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Top 5 Reasons to Start Drop-shipping Business in 2020

Business is evolving with each passing day and is getting more streamlined but this year has been rough due to the pandemic. It led to many people losing their livelihood. But don’t let it hold you back, I think it’s time for you to be your own boss and get into drop-shipping. Instead of investing a ton of money in fancy offices and equipment, simply start your business off a laptop or PC.

Drop-shipping is more like an arrangement between a wholesale marketplace and a business establishment. This allows the distributor to send the merchandise directly to customers on your behalf. This is one of the easiest processes to conduct business without having to bulk buy products or maintain a physical inventory.

Reasons to Start Drop-shipping

There are many reasons that drop-shipping is one of the most preferred business models out there, especially for newly starting entrepreneurs. Let’s discuss some of its major benefits down below:

  1. Easier to Start

Getting started with an eCommerce business is quite easy as compared to physically dealing with products. All you need is a laptop or PC with a working internet and you are all set.

In wholesaling or retailing, there are many things that you need to take care of before you can start your operations. If you are an experienced businessman or a beginner entrepreneur, you’ll be glad to know that drop-shipping does not require a large inventory of products or other expensive equipment to run a business.

This is also one of the biggest reasons that people often start their journey into the business through drop-shipping first.

  1. Location of Your Choice

Since the drop-shipping business model does not require you to be at a specific location, you can freely start your empire from anywhere through a computer.

You should also have a proper way of communication with the online wholesale marketplace and your customers to avoid any unnecessary halt in the flow of operations. You could be enjoying a fun holiday in Cuba and landing sweet deals in the USA. The possibilities are endless.

  1. Highly Scalable

Managing a traditional business becomes quite tedious to deal with if the number of orders is increased. If you receive double the amount of orders, you’ll have to do double the work to fulfill them, there’s no shortcut to it.

In drop-shipping, most of the order processing is done on the supplier’s end which allows you to expand your operations without any fear or overworking yourself. However, growing the number of sales on the customer’s end will require hard work.

  1. Potentially Limitless Product Variety

Since you won’t be physically stocking up on goods, you can sell anything your supplier has to offer in his stock. From old to new merchandise, everything he owns, you can put up for sale without any additional cost or effort.

Without any additional cost associated with it, drop-shipping gives you the freedom to expand your inventory quickly and cheaply. If a product is high in demand for retailers or resellers, you can immediately snag it and offer it to your customers without waiting for it to be physically present in your warehouse.

Drop-shipping also allows you to be experimental and try out new items without the risk of loss if it doesn’t sell quite as well.

  1. Low Investment, High Gain

Here’s where most of the people get sold on the idea of drop shipping.

Drop shippers do not require minimum orders or a set budget to start their operations.

For traditional businesses that buy stock in bulk, it can become a problem later if it doesn’t sell that well or customers don’t pay before the cut-off date.

Since you won’t be dealing with physical inventory or a warehouse, your overhead expenses will be drastically lower than other businesses. As your business grows, your profits increase much more exponentially as compared to your operating costs, which lead to a better cost to profit margins than other businesses.

Conclusion

As mentioned above, drop-shipping isn’t a perfect or completely stress-free way to build an online business, but it’s easier to get started with. This model has definite advantages that cannot be looked over but it also comes with complexities. The great way to approach it is with careful planning and considerations, prevention of hurdles rather than relying on contingencies and you’ll be set for the most part.

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