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What is DropShipping?
Dropshipping is an innovative method of online buying and selling that is becoming increasingly popular, not only in the Asia region but also on a global scale. The concept is simple: rather than a seller maintaining a full inventory of stock, either at their premises or in a warehouse, they partner with a dropshipping supplier – often a wholesaler – who fulfils the order at their end, and delivers the product directly to the buyer.
Dropshipping has become such a popular order fulfilment model because of the many benefits it can bring, not only to sellers, but also to customers and suppliers, too. The advantages for drop shipper (business owner):
- It is easy to get started
- There is no need to manage, stock and organize inventories
- You don't need to own any stock and start selling anytime you want
- Allows you to function on a very low operating budget
- Allows you to have a healthy cash flow, as you don’t have to spend a lot until you start seeing money back
- You don’t need to have a website as you can sell at high-traffic marketplaces such as Carousell, Lazada, 11th Street, Facebook, Instagram or other online marketplaces.
- While average margins may be lower compared to other retail stores that stock their own inventory, BUT there is no risk of a “bad buy” that results in over stock issues
Despite dropshipping only recently becoming a standard way to fulfil orders here in the Asia, it’s certainly not a new concept. In fact, dropshipping is probably much more common than you may think, and many big name stores now opt for this method due to its ease, convenience, and cost saving benefits.