Dropshipping has a number of benefits other than just saving you from needing a large upfront investment for inventory. Let’s take a look at a few of the biggest benefits.
Little To No Startup Capital Required – The most obvious benefit of using dropshipping is the fact that you don’t need to pay for inventory upfront, so you can start your store even if you’re on a shoestring budget.
Less Work Involved – With traditional retail methods, you must keep inventory, remember to restock products before you run out, handle packaging and shipping products, deal with returns, and more. With dropshipping, you just pass the order on to the manufacturer or distributor and your work is done.
Lower Overhead – When you stock your own inventory, you must have space for that inventory, which often means renting warehouse space and/or office space. Even if you keep your inventory in your home, you’ll need to set aside space for it and spend time managing it, plus you must buy things like shelving to hold the products.
Flexibility – Rather than be tethered to a specific location, which would be necessary if you kept your own inventory, you can operate a dropshipping business from pretty much anywhere in the world as long as you have a computer and reliable internet connectivity.
Wider Availability – Because you don’t need to spend money upfront, you’ll have more products that you can offer your customers than you might in the beginning if you were purchasing inventory upfront.
Scalability – Your business will also be able to scale upward more quickly if you use dropshipping, because adding new inventory is as simple as listing it on your shop. You can scale almost endlessly as long as you can find appropriate products.
As you can see, there are some pretty big advantages to using dropshipping over traditional retail, but there are also a few disadvantages to be aware of, which we will discuss in the next section.