It is hard to start a business from scratch. It takes a lot of time and effort, and having some delays on the growth of a certain business is something that every businessmen cannot avoid from happening. When you run out of working capital, it makes the situation even harder. With the credit market’s tighter conditions these days, it is now harder to get loan.  When you’re lack of working capital, it is already understood that you already have used all your available credit lines that eventually causes your credit score to lower down making you less attractive to the banks for lending some cash.
With the situation you are currently in, the best thing that you can do first is to take a break from working full-time on your business and look for a job that will let you pay your debts. Right after paying off your debts, you can already start saving for your working capital and start your business again, this time around with enough working capital.
However, if you really wanted to continue with your business, you can also try to approach suppliers you have already lines up and ask for a credit line. This can be very risky because if you do exceed on your credit line, there might be a tendency that supplier will hold your account.
Another good option is to have an account with a drop shipper. In this way, you can advertise your drop shipper’s merchandise, sell it to your customers, and when your buyer’s money arrives, you can now complete the transaction by paying your requested product from your drop shipper typically via credit card. After completion the shipper will now mail the purchased products to your customer on your behalf. In this way, you can have your business ongoing without the need to purchase an items for your inventory, thus lets you save a lot of money.
Drop Shipping is not new anymore, a few studies about it was already published in 2006. The study shows that about one-third of internet retailers rely on drop shippers even Amazon did it. However, bookselling Goliath later found out that this kind of practice was not good enough for the volume of business it was doing. Because of this Amazon bought its own inventory and building warehouses.
Few of the downsides of drop shipping are the lower profit. With drop shipping, you are introducing intermediaries, the drop shipper who is making their own profits. Because of this, your margin will now be smaller compared to if you are the ones acting as the wholesaler yourself. With products that have higher margins, this will not be a problem at all. However, to those products with margins that are already low, it would be hard to make money at all.
Another downside is the scam. Drop shipping scam is all over the internet. One key factors of a scam is the recurring monthly fee or difficulty in getting a live person on the phone. One more thing, some drop shippers may deliver their service slower or of low quality than what you have represented to your customers, thus a big factor of losing them.
When choosing for a drop shipper, make sure that you have discussed with them the policies on backorders, returns, and lost shipments.
Mentioned above are just a few ways of getting an inventory even if you lack money. When deciding, always make sure that you have thought of it a million times.