What this essentially means is more liquidity for your business
For traditional businesses, the need to have certain items in stock at all times can pose a problem for two distinct reasons. Firstly, holding inventory requires a certain amount of space. If you don’t own a warehouse or have enough storage space in your current home to account for this inventory, then you’re going to run into problems. Another reason why holding inventory can prove to be troublesome is because when you purchase physical inventory for your business, you’re essentially turning your money into a tangible product. What if your inventory never sells? Then you’re going to be stuck with too many products of a similar type and won’t be able to do anything with them. For this reason, most businesses would rather hold liquid wealth, rather than wealth in the form of a good that they’ve purchased ahead of time.
Dropshipping solves both of these problems. As you’re going to find as you read this book, dropshipping does not require that you have a warehouse full of goods to ship to your customers, or even that you make the products that you ship yourself. Instead, dropshipping enables you to simply purchase goods from other vendors that you will then ship to your customers, or use warehouses that already exist for your storing needs. In this way, you’re able to reap the benefits that exist when you ship products to your customers, without having to worry about the inventory problems that were just discussed in the previous paragraph. With services like AliExpress (which we’ll talk about more in this book), you’re able to avoid problems associated with inventory. What this essentially means is more liquidity for your business.
