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Traditional Business Issues Entrepreneurs Solve with Drop Shipping


Entrepreneurs must overcome many issues to build a successful online retail business. The four main hurdles that every aspiring retail entrepreneur must face are: product sourcing, inventory storage and management, capital investment, and financial risk.  The drop shipping business model helps you solve these issues.

Product Sourcing

The most difficult issue that business owners face is where to find a consistent source of products to sell. Not just any products will do; they must be high-quality, new, in-demand, and reasonably priced. Entrepreneurs need access to these products on a regular basis; preferably when it is convenient to them. Since many entrepreneurs start building a business while working a day job, accessing their source of products at night is essential to success.

Product availability is crucial; however, an optimal source of products is also diverse. With a wide variety of available products to choose from, aspiring entrepreneurs have the opportunity to build the type of business that suits them. A diverse selection of products enables business owners to sell in several niche markets, and launch new product offerings at any time to expand their business.

Inventory Storage and Management

Before entrepreneurs can purchase inventory they must have somewhere to store stock. Storage room size requirements are dependent upon how many products the entrepreneur intends to sell. A spare room might fit the bill for some entrepreneurs, while others may need warehouse space. Of course, when a business grows, so does the storage space requirement.

Storing inventory is important, as is managing inventory. Business owners must figure out a way to manage their stock. They need to know exact inventory counts, where each product is located, and when to order more stock. Inventory management software can be quite costly.

Capital Investment

Speaking of cost, capital is a serious issue. Capital, in this instance, is the amount of money it takes to get a business up and running. Entrepreneurs may need a hefty bankroll depending on the costs of their business solutions.

Capital investment include the cost of office equipment, office supplies, procuring stock, inventory management software, storage or warehouse space, packaging and shipping supplies, gas, and car wear and tear from driving around town to obtain stock or ship orders.

Financial Risk

Another weighty issue--financial risk--is inherent with traditional retail business models. Before entrepreneurs can launch new product lines, or sell any products, they must acquire inventory. If the stock they purchase sells, then the business makes a profit. Unfortunately, product demands change frequently, which inevitably leads some entrepreneurs with unwanted, obsolete, or outdated merchandise. Often, the only way to move the merchandise is to sell it below cost. Obviously, this formula is not conducive to success.

Processing and Shipping Orders

Fulfilling orders is time-consuming and costly. Every order must be picked, packaged, labeled, and shipped. The cost of shipping supplies, storage space for the supplies, gas, and car maintenance add up quickly. When business starts really booming, fulfilling orders can be a full-time job; which in turn requires business owners to hire an employee or two to take care of processing and shipping orders.

Time Management

Aspiring entrepreneurs must have strong time management skills to stay on top of all the issues that arise when building a business. If too much time is spent on obtaining products, handling stock, managing inventory, and fulfilling orders, then other crucial aspects of business may suffer.

Dropshipping solves these issues that traditional businesses deal with. 


Learn more about How to Drop Ship Successfully at the Drop Ship Access Education Library!

product sourcing



Once upon a time, branding was simply a symbol, a name, and/or a design that represented a business. Today, branding stretches far beyond that realm and incorporates the people who work at that company. Because of Facebook, Twitter, Google+, and LinkedIn, nearly every employee represents his or her brand- whether they want to or not. And it is absolutely critical that your brand is represented properly all the time.
Posted @ Saturday, July 06, 2013 11:56 PM by David Song
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