Dropshipping has a number of advantages, especially for entrepreneurs who are just starting out with e-commerce. One of the biggest pluses is clearly the small seed capital factor required to get started.

As already mentioned, this business model does not require any products to be purchased and stored in advance.

In total, there are three parties involved in this distribution model:

End customers buy a product in an online or offline shop and do not know whether the delivery will be dropshipped or not.

At no time do they know who the wholesaler is, as they only have contact with intermediaries.

The seller manages the shop and tries to attract as many potential customers as possible.

When an order arrives, the dropshipping wholesaler is contacted and the details of the order and the customer are sent.

The profit on this transaction is the difference between the amount the wholesaler charges for the product and the amount charged to customers.

The dropshipping provider who receives the order packs it up and sends it directly to the end customer.

On the packaging there is (usually) no reference to wholesale, only the branding of the shop – if at all.

The wholesaler takes care of all formalities related to shipping formalities, customs and distribution costs.

In short: as soon as the end customer has ordered and paid for the product in the online shop, the dropshipper buys the product from the manufacturer or wholesaler and specifies the end customer as the recipient.

The big advantage here is that the product does not first pass through the hands of the shop owner, and the goods do not have to be bought and stored in large quantities .

Likewise, dropshippers don’t have to worry about excess products that just don’t sell and then gather dust in the warehouse.

Because of the (seemingly) low initial cost , the dropship model is a handy way to test new products or test the ecommerce waters before jumping in all the way.

Another advantage offered by the dropshipping solution is that a much larger range of products can be offered, since goods do not have to be stored at great expense.

Likewise, not having a warehouse allows you to manage the dropship shop from anywhere in the world – all you need is an internet connection.

Of course, while this business model offers some excellent advantages, there are also disadvantages that need to be considered…

The cons of dropshipping
This is by far one of the biggest drawbacks this e-commerce model has:

You can have little impact on customer satisfaction take!