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Basically, dropshipping is a business model where you (the dropshipper) acts as an agent for the manufacturer and sell their items. This model became very popular because most manufacturers do not want to bother themselves by having a sales and marketing department. They leave that part to others who really specialize in sales and marketing and that can be you.
Basically, dropshipping is a business model where you (the dropshipper) acts as an agent for the manufacturer and sell their items. This model became very popular because most manufacturers do not want to bother themselves by having a sales and marketing department. They leave that part to others who really specialize in sales and marketing and that can be you.
So what are the pros and cons of dropshipping
Pros
Small startup cost - you just need a website and do ads
No fulfillment obligations or expenses - Since items will be shipped by the manufacturer directly to the customer, you won't have to worry about packing and shipping.
No inventory needed - By acting as an intermediary between manufacturers and customers, you won't have to buy stocks of inventory.
Cons
Costs in making a website and doing ads - since you need your own platform to sell the drop shipped items, you will have to have your own website. While this sounds easy and affordable, the problem with websites is that it is like having a store that no one knows. People won’t go to your website unless you lead them to it, and that's where the bulk of expenses come in. The minimum effective Facebook ad will cost you about $5.00 (USD) per day. While that sounds small, an ad done for only one day hardly brings results. The longer it runs the better the effectiveness of the ad (assuming you have an effective ad).
If you plan to dropship and have suppliers outside of the country you sell to, COD payments will not be applicable. So dropshipping into the Philippines from a source outside the country is impossible (currently) - why? Because 90% of Filipinos still prefer COD. Second, there is no way for you to collect payment if the courier is sent by the manufacturer.
You won't be able to maximize e-commerce platforms like Lazada and Shopee - These e-commerce sites require a certain number of days for you to fulfill your orders and if your products are not on-hand, you won't be able to comply with their required time frame.
So if you are ok with the pros and cons of dropshipping lets see what the ideal scenario is.
Countries = USA, some parts of Europe, Australia, New Zealand and other countries with e-packet services from China (look it up)
Product sources = Alibaba (bulk items) and Aliexpress (retail)
Products = Items that can be sold with a good margin enough to cover ad expenses, something lightweight and doesn’t easily break when mishandled (trust us, it will be mishandled)
If you can visualize and have an idea with these scenarios, then it is time to try out the business.
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