Many traders believe dropshipping is an absolute godsend in saving time, your own resources, and cost.   The quick answer is yes it can do these things BUT there are potential downfalls you need to be aware of.

1. Advantages
and
Many
traders
believe
drop-­‐shipping
is
an
absolute
godsend
in
saving
5me,
your
own
resources,
and
cost.
disadvantages
of
The
quick
answer
is
yes
it
can
do
dropshipping
in
these
things
BUT
there
are
poten5al
downfalls
you
need
to
be
aware
of.
Australia
1

2. What
is
dropshipping?
1
In
essence,
you
as
the
retailer
can
avoid
keeping
stock
and
pass
over
the
customer
order
as
well
as
the
shipping
details
to
your
supplier
who
ships
the
goods
to
your
customer,
on
your
behalf.
Advantages
2
The
two
significant
advantages
are
the
elimina5on
of
retaining
inventory
and
since
you
as
the
retailer
are
paid
immediately
on
sale
AND
(usually)
pay
your
supplier
on
credit
card
or
credit
terms,
you
fall
into
a
posi5ve
cash-­‐flow
posi5on.
You’ll
find
you’re
elimina5ng
duplica5on
of
a
number
of
inventory
efforts
such
as
picking,
packing
and
shipping
the
ordered
item
-­‐
with
drop-­‐shipping,
this
only
needs
to
be
done
once
and
by
your
supplier.
©
Alibaba.com
Hong
Kong
Limited
–
Advantages
and
disadvantages
of
dropshipping
2

3. Disadvantages
3
Since
you
can’t
be
100%
certain
your
supplier
has
sufficient
stock
to
fulfil
your
customer
order,
there’s
a
likelihood
of
back
ordering
taking
place
which,
obviously,
could
affect
shipment
expecta5ons
and
therefore,
your
on-­‐line
reputa5on.
There’s
been
some
historic
evidence
with
the
promo5on
of
drop-­‐shipping
being
used
by
scam
ar5sts.
I’d
refer
you
to
our
previous
ar5cle
on
‘
Five
Ways
for
Australians
to
Avoid
Scammers
Online’
as
a
good
star5ng
point
in
avoiding
bogus
drop-­‐shipping
schemes.
Further
to
this,
you
also
need
to
understand
the
supplier
you’re
dealing
with.
There
are
a
few
drop-­‐shipping
suppliers
who
are
actually
just
middlemen
in
the
supply
chain
I.e.
they
are
just
a
shopfront
for
many
true
drop-­‐shippers.
Check
out
their
background
and
opinions
from
other
traders.
We’ve
got
some
extra
5ps
on
this
in
‘Finding
The
Right
Supplier’.
Please
do
check
out
these
free
resources
and
let
us
know
any
other
tools
you’re
using
or
would
like
to
see
on
Alibaba.com.
As
always,
we’re
here
to
help
you
with
your
online
sourcing
and
trading
as
much
as
we
can,
so
if
you
have
a
question
just
ask.
About
Alibaba.com
Alibaba.com
(HKSE:
1688.HK)
is
the
global
leader
in
e-­‐commerce
for
small
businesses
and
the
flagship
company
of
Alibaba
Group.
Founded
in
1999,
Alibaba.com
makes
it
easy
for
millions
of
buyers
and
suppliers
around
the
world
to
do
business
online.
©
Alibaba.com
Hong
Kong
Limited
–
Advantages
and
disadvantages
of
dropshipping
3

4. Alibaba
Australia’s
Social
Media
Channels
Facebook:
Facebook
has
over
10
million
ac5ve
Australian
users
per
month
so
becoming
an
ac5ve
par5cipant
with
the
Alibaba
Facebook
Page
will
have
benefits
for
any
proac5ve
business.
The
Alibaba
Facebook
Page
boasts
instant
downloads
of
the
Business
Starter
Kit
for
sourcing
products
and
finding
quality
suppliers.
You’re
able
to
view
videos,
Alibaba
Upcoming
Events,
member
tes5monials
and
exclusive
promo5ons
and
event
invites.
LinkedIn:
The
LinkedIn
Alibaba
Group
will
connect
like-­‐minded
members,
provide
a
new
stream
of
poten5al
suppliers
and
foster
stronger
rela5onships
with
exis5ng
members.
The
Group
allows
members
to
expand
into
their
professional
LinkedIn
network,
using
an
already
trusted
global
brand.
TwiCer:
Get
fast
and
instant
facts
from
Alibaba,
by
following
our
Twicer
profile
alibaba_aus
We’ll
be
‘twee5ng’
our
own
flavour
of
AliFacts
with
useful
and
helpful
reminders
for
your
Australian
on-­‐line
experience
in
buying
and
supplying.
Here’s
a
recent
‘tweet’
highligh5ng
what
a
local
Adelaide
business
is
doing:
“An
Adelaide
hair
salon
is
using
Alibaba.com
to
grow
its
business
&
help
cancer
pa7ents
look
&
feel
their
best
h:p://ow.ly/629r8“
YouTube:
The
Alibaba
Australia
YouTube
Video
Channel
is
a
growing
member
showcase
of
success
stories
and
tes5monials.
To
get
a
taste
of
the
sort
of
member
stories
you
could
also
be
a
part
of,
check
out
THIS
VIDEO.
Par5cipa5ng
allows
for
expanding
your
market
reach
and
to
tell
the
world
about
your
products
and
services.
Alibaba
Blog:
The
Alibaba
AU
Blog
provides
5ps
for
the
online
trading
beginner,
seing
up
a
successful
online
business,
advice
in
finding
the
right
products
from
the
right
suppliers
for
your
business
and
informa5on
on
how
best
to
op5mise
your
product
line
and
process.
Access
the
latest
trends
and
products
in
Australia’s
online
trading
industry
by
subscribing
to
the
blog.
Join
Together
For
Greater
Success
Alibaba
is
firmly
dedicated
to
rapid
growth
within
the
Australian
market
and,
more
importantly,
our
partnerships
with
Australian
members.
Like
any
strong
and
long-­‐term
business
rela5onship,
your
success
is
our
success.
Please
do
check
through
each
of
the
Alibaba
Social
Channels
we
have
put
together
and
join
those
that
align
to
your
business
and
personal
objec5ves.
Can
We
Spread
Your
Word
Too?
If
you
have
a
successful
sourcing
/
business
story
to
tell,
we
would
love
to
hear
from
you
via
our
Social
Media
Channels.
We
like
to
promote
success
stories
via
Tes5monials,
Press
Releases
and
in
general,
our
Social
Media
Channels
–
please
do
let
us
know
your
story.
©
Alibaba.com
Hong
Kong
Limited
–
Advantages
and
disadvantages
of
dropshipping
4