Brandon Wetzel of Yardley, PA cautions small business owners from thinking this is the answer to their entrepreneurial dreams. In many cases, drop shipping makes sense, but like with any model, there are drawbacks as well.
For this model, there’s also risk in the lack of inventory control. Brandon Wetzel, Yardley native, explains that when businesses give up control over their inventory, including quality checks, then they effectively trust the manufacturer to take care of their brand and reputation. Unfortunately, this isn’t an idealistic scenario because customers may still receive damaged or subpar goods. When this happens, it’s the business that will take the hit, not the manufacturer. This is because in the drop shipping model, the manufacturer doesn’t make itself known. They’re invisible and only the business’ logo and colors are seen on the packaging.
Brandon Wetzel of Yardley adds that the lack of inventory control typically results to out of stock goods as well. It’s happened too many times before. A customer wants to buy a specific item and a business can’t commit to a specific date on when they can deliver the item. Chances are, the business is operating on a drop shipping model. This is why many drop shipping businesses will tap into multiple suppliers, to mitigate inventory issues, but this isn’t a fail-proof solution that works out every time.
Another drawback to the model is that the margins tend to be low. Brandon Wetzel of Yardley explains that many businesses in the drop shipping niche engage in pricing wars. They don’t mind selling their products at rock-bottom prices because their overhead costs are low to begin with. Instead, these businesses rely on volume to make a profit.
Is Drop Shipping for You?
With all that said, Brandon Wetzel of Yardley, PA still believes in the potential of the drop shipping model as a way for small business owners to get started. The key here is to find a niche that isn’t saturated yet. What that product or industry is depends on the entrepreneur’s market research skills. As a bonus tip, Brandon Wetzel, Yardley native, suggests checking out Google trends to find out what products the market is looking for.