Expand Your Catalog Without Amplifying Your Inventory Costs Through Dropshipping


If you’re thinking about expanding your eCommerce business, consider dropshipping. For those who are new to the term, dropshipping allows you to sell online without having any inventory.

Expanding your business and adapting this secondary business model can solve several inventory problems. It can help you get products your customers have been asking for even if you don’t have the budget to get them right now. It can also help you scale your store and product offerings without worrying too much about inventory costs and warehouse space.

How does dropshipping work?

You add the products from a supplier to your store and market the product. When a customer places an order on your store, you forward the order to the supplier and the supplier ships it to your customer directly, bypassing you.

You don’t have to store or ship the item.

Sounds simple? It’s because it is.

All you need is a virtual inventory: a dropshipping store allows you to sell products entirely online.

All you have to do is show the product on your site for all your customers to see. When a customer purchases the product, they will pay you the retail price that you have set.

For example, you have listed a jumpsuit on your store with the retail price at $50. When a customer purchases the product, they will pay you $50. Now, you have to forward this order to the supplier, but only pay the wholesale price of the product, which is, say, $13.65.

You get $36.35 as your profit. The supplier ships out the product to your customer and voila! The transaction is complete.

The best part about dropshipping is that apps such as Spocket entirely automate the process for you. Finding, ordering, and shipping products can be automated with apps.

Why use dropshipping?

Dropshipping provides you with a low effort, high returns project model, whether you are a new ecommerce entrepreneur or have had an online store for a while.

What dropshipping solves primarily is the inventory distortion issue. This is where retailers and suppliers lose trillions of dollars every year because they miscalculate the number of sales they will receive. Not holding inventory reduces one frown from the forehead of the modern entrepreneur, but that is not the only problem dropshipping solves.

Let us understand the benefits of dropshipping in detail.

Fresh collections and new stock at your fingertips

With changing seasons and trends, online stores need to stay updated with products that suit the current fad. With the right app, dropshipping can make changing products very simple.

Since you are listing products from suppliers on your online store, you can easily change your product listing in a couple of clicks. This is beneficial, especially if your product range is seasonal.

When Valentine’s Day rolls in, or the 4th of July approaches, you want to make sure you have the right products listed so you can make the most of the season. You can change product offerings without worrying about stale stock.

You hold none of the inventory, so you can shake up your store anytime  and cater to an audience that is on board with your new products. This also allows you to test out your products. Find new products, and never worry about unsold products.

No upfront costs when dropshipping

One reason why eCommerce businesses struggle to scale is due to budget.

With dropshipping, adding new products to your store is relatively easy, and costs very little.

Once you have set up an online store, you can use a dropshipping app to import products and start selling at no cost.

You only have to pay the supplier when the customer orders a product. No pre-payments, allowing you to experiment with dropshipping, try out different products with no liabilities involved.

The cost of dropshipping, even if you’re thinking long term is substantially lower than other business models.

Easy product import and order placement

Product sourcing apps now automate the entire order process to just one click of approval. With apps, retailers can avoid the hassle of the manual work involved with shipping a product from one’s own warehouse.

You can add products to your store without hunting for suppliers, checking up on their background and creating complicated agreements. Suppliers are already vetted and permissions obtained.

Shipping out one order a day is easy but when your business grows, and you start making substantial money online, shipping 50 orders a day can quickly turn into a headache.

With all of the above handled, you can simply browse through approved suppliers, and select products you think would do well on your store.

Skip creating shipping labels, boxing, manual data-entering. Spend your valuable time on Facebook ads, customer service, and social media strategy, while all the boring mindless jobs are taken over by code.

Solves shipping problems for your customer

When you ship from a single warehouse, reaching states and countries outside your own can be difficult. Dropshipping allows you to broaden your market to regions outside your comfort zone: all the while keeping shipping times and shipping rates steady.

With suppliers that are located in the same country as your target audience, you can offer domestic and quick shipping. 74% people are unwilling to wait more than a week for their orders – and offering fast shipping to countries that you do not have a warehouse in is impossible, unless your customers are willing to pay exceedingly great amounts for expedited shipping.

With dropshipping, you can simply pair up with the right supplier in the right countries, and create a global brand, rather than a local one.

Great Discounts

With dropshipping apps, you get products at wholesale prices that are heavily discounted. Suppliers offer at least 30-60% discounts, which allows for considerable profit margins.

Dropshipping can be a great solution to the question “How to start an online store” due to the low upfront cost and the low effort involved. It works really well for established businesses as well. It’s a new avenue to discover that brings along with it, great potential.

Dropshippers are slowly taking over the eCommerce market. About 22-33% of internet retailers use dropshipping to expand their catalog and reach.  We suggest it’s time you gave it a try!

Author Bio

This blog was written by Isha Mandloi. She is a Content Creator at Spocket, an eCommerce solution set to solve the trillion dollar inventory distortion issue, one entrepreneur at a time.

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