Why Home Based Ecommerce Businesses Choose Drop Shipping

home based ecommerceRunning a business from home is the dream of many individuals yet many never realize this dream because they aren't sure how to get started. Many home based ecommerce businesses choose drop shipping for many reasons, chief among them is the ability to get started with limited funds. Below are several reasons drop shipping is the top choice among home based business owners.

 

Low Initial Capital Outlay

Starting a home based ecommerce business requires minimal capital investment. All that is needed to get started selling online is an internet connection, a computer, a business license, an ecommerce platform, and a willingness to succeed. The amount of hard work involved in running an online business should not be underestimated however, there is opportunity to make money online.

 

No Inventory is Required

One of the advantages of using dropshipping is that it eliminates the need for the business owner to purchase and maintain an inventory of products. A retailer's largest investment is typically inventory and this is especially true for a home based ecommerce business. If you are a business owner that maintains a physical inventory and you purchase the wrong quantity of a product, you will be forced to take a loss by reducing the price or taking a charge against your inventory. With dropshipping, the seller has no inventory since items are shipped direct from the supplier as the order is placed by the customer.

 

Flexibility on Products to Market

Another advantage of using dropshipping for your home based online business is that it allows the business owner to sell a range of products that would otherwise be cost prohibitive if the seller had to maintain the inventory. This can free-up the business owner to focus on other aspects of growing the business such as marketing, finding better suppliers, or improving customer satisfaction. Being successful in the marketplace today requires a business owner to not only understand the needs of potential customers, but it also requires the owner to offer the right products at the right time. The beauty of the dropshipping model is that you can literally change what products you want to offer your customers with a few clicks of a mouse.

 

Other Considerations

There are a few things to consider before starting your online ecommerce business. Their is obviously more to starting an online business than buying a computer and setting up a website. One of the first decisions you will need to make is what business legal form you will operate under. Many home based businesses operate as a sole-proprietor however, a growing number of small business owners choose to operate as a Limited Liability Company (LLC) or S Corporation. At this point it is advisable to consult with a CPA or tax lawyer on which business legal form best fits your situation.

Choosing the right niche in which to compete will play a major role in how successful your online business will ultimately be. Selecting  the right products that are readily available at the right price and not widely available locally, will help to focus on what type of online business will have a better chance of success. You can find more 7 figure business ideas and review here.

Finding reliable wholesalers, selecting your products, and choosing a selling platform will consume much of your time during the start-up phase of your online business. While it is possible to do this on your own, you can get a full guide on how to build a 7 figure business here,  many first-time ecommerce entrepreneurs partner with an established online ecommerce company that provides the ecommerce platform as well as having relationships with reputable wholesalers for you to pick from. They don't do this for free though. You will pay fees for the privilege of selling your items on an ecommerce platform and the wholesaler will typically add a fee for each item purchased to cover overhead and shipping.

Your customers will expect timely receipt of items ordered and good value for their purchase.  Choosing dependable suppliers is crucial to your success and ultimately it will fall upon your shoulders to fill an order for an item that a supplier may be out of stock on. A good business practice is to have backup suppliers in place should a primary supplier be out of stock.

And finally, the success of any business depends in large part the willingness of the business owner to put in the hours and effort necessary to run a successful online business.  The learning curve is huge and often it requires hiring the right talent to guide you from business formation to the delivery of a final product to your customers. Executed properly, running your own business can be a rewarding experience.

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One Response to Why Home Based Ecommerce Businesses Choose Drop Shipping

  1. TheFrugalFox.org 01/13/2018 at 9:13 am #

    Great post! Will look into it

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