Depends on who you talk to, there are going to be people who are all for the drop shipping as well as those who are totally against it. So here is the list of Pros and Cons to drop shipping and a detail drop ship review!
The Overview of Drop shipping!
The good news is, that if you are really going to drop ship, you don’t have to stock any inventory at home, which means, you don’t have to come up with a large sum of money and a possibility of being stuck with dead inventory! Many of the wholesaler warehouses have those kind or products in the large quantities, and so you don’t have to worry about them running out of the inventory. The way it works is like this: Your customers will place an order on your site, and you contact the supplier to send the product directly to the customer.
The Pros are as listed below:
You don’t have to invest into purchasing the larger quantity of the products. You don’t have to work too much on the inventory, finding the place to stock it all, shipping and handling. You can list multiple products and see which sells best, and later on, put all your efforts to find as many customers as you can! You can have as many items listed as you want to, and unlimited amount of products to sell. The size of the item does not matter, large or small, it can all be drop shipped!
The Cons of Drop shipping
Now, it would be wrong to say that this is all easy to do. There are few cons to this as well:
One problem is that with this method you are going to have a lot more competition, and in return, a lot smaller profit margin. You have to stay competitive, so you have to lower your prices. Especially if you are selling on auction sites such as eBay or Amazon!
Sometimes supplier will run out of inventory and you have to tell your customers that you don’t have that product to sell any more. Which can cost you if you are selling on auction sites.
When you are selling online and one item at the time, you are getting the wholesale price, but if you were to buy bulk, you would be getting a lower price.
You do have an extra cost associated with the drop shipping, which is a drop shipping fee, and you have to account for that when selling your product.
Since you are not in control of the inventory, you have to rely on other people to fill your orders, and sometimes there is going to be an issue with it. It is not often, but it does happen.
To sum it up:
Drop shipping works and it can be a great way to start selling online, BUT it does have its own downsides. However, some of the down sides you can work around. For example, if you are selling one particular product, and you know it is selling like crazy, stock some of that inventory at home. This way if the supplier runs out of inventory, you are going to have something to ship and sell probably at the higher price.
There are many scams online for wholesale suppliers! One type of those are “mall type setting”, where you subscribe for membership site. Where you have millions of products at your finger tips, all in one place and all you need to do is post those products on your site. WARNING! Stay away from those. One reason is that the prices are higher than retail. Second, you won’t be able to get out of that membership really that easy.