Have you ever thought about owning a lucrative business online but don’t know where to start or if it’s worth your time and effort? If so, dropshipping is a viable option for you.
And if you are not familiar with the term, dropshipping refers to the selling of products from wholesale suppliers online that process and ship orders to clients on your behalf. Here is how online dropshipping works in a few simple steps:
- You choose an online dropshipping platform like Mydepot.
- You set up a seller account.
- You set up a payment method.
- You link your online store e.g. Shopify, Amazon, or Wayfair to the platform.
- You choose and import products from wholesale supplies present in the platform on your e-shop.
- Once you get a sale/order on your online store, the platform will handle and ship the order from their inventories to the client with your business/name store appearing as if you have sent the package directly.
Dropshipping has been around for more than a decade and it remains a highly profitable industry despite the rise in competition and the COVID-19 crisis. In fact, the online sales of goods have plummeted by 6-10% in major markets such as the U.S, Turkey, Germany, Russia, S. Africa, Switzerland, China, and Korea (source: United Nations Conference on Trade & Development). Due to the space restrictions of the pandemic, more and more people across the world are now spending time at home and browsing the web, looking to buy valuable products and services. Some popular industries include groceries, health products, cosmetics, digital goods, and home-furniture goods. So what does this mean? We are shifting from a traditional retail model to an e-commerce model and you can too take a piece of the e-commerce pie by investing in dropshipping.
So here are the top reasons to invest in dropshipping in 2022.
1. Low capital/upfront costs.
If you have or plan to have an online retail business, dropshipping is the only method to sell goods without owning and handling stock yourself. Having your own warehouse comes at a very high upfront and maintenance cost which typically ranges from $11K-800K. The figures can become even higher if we add up maintenance, logistics and shipping stocks from the inventory.
On the contrary, investing in a dropshipping platform costs only a few hundred upfront (typically $250-600 depending on the platform’s pricing). The platform may also deduct commission fees but these only apply when the customer makes a sale on your online store and they are usually low and not charged on a fixed basis.
2. Low inventory management.
By enabling a third-party order to manage and ship your orders physically on your behalf, you don’t have to manage any physical inventory directly. They will track your inventory, process orders, and maintain the physical infrastructure for you so you can focus only on your sales and promotion of sales digitally. You simply outsource all the hard inventory management work to the supplier and save a tremendous amount of time, energy and resources. If you work with a reputable platform and good suppliers, they will be open about the entire shipping process and keep you updated on the progress of the orders coming from your online retail store.
3. Broad range of goods.
In many cases, owning a large physical store comes with many space restrictions. In large stock categories like home goods and furniture, it will be extra costly to own a large warehouse with a big range of goods. Dropshipping in this case has no space restrictions. You can list and sell hundreds or thousands of products in different categories from a dropshipping platform to your online store at a minimal cost. At Mydepot, we currently host over 3.000 home products and we keep expanding our range so you can have the benefit of offering a diversity of related goods in your store without operating a costly physical warehouse or showroom.
4. Better flexibility and scalability.
Dropshipping products via a third party offers you better flexibility and opportunity to grow your online business. You can choose to sell more goods and change your listings as you wish and according to the latest market trends. This will in turn boost your profitability and mitigate any financial risk, which is often involved when you are buying and handling several physical goods at once.
So, whether you are a seasoned sales executive or an aspiring entrepreneur looking for a main or supplemental source of income, dropshipping has much to offer you.