Why Dropshipping is the Easiest way to Start an Ecommerce Business

The ecommerce landscape is thriving. In 2019 alone, ecommerce sales totalled 3.5 trillion dollars globally and by 2023 this figure is projected to grow to more than 6.5 trillion dollars. The prospect of setting up and maintaining an ecommerce business can seem overwhelming but for entrepreneurs keen to make their first steps into this potentially highly profitable marketplace, dropshipping could be the perfect avenue to take.

So, let’s take a look at what dropshipping involves and explore some of the primary advantages of this innovative retail fulfilment method.

What is Dropshipping?

Dropshipping is a unique business model and retail fulfilment method which allows entrepreneurs to set up and run an online ecommerce store without ever needing to hold inventory.

So, rather than packaging and shipping out an order to your customer from the inventory you have already paid for in advance, your business will purchase the product from a third party, typically a manufacturer or wholesaler, who will then ship it directly to your customer under the name of your business.

Essentially this means that with a dropshipping product fulfilment method in place for your ecommerce store, all you will need to do before you can start generating an income is set up your website, market it to your target audience, and take care of customer support.

The Advantages of the Dropshipping Model

The number of ecommerce businesses using the dropshipping model is increasing all the time, allowing individuals that don’t necessarily have the cash reserves to buy up and store the huge amount of stock needed to run an online store. Some examples of industries and sectors exploiting the advantages of dropshipping include online CBD stores, vape stores, phone and car accessories and office gadgets. There are many other product groups that are seeing significant growth year on year.

Let’s explore some of the primary advantages of the dropshipping model.

Minimise Set Up Costs

The growth of platforms such as Shopify, eBay, Etsy and Amazon has meant that anyone wanting to explore the potential on online marketplaces can set up an online store without needing to invest significant sums of money into the creation of a website.

For many budding entrepreneurs, the need to invest in stock can be a huge barrier to entry but dropshipping removes the need to invest in large quantities of inventory upfront before a sale has even been made.

Minimal setup costs can mean that some of your competitors will offer similar products at extremely low prices to increase their revenue. In most cases such as this, however, these competitor brands will have a low-quality website and minimal customer service. So, if your website delivers an optimal user experience and you commit to the provision of excellent customer service, you shouldn’t find it difficult to differentiate yourself for the right reasons.

Reduce Operational Costs

With no need to invest in large quantities of stock or to source premises in which to store it all safely, businesses utilising the dropshipping method will experience markedly lower operational costs than those choosing to fulfil orders in-house.

Having important business funds tied up in inventory and storage solutions can inhibit growth so keeping operational costs to a minimum can allow entrepreneurs to invest in other aspects of their business, such as advertising and marketing, which can drive tangible results and see incomes soar over both the short and long term.

Focus on Growing your Brand

Storing, packaging and shipping products yourself requires the implementation of seamless processes that take time to perfect to ensure that every order reaches your customer in perfect condition. Remember, it is never as simple as picking a product off a shelf, placing it into a box and mailing it out. You will need to consider everything from sourcing packaging to implementing safe warehouse practices and ensuring that the correct address labels are placed on each box before they are shipped out.

With dropshipping, you won’t have to invest your valuable time in this aspect of your business which means that you can focus more of your attention on marketing your business effectively and growing a strong and recognisable brand.

The Joy of Flexibility

Dropshipping businesses have the advantage of being able to be run from anywhere that has a good internet connection. The only consideration entrepreneurs will need to make is to ensure that they have the ability to communicate with both their customers and their suppliers easily.

Maintaining a flexible and adaptable business model is also an excellent way to drive growth. As dropshipping businesses don’t need to purchase the products they sell ahead of time, they find it easier to provide a wide selection of trending products to their potential customers exactly when they want them.

This also means that businesses using this fulfilment method find it simpler to test the potential success of new product lines or categories without needing to invest a significant sum of money into something that might not deliver the returns you had hoped for.

Dropshipping can be an ideal option for a range of businesses and with time and hard work, driving significant success shouldn’t be out of reach for many dedicated entrepreneurs.

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