If you are willing to start an eCommerce business and not sure about dropshipping as an order fulfillment method, continue reading the blog. Here, we’ll focus on what dropshipping is, its pros and cons and how good it is for your business.
What is Dropshipping?
Dropshipping is a supply chain retail fulfillment method where the product is directly supplied to the customer from the manufacturer or the wholesaler. Instead of purchasing and storing a whole lot of inventory, a dropshipper just need to tie up with a manufacturer or a wholesaler and enlist the complete merchandise in the eCommerce store. This particular fulfillment method reduces the initial investment as the eCommerce store can eliminate the inventory maintenance cost. However, profit margins will likely be reduced and competition will become higher.
Is dropshipping really a good fulfillment option?
Deciding this is not as simple as it might appear to some of the eCommerce business owners. For a business owner who is willing to go with low investments, dropshipping is the option for them. While for some it might seem that the business is actually out of their hands.
Let us now discuss the pros and cons of Dropshipping:
Pros of Dropshipping:
Cons of Dropshipping:
In order to integrate dropshipping model with the eCommerce business, it is necessary to understand businesses’ profit margins and ensure it makes sense for the business. Working closely with suppliers and integrating them with the order fulfillment software can really solve those challenges that a business may encounter while opting for the dropshipping model. To ensure a hassle-free fulfillment process, Vinculum – A global SaaS-based eCommerce ecosystem enabler offers Vin eRetail which can help business owners to enable multi-channel retailing with ready integrations to leading marketplaces, 3PLs and webstores.