Yes, Dropshipping is profitable when it's done in the
right-way.
Dropshipping helps you to manage your online store without
any hassle or tension of managing the entire inventory. It depends not on the
location but on your skills, the time you have to spend on it, the niche you have chosen, etc. After this whenever a customer orders from your store, you just have to
notify or forward the order to the drop shipper, after that they will pack and
ship the product to the customer. The customer will get the product in the box that
is having your company name and logo on it.
Five Important factors for Dropshipping Margin
1. PO-SMS Discrepancies
Discrepancies between purchase order and supply manifest
system can affect item, quantity, order date, shipping address, ship date,
delivery date, customer name, contact information, shipping service, label, and
packaging, etc. Any of these can lead to wrong item delivery or other order
fulfillment fails that can hurt reputation and revenue.
Suppliers operate a two-tiered pricing system-wholesale
pricing and dropship pricing, the latter higher than the former based on the volume of the order
Discounts drive retail sales. Black Friday and Christmas
sales are good examples. However, with dropship pricing, it becomes difficult
for dropshippers to offer competitive discounts.
4. Market Saturation
Due to the low startup costs, dropshipping is attractive.
Competing with thousands of other sellers forces prices down in order to stay
competitive
5. Free Shipping
Free shipping as a big incentive for shoppers to spend more.
However, with dropship pricing, it might be difficult to offer free shipping
5 Key Points to Know About Dropshipping
1.Startup
Cost
2. Market
Share
3. Widespread
Adoption
4. Future
Outlook
5.Also
known as Supplier Direct Fulfillment or Vendor Direct Fulfillment.
How to better price your drop shipment
• Manufacturer's
Suggested Retail Price
• Listing
Fees
• Hosting
• Marketing
• Percentage
of final sales
• Payment
processing fees
• Subscription
for Apps, Plugins
• Competition's
price
• Customer
price perception
• Price
trends over time
How to Stay with Profitable Your Dropshipping Margins
1. Start
with a little
2. Create a content marketing strategy
3. Aim for
Retail Order Consolidation to reduce shipping costs
4.Team up
with other drop shippers to order wholesale
5. Quality
control measures to beat returns down
6. Include
size guides if selling fashion to reduce returns
7.Find high
demanding products
8. Check
products with large volume orders and good reviews
9. Let
customers know where items are shipping from in case of delays
10. Optimize
website design for higher engagement and conversion
