A review on Starting a Drop Shipping Business, Part 2
This is part 2 of the series on Starting a Drop Shipping Business. You can read the previous article of this Series below:
Part 1 : What is drop shipping and the advantages of drop shipping.
In the previous part of this series, I discussed the basic theory and some advantages to start a drop shipping business. They are many people start their own drop shipping business after reading its attractive benefits. However, like most business, drop shipping also has its own disadvantages which we cannot overlook.
Today, in this part, I would like to discuss the disadvantages of drop shipping and what kind of thing you must pay attention in this business.
The Disadvantages of Drop Shipping
Below are some of the biggest disadvantages of drop shipping:
- You complete rely on the wholesaler. One of the advantages of drop shipping is you don’t have to worry about the after sales service such as delivery and etc. However, this also is a disadvantage for you. You have no control over on this and therefore…
- Your credibility is on risk. Please remember, your customer is dealing with you and they have no idea about your wholesaler. So if the drop shipper happens to be slow, or out of stock and take a long time to deliver the products to customers, your complain call and email will be increased and your business credibility is dropped due to this uncertain factors.
- Lack of quality control. Products and service quality is very important for a business to grow. It is directly related to your business’s image and credibility. However, in drop shipping, you have no idea the condition of the products, the after sales service, the delivery and also the returns services. In a nutshell, you have no control on the quality.
- Your Profit margin is affected. Sometime your margin will drop due to the fluctuations in wholesale pricing. So you must pay attention on this.
- It is hard to fully understand a product. Since you never ever seen the products yourself, sometime it is hard for you to answer customer questions about the product. In this case, you have to select a wholesaler that has this kind of system or give you the sample to let you understand the product.
- Competition. Well, your wholesaler might deal with a lot of sellers like you. So all of you is selling the same category of products and the competition is there.
Above are some of the main disadvantages that you must pay attention on. Just like other kind of business, you must think a way to fully maximize the advantages and minimize the disadvantages efficiently. So in next part, I am going to discuss the proper way to start a drop shipping business that you can make money from.
Although some people can make a buck out of it, drop shipping sounds like a rather dead end career choice.
Eventually, the seller will come across a new, inventive way to cut out the middleman (i.e.: the drop shipper). The internet leaves little room for intermediaries who offer little or no added value -or- significant differentiation.
Maybe a good way for drop shippers to score more sales would be to package “unique bonuses” like magazine subscriptions, special coupons or even lottery tickets — it may also help bring customers back for more!
Thanks for all your good tips.