Why dropshipping is also costly
There is the idea by many novice e-commerce entrepreneur that dropshipping is actually cheap. This is actually not a true fact about dropshipping. Dropshipping requires a lot of resources in order to be executed successfully. The main idea about dropshipping is the fact that you put a higher price on the product. This automatically makes the product a bit more expensive and hard to sell. Most dropshipping business owners are looking for a 10 to 25% profit. However with a product that is already available to ship which is quite cheaper than that you will have a hard time finding someone to buy your product. Therefore you will have to use more time and funds to market your product.
Dropshipping requires other funds either than just for marketing
There is the need for other funds in dropshipping than only marketing. A lot of people start a dropshipping business believing that they only need funds for marketing. However it takes 2 to 3 days for credit card payments to be processed. This is a fraud prevention technique used by credit card companies. It is therefore impossible for you to wait for another 3 days for the customer’s funds to appear in your account. The best way to speed up the process is to pay for the product using your own funds then direct the package to the customer’s door step. If you are dropshipping expensive stuff you will need a lot of funds.
Dropshipping is difficult
Another disadvantage that I have discovered with dropshipping is the fact that it is hard to get loyal customers. Most products are dropshipped from China. Therefore they take a long time to reach the customers. This means that customers have to wait for their product for days. This is part of what I would call poor service delivery.