Is dropshipping really so profitable?
Dropshipping is profitable when it’s done in the right-way.
Hope you are familiar with the concept of dropshipping works. If not let me explain it to you. Dropshipping is a business model wherein you don’t have to own or manage the inventory. You just own an online website, that’s it. In this business model you will enter into a business agreement with a drop shipper (often a wholesaler or a manufacturer), that roughly says, Hey you get me an online order and I will be happy to ship the product to the end customer.
Easy isn’t it, NO IT’S NOT.
As a business entity you need to rely on third party to fulfill the order. That’s the biggest challenge with dropshipping. It’s extremely difficult for find the right drop shipping vendor/ partner for your establishment.
First thing when you plan to start dropshipping you need to fathom the idea that the success purely depends on your online strategies. It’s not an easy task to compete with every brand that tries to dominates the search engine and still trium in terms of getting a higher visibility. You need to have a fair idea of who to target and which target market to penetrate.
If it’s a new website then it becomes a bit hard to compete with the well established brands in terms of branded keywords. I didn’t said its impossible. It’s just that you need to come up with a good SEO strategy to outsmart the competitors. I most cases the people tend to give up with in the first fe months. Let me remind you ROME is NOT build IN a DAY. You can only succeed if you put your heart and soul to it. You need to follow the best standard set in the industry.
Advantages of Dropshipping
- No need to maintain a big team
- Can start with the least investment
- Don’t have to muddle with inventory management
- Sell a product and then earn the commision/ profit margin
- The hard work you put into SEO will be a long term investment
- Can scale up at anytime and convert the online store into an exclusive store.
- Can list multiple products on the same platform and give the user an opportunity to select the best.
- Cans start at any time (only hassle is to find the right dropshipper, and agree on the profit margin.
Disadvantages of Dropshipping
- Digital marketing will consume a good amount of resource
- If not monitored and managed, the business model will create confusion among customers
- You will be the sole point of contact when comes o the product, since the customer placed the order on your platform.