What is Dropshipping?
Dropshipping is where you buy low and sell high.
Dropshipping is an ecommerce business model where the retailer (or person/company selling the item) doesn’t physically have the products they sell. Instead, the manufacturer or a third party fulfillment company ships your items to your customer or sends the stock to a dedicated drop shipper once an order is placed.
Is Dropshipping worth it?
The major question you are probably asking yourself now is “Yeah, it sounds like it could work. But is it worth it?” This comes down to the price for the items you sell, and in essence, your profit margins for each.
1. You only pay when your customer pays you. You do not have to pay for inventory upfront. Nor do you need to pay for boxes, shipping supplies, or shipping labels. With dropshipping, you receive payment for the products at the same time you pay your suppliers. This frees up cash for marketing and growth.
2. Low barrier to entry. Dropshipping has a much lower barrier to entry because you don’t have to worry about developing new products or purchasing and storing inventory.
3. No inventory management. Inventory management requires storage and handling costs — someone has to fold shirts and put them on the shelves! And you might purchase or manufacture large volumes of inventory that don’t sell, so there’s significant financial risk involved.
Businesses that dropship, on the other hand, remove those risks. A third party handles inventory, and products are available to the customer on demand.
4. Requires no storefront or warehouse. Whether you are just starting out in ecommerce or are growing beyond your current warehousing and staffing needs, dropshipping allows you to operate with a smaller warehouse and workforce.
Dropshipping nixes the need for a physical storefront — which means no lease, no mortgage, no construction costs, no upkeep.
5. Test new products with minimal risk. Innovation is critical for keeping customers engaged. Dropshipping lets you test new product lines without spending lots of money. If customers don’t respond to a new item, simply remove it from your store!
6. There are many tools that work with dropshipping workflows. There are many different inventory management softwares out there that will work with your suppliers to make sure you never sell anything that is out of stock.
7. Create passive income. Passive income is earned with little to no daily effort (though it does require upfront work). With dropshipping, it’s very possible for you to be working on other aspects of your business while orders are placed and fulfilled automatically. You can even wake up the next morning and see you made $1000 overnight!
1. High competition. The same low barrier to entry that makes dropshipping attractive creates heavy competition. You'll have to find other ways to stand out from the crowd.
2. Lower profit margins. Your profit margins are usually reduced of what you could expect from buying products in bulk and housing/fulfilling orders yourself.
3. Finding the right supplier: A lot of what makes a dropshipping business successful is finding the right supplier. You want to make sure the suppliers you use ship out right away and have a low cancellation rate.
4. Finding the right products: Another major part of what makes a dropshipping business successful is finding the right products to sell. You want to make sure the products you sell are popular, but not overpriced.
How can Direct Dropship help?
We have partnered with the biggest brands and best product lines from around the globe. We work with reputable manufacturers, distributors and importers to stock the shelves of our diverse network of warehouses to ensure that your customer receives their order as quickly as possible.
We take the guess work out of what to sell. Direct Dropship specializes in Niche Analysis. Basically, this is just a fancy way of saying that we will only carry the niches (product lines) that have a large enough customer base, but a limited number of competitors so you will be sure to sell products.
We ship all orders blind. We do not include a packing slip with prices or include our name on the return label. Your customers will never know who we are or what you are actually paying for the products.
Most orders ship in 24 hours. All orders ship within 3 business days. Guaranteed!
You know exactly how much we have in stock. We include our full quantity on our website and in our data feeds
We provide you with the tools to make you successful. We provide all of our customers with FREE Inventory Feeds to make it easier to sell wherever you want.
We have transparent pricing. Your orders will consist of three parts: item cost, shipping, and processing fees.
Item Cost - this is our landed cost of the item, we do not mark our prices up.
Shipping - this is the actual cost of shipping that we pay to ship the order to your customer.
Processing Fees - This is a flat 3.5% charge to cover our cost of processing credit cards as well as cover the cost of housing the inventory in our warehouses (boxes, shipping supplies, etc).
We also charge Sales Tax where applicable as required by law.