A decade ago, opening a retail store required a significant amount of capital. You needed money to buy stocks in bulk, a warehouse to store the inventory, and a storefront to sell the products. At the end of the day you’d hope and pray you still have enough cash to pay for advertising.
This has been the bread-and-butter of the retail world for quite some time – until the Internet and wholesale drop shipping companies came in.
Easy-Build Online Stores
Today it’s easier than ever to build your own store – online. With free tools and cheap web hosting, you can set up shop on the web starting from scratch.
There are shopping cart platforms like Shopify, Amazon, Magento, eBay, and even Facebook, which allow you to do what was once impossible: open a store in only a few hours, and maintain it for as low as $20 a month.
The problem with these online stores is that owners don’t have the same resources as established businesses, so they need to find another way to compete besides price alone. This is where drop shipping comes in.
Drop Shipping as the Perfect Fulfillment Model
With the computer revolution, drop shipping came in as the ultimate fulfillment method. Manufacturers would receive orders directly from retailers, and the supplier sends the products straight to the customer.
This improved logistics, and allows businesses to accept pre-orders and payments from consumers. Businesses can now list items on their site and see what sells instead of buying inventory upfront in bulk. The margins may be slim, but it eliminates inventory risk.
And that’s great for retailers just starting out.
Dropshipping, no doubt, completely revolutionized the world of retail. Thankfully it’s growing and it’s here to stay, and will probably continue to shape the way businesses interact with their customers. In the next decade, retail stores will likely become showrooms, wherein the real fulfillment is happening online, behind the scenes.