Chapter 1: Understanding the Dropshipping Model
Briefly explain the dropshipping business model.
Advantages and disadvantages of dropshipping.
Brieflyexplainthedropshippingbusiness model.
Dropshipping is a retail fulfillment method where a store doesn't keep the products it sells in stock.
Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller does not handle the product directly
Advantages and disadvantages of dropshipping
Advantages of Dropshipping
Low startup costs: No need for inventory, warehousing, or shipping costs.
Wide product range: Offer a variety of products without holding stock.
Flexibility: Easy to scale the business up or down.
Low risk: Minimal financial commitment compared to traditional retail.
Disadvantages of Dropshipping
Low profit margins: Competition can lead to price wars and reduced profits.
Limited control over shipping: Reliance on third-party suppliers for shipping times and quality.
Inventory issues: Stock availability can fluctuate, leading to out-of-stock issues.
Customer service challenges: Dealing with customer inquiries related to shipping and product issues can be complex.
Disadvantages of Dropshipping
Low profit margins: Competition can lead to price wars and reduced profits.
Limited control over shipping: Reliance on thirdparty suppliers for shipping times and quality. Inventory issues: Stock availability can fluctuate, leading to out-of-stock issues.
Customer service challenges: Dealing with customer inquiries related to shipping and product issues can be complex.
