For my next venture I am thinking about setting up a dropshipping company. Dropshipping involves selling products that you don’t actually own, so you don’t need to buy and keep stock. The wholesaler suppliers you with the product description for you to list on eBay, Amazon or your internet store. You then take the order and forward this and the payment to your suppler, the dropshipper, who then forwards the product to your customer.
There are several benefits to dropshipping. Firstly it doesn’t cost much to set up. You don’t need to buy any stock, rent any warehouse space or organise the paperwork and shipping. It is really simple to do, just decide what you want to sell, find the right supplier and set up your internet shop.
You don’t have to decide what stock you need to buy to sell on, saving on making mistakes with your inventory which is a waste of money, time and space. You won’t need to find stock to buy or sort out pricing, all this is sorted by the dropshipper.
To save on delays in shipping, it is probably going to be better to find yourself a dropshipper in the UK. Much easier if you find there are problems than having a supplier in China.
There could also be problems with dropshipping. There may be problems with stock availability. You won’t be able to see this in real time, just when your supplier sends their stock list to you. If something sells out, you won’t know until the next time you receive the stocklist and you’ll have continued selling. This will cause problems with your customers who will see you as unreliable.
You won’t have any control over the dispatch of your orders, so you’ll be the one who will get the flack from your customers if there are errors, mistakes or delivery problems. If there are lots of returns, you’ll have to deal with these, as your dropshipper probably won’t.
If you sell on EBay or Amazon, you will have to compete with traditional sellers, who hold the stock and may offer lower prices and are more reliable. Dropshippers may also is going to incur higher costs as they are going to be fulfilling lots of small orders from your instead of a big order, the price you have to charge could be higher.
It does seem that dropshipping might not be the best thing to do on its own. It might be better to add dropshipping to another business such as a blog. However, if you can find a niche market which doesn’t have much competition from traditional retailers it will probably work better. I’ll keep you updated as I go!