What is Dropshipping?

Let’s start by understanding what starting a dropshipping business means. If you already understand it, then you can click here to scroll down!

If not, then I will explain the dropshipping business model really simple to you:

1. Dropshipping is an online business model where you got an online store where you sell products, but you don’t have any of them in your storage or your house.
2. When someone places an order on your dropshipping store, then you place that same order directly with your dropshipping supplier. Don’t worry. There are a lot of apps out there that help you with automating this part of the order fulfillment. For example, DSers, or these 14 DSers alternatives.
3. Then your dropshipping supplier will handle the rest. Think about preparing the package and sending the order straight to your customer.
4. Now your customer will receive the package straight from your dropshipping supplier, and you never touched the product in between!

To make it even more clear, here is an infographic of ours that does a great job of explaining the concept of dropshipping:

If you’re interested in learning more about dropshipping, then I suggest reading the article I linked to below:

Dropshipping for Beginners: What Is It & How to Start Today?

Now that you know the basics of this business model let’s begin seeing the pros of dropshipping:

What are the Pros of Dropshipping?

Dropshipping is great, but what makes it so great? Let’s find out!

1. Quickly test products without buying in bulk (No inventory)

Let’s start with the first pro of dropshipping; you can quickly test and sell new products without buying them in bulk.

For people that are not sure what buying in bulk is, this is for you:

Buying in bulk means that you purchase a lot of the same product at the same time instead of purchasing one at the time with dropshipping.

This means that you will need to find a place to store your products. Which has its own advantages, don’t get me wrong! But the thing that I’m pointing at is that if you’re not sure if you can sell the product or if you’re not sure if your target audience will like the product, then you could be stuck with tons of products that you can’t sell.

The advantage of dropshipping is that you don’t have to purchase hundreds or thousands of the same product before you can sell them in your online store.

You can literally purchase them one by one. This means that you only pay for products when someone places an order on your online store! Isn’t that nice?

Yes, that has its own disadvantage as well (which you will learn below), but the nice thing now is that you can see if you can sell the product before committing to a huge bulk order.

If you can’t sell the product, then you can easily move on to new products without worrying about having any leftover stock in your warehouse or home (wherever you store the products).

Now the big thing you need to remember here is that you need to know when to stop dropshipping.

Look, if your product is selling well, and you know you found a market to sell your product to, then it’s awesome to purchase your product in bulk. This has its own advantages, which I won’t go over now, but you can read this article here if you’re interested in learning more.

Plus, I suggest reading How To Quickly Test Products With Dropshipping before you move on to selling new products in your store.

2. Not much startup costs in comparison to retail stores

This one flows in really well with the one above that you don’t need to purchase bulk in order to start selling products in your online store.

Look, it’s really cheap to start a dropshipping store mainly because of that reason; you don’t need to own the inventory! This also saves you in other things like warehouse fees.

If you’re unsure what kind of costs you will have when starting a dropshipping business, then I highly suggest you read our other article here as well, which goes over all the costs of starting a dropshipping business.

But do keep in mind, as I said above, that it’s still a real business and not a way to get rich tomorrow!

However, those startup costs are in comparison to normal ecommerce stores that have their own inventory.

But what about the costs in comparison to starting a real offline retail store?

For that, I suggest reading this great article by Cardconnect, which lays out all the costs you will have when starting a retail store.

As you can see, the costs are significantly higher than running a dropshipping store or even a normal ecommerce store. Although once again, each option has its own benefits.

One example I can give you is that if you want to open a dropshipping store or ecommerce store online, then you don’t have to pay rent, but you do need to have some way to open your business—something like Shopify, which only charges you $29 per month on their lowest plan.

That’s a lot of difference between the rent of a retail store, right?

3. You don’t have to produce, store, and send the products

The great thing about dropshipping is that your dropshipping supplier handles everything! They take care of the shipping, storing, and manufacturing of the product.

This means that all you have to do is take care of the marketing of the product and your dropshipping supplier handles the rest. Awesome, right?

But of course, that has a disadvantage as well; you can’t see the product, so there could be issues with the product quality. (More about that below)

This also means that you can easily add new products to your store without having to worry about where to store them.

4. Learn useful skills

As I said above, dropshipping is just a fulfillment method.

The rest of ecommerce doesn’t change. You’ll still be learning skills like:

• Digital marketing
• Copywriting
• Conversion optimization
• Social media management

And, of course, much more!

These skills will come in handy, even if you don’t decide to continue with your dropshipping store in the end.

5. You can open a dropshipping store really fast

A lot of people are starting with dropshipping because it’s so easy to open a dropshipping store and start selling that same day.

But why is it easy?

Well, for example, if you compare it to opening a normal “offline” retail store, then you’re looking at an investment that you need to make before opening the store. (As you read above).

With dropshipping, you only pay for products when someone places an order on your online store!

And not only the investment in money is different. For the time, it’s the same.

But don’t worry.

I won’t teach you to do the same as that.

It’s better to take your time when building your dropshipping store to be more unique than all the other dropshippers out there who do open their dropshipping store in a few hours!

6. Highly scalable

You can literally sell to the whole world if you want to.

Do you know why?

Well, because your dropshipping supplier can ship to anywhere in the world without you needing to worry at all, but do check with your supplier before you want to start advertising in a new country! There could still be a small chance that your supplier doesn’t ship there.

Plus, you can find local dropshipping suppliers in each country, for example, in the US. This will have benefits on its own as well, like faster shipping times. (You can find more reasons to start dropshipping from local dropshipping suppliers here)

Because if you ship from China, then the shipping times might be 2-4 weeks in total! (Source)

If you’re wondering now which countries you should target as a dropshipper, then take a look at this article here. Which goes over the best and worst countries you can target when dropshipping.

Another benefit of dropshipping that fits well with the highly scalable one is that you can turn your store into a brand!

Or you can start a branded dropshipping store from the beginning already.