Online stores working off the traditional dropshipping model are becoming
increasingly popular with budding entrepreneurs. However, their popularity doesn’t
go hand in hand with profitability and more often than not such businesses go
bankrupt and close. This is in stark contrast with stores based on digital
dropshipping where closings are much less likely to occur.
An essential part of every business is on-time updating of the offer on a website. This
includes regular price and stock quantity updates. This way, the store sells products at a
price that is currently profitable, which is especially important in the case of rapidly changing
wholesale prices. Regular product updates help customers make sure that they will receive
the desired item after making a payment. Furthermore, they don’t have to wait for the seller
to replenish an out-of-stock item.
It is relevant to note that the inventory updates can be either manual or automated. Manual
updates, characteristic of the traditional dropshipping model are more prone to error and
therefore should be avoided. With automated updates, which are more popular with
businesses based on digital dropshipping, the risk of error is considerably lower. Basically,
automated updates outperform manual updates, making them fast and hassle-free.
In stores based on digital dropshipping delivery processes and any delivery-related issues
are handled online and are fully automated.
In contrast, in businesses based on traditional dropshipping, shipping is made offline. Here,
it is the supplier who has a final say on shipping options. What’s more, the business owner
cannot eliminate mistakes such as delays, backorders or faulty products made by the
supplier. Such delivery-related issues are likely to have a direct impact on the brand and
they may damage entrepreneur’s reputation in the long run. This is only a short step away
from dealing with unhappy customers who complain about the quality of service and ask for
a refund. Ultimately, one cannot tell whether it is the supplier who should take responsibility
for a given mistake or whether it is the customer whose complaint was invalid.
Such hurdles are practically non-existent with businesses based on digital dropshipping
where delivery takes place immediately and no shipping is involved.
Lower wholesale prices
In traditional dropshipping, suppliers set excessive wholesale prices on physical products
because they need to cover shipping fees. This means tighter profit margins for the retailer,
which then translate into lower profits for their businesses. Add expenses such as rent, utility
bills and accounting costs that entrepreneurs need to cover regardless of their turnover and
here’s why they may find it difficult to achieve financial stability.
It’s completely different with digital dropshipping where supplier prices are significantly lower
as they include no shipping fees. This, in turn, allows retailers to set larger profit margins like
30% per product and increase their profits in the end. Merchants who source digital products
from CodesWholesale.com will get lower wholesale prices than usual, which is typical of
digital dropshipping. Also, all aspiring entrepreneurs who think of opening their digital games
business can do so by connecting to CodesWholesale inventory of digital games.
In sum, digital dropshipping is a far better practice for businesses to adopt. Not only is it
more convenient but it also minimizes the risk of going bankrupt. Just think how relaxed you
could feel once you relieve the burden of updating inventory manually, dealing with unhappy
customers and struggling with slim profit margins.
Now, you can focus on the most urgent priorities for your business!