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Advantages and Disadvantages of Drop Shipping
I am sure by now you have setup your necklace business online and probably thinking, "I only want to sell but I don't want to invest in expensive necklaces". In that case, you need drop shippers.
But what is drop shipping anyway? I'll tell you this one thing more: drop shipping is the process in which
you take orders from a customer, arrange with your chosen wholesale necklace supplier to drop ship your product directly to the customer. In the end, you will profit from your effort.
But how will I benefit from drop shipping? How will it affect my jewelry store business? I will give you the answers for your convenience.
Drop Shipping Advantages
- No inventory to process - This is the brightest benefit you can achieve from drop shipping. The necklace product stays on the wholesale necklace suppliers' warehouse. There are no storage fees to calculate, no need to purchase bulk necklaces for storage in your home or office for selling. Your wholesale supplier will handle necklace product inventory.
- Minimal or no investment at all - This happens because you take customer's order first before buying the product from the wholesale supplier in wholesale price, and sell it to customers at retail price. The difference will be you earning. No hassle right?
- Various necklace products to offer - If you have found reliable wholesale necklace suppliers that will do business with you, you got the jackpot. You can offer supplier's necklace products to customers in a variety of designs which customers love.
These are fantastic benefits! You earn by selling products with no inventory with wider necklace product selection and with minimal cost. But wait, here are some more, there are downsides in drop shipping of course. And I will let you know them one by one.
Drop Shipping Disadvantages
- Middlemen and scam suppliers on the rise - Always be careful in choosing a reliable wholesale necklace supplier. Avoid the alligators trap, it only means that you need to be watchful because it hurts to be scammed. These middlemen will act as real suppliers who will only take your orders and forward that order to the legitimate supplier (the real one).
Of course the legitimate one will drop ship the product to the customer. BUT, the middlemen who take your order will charge you now a "drop shipping fee" which is not suppose to happen. What a waste of time right? So avoid these impersonators.
- Unclear inventory - Real wholesale necklace suppliers update you from time to time about their necklace product available stocks. So that when a customer orders a pearl necklace, you can easily provide them with the status if it's available or not.
With scammers, you will lose your valuable customers because of unreliable information on product availability.
- Smaller profit margins - This is the biggest pain in the neck because your necklace business depends on it. Middlemen will not let you buy necklace products with the real wholesale price. They will make the wholesale necklace price even higher and will support convincing words on their product to make you engage in it instantly without even noticing their internal tactic to gain more money from you.
Customers will have the greatest suffering because they will buy the necklace product with higher prices. If they feel overpriced, your necklace business will suffer too because you are losing valuable customers in the long run.
- Product issues and returns - You are the one who directly deal with the customers and not your suppliers. When they have problems or any issues concerning with the product, or if a refund request has been set by customers, they will directly communicate with you.
This will also be a pain in the neck because you have to deal with those problems clearly and act fast to avoid losing customers. In that case, this might mean losses on your part.
If you have a good wholesale necklace supplier, they might help you ease your pain in the neck on customer issues and returns.
- Wholesale supplier issues - Because you do not create the product that you sell, you not sure or you cannot control its quality and drop shipping times to your customers. If you have found a really reliable and legitimate wholesale necklace supplier, this will lessen your problems.
So that was it! I hope these ideas about the pros and cons in drop shipping will help you achieve you goal to profit more from your wholesale necklace business.
One more thing to consider, if you want to find a real wholesale necklace supplier that provides drop shipping services, search for keywords such as "necklace wholesalers or wholesalers" and NOT "drop shippers". You will only get a bunch of alligator middlemen who will only bite you on the neck and take away your money.
I wish you good luck to your journey in a profitable jewelry business.
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