The world of commerce is quite an uncertain one, without any doubt. Some new trends go away as easily as they started, while others keep growing. Dropshipping is one of the business models that developed fairly recently. Since then, it has gained quite a huge market. It also brought in many new entrants into the world of e-commerce and made it bigger than ever. After all, this model is quite simple yet very profitable.
Now, you might wonder whether dropshipping is a worthy investment based on the current condition. In that case, the answer is more complicated than a yes or no. So, let’s get to know how much you can benefit from dropshipping in UAE currently.
How does Dropshipping work?
In case you’re new to this concept, you must be eager to know how it works. You can see dropshipping in UAE as a kind of retailing, but with a significant difference to the traditional way. In this model, you don’t store the goods that you’re going to sell. Instead of that, you receive an order from a customer and forward it to a supplier.
So, all you need to do here is take on demands and pass them on to suppliers. Meanwhile, you can make a good amount of profit acting as a bridge between them. Like all other industries, this one too comes with its own shares of benefits and risks.
Is Dropshipping a Legitimate Model?
Many people are new to this concept, and often they wonder about its legality. After all, there have been many discussions on that matter. But in the end, dropshipping was recognised as a legitimate business model and remained so to date.
But, if you’re thinking of becoming a part of this business, you must make sure what goods you can actually supply. Now, this may differ from one country to another.
How do you Benefit from Dropshipping?
Regardless of the challenges you face, the benefits that drop shipping offers remain the same throughout time. As you shall see, this concept has its fair share of pros. Here are some of the biggest ones among them:
1. Easy to startup
In other models, you have to make a significant amount of investments, especially in terms of money. Apart from that, it takes time as well, but that’s not the case with dropshipping. This model takes less time and even much fewer costs or investments. You need not invest in a warehouse or space to store goods, as in traditional models. As a result, it’s quite easy to get started. That’s why you can see so many startups in this industry.
But even though it’s easy to enter this business, it takes time and effort to grow. So, you must not see it as easier than it actually is.
2. You buy only according to the demands
In traditional retailing models, you need to buy goods in bulk. Now, that requires a good amount of investment, which a startup may not find to be convenient. So, dropshipping is a simpler alternative when it comes to this matter. Here, you need not buy bulk goods and store them. Instead, you buy as per your customers’ demands, and that also minimizes your losses, if a customer cancels the purchase.
3. You can sell a variety of goods
In drop shipping, you can supply pretty much all kinds of products. So, if you can handle all the various types of demands, you’ll make a good profit for sure. Now, for that, you only need to secure suppliers for various goods. Thus, that is more challenging than you might think in many cases.
4. You don’t have to handle the shipping
In the dropshipping business, the supplier is responsible for taking the goods to the customer. So, you only need to take the order and pass it on to the producer. Then, they pack the goods and ship them to the delivery location. That means you can worry less, as you’re not responsible for any damages or defects that can befall on the goods.
5. You don’t need a significant workforce
In traditional e-commerce models, you need quite a large number of employees working under your supervision. And they handle various aspects of your business. But, you don’t need that when it comes to dropshipping. After all, you don’t need more than a handful of people to take orders and pass them on. Thus, you can even do that yourself just with an internet connection.
What are the Challenges in Dropshipping in 2021?
Now, it’s time to look at the risks you’ll face in this business currently. Some of these have always been there since the beginning of the concept. So, here are some of the biggest challenges that you’ll have to overcome:
1. Increasing competition
The number of competitors you have to face in dropshipping is steadily increasing. Many startups come up in this industry every year. To deal with that, you need to give attention to various important aspects of your business. Making sure that you provide an optimal service is the only way to stay ahead.
2. Customers might receive damaged or lower quality goods
This is quite a common challenge in the dropshipping business, and buyers often find the goods damaged upon arrival. Sometimes, they may even find that it has a lower quality than advertised.
To make it worse, you have no control over these things. After all, your job is only to pass on the demands. Yet, these issues can affect your business, so you need to deal carefully with this matter.
Looking for an effective way to deal with this? Always request the supplier for a sample product before you buy it.
3. Late shipping can affect the customer base
Since you don’t control the shipping, you may fail to ensure that it reaches the customer on time. Now, any customer will find that quite inconvenient, and as a result, they might decide to look for a better service. So, they might stop ordering from your dropshipping site altogether.
How do you deal with this issue? Choosing the supplier wisely is the best way to ensure that your customers don’t face this problem. You will benefit a lot by doing that, and it’ll help you maintain your earnings. So, maybe this will help you create a trusted brand.
4. Requires considerable investment in marketing
If you’ve recently started the dropshipping industry, you have a long way to go. For that, you can’t do without the help of effective marketing. Thus, you might need to hire a professional to apply the best strategy. Now, that usually comes at quite a high cost. Established businesses won’t have any trouble paying for that, but you might find it difficult as a beginner.
5. Shipping can be quite costly
You might come across this challenge quite frequently. Moreover, you have to pay separately for two orders from the same customer, that’s because it would go in two packages. So, that’s yet another challenge you face as a newcomer to the dropshipping market.
But, you need not worry as there’s a solution for this too. You can adjust the price of the goods and the shipping charges. Based on your calculations, you can either increase or decrease the former. While considering the shipping charges, you can either make it free or set a flat rate.
So, Is Dropshipping Beneficial for You?
There are specific challenges in this market, but you can deal with most of them. The only aspect you can never control is the demand, which keeps fluctuating. Also, you might find it a little challenging to grow in this market. But there’s nothing that says dropshipping is a bad business in general. So, it depends on whether you can deal with the challenges it poses.