Dropshipping: advantages, disadvantages

Dropshipping is the sale of goods that are already in the United States and can be resold at a higher price through Amazon.

The sales process looks like this:

1. the seller finds the product from the manufacturer and lists it on Amazon, making his own markup;
2. the buyer orders the product;
3. the seller receives money and confirmation is sent to the client, after which the seller buys the product from the manufacturer, giving the shipping address specified by the buyer;
4. the manufacturer sends the product to the buyer.

Thus, the buyer gets the desired product, the manufacturer gets his price, and you get a margin.

Benefits of dropshipping:

• Low start-up capital. To start sales, $100 will be enough for you.
• The goods do not need to be purchased in advance and stored in the warehouse.

Disadvantages of dropshipping:

• Low markup. Only with a low margin will you be able to compete.
• You cannot assess the quality of the products you sell blindly. It is also impossible to control delivery times.
• Violation of the stated conditions will result in negative reviews that will pour into your account. A damaged reputation is hard to overcome and will keep you from adding clients.
• The strategy involves laying out a huge range of products at the same time - thousands of items to make money. Selling successfully requires thousands of unique product descriptions with photographs.
• You must conduct all negotiations on a daily basis (customer-seller, seller-manufacturer), which will require knowledge of English.
• Difficult to delegate business.
• Manufactures do not want to be a link in the chain, when they can supply this product directly to the retail buyer.
• The risk is great.