Chapter 2: What is Dropshipping?
Dropshipping has revolutionized the way we do business online. While it
might sound intimidating to beginners, the fundamentals could not be more
simple. The traditional methods of ecommerce are usually what we think of
when selling items online. You advertise and market the item, buyers pay
and leave their postal address, you package and send the item. While this
might be great if you have all the time in the world to package and handle
items, in today’s fast paced world there has got to be an easier way.
This is where dropshipping takes the stage as the cornerstone of online
business. The idea is simple yet unique. You advertise your item and
buyers pay and leave their postal address, only this time instead of
hassling with a warehouse of items to pack and send you simply leave the
details of the items and the buyer's address with your designated
dropshipper. The dropshipper, from their much larger warehouse, then
packs and sends the item on your behalf.
The beauty of this system is that you literally have the ability to make
money without prior investment. Having no inventory to weigh you down is
an immense benefit particularly in uncertain times since you will only ever
pay for an item after a purchase has been made.
Dropshipping is becoming an increasingly common way to do business
online, taking the fundamentals of ecommerce but simply adding a
middleman to take care of the shipping and supply. There is huge potential
to make an impressive income if you remain focused and determined while
keeping on top of managing your business. While you may not be spending
time packing and sending orders, there is still plenty of work to do, though
you will be mainly focused with sales and marketing to grow and expand
your operations.
Your customer does not see you. You are a ghost in the entire operation.
Every step of this dropshipping process can be done with just a laptop and
a Wifi connection. There is huge potential when it comes to this lucrative
business model. Firstly you do not have to stock any products nor pay for
product storage. Secondly, you will only pay for the product after your
customer has paid for it. You are using part of your customer’s money to
pay for the product. The remaining amount will be your profit of course.
Hence there is zero capital risk involved in the entire operation. Talk about
a risk free investment. However, like all businesses, your time and effort is
required to make this a success.
The entire business can be outsourced
and automated after you get a hang of things. Customer service can be
outsourced to several outsourcing companies or you could simply hire a
virtual assistant or freelancer to do the job for you.
A business manager
can be hired from freelancing sites such as Fiverr or Upwork if you decide
to completely automate the business and live off its passive income every
month. But first let us go to the basics and fundamentals of the
dropshipping business. Let us learn how to walk before we attempt to fly.