Dropshipping is rising exponentially in the United Kingdom at the current times. This is due to a number of reasons which will be covered later in the article. Dropshipping is the process of selling in which the sellers do not physically posses the items being offered for sale. Within receiving a purchase and payment the sellers will instead contact the manufacturers and get them to ship the required item or items to the buyer. The seller gets the difference between their sale price and the supplier’s sale price.
Dropshipping is currently on the increase in the UK and many sellers are looking into the application of dropshipping in their own businesses. This is mainly due to a few very prominent and relevant factors to the current economy.
Recently in the United Kingdom Vat has been increase from 17.5% to 20.0%. Obviously this has had a major affect on both citizens of the UK and businesses. However vat does not affect sales made to other countries. For example if a business was linked to a dropshipping manufacturer in France then vat would be reduced, therefore allowing the business to make a profit due to being able to offer more competitive prices. Because of this and other reasons many online businesses are looking towards dropshipping companies in order to reduce costs.
Businesses in the United Kingdom have been hit very hard by the recession and many have been put into bankruptcy and closed down. A functioning online business consists of important goods to storage facilities and then sending them to the recipient. All of these processes involve the expenditure of money and profit relies on the products selling. Using the process of Dropshipping allows online businesses to eliminate these expenditures and therefore lower risk.
This is easily one of the largest factors which are affecting the rise of dropshipping in the UK. Due to the rapid advancement of the internet the amount of online businesses are growing exponentially. It is a common dream to be able to work from home, making easy money and being able to choose your own hours and income. Therefore many starting businesses lacking the experience and money to order a sufficient amount of products will take up dropshipping as it allows them to offer products that they do not physically possess. In addition to these points in this time of recession a massive amount of jobs, especially in the tertiary sector have been cut. This means hundreds of thousands of people have lost their jobs. Therefore people may see this as an opportunity to set up online business. Therefore dropshipping becomes an attractive prospect when setting up a business.
Although dropshipping has a murky background with many debates discussing the positives and negatives of the process it cannot be denied that it is increasing in the United Kingdom. Greater education in business related skills arms the younger generation with the knowledge to effectively run, manage and maintain businesses. Dropshipping has the potential to be a major expansion path to businesses of today and the future.