Is Drop Shipping the Best Among Online Businesses?
Dropshipping is becoming prevalent nowadays as the number of startup firms is increasing. It means making products directly available from the manufacturer to the customer. This saves time and money flow more quickly. Therefore the risk is lower. Drop shipping requires lesser investment as you do not need to store the products in your warehouse and incur additional charges. Simply promoting the products through online platforms and customers viewing the same makes our work done.
Today each individual carries a smartphone and access to social media platforms has become very easy. Majority of businesses, whether old or startup are following this trend. The reason being, lack of time. People prefer shopping, sitting at home, and ordering online. In their leisure time, they simply prefer to browse their phones. This is how the products are displayed to create a demand in their minds, and they end up buying things.
Dropshipping also allows businesses to test how far a new product raises demand in the market. This prevents unnecessary investments in production, raw material, and labor costs, manufacturing only that much as is necessary to meet the demands in the market, extending gradually. Whenever a customer purchases a product from a dropshipping store, a third-party supplier or manufacturer ships it to them directly. The customer pays the retail price the firm sets, and the firm pays the wholesaler price. The rest realization is profit. Product handling or investment in logistics, inventory, and raw materials does not exist.
Online platforms such as Flipkart, Amazon, Myntra, Big basket follow the dropshipping concept for their business. Over the years, we have seen this concept being applied to offline stores as well. Retail chains such as Pantaloons, and Shoppers Stop. Reliance Stores have all introduced their online platforms so make use of the dropshipping concept. In order to realize profits through dropshipping, time and patience are required.
Another modified concept of drop shipping has emerged which is known as drop surfing. Drop surfing is simply exploring the market to get the vendor supplying the same items at the cheapest rate. This increases the profit margin helping with greater profits. Choosing the right niche, constantly acquiring more clients, and proper implementation of marketing strategy will make dropshipping the most profitable business model for you.
One of the prime reasons why dropshipping fail is people either choose the wrong niche or the wrong products as per the target audience, improper pricing strategy, or lack of communicating it properly. There is n number of products in the market, but when starting a business, we need to identify products with which we connect ourselves and will be comfortable when selling them to customers. Suppose a person is interested in fashionable clothes and follows a proper workout regime and diet plan. This implies that the person loves to take care of himself/herself. This person will excel in business associated with apparel, cosmetic brands, or organic foods without fail. Challenges are a part and parcel of every business and we must deal with them to grow ahead in our lives.
Some of the challenges that drop shippers face are listed hereunder
Creating a brand you call your own
Building your own brand takes time and consistent effort. It is different when manufacturing something made by you, and in contrast when dealing with third-party products. Third-party products are easier to handle when availability is easier but suppose the brand decides to shut down its operations and move to some segment, in this situation the sellers suffer.
Finding A Reliable Supplier
suppliers with proper knowledge and interest in business are hard to find. People who are absolutely novices, sometimes want a brand of their own and end up ruining things, for themselves and also the manufacturer. Their improper communication and wrong marketing strategies might sometimes lead to compromising brand equity.
Building the trust of Customers
The most crucial challenge in handling customers today is that they have plenty of options lying in front of them. So here the challenge is to realize the way in which you can put your products forward and cross-sell. It can be achieved only by building trust.
Shipping And Processing Time
Shipping and processing are directly handled by manufacturers, and managing time becomes crucial.
Dealing With Customer Returns
Return policy is applicable to all businesses, and for any business to sustain handling the return policy well becomes crucial. But in dropshipping, it is quite a challenge since the products are directly shipped from the manufacturer to the end customer. But facing it and handling it well will go a long way in making the business a success.
Going Out Of Stock
a product may become out of stock due to sudden demand, unavailability of product from source, lack of raw materials or political upheaval, etc. It will lead to a loss of sales for the resellers.
Scope of Dropshipping
After the onset of Covid -19 in the year 2020, dropshipping has created a different space for itself. People tasted the comfort of purchasing essentials and luxuries online. Business owners saw it as an opportunity to explore and dive into the World of enormity. They smelt success and tasted it at the same time and it became a trend. Despite the challenges, people moved forward and achieved them gradually.
While E-commerce is a broader concept, dropshipping is the starting point of it. Making an E-commerce run and forming an organizational setup, requires huge paperwork, documentation, investments, and manpower. Dropshipping business can be run sitting in the comfort of your home.
Dependence on e-commerce helps us order and receive things at home. Dropshipping is gradually increasing the number of independent workers. It has led to more people generating money without being dependent on their jobs or employers. During the time of Covid 19, a large number of people lost their jobs, some salaries were deducted, and some organizations shut down never to reopen again. But the commitments and priorities of people remained the same. In such a critical situation, people searched for alternatives. Some found solace in selling everyday essentials to people on a daily basis. Some went ahead to invest their time into something more broader and sustainable.
E-commerce requires entering the field of business with a substantial amount of money and investments at hand. Dropshipping requires minimal to no investment. It makes money over time.
Dropshipping business is gradually gaining prominence over offline businesses. This is due to the ease of ordering and receiving the item. This is not only limited to products but also services. Companies like Urban Company offer cleaning services, Wellness services in the comfort of their home. They carry every essential item required to create the setup and deliver their service on time. There are many such service-providing companies, and they are running quite successfully and progressing by leaps and bounds.
With people’s support and cooperation, dropshipping has acquired an important place and created employment for people as well. It has made every section of the population have the desire to earn for themselves and fulfill it well, without having to put 8 hours to work, justifying it and traveling from home to reach office on time.
Dropshipping sees success, even more, when you are the manufacturer and supplier at the same time. The entire control lies in your hands if you, yourself are the creator and know every bit and inch about your own product. Any query coming up can be handled better and without any prior approval, or request for validation. Feedback received can be used to improvise your own skills. The gadgets and machines bought are your sole assets and you are the sole owner of every item possessed by you. Dropshipping your own creation can bring out your creative best. And taking it seriously will make you successful with an edge.
The most reliable part of the dropshipping business is it can be a consistent source of income for you without having to do much. If you have done your part well, it will follow its own course and you can see it giving good returns to you in the long run.
In Conclusion, drop shipping is definitely the best among online businesses. We are a developing country with our own set of challenges and benefits. Any development towards creating money means creating wealth for the nation. More money in the hands of people would mean an increase in purchasing power of people which will boost the demand for products. This will end up creating a vicious cycle for the economy benefiting it in the long run. People do not have to solely depend on jobs with a meager income to earn their living and lead a below-average life. An increase in the overall standard of living of people is also going to benefit the weaker sections of society, thereby also providing them access to means which makes life comfortable. Any development comes with its own set of boons and banes after all. The intensity differs and how we handle them effectively ultimately matters.