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This inventory management technique eliminates the cost of holding inventory altogether. When you have a dropshipping agreement, you can directly transfer customer orders and shipment details to your manufacturer or wholesaler, who then ships the goods directly to your customers. Thus you do not have to keep goods in stock, get to save on upfront inventory costs, and benefit from a positive cash flow cycle.
Drop shipping is a fulfillment model that allows you to buy products individually from a wholesaler and ship them directly to your customer.
Instead of purchasing a large amount of inventory, you simply partner with a drop shipping supplier and list their merchandise for sale. Then, once you receive an order you forward it to the supplier for fulfillment. The supplier will ship the product directly from their warehouse to your customer, and charge you only for the price of the shipped item.
True<<<<<<<<<<<<<<<<<<<<<<<<Answer>>>>>>>>>>>>>
TRUE.
Please see the below advantages of dropshipping:
Lower Capital Requirement: With drop shipping, you don’t need to invest thousands of dollars in inventory. Instead, you only purchase a product when you have an existing order to fill.
Wider Product Selection: When you don’t have to pre-purchase all the items you sell, you can offer a significantly larger number of products to your customers.
Reduced Risk: Without thousands invested in inventory, the risk involved with starting an online store is dramatically reduced. If things don’t work out, you aren’t stuck with thousands in inventory you have to sell at a loss.
Location Independence: Because you don’t have to worry about fulfillment or running a warehouse, it’s possible to run a drop shipping business from anywhere with a laptop and an internet connection.
Highly Scalable: Because you don’t need to manually fulfill each order, it’s relatively easy to scale a drop shipping business.
I am completely agree with Mr Hany
Yes, Dropshipping technique eliminates the cost of holding inventory altogether because having this agreement can directly transfer customer orders and shipment details to the manufacturer or wholesaler who directly ships the goods to customers.
True and it requires little initial investment, has low operating expenses and offers flexibility. But there are challenges as well
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