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Doing business using the drop shipping approach has many advantages. One of the most common barriers to starting a business is having sufficient capital. This is what makes dropshipping so appealing because the capital requirement is not as much as compared to physically setting up your own store and holding inventory. Just the lease and renovation alone immediately entails costs

You can do drop shiping from your own home. It has more to do with being able to advertise well and get costumers to pay for a product to be delivered. You’ll get paid first then the product gets delivered. Payment to the wholesaler/dropshipper can be made after the delivery is done. With this arrange your capital resource need not be so large.

Another pro or advantage to dropshipping is if there is a downturn and business is slow or stops altogether; you will not be stuck with unsold inventory. Inventory is money that’s not earning interest and the product may even deteriorate in value.  If you have a delivery service you could wind up with an underutilized or unused delivery vehicle and you may also have to lay off the delivery man. With dropshipping you’re putting less of your capital at risk.

As to the cons or disadvantages, the Achilles heel of dropshipping is you do not have control of the merchandise and the delivery process. You will not be inspecting the quality of the goods as they are to be delivered so they may not be up to standard. Delivery may also not be done on time. This all leads to bad business and it could be difficult to recover from.

Another thing to watch out for is if you’re dropshipper is too enterprising for your own good. He may eventually take the customers away from you since he is the one in direct contact with them. You may never know if he is inserting advertising or giving flyers to your customer for purposes other than your own.  This can be mitigated with your selection and relationship with the dropshipper.

Just like any business dropshipping has its pros and cons. The challenge is to take advantage of the pros and learn how to mitigate the cons.

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