Many people have heard of the term ‘dropshipping’ and believe that this business model is the best option for anyone looking to start an online business. In 2019, online dropshipping has been hailed as the easiest way to make money online for millennials. This particular group prefers starting an online business instead of a traditional brick and mortar setting because they have extensive knowledge in IT, specifically the internet. Moreover, this group often has little income. SaaS site builders like Shopify and sites like Etsy and Amazon has made it possible to launch a full-fledged drop shipping business with as little starting capital as $20.
However, this low entry barrier has seen hundreds of online drop shippers offering all kinds of products flood the market. One of the most competitive areas in the world of online dropshipping is the furniture business. If you intend to start an online furniture dropshipping shop as a side hustle or to stop employment altogether, this article will give you the pros and cons of starting one as an eye-opener.
Benefits of starting an online furniture dropshipping store
The number of potential clients you can reach via an online store is one of the biggest advantages of starting an online business. Unlike a traditional physical store where you only reach clients within the geographical bounds of the business, you can go statewide or national with an online business. If you have the right business acumen, grit, and excellent marketing strategies, you can very easily reach millions of customers.
Moreover, with an online store, you can impress your clients with both digital and physical displays of your products. You can also channel your marketing efforts towards your target market. Product promotion is essential, especially during specific seasons and festivities when clients are looking for furniture and gifts for new homes, holiday houses, and family.
Another advantage of starting an online furniture drop shipping business is the little initial capital needed. With a computer, strong internet connection, and a reliable supplier, you can start a business. You will not have to get any costs involved with a physical business (rent, utilities, wages), warehousing and storage, or manufacturing. Dropshipping also shortens the supply chain significantly, thus reducing costs. Expenses like LTL, FTL, freight, and Port Operations reduce your profits.
You can quickly expand into new markets
As your business grows, you will probably want to expand and cover new grounds for profitability and more challenging experience. Going global with a physical business presents many logistical and legal issues, especially when it comes to hiring or sending staff abroad. However, all you will need to test the international waters with an online business is a reliable shipping company and suppliers. In the furniture business, you may have a shot if you are selling unique products with a vintage or cultural feel to international markets.
A near-infinite inventory
One of the reasons why the dropship industry exists is to overcome the problem caused by inventory distortion. Billions of dollars are lost annually because of empty shelves and stockouts. With an online furniture dropshipping business, your inventory will virtually never run out. This advantage comes because you will tap higher up on the distribution chain to ensure your supply is unlimited. The ability to always have what your clients need will definitely improve customer satisfaction and give you an edge over the competition.
With an online dropshipping business, you can try different types of furniture without incurring massive losses in case they do not work out, for instance, office furniture, children’s items, dining sets, etc. The scalability of online dropshipping business also lets you operate at whatever capacity you need as per business profitability.
Increase in cash flow
Another advantage of starting a dropshipping business is that you will only pay for the products you sell after they have been bought. You will not incur storage or inventory costs.
The advantages of starting an online dropshipping business are many, but here are some disadvantages that you need to pay attention to:
You may not incur any inventory issues, but since you are not in control of inventory, problems may arise if your suppliers are not reliable. You will also need to ensure that your inventory data is in sync with that of your suppliers; otherwise, you will still endure the losses of inventory distortion. Your customers will also be disappointed if they add products to their carts that are not available, which will hurt your reputation.
Shipping is tough enough because of varying furniture shapes, sizes, weights, and suppliers’ locations. Your clients may opt to buy products from your site that is from different suppliers. This means that you will have some complex logistics to carry out, not to mention different shipping charges because of the varying distances. You may have to absorb some of these costs yourself, which will impact your business.
There already exist big names in the dropshipping industry that can offer excellent furniture at reduced prices. When starting out, you will compete with names like Amazon as well as other smaller names that have existed for longer than you have. To get clients, you will have to offer your products at meager prices, which will hurt your profits. It may take months, maybe years for you to break even. You will also strain to build a stable customer base and incur massive marketing costs.
The pros of starting an online furniture dropshipping business by far outweigh the cons, but the latter are still essential to consider. If you have a trustworthy supplier and patience, you could very easily make it as a successful business owner.