Pros and Cons of Dropshipping: Is It Worth It?

Dropshipping has emerged as an online business model that more and more people want to take a try. This photo below helps you have an overview look at the rapid growth of dropshipping since the beginning of 2022.

Dropshipping trend in 2022

For those intending to jump into this industry, you should research and survey before leaning into that. To help you with that, we will show you the pros and cons of dropshipping business model. Ready?

What Is Dropshipping?

Dropshipping is an online business model in that you can own your online store selling one or many different products. However, you don’t need to store any of them in the warehouse or the storeroom.  

When a customer places an order from your online dropshipping store, that one will be directly moved to your dropshipping supplier.

Then, you don’t need to worry about the packing and delivery because the supplier handles all the rest for you. The dropshipping supplier will manufacture, wrap and ship that order straight to your customer.

After that, your customer will receive the package straight from the dropshipping supplier. Thus, you don’t need to touch any of your fingers to do that.

This infographic below will be much easier for you to visualize the dropship model.

Dropship Model (Source: Fulfillbot)

7 Pros of Dropshipping

Dropshipping has several plus points that attract you crave to start immediately. Most of them focus on how easy it is to set up with a low-cost investment. Now, let’s discuss the details.

1. Purchasing inventory is unnecessary

The resulting impact of dropshipping is that you never touch or see the product, so there's no need to buy them in bulk (known as bulk buying).

So, what does “bulk buying” mean? It means that you purchase simultaneously large numbers of the same products instead of buying one at a time. As such, you need to have a warehouse or storeroom to keep all the products, otherwise, you will not find a way out from thousands of them.

It can be inferred that once someone places an order from your online store, you just only pay for that one. Isn’t that great? Absolutely, yes!

You can also have several choices to test out some of the products from other dropshipping suppliers to know which one has the best quality and works with your customers. Hence, moving to another product business is simple than ever, and no worries about the leftover stocks at your store.

Sounds easy and flexible, right?

2. Low-cost startup

Since you don’t need to invest a large amount of money up front to buy the inventory, the running expenses can be pretty low and help you save lots of fees such as warehousing cost. How awesome it is!

However, the costs might increase once your business grows, but are still considered very low compared to normal e-commerce stores that have their inventory or offline retail store.

3. It takes short time to open

It’s quite easy to open dropshipping store compared to an offline retail store which takes a longer time to find the investment, purchase inventory, and pay for the warehouse.

The higher the investment is, the longer the time takes.

Because they need to consider carefully before making the decision with the lowest risk.

4. Flexibility

Dropshipping business can be managed from anywhere in the world, which is its most amazing thing. You have more choices to decide where you work with flexible time and the people you want to work with around the globe.

You also can sell the products to all kinds of customers over the world because your dropshipping suppliers can ship anywhere in the world. However, remember to check with your supplier before you want to start advertising in a new country! Nothing is sure 100%, so there could be 1% that your supplier doesn’t ship there.

5. No need to engage in the production, packing, and delivery process

The best thing is that your dropshipping supplier handles everything after receiving your customer’s orders. Producing, packing, and even shipping is their responsibility from this moment. You don’t need to touch any of your fingers into those.  

The ultimate “mission” you need to carry out is planning the best marketing for the store and then, your “superman” - dropshipping supplier takes care of the rest.

6. Great chance to learn multiple helpful skills

Running a dropshipping business certainly requires you to learn several dropshipping skills to boost your business such as digital advertising skills, sales skills, and much more.

They are also useful to apply to other fields or make your life easier even if you don’t run your business anymore.

7. Easier to expand your business

In traditional businesses, if the orders increase, for example, two times than usual, it means that the work will be double for you and your team. But the way dropshipping business works is different. It’s your suppliers taking charge of increased numbers and order processing. You will save the amount of money by no need to hire employees for that.

Instead, you can have time to do your marketing and other work, whilst your suppliers do the hard work behind the scenes.

9 Cons of Dropshipping

Dropshipping can be considered a simple way to start up and easy to get rich, but as with anything, there have downsides involved. Let’s find out the first one.

1. The dropshipping mindset

Most people think that dropshipping is an easy way to make money quickly. However, it’s still a real business and isn’t all about golden rainbows like you think.

You need to put in your real effort and much hard work to dive deep into it. Otherwise, it’s hard to be successful and become unique from others. Or it just wastes your precious time but is not effective and profitable.

Change your mindset into the right one first.

2. Limited control

You have almost no control over everything in your online store but the price of products and what kind of items you’re going to sell. Once you already delivered customers’ orders to your suppliers, you can’t interfere deeply with the next processes such as production, package, and delivery,...

Due to that, checking the quality of products before sending is pretty hard. You will not know or see whether it’s good or not.

You will also not have a choice choose how to design the package or how to wrap it in your style because the suppliers take care of that instead of you. It’s completely impossible to put anything from your store like some others did such as thank you cards, or discount vouchers to create the impression for customers to remember your brand.

Therefore, if your customer complains about order processing, delivery speed, quality of product, and refunds, it’s not quite easy to solve that immediately.

3. Problem with quality product control

You just finished your part after delivering customers’ orders to suppliers. That’s all, no need to interfere after that. Is it a good or bad thing?

It will be terrible if the quality is not good enough for customers. Because you never see or touch the product. So, if there have any issues with product quality, you will never know until your customers complain about them.

So, consider carefully when choosing the suppliers or you can order the sample from them to take a test.

4. Stock shortages

Because you’re not the one owning the inventory so you never know whether the stock is run out or not. Imagine that you’re selling items quite well, many customers order from your online shop but your dropshipping suppliers can’t keep up.

They are not available for your needs all the time.

It can make your customers wait and make them cancel their orders.

Just remember to keep in touch with dropshipping suppliers regularly and ask them how many products they have left.

5. Can’t combine products in an order

It will happen if your shop has contact with multiple different dropshipping suppliers. Just imagine that, if one customer orders many different products, and for each product, there is another different dropshipping supplier, you can’t combine these products into one package like other normal retail.

Thus, your customers will receive several separate packages at different times and might complain that their orders are not complete after the first package. But this is not enough, you also have to pay a shipping fee multiple times which costs you added money.

You can have a backup plan or another dropshipping supplier who got the same product in case your dropshipping supplier runs out of stock.

6. Refunds can be complicated

As we mentioned above, you can’t control everything and also never see the products. It’s hard to check. If they are not good as advertised, the chance of refunds highly increases.

And the problem with your customers can never be easy to fix immediately. You probably can lose them.

7. Poor customer service

Because you can’t manage the supplier chain.

Imagine that once your customer complains or asks about the product, you will not be there to help or reply to them immediately.

It might take some time to discuss with your dropshipping supplier first and then, your customer will get your reply soon.

8. Earn less profit

Is it real? Why does it make less profit than usual normal business? Let’s take a look here.

If you buy products in bulk, the cost will be surely cheaper than purchasing each item at a time. This leads to making less profit.

A regular wholesaler sells their goods in bulk for you while a dropshipping supplier sells you just a single unit whenever you place an order.

Due to selling a single product each time, they are taking charge of storing and ensuring products and other related expenses such as paying staff in packaging and delivering,...

Wholesalers run their business with very low-profit margins and depend mostly on a large number of purchases to make a good profit. Thus, when these additional charges are added, the price of individual items is increased because they have no option.

Then, guess what? You will pay more to your dropshipping supplier, and your profit margins will be lower.

9. Highly competitive

Just imagine dropshipping as a cake, everyone out there craving for the whole cake not just a piece of it.

The more people want that, the higher competition is.

So how can you make your online store unique and outstanding from others if you don’t work hard for it?

As some or many of them just open the store fast, import some products (without checking carefully the dropshipping supplier), and start marketing.

If they are all the same, how can customers remember your brand?

Be creative, be unique! And the best.

Final words

Now, you all know the pros and cons of dropshipping. Leaning in or not is up to you!

In case you find it difficult to make money with dropshipping, we also have a blog about Copping Sneakers for you to consider.

Wish you the best of luck from Hidemyacc!

If you know any other aspects of dropshipping, feel free to share with us!

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Are you still intensely interested in business? Do you want to make much more profits with other different products but not just stick to the only one? Get an anti-detect browser !

Dropshippers use such software to expand their business via many stores without linking all the stores to one owner.

You can earn more profits, avoid getting E-commerce accounts suspended, and sell many other different products by running multiple stores.

You will need a web browser with anti-detect features to create several accounts for your marketing campaign and product promotion such as running ads, seeding,...