Dropshipping Ultimate Guide

If you are a budding entrepreneur in 2023, dropshipping is something that crosses your mind often, and today we will see how to turn it into a profitable business. A lot of people try digging out information regarding this new business model but fail to find meaningful insights into the subject. Today, I am going to share this comprehensive guide to dropshipping and its role as an order management process with all ins and outs included. While a lot of people hear about this idea as a dead one, I strongly feel that you will be able to run its profitability after reading this article.

Dive in deeper to explore the opportunities of selling without owning stuff below.

The flow of content:

Introduction

Dropshipping and Order Management

Understanding Dropshipping Business Model

Why You Should Start Dropshipping: Benefits And Opportunities Explained

How To Get Started

The Problems Every Dropshipper Faces And How To Handle Them

Marketing Your Business: Dos And Don’ts In a Nutshell

Summing Up Useful Resource:

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Preview

Understanding Dropshipping Business Model

Before we start, please take a note about the three major stakeholders: Manufacturer, Client, And You (aka the retailer.) 

Conventionally, the firm which takes the order is the one who produces it and ships to their customers. But, if you are using the dropshipping model, you don’t need to manufacture, store, or ship the products at all! You can list the product you are interested in selling, receive the order from the customer, and then purchase it from the manufacturer/distributor. They will take care of warehousing, packaging, and handling, along with shipping the product to the customer. 

Market Stat:​ By 2025, The market size for dropshipping is expected to reach ​​$557.9 Billion

You don’t even need to touch the products. You can purchase their merchandise under your brand and market them directly. The warehousing also falls on their part, so you don’t need to stack the boxes at your garage or storerooms, let alone packing them. They will do it all on your behalf. All in all, this reduces the need for investment as you receive the order and forward it to the manufacturer. They will take care of the rest. And still, you get your cut out of the price difference. You bore only the shipping and marketing charges. It sounds wonderful, doesn’t it? 

Why You Should Start Dropshipping:

Benefits And Opportunities Explained

First of all, I recommend people who are already in online retailing to go forward with it. Newbies can always start, but they will have to follow the later mentioned steps far more strictly. As an entrepreneur, the only thing you might have in abundance is morale. So I advise you to manage your finances, operations, and time in a systematic manner. If you are willing to do so, here are some of the most amazing benefits listed down below:

●     No Need To Hold Inventory:​ One of the foremost advantages of dropshipping is no need to do ​ inventory managemen​          t ​ as the third-party will fulfill the​      orders from their inventory. Before you forward the order to them, you can compare the best pricing from all the suppliers and make your decision. Thus, all you need to do is to list down the items on your store and directly sell them.

●     Low Capital Requirement:​ As we discussed earlier, a majority of ‘liabilities’ aren’t concerned directly with you. This translates to a lower requirement of the capital for investments.

●     No Real Estate And Insurance Required:​ You need not purchase or rent a warehouse. A lot of newbies in e-commerce either use their homes or rent garages. The bigger players also need to pay for insurances of the place and stock in many cases. Hence dropshipping is a better alternative.

●     Low Risk Involved:​ The only risk in the model is that the client considers you responsible for fulfilling their orders. You have to handle any mishap. As long as there are no problems, you have virtually zero risks.

●     No HR Costs:​ Since most of the work is done by third parties, you need not hire staff on your side. The entire operations on your end include only selecting products and deciding pricing.

●     No Risk Of Unsold Stock:​ As you don’t own any of the stock or make any payment in advance, there is no scope of making losses on unsold stock. The cash cycle starts only after receiving demand for listed items. You don’t need to make any commitments to make a purchase to any of your suppliers.

●     Good For Entry-Level Businesses:​ A lot of people fear to make the first move. They might want to test if an idea works not. In such cases, having minimal investments gives the liberty to experiment without hurting our pockets.

●     Create Alternate Streams Of Income:​ Many online stores have access to a client base that purchases items related to the store’s products. If the store doesn’t sell them, it can use dropshipping to generate alternate revenue streams. ●        Pursue It As Your Side Hustle:​ Are you looking forward to quitting your

9-to-5 job and kick start your venture? If yes, then you can join the internet-driven entrepreneurship wagon as a side hustle. Working after office hours is totally okay as long as you look after essential stuff properly.

●     Test New Products:​ Did I just mention that businesses use it for selling products that aren’t a part of their lineup? You can test new merchandise without investing any significant amount and later spice up your product portfolio from self-sourced ones.

You can make a considerable amount of money, but the main advantage here comes in the form of exploring new horizons. No matter if you are looking to raise capital for turning your side hustle into a full-fledged enterprise while learning or considering expansion, it’s equally effective. Your venture on this level is more of a litmus test as it will give you an idea of whether to scale up or reconsider the products. 

One thing I would like to bring to your notice is that all of these benefits come with one primary condition, you dedicate enough time. And of course, if you treat it like a quick-get-rich scheme, you will hardly taste any success. You need to remain consistent, focused, and calculative throughout this feat.

Though it seems simple, there are tonnes of technical aspects to look out for. In the following portions, I will cover the process of successfully entering the landscape. Have a look at the step by step process below: