What everyone must know about drop-shipping!

  • 3 min read

You may have had a dream of starting up a store someday, you may have thought of starting up a mortar and brick store which was unfortunate for some reasons and thought that it is or was a dream that will never come true. Hey if you thought so then you were mistaken because you can start it up online. 'You are kidding, you say. Nope, I'm not kidding because thanks to the so-called 'drop-shipping' you can start up your business right away. Drop-shipping means to ship (goods) from a manufacturer or wholesaler directly to a customer instead of the retailer who took the order. Drop-shipping is a business model you can use to start up or run your store without holding any inventory.

Drop-shipping - How it Works?

No doubt you have browsed or visited many online stores, perhaps a few but you may not have realized that some of them use the drop-shipping model to be up and running and in turn making profits. Here's how drop-shipping works.

An individual sets up an online store or website and adds or creates products to list on his e-commerce store or website. Interestingly, they do not keep any of the products in stock.

When a customer visits their store or website and makes an order- which includes providing their shipping addresses- the retailer turns to his or her suppliers and orders the product that the customer who visited his store or website ordered for and then fills in the address that was provided on his website or online store. 

The retailer gets all of the products from the supplier at wholesale price. 

To illustrate: Let us say a supplier deals in men's shirts and sells them at a wholesale price which is $10. A retailer will list that shirt on his online store for $15 or $20 when this shirt is ordered on the retailer's store, the retailer forwards the order to the supplier and he, the supplier does the rest of the work and makes sure that the package is sent to the address listed in the order under the drop shippers name.

Benefits Of the Drop-Shipping Business

1. Little to no Investment

The drop-shipping model makes it possible for you to start your online store business without any investment. Starting up an e-commerce store could mean buying and stocking products • Packaging them • shipping them to the customer. This means making losses if the products you are selling don't sell. Imagine having stocked up products in your house or a room you rented and these products end up not selling, with no doubt you would be disappointed and nothing hurts like this.

Yes, I know two things about entrepreneurs; they are the kind of people who start a business and are willing to risk losses to make money. Believe me, this is how it is for them, but no one likes making losses. So, drop-shipping is worth it. You can start this business with little to no investment.

Note that there are some payments that you will have to make; you will have to pay for the domain name that your store will be connected to and also pay for hosting. There is another option though, and that option is to use Shopify or Bigcommerce to set up your drop-shipping business. 

2. Getting Started is Easy

A drop-shipping business is not difficult to start up. If you were to start up an online store without this model then you would have to do much work before starting to sell, honestly writing- because this is not an audiobook-  you would have to make a budget, build a website, find a shipping company like FedEx or DHL which would result in a lot of research and bigger investments. It is true that you have done your research already about this model or you want to - which is good- but not the kind of research one would have to go through to set up his or her e-commerce store. Ladies and Gentlemen for a fast-track to becoming an online retailer; Drop-shipping business could prove to be your way to go. You will be up and running in a short time.

3. Ability to Work from Anywhere

Drop-shipping is flexible as it allows you to work from anywhere around the world, maybe at your home. It is up to you. Remember that this business can be run online as long as you can fulfil your duty- which is forwarding your customer's orders to the suppliers- and other things which may come up like communicating with your suppliers or customers. Note that you can run your drop-shipping business anywhere as long as you have a good internet connection. Additionally, you do not have to quit your job if you have one, all you have to do is find a way to balance your job and the drop-shipping business.

4. No need to Hire Extra Staff

Your role as a store owner running a drop-shipping business is to forward orders you received to your supplier no matter how many orders you have received, and the Suppliers role is to ship the products to the customer. So hiring extra staff is not necessary because you can manage your business by yourself.

All the best for your drop-shipping business!

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Derrick Mbabazi is the founder of Novarick, a platform he believes will reach great heights. He is passionate about helping others and wants to share useful info here. He aims to make it easy for peo…
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