Xune Business Growth Insights

Dropshipping Vs Holding Your Own Stock

Dropshipping Vs Holding Your Own Stock

A decision to move into the eCommerce space is a decision that should not be taken lightly. After all, starting any kind of business is a bold move and sometimes, fortune does favour the brave. However, e-commerce business can take many different forms and with options available, it might seem like it is quite confusing as to which business method works for you.

There are many factors that will drive your decision such as time, effort and of course, cash but understanding the different options and gaining insight will help you to make informed decisions. When you make informed decisions, you are more than likely going to make the right decisions and that is particularly true when it comes to dropshipping vs own branded stock.

You might be wondering, should you dropship? That decision is based on your desires and commitment while you might simply want to know if own branding better than dropshipping? Of course, both methods have their positives and their negatives but they could be personal to you and your circumstances, so it is best to move forward with an understanding of what the difference is between the two.


Dropshipping – What does it mean?

Dropshipping will enable you to own an e-commerce business without the need to be hands on. There are many suppliers out there that are willing to allow you to sell items without ever taking possession of them. In its simplest form, you advertise and sell the products and invite customers to purchase. When they do, a third party takes care of the entire order and shipping process.

While this might sound like a great option, it does come with its potential downsides. The important thing about owning a business is giving your customers value. Dropshipping makes this difficult and that can lead to customers making the choice to purchase from other sources and this includes going direct to the supplier. When it comes to dropshipping, sales are made quickly, almost impulsively but with that comes a difficulty when it comes to customer support and service. There are questions to consider such as “Who handles returns?”, “who deals with product queries?”. These are valid questions that can make dropshipping seam as though it is not a valid choice. However, if customers find out that you are doing nothing more than dropshipping with inflated prices, they are likely to return their items and go elsewhere.


Holding your own stock?

This is more like an old-fashioned, bricks and mortar approach to owning an online store in the e-commerce world. In this instance, you simply purchase your own stock and manage your stock levels on your own. Giving you full control over your stock levels and how you manage the entire order process. While this is a favourable option and one that looks more professional, you are going to have to remember that you will need somewhere to store your items as well as the cost of purchasing the items.

Along with this, you are going to also need a fully-functioning website that showcases your products and guides your customers, taking them from visitors and turning them into conversions. If you want a website that works effectively and provides an immersive experience for the buyer then you are going to have a website specially designed. This is a great move to ensuring that your e-commerce business is unique but it could set you back anything from £2,500 to £15,000 depending on the amount of stock that you hold.


So, which is best?

While there is no “best option”, there is one that has a greater level of scalability, control and professionalism and that is the option of holding your own stock and own branding. If you choose this e-commerce method, then you will find that you are more than likely going to succeed while being in control of how the business evolves and grows over time.

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