Pros and Cons About Dropshipping That You Need to Know

by Edwin Deponte, Guest Contributor

Nowadays, almost one-fourth of online businesses use dropshipping as their order and fulfillment method. Dropshipping is becoming famous because of its low overhead and no inventory business style. So, a lot of people can start their business even without having a substantial capital for inventory and warehousing. Usually, this is an effective strategy for online stores. But, not everything about it is good. Just like any other thing in the world, it has both pros and cons. Therefore, let us discuss the pros and cons about dropshipping that you need to know.
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Dropshipping is an emerging business model that has been proven to be effective.

No inventory
Any company that handles its inventory takes up a lot of time, effort, space, and money just to continue selling products. This is one of the great things about dropshipping. With dropshipping, you do not need to have your own inventory. You can find a supplier of goods then let them worry about the shipping. So, other than saving a lot of space for storage, you also have fewer things to think about such as tracking your shipments and maintaining the quality of goods.

Less overhead expenses
One significant expense usually most companies have is their inventory. But, because there is no inventory, you do not need a lot of money revolving around your business. Aside from ideally getting the assisted for Managed IT services in Milwaukee, you do not need to hire employees for your inventory checking or handling. So, overhead expenses are kept at a minimum.

More products to choose from
Low overhead costs and no inventory helps a great deal on this one. You can post different products from your suppliers without having the risk of overstocking because you do not need to have your own inventory. You can drop any product that is not selling without any risk.

Less control
This is one of the major disadvantages of dropshipping. In some parts of the transaction, you have no power whatsoever. When a customer orders a product from you, your supplier will be the one who will handle the shipping of that item. So, if a problem arises from the shipping process, it may reflect poorly on your business. So, make sure that your suppliers are professional and responsible for their actions.

Reliance on others for stocks
This is another problem in dropshipping business models. If your supplier runs out of stock, you also run out of stock, and there is nothing you can do about it. This problem counters the benefit of being able to sell a vast variety of products. If one item becomes popular, you might have problems getting new stocks because your supplier will most likely be also supplying other vendors or businesses. So, this is a major problem because you can lose customers because of longer lead times even if you have no control over it.

Conclusion
Dropshipping is an emerging business model that has been proven to be effective. But, just like anything else, there will always be pros and cons in doing anything. So, make sure that you take into consideration the drawbacks of a dropshipping business model compared to traditional retailing. Good luck!
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Author Bio:

Edwin Deponte is a motivational writer who is also passionate about Social Marketing. He believes in others’ abilities and tends to bring out people’s hidden potentials through his words of inspirations and motivational articles.