To dropship or not? Will be an answer you will be able to answer at the end of this course but first, let’s define ”Shopify Dropshipping”.
What is Shopify dropshipping?
Shopify Dropshipping business model is structured around a supplier or manufacturer and the seller. It simple, its a fulfillment model that allows you as a store owner to buy products from the seller or manufacturer and ship them directly to the customers after placing an order without you handling the inventory or shipping.
Let me simplify it.
You have a shop, and you don’t own the products, neither are you required to pay for the products in your shop before listing them.
For instance, you want to sell hoverboards but lacks the capital to buy the hoverboards in bulk to list them in your online store, so what do you do?
Simple, you create a store and look for a supplier of your choice, get into agreement then list the products on your store, when a customer places an order they have no idea you just a middleman who has his mark up set up on any product they will order.
So when they placed an order, you go to the supplier website, order the same order then they will ship the product directly to the customer and not through you.
If you listed the hoverboard at $145 and it only cost you about $49 you pay the $49 to the supplier and keep the difference,how about that? Sweet right? But don’t celebrate yet.
Thus the power of Shopify Dropshipping business and what makes it more interesting is that it has been automated nowadays using apps that I will cover later in the course of this eBook.
Before Shopify dropshipping happened or any other form of dropshipping, the use of traditional e-commerce fulfillment models were the most popular.
These traditional modules of e-commerce required store owners to handle inventory; one had to buy products in bulk and cater for the warehouse that handles his stock.
The traditional e-commerce model required you to do your shipping, unlike the current dropshipping business module where almost everything is being taken care of by the use of an app and a platform that provides you everything from hosting, domain names, apps to fulfillment options.
Dropshipping has helped eliminate the worries of inventory, handling shipping, returns and the hustles that comes with running a traditional e-commerce store.
The century we live in, not everything comes in a silver platter neither are every innovation works perfectly. There are glitches to every system you may have tried out and dropshipping ain’t an exception.
So let me take you through the advantages and disadvantages of dropshipping.
This is the place you pause and ask me any question you may have before I take you through the pros and cons.
Swiftly inbox me on facebook or contact us page on my blog and I will get back to you or slide into my Dm on Instagram.
Pros of Dropshipping
Compared to traditional e-commerce system where you required considerable capital to start, cash for warehouse or store, inventory capital and much more, dropshipping have low start-up costs, unlike the traditional e-commerce system.
There are minimal risks involves when running a dropshipping business. God Forbid you to end up not selling the products in your shop, maybe due to poor marketing strategies or poor choice of products.
You can close your shop and walk away, unlike the traditional e-commerce where you left with inventory, and you have no idea how to get rid of them unless burning them ! with dropshipping its easy and straightforward you are not tied down to any inventory. If it doesn’t work pivot and choose something else to try out.
Since you are operating online while dropshipping, no law requires you to live in a specific place. You can drophip from anywhere you want in the world. You are not tied to the location you getting your inventory from, in other words, you are a nomadic entrepreneur.
Don’t be jumping all over the place yet! We have some disadvantages of dropshipping that may be wary you off.
Cons of dropshipping Business
Dropshipping business has a low -barrier of entry; you may think you are the only person dominating a particular niche only to wake up to thousands other drop shippers selling the same product and using the same supplier as you.
This brings us to how to choose a right niche for your Shopify store which I will cover comprehensively. Now that what makes most of the dropshipping business fail.
A customer can see over 10 ads selling the same product at different prices; this is due to the high competition of dropshippers. So the key is to fund a rare but in-demand product or niche and brand yourself around that.
In most cases, it’s rare to get direct contact with the real manufacture of the product you want to sell. IN most cases we head up talking to suppliers who acts as the manufacturer but in reality, they also dropshipping the product.
Dropshipping products tend to have a lower margin if you bought it in bulk rather than buying the same product in a small quantity. You will make good margin if you buy the product in bulk and at a time suffer loss or low margin if purchased the products in low volume.
Let this not to bother you, you are going to learn the tricks and how you need to run your business smoothly overcoming the above challenges mentioned.
At times you may wish to have your store name or branded products to help you built a strong case online, but in most cases, suppliers don’t provide the option of sending your customers branded products unless you buy the products in bulk.
But still, it’s not guaranteed you will have them branded as you can remember you are not even sure you deal with the owner or manufacture of the actual product.
If you lucky enough to land yourself a supplier who would do the branding or customization for you on the products they count yourself lucky.
Now let’s go into how to find or identify a niche or product you want to be listed on your site, or you intend to sell on your site. Shall we?