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When it comes to starting an online business, there are many options to choose from one of which is DROPSHIPPING. The dropshipping business model is a convenient and lucrative way to earn money online. In this dropshipping 101 guide, you can learn what is dropshipping as well as the benefits and drawbacks of dropshipping. This guide is ideal for beginners who are seeking an online business to start with. As a beginner, you want to be guided and avoid several mistakes that will hinder your chances of success. Do you like selling items but don’t have the capital to stock an inventory? Then, the dropshipping business model might be just what will profit you. WHAT IS DROP-SHIPPING? To fully articulate what is dropshipping, there is a need to distinguish between what you are about to learn (dropshipping) and what you know (traditional eCommerce). In traditional eCommerce, the entrepreneur builds an online store where he displays and sells products to consumers. He either manufactures the product or buys directly from a wholesaler. After which, he stocks the products in a warehouse while he waits for an interested buyer. When a buyer shows interest in the product and places an order, the entrepreneur is obliged to fulfill the order to the customer. This can be overwhelming because it comes with so many limitations. The dropshipping business model is quite similar in that it requires selling items online; however, it is different in so many ways. Dropshipping is a supply chain management method that allows an online retailer or an entrepreneur to sell a product through his online store, which is then fulfilled directly by the supplier. Unlike traditional eCommerce, in dropshipping, the retailer does not stock goods rather he partners with a supplier who packages and ships the goods directly to the customer. In dropshipping, the supplier takes responsibility for inventory, warehousing, packaging, and shipment leaving the retailer (could be you or any freelancer) to focus on advertising and marketing efforts. In the event of a return or questions, the supplier can cater to this. The retailer makes a profit from the difference between the price tag of the supplier and the price tag on his store. Take for instance; Mr. A is a manufacturer or a supplier of Bluetooth speakers. He owns a warehouse where he stores all of his goods. He also owns a logistic company where he packages and ships orders to customers. Mr. B is a retailer who cannot afford to buy Bluetooth speakers but can create a website, market the product, and transfer orders to Mr. A who does the packaging and delivery. If Mr. A sells a Bluetooth speaker for $19, Mr. B can upload the product in his store for $32. The difference $32 - $19 = $13 belongs to Mr. B for his marketing efforts. DROP-SHIPPING IS THE SOLUTION TO E-COMMERCE’S MAJOR LIMITATION Many people fail to live the dream of owning an online store just because they lack the capital to stock an inventory. Others cannot cope with the complexity of shipping procedures. Dropshipping solves these two major limitations. With this business model, you do not need to own a warehouse nor do you need to stress going through shipping hassle. You can sell other peoples’ products and make money without owning a warehouse or worrying about the delivery. Isn’t this exciting? Why you should consider the eCommerce business model – Dropshipping Pros There are so many reasons to start dropshipping today. These are what I like about this supply chain management method. Dropshipping eliminates the need to stock an inventory: You don’t need to buy any product before making a sale. This way, you can save money and time spent on manufacturing and delivery. Stocking an inventory will incur additional costs on labor and warehouse: Since you are not buying any product, there is no need to pay for warehouse or labor. Little capital to get started: With a domain name and hosting plan, you can start up a dropshipping business. You will find tons of free website hosting software e.g. WordPress that can help you build a stunning eCommerce website with little or no coding skill. No worries about overstocking or shortages: You can sell any product without thinking of its lifespan – perishable, bulky, or out of trend. Sell anything: There is no limit to what you can sell and who you can sell to. Dropshipping offers retailers the flexibility of choosing from a wide range of products to sell without the need to first stock them. So long as your supplier can deliver items to customers anywhere in the world, you have nothing to worry about. No stress, little hassle: Since the supplier handles packaging and delivery, the retailer has little to do other than advertise the product. Limitations to the dropshipping business model – Dropshipping Cons A few limitations to the dropshipping business may include: Low-profit margin Difficult if you want to build a brand High competition High advertising cost WHAT YOU NEED TO START THE DROP-SHIPPING BUSINESS MODEL If you think dropshipping is right for you, here are a few things you will need to get started. Create a business plan Know what product to sell Look for the right dropshipping supplier Create an online store Pay attention to SEO to boost your ranking on search engines WRAPPING UP Starting a dropshipping business is achievable even for a beginner. According to Statista, in 2020, the estimated value of the market for dropshipping e-commerce was 128.6 billion U.S. That's huge for everyone. Once you can find a reputable dropship supplier and the right product, you are good to go. We hope you find this article helpful. You may also click here to see other amazing tips on how to succeed as a freelancer.

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