Dropshipping is fast becoming a popular option for eCommerce stores. Rather than lease a warehouse and pay thousands of dollars in overheads, you can link up with product suppliers and have them ship the products directly to the customer. You never even have to lay your hands on them. However, for all the benefits of dropshipping, there are equally as many downsides. Here is why dropshipping isn’t always the best idea for your business.
You Never Know Stock Levels
As you rely on several different suppliers to supply your goods, you can often be left in the dark on their stock levels. While in some cases you can sync the supply to your software, in most cases, it’s a guessing game. Therefore, when you list the products on your eStore for people to buy, there is quite a bit of risk. Are you going to be able to fulfill the order, or will your potential new customer be left disappointed?
You Can’t Be Assured of Quality
When you select suppliers to sell products, you can never know the quality your customer is going to get. There have been many cases where the supplier of products outsources the manufacturing, which means the type of product differs on a regular basis. If you can’t trust your supplier to provide quality goods, you risk getting a reputation as a business with shoddy wares. The quality is one of the main reasons why dropshipping isn’t always the best idea for your business.
Pricing isn’t Competitive
When you are buying products for your business, physically receiving the items yourself, you often get exceptional bulk deals. However, when you are sending orders through one at a time to manufacturers and wholesalers, you miss out on those lower unit rates. Therefore, as a rule of thumb, there is less profit to be made in dropshipping.
Overall, you have less control over your business when you choose dropshipping as your product stocking method. You don’t know whether the supplier will make a mistake and send your customer the wrong order, or whether they will let you down with stock or pricing. It’s the risk you have to be willing to take.
Dropshipping could benefit your business significantly, but there is equally as much of a chance that it won’t at all.