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How Exactly Does Dropshipping Work and What Are the Benefits?

An estimated 25% of all people online, that’s how many people are estimated to take advantage of online shopping by the year 2020. The question is, how can you take advantage of this trend?

If you plan to get involved with business online, it pays to learn more about dropshipping. Keep reading to learn what dropshipping is and why it’s worth pursuing.

What Is Dropshipping?

The typical shopping model isn’t complex. You order products in bulk, pay a discount based on volume, and resell your merchandise in your store. The problem with that model is that you need a large outlay of cash to properly start a business.

The dropshipping model solves that problem.

When you dropship in your business, you don’t need to buy products in bulk. Instead, you form a mutually beneficial relationship with manufacturers. Instead of buying in bulk, you send your orders to dropshipping suppliers as you get them, and they handle the shipping process for you.

This method allows you to pay for your merchandise as you go. It lets you start up your store with smaller amounts of cash and become more profitable more quickly.

How Will Dropshipping Help?

Now that you know what dropshipping is, you need to figure out if it’s the right choice for your business. Below are several benefits you’ll see with this business model.

1. Focus More on Acquiring Customers

You likely have a limited amount of capital if you’re a new business. The problem with buying many products is that you’re left with little money to spend on advertising. Dropshipping doesn’t have this problem.

You’ll be able to devote most of your funding to acquiring new customers. You can set up several ad campaigns online, optimize your conversion process, and make sales faster than you can with a limited ad budget.

2. Reduce Staffing

Buying products isn’t the only cost for going down the traditional retail model. When you have a lot of inventory, you need to have people around to stock and ship your product. You can avoid this problem by outsourcing fulfillment to manufacturers.

A dropshipping company like Smokerolla Dropshipping already has an established shipping process in place. They’ll package and ship your products for you, saving you from hiring a team to handle the process.

3. Save Space

You can’t start a regular retail business without a lot of space. Your products need somewhere to stay. In most cases, this means renting a warehouse for storage.

You can start a dropshipping business completely remotely. In fact, you can hire your entire team remotely. As long as you have a laptop and WiFi, you can work anywhere in the world.

Start Your Dropshipping Business Today

Not everyone has a small fortune to buy inventory for a new eCommerce business. Luckily, dropshipping is available for anyone who wants to start on a budget. Start researching your market today and reach out to manufacturers to see what they can offer you.

If you decide that dropshipping is right for you and are ready to start, head back to our blog. Our latest posts will help you gain the knowledge you need to get your business up and running.


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About The Phat Startup

The Phat Startup was created by Mike McOwen to create a space where entrepreneur lifestyle could be focused on. We tend to live a different lifestyle than most. Entrepreneurs tend to be interested in maximizing their life, not only their profit.

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