Dropshipping has become very popular in the past few years. During the epidemic, China’s drop-shipping business has also grown at a very fast rate.
The dropshipping business is expected to be worth $557.9 billion by 2025. MarketWatch says that the effects of the pandemic will cause the number of people who shop online to rise from 15% in 2020 to 25% in 2025.
According to data from DataIntelo, the drop shipping market will reach its peak in 2020. In 2021, the market size and growth rate from one year to the next will slow down slightly. Cross-border e-commerce will be allowed again in 2022. The dropshipping industry is steadily getting better.
The way the dropshipping model works for business
A drop shipping company is also a storage company.
When a customer places an order, it is sent to the service provider’s warehouse, and the goods are then shipped from the location in the logistics provider’s network closest to the recipient.
By leveraging logistics service providers’ expertise in areas like storage, transport, personnel, distribution networks, financial resources, etc., dropshipping benefits both parties involved.
What are the pros of dropshipping?
1. Cost of capital is low
When retailers use dropshipping, they save money on labor costs because they don’t have to pay employees to pick, pack, and deliver orders. They also don’t have to buy packaging materials.
Most of the time, drop shipping means low overhead costs and low start-up costs, so there isn’t much financial risk.
2. Low cost of time
You only have to worry about taking orders through your e-commerce platform or one you built yourself. You don’t have to worry about packaging and shipping, which saves sellers time and gives them more free time.
3. Variety of Choices
The drop shipping model makes it easy for sellers to offer more products and more options.
4. Fast and Efficient
Since the delivery address is known and the service can be done as quickly as possible, the seller can get a bigger discount on the final delivery. Cost control and being on time are the best, because they make the experience of using the product better and make people more likely to buy it again.