Pros and Cons of Dropshipping | Advantages and Disadvantages of Dropshipping

Introduction : What is Dropshipping?

Dropshipping is simply a type of business done by sellers who do not have stock. That is, the intermediate seller takes orders from the buyer and delivers the items to the buyer by the manufacturer or wholesaler on his behalf. The intermediate seller can easily make a profit from this. In Dropshipping, the  intermediate seller has no bulk stock. But he maintains an online shop/marketplace. He lists various types of items in that online shop for a certain amount of price. The buyer then comes to his online marketplace and orders a product. He now sends the buyer's address, etc. to the wholesaler or manufacturer along with the details of the order. The wholesaler or manufacturer will ship the relevant order. 

Pros of Dropshipping

1. Start-up costs are minimal (It's very easy to start a Dropshipping business online. It does not cost as much capital to start a normal business)
2. No cost for warehouse (The seller does not have a warehouse for Dropshipping. There is only online store. So there is no cost to maintain a warehouse)
3. Integrates well with e-commerce (The Dropshipping process is almost completely integrated with e-commerce. Therefore, all the advantages of e-commerce will help in the success of the Dropshipping process here)
4. No legal permission or license required (When starting a general business, the relevant agencies must obtain legal permission as well as licenses. But you do not need such a license to start Dropshipping)
5. Product promotion costs are low (When using Dropshipping, the manufacturer does not have to spend a lot of effort to promote their product. Dropshipper will do the promotional work)
6. Not used for high value products (Dropshipping is often not used to trade high value products such as vehicles)
7. Better part-time additional income for freelancers.

Cons of Dropshipping

1. Small profit (You get a very small income from an item sold through Dropshipping)
2. Hard rules and regulations of Dropshipping platforms (Many people use platforms like Etsy, Ebay, Shopify to run a dropshipping business. But you have to abide by the rules and regulations imposed by these platforms. They can often put you at a disadvantage)
3. Poor customer service (Dropshipping does not involve the customer and the manufacturer / wholesaler directly. But the relevant product is sent directly by the manufacturer to the consumer. The customer does not know who the manufacturer is. The customer only connects with the seller. Therefore, direct customer service cannot be provided)
4. Product quality issues (Often the Dropshipping seller has not used or seen the products he is selling. In such a context, the product description quoted by the seller may not be true. In such cases, the product may not have the quality that the customer expects)
5. Used by fraudsters (Fraudsters sometimes use this dropshipping process to pretend to be sellers, list fake items and defraud buyers)
6. Technical knowledge is essential (Maintaining a dropshipping business requires some technical knowledge. Starting without proper technical knowledge can lead to failure)