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Benefits of DropshippingIn this Amazon dropshipping guide section you’ll learn some of the benefits of dropshipping that’ll help you understand why and how to dropship on Amazon.
Hold no inventory The biggest benefit of dropshipping is that the dropshipper doesn’t need to carry any inventory. This is great because it makes the business model less risky for the dropshipper. As there’s no inventory to carry, there is less work involved in the business. In addition, there’s also fewer costs as you don’t need to pay for a warehouse to hold the inventory. Few skills needed Few skills are needed to have a successful dropshipping business. A dropshipper needs to be great at marketing, administrative tasks and providing excellent customer service. If a dropshipper can master those three skills they can achieve great success. With great marketing skills they can attract more customers. Since they don’t carry inventory, they can intensify their marketing efforts as they don’t need to worry about inventory or the cost of labour associated with shipping products. Within the realm of administrative tasks the dropshipper will need to process orders, pay for taxes and expenses and more. Lastly, by providing excellent customer service they can maintain positive relationships with the customers who’ve purchased from them.
Easy to start up Starting a dropshipping business is relatively easy. You can set up a store within a day using Oberlo. All you need to do is choose products from an Oberlo supplier. There are three types of suppliers inside Oberlo: Oberlo Verified suppliers, Oberlo suppliers, and AliExpress. Compared to buying inventory for your store, you don’t need to wait to receive inventory or take product photos. With dropshipping, you can easily import product details such as specifications and images. This saves your business time and money.
Test products easily Another great benefit of dropshipping is that you can test products easily. Since you don’t carry inventory, you can run ads on products to see which products convert best. If certain items aren’t high performers you can remove them from your store easily. Since you didn’t purchase inventory, there’s no cost, aside from advertising, for a low performing product. In the event that you want to eventually purchase inventory, you’ll also know which products sell well as well as how many SKUs you can sell easily.
Low start-up cost The dropshipping business model is low cost. First, you only purchase products when a customer places an order. Second, there’s no warehouse needed for inventory. Third, you don’t need to hire extra employees to manage the shipping of products. Next, your main expenses include cost of goods, advertising, and website.