Reasons Dropshipping And Internet Don’t Always Mix Well

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It is easy to get lured by the prospects of using drop shipping to sell on the internet. After all, dropshipping is the product sourcing method which is most often touted as being the best fit for small e-commerce businesses.

You don’t need to stock the items and print labels, you don’t need to pack and ship them either: all you have to do is list them on your website and wait for the money to come rolling in! You don’t even have to pay to your dropshipper until you actually sell the item. What could go wrong?

Unfortunately, small e-commerce businesses and dropshipping don’t really go well together. Dropshipping is a volume business: a small e-commerce website will rarely have enough sales to justify the costs. There is no minimum order with dropshippers, but that also means that you will be paying more per each item than when you are buying in bulk. You will have to pay a drop ship fee to cover the dropshipper’s costs as well. Since your dropshipping profit margin is already thin, this is sure to eat a lot of your profits.

You are not the only one who came with a brilliant idea to drop ship online: the internet is chock-full of dropshippers! That makes branding yourself difficult, especially if you are a small business with a limited budget, or if you have only just started! The same product is likely to be listed on several e-commerce websites, which is sure to translate into prices of an item going down.

One of the main attractions of drop shipping is the promise of a hands-free profit. However, that also leaves you vulnerable if your dropshipper doesn’t do his part of a deal. If he is, for example, slow filling your orders that will reflect poorly on your own business. Problems with orders are difficult to sort out when you don’t really have a control over the process – but your business will be held liable.

Backordering represents a great, unsolvable problem when using dropshipping as a sourcing method for your e-commerce business: if you place a shipment request for an item that is sold out, again, that is your problem.

Don’t get too excited with the idea of drop shipping through your e-commerce website, but don’t discard it either! To successfully dropship, you “just” need to have a product with a large profit margin, but with few competitors!

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