Imagine setting up your own online store with dozens, hundreds, even thousands of products without having to spend a single dime upfront on inventory.
Instead, you find products on another website (let’s use Amazon in this example since most people are familiar with it), add products to your site, and price them higher than they are being sold on the original size (Amazon).
Let’s say you are selling a frying pan that sells for $14 on Amazon. You price it at $20 on your website. When a customer orders it, they pay you $20. Then you go to Amazon and order it for $14, having Amazon ship it directly to the customer, and you keep the $6 difference.
• Lower Upfront Investment – Because you don’t have to pay for inventory upfront, your initial business startup costs are much lower.
• No Warehouse Space Needed – The dropshipper is the one who deals with inventory, so there’s no need to rent a warehouse or take up space in your home to keep your inventory.
• No Shipping Hassles – The dropshipping company also handles packaging and shipping products, so that takes a lot of work off your hands, freeing you up for other tasks, like marketing, and sourcing other products.
• More Products – If you don’t have to worry about whether a product will sell or not because you aren’t paying for it upfront, you can take more liberties with the products you add to your store. If a product doesn’t sell, the only thing you’ve lost is the small amount of time it took to add it to the store, and you can remove it just as easily.