Dropshipping is a growing business that has taken captive many of today’s generation with its attractive business model that requires very little work in exchange for large profits. For those unfamiliar to the concept, Drop-shipping is a relatively new development that allows a goods sales store to feign availability of stock for a customer, leading to them making a purchase. After the purchase has been made, once the retailer knows the demand for the product he poses as a distributor for, he then purchases the same goods by the same amount of initial purchase at a price that is lower than the price that they sell it for. But the difference in price cannot be too big, as they have to be able to pick up customers that aren’t gullible enough to pay prices that are much more than what the product is actually worth. Due to these high demand industries, other businesses face the brunt of this changed dependence. People now have slowly begun to rely more on Drop-shippers that sell online than some online retailers. Although this shift has not occurred completely yet, it can be predicted that such a shift will take place in the near future.
Due to there having to be no specific inventory location, drop-shippers can provide their produce to locations depending on the demand, whereas regular retailers that sell their own product would need to account for inventory, which means that the cost of transport from one location to the other would be high. For example, if an individual who lives outside a major city requires a product, a drop-shipper can look for retailers near the customer and provide them stock from this retailer, thus drastically reducing shipping price. On the other hand, a retailer based in the city with an inventory would have to pay travel costs to move his product from within the city to the outside which may cost more. This would mean that a customer would prefer to make a purchase from a drop-shipper than from an individual retailer.
Drop-shippers also have the advantages of availability. Other retailers would have to wait to restock an item before they can sell a specific item, which would mean that if they do not have stocks, they cannot provide even for customers who desperately need some form of goods quickly. This problem is made nonexistent by drop-shippers, as they can look at several retailers and see which one has a specific item in stock, enabling them to seem as though they have unlimited stock of everything at all times.
Due to several reasons such as these, the market for several genuine competitors of drop-shippers has dropped drastically. The economy has shifted to pave the way for a whole new era of sales that do not even require the physical presence of goods in order to provide it. This era is an era of convenience and comfort that poses as a threat for many similar companies that already exists.
