The Benefits and Challenges of Running a Dropshipping Store

Why Dropshipping?

The dropshipping model is becoming an increasingly popular form of ecommerce because it allows people to start their own businesses without needing to make significant investments in inventory management, stock storage, and shipping.

As a result, you don’t need to buy inventory or store it, so your start-up costs are significantly lower than if you were to open a traditional brick-and-mortar store. You also won’t need to hire employees for tasks like packing orders or sending out invoices, as everything will be handled by your supplier. All you need is some basic knowledge of how the process works, and then start selling!

How the Dropshipping Model Works

• Start by finding a reliable supplier offering good pricing and shipping times.
• Build an online presence with all your featured products to start accepting orders.
• When a customer lands on your page and places a purchase, you send the order to the dropshipping supplier for fulfillment.
• Now, all you need to do is focus on promoting the various products you’re offering instead of managing inventory.

Benefits of Running a Dropshipping Store

1 – Incredibly Low Start-up Costs

One of the biggest benefits of starting a dropshipping business is that you don’t need to buy inventory upfront. This means that you don’t have to pay for shipping, warehouse space, and staff. You also won’t need to waste time filling out paperwork and getting approvals from multiple suppliers.

However, you have to make sure that you have enough money in reserve for when customers start purchasing your products, and they must be quality ones so customers will continue repurchasing them.

2 – Easy to Rapidly Scale

Another benefit of running dropshipping business is that you can rapidly scale up or down as your business grows. You don’t have to worry about inventory because you can order more products when needed.

You also don’t have to spend time sourcing new product suppliers and providing customer service for suppliers since those are all handled by the third party that you use in your store. This allows you the freedom to focus on marketing and customer service instead of other things that would be very time-consuming.

3 – Add/Remove Products Quickly

This is where the dropshipping model really shines. It’s hard to imagine how much time, money, and energy would be saved if you didn’t have to deal with inventory management. You can just focus on sourcing products and growing your store.

This helps you grow and expand to your customer’s needs as you can create upsales, cross promotions, and complementary items that showcase the features of your primary product line.

4 – Complete Market Flexibility

The benefits of running a dropshipping store are many. One of them is the fact that your entire business model can be changed quickly, at any time you want. You can change products, prices, and marketing campaigns whenever you like without worrying about sourcing new items or renegotiating contracts with suppliers.

This can all be achieved online from anywhere in the world. You can conceivably run a dropshipping empire from the phone in your pocket. In fact, with the OPMC WooCommerce Dropshipping Plugin from our team, you get a comprehensive dashboard for managing every aspect of your business while on vacation, visiting family, or taking a bath!

5 – No Inventory Management

One of the most significant benefits of running a dropshipping store is that you don’t have to worry about inventory management. You don’t need to worry about storage, shipping, returns, customer service, or accounting.

This allows you to focus on generating more sales and less time on managing your inventory and shipping process. That saves you money from not dealing with storage or unnecessary employees. When profit margins can be razor thin, it helps to have as many cost-savings benefits as possible.

6 – Customized Branding

The final benefit of running a dropshipping store is that you get to customize your branding to your store. This means that you can use the same branding across all your marketing materials and make sure that it’s easy for customers to recognize and memorable.

Whenever your customers order from your online store, all they see is your brand instead of your supplier.

Dropshipping Challenges to Overcome

1 – Relying on Third-Party Suppliers

Dropshipping is the business model of selling products without holding any inventory. Instead, you rely on third-party suppliers to fulfill orders. This means that your company only needs customers and an online store—no physical warehouse or storage space is required.

However, it also means you’re relying on someone else’s inventory and supply chain management systems to keep up with demand. That can be problematic if something goes wrong with their systems or if you decide to change from one supplier to another.

To overcome this dropshipping challenge, you want to explore the reviews and reliability of the supplier you are working with beforehand. Make sure they have the capabilities to deal with any shipping snafus that might pop up, so you don’t suffer the repercussions in your own sales figures.

2 – Getting Past High Competition

There is always a lot of competition in any online market, and dropshipping is no exception. It’s important to know how the store you want to build will stand out from the crowd, especially if there are already established stores doing well in your niche. But don’t get discouraged! There are some things you can do to get started and make sure you have a chance of competing with more prominent players.

We’ve written a few articles about how to best promote your business that you can read, but the best method is sticking to your niche and leaning into the needs of your target audience. The more they see you authentically care about their pain points, the better you’ll be able to sell.

3 – Ensuring High Customer Service

This may be the most crucial dropshipping challege to overcome while running a dropshipping store. After all, your customers are what will keep you in business and ensure that you stay profitable over time. 

WooCommerce will help with some aspects of this because of the various theming and customization you can make, but your best bet is to integrate a chat feature or 24/7 support system so their questions can be answered as thoroughly as possible any time of day or night.

Is Dropshipping Worth It?

Dropshipping is worth it, but it’s not for everyone. If you’re considering starting a dropshipping business, there are some things you should consider before diving in headfirst. First and foremost: start with a small budget. 

You’ll need to be careful with your cash until you’ve nailed down the process (and know how much money you can realistically make), so don’t drain all your savings on inventory right out of the gate.

You can make a lot of money with dropshipping—it just takes time! To help ensure your store gets off on the right foot, test the waters first by selling one or two products upfront before expanding.

Secondly, and probably the most critical way to profit from this business model, you need to use automation. The more streamlined the process of running your dropshipping business, the more you can focus on keeping a solid flow of new leads.

We suggest you check out our WooCommerce Dropshipping plugin that connects with many suppliers and automates your various business processes. Most importantly, you get an easy-to-read dashboard for quick decision-making so you can leverage trends, customer demand, and supply issues, all from the convenience of your smartphone, tablet, or PC. You can pick up our plugin on our storefront to learn more.

Conclusion

Like any business you are starting up, you need to put in a little work to get your dropshipping online store off the ground. With some solid effort and clean automation, you too can experience a fantastic new income stream and business model that will grow rapidly based on the success of your sales.