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Benefits of Dropshipping
In
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.