What is Dropshipping? Advantages and disadvantages.
by Raquel Rosa, 3/27/2020, 7:48:08 AM
How does it work?
The concept is simple. The seller creates an online store with products that he does not have in stock. So when the user buys, the shipping and delivery of products is done by another company, which does have stock, the dropshipper.
Costs are lowered and the possibilities of both selling and buying are extended. Some studies suggest that this sales strategy, in which retailers become mediators between the product company and the buyer, is more likely to be profitable.
The retailer receives a commission or fixed amount for each sale.
The wholesaler, or dropshipper, can sell more products without having to manage and position his online store.
A simple formula that more and more businesses are embracing. Because it requires less initial investment, less logistics management, allows great scalability and reduction of fixed costs.
Costs are lowered and the possibilities of both selling and buying are extended. Some studies suggest that this sales strategy, in which retailers become mediators between the product company and the buyer, is more likely to be profitable.
The retailer receives a commission or fixed amount for each sale.
The wholesaler, or dropshipper, can sell more products without having to manage and position his online store.
A simple formula that more and more businesses are embracing. Because it requires less initial investment, less logistics management, allows great scalability and reduction of fixed costs.
And what about the customers?
They can find specific products more easily.
Is there no risk?
There is always risk and every risk requires a great effort. This business model, in particular, involves a great deal of SEO and SEM work and the search for a wholesaler who guarantees a good customer experience. In addition, the competition can force us to lower the profit margin.
