is not so difficult to start a dropshipping business. Before you, Many were thinking and now they are at a  good place in this business. In fact, many successful dropshipping businesses are running this business from their home.

Now let me you, what does dropshipping means?

Actually it is a kind of retail marketing in which a seller doesn’t have its own stock of product. The seller buys the product from the third party and ships it to a direct customer. It means the merchant never sees or handles the product.

If I tell you simple words, firstly the customer order a product on retailer online store then the online retailer sends its customer detail to drop shipper suppliers. Drop shippers pack the product and order to the customer by the name of the retailer. Hoping, you all have understood very well the real means of dropshipping.

Now you need to understand the three most applicable players that help in dropshipping.

Manufacturers, Wholesalers, and Retailers:

  • Manufacturers – Manufacturers create the product and do not sell directly to the public. Manufacturers sell their product in bulk to retailer It’s very profitable to buy the product from the manufacturer for resale. It is easy to buy directly from the wholesaler than stock products and to reship the product.
  • Wholesalers – Wholesalers buy products to stock dozens.  it buys the product in bulk from manufacturing and marks it slightly resale it to the retailer. Most of the wholesaler is strict, they only sell to the retailer they don’t sell to the general public
  • Retailers – Those who sell his product directly to the public if someone wants to run his business and wants to fulfill his order via drop shipping supplies then it means he is a retailer.

Now, if you are thinking to start a new drop shipping you should know its advantage as well as disadvantage.

Advantages of dropshipping:

  • Very easy to start
  • You don’t require any formality to dropshipping only you have to follow these three steps
  • Find suppliers
  • Set up your own website
  • Start selling goods

For further processing, you don’t need to worry drop shipper will be available for other works.

  • Managing a warehouse
  • Packing your product
  • Shipping your product
  • Tracking inventory
  • Handling return
  • Managing stock level

Less capital is requiredIt is the biggest advantage for someone who doesn’t have enough budget to invest but want to make money. It is possible to launch an e-Commerce online drop shipping business without investing thousands of dollars. Only you have a little amount for the running website such as hosting theme apps etc.

You don’t have to purchase a product unless you already made the sale and the customer has paid it.

Flexible Location – This dropshipping business is the only business that you can start anywhere around the world. You need the internet. There only you have to make yourself comfortable to communicate with suppliers and customers easily. Then you will be able to run and manage your business. So it does not require a specific place such as office, warehouse, etc. to run. You can start your business even in the room of your house only you have required a laptop and fast-moving internet.

Wide Selection of Products –There is lots of product when it comes to your sale because you don’t have to pre-purchase the items you sell. You can list more items on your website to sale you can offer an array of products to your potential customers.

Easy to Scale –If you are handling traditionally business, then you have to work more and need more resources for gaining more profit. But in this dropshipping business, you don’t work more. Only send orders to drop shippers. Further, he will handle and you will get your profit and remaining time you can use in another aspect of growing business.

No risk: If your business does not sell a product then you don’t need to worry because you are not going to lose anything. So you don’t need to take any kind of pressure for getting loss.

No Losses on Damaged Goods: In other traditional businesses you will be in loss If your goods are damaged. but in this business, you don’t have any risk of getting lost. If your good is damaged, Dropshipper supplies goods in fewer shipment steps. So he will be a responsible person if goods are damaged during supply.

 

Some Disadvantage of dropshipping:

Like a coin it has also two phases, Dropshipping has also two phases. Now you need to know the negative aspect of dropshipping. So you can prepare yourself before.

Here is some disadvantage that comes along with your business.

Slightly lower profit margins: It is the biggest disadvantage of dropshipping business. If we compare from other business we come to know it has less margin compare to others. Because it does not require shop and more money to start, but other Businesses required to set up a shop invest money then they earn margin accordingly.

Complete liability: If you are selling something to customers from your website through the supplier, and customer found some fault on product brand then this will be your whole liability if something went wrong with the product. So it is very important to choose liable suppliers, but you had to accept responsibility for the mistake which you had not done.

Shipping Complexities: You will get a good profit if you will sell multiple products but it is not so good idea if you have multiple suppliers for delivering this product to the customer because different suppliers will charge you different shopping costs depending on the factor like location and quality of the product. Let me clear you more, if a customer orders a product three times that all are available from separate suppliers. You will have to bear the shipping charge for sending each item from suppliers to the customer, but the customer will not get ready to pay the three-time shipping charge. He will think that you are overcharging. So it will be difficult for you to manage so the calculation will be very complex and you will get a very little margin.

Competition is High: Dropshipping business on Amazon and eBay is too much competition you will get more and more retailers in this segment.

Managing Inventory: It is nearly impossible to keep the record of stock of suppliers. A communication gap can cause issues such as cancellation of an order.  This can be fixed with the software but those come at some price which may increase you a fixed price.

Avoid from a mistake: Common mistakes that should be avoided when picking a product for dropshipping: Here I am going to tell you the basic thing to follow to avoid the mistake in dropshipping.

Basing of product: Don’t base your product ever according to your likes or dislike. Base your product according to your research facts and evaluating market demands.

Conclusion:

I hope that the above information provided makes you understand very well. Now you are the person who knows everything about dropshipping. Now you have learned all the aspects of the dropshipping business. You will get success. Instead, you need to be very serious and dedicated. I highly congratulate you that you have reached on a level of your understanding that you can grow your own shipping business. The best thing in dropshipping is that you can learn from testing the product in real-time. Drops hipping provide you a safe place to start. It provides an opportunity to grow without any fear of losing it. Dropshipping provides an opportunity for businesses to grow without any risk without any investment.

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