Two of the major stopping blocks that prevent people from starting up their own work-from-home online business are physical storage space for products, and the associated cost of that space, and the staff to deal with packaging and shipping. But if you use the dropship business model, you circumnavigate your way around both of these problems.
Dropshipping is relatively new idea. It was solely borne as a way of making it easier for people to start an online business without the worry of finance, storage, warehousing, or shipping. What happens when you dropship is that the goods that you are selling get dispatched directly from your source, straight to your client's delivery address. Let's take a closer look at the enormous benefits that come when you dropship. They include:
* Cash flow
Let's take at finance first. The conventional business model would suggest that you buy stock in bulk, find somewhere to store it, sell it, pack it, and ship it. There are of course various costs associated with all of these stages. Firstly there is the cost of buying your stock to begin with, and this is one of the most daunting problems that face many wannabe onlinepreneurs; one that prevents many people from ever getting started. But when you dropship, you don't have to hold any stock. Remember it goes directly to your client from your source. It doesn't touch you at all.
Now let's have a look at cash flow. For those of you new to business thinking, the term "cash flow" refers to the lag in time between having to lay cash out up front, until you start to claw it back in again as you sell the product to your customers. In the meantime, you still have to fund all of the associated costs of running your business. But if you use the dropship business model you don't have to fund stock in advance; you order it in what is known as a "back to back" environment. No cash flow dilemma.
Storage speaks for itself. There is never enough storage space at home, even for your own possessions, so finding extra space to accommodate stock, (which can also be quite bulky and demanding of space) is a real problem. But as a dropship consignment goes straight from the manufacturer or distributor straight to the end user, no storage is required.
You win on administration too. When you stock anything you have to have stock records. You must record and monitor the ins and outs of the products, set re-order levels to ensure that you don't run out of stock, and raise all of the dispatch paperwork. However, when you dropship, all of this admin is done by your Dropshipping service provider.
One of the other biggest costs for any business is its staff. The more staff you have to employ, the bigger your wage bill, and the higher your running costs. It puts a squeeze on your potential profit. One of the big advantages with working from home, is that you can be a veritable one-man-band, and when you dropship, this really helps as most of the work is done by others, negating the necessity for you to have to employ staff.
Finally there is the shipping itself, and the more successful your business becomes, the more shipping you will have to do. This is not only costly, and another potential cash flow problem, but it also very labor consumptive. So when you dropship you save yourself a whole host of problems.
A dropship facility can make your business dream turn into a business reality. Why not find out more by searching out your options online?
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