What Is Dropshipping? Everything You Need To Know
Dropshipping is an option that is becoming increasingly attractive as a viable business model for online stores.
This distribution model is closely linked to online sales and frees the e-commerce website owner from management tasks. So before we analyze what dropshipping is and how an online store can help, we will take a look at some key elements.
Dropshipping and e-commerce
For many years, e-commerce has started and is growing rapidly. In fact, according to a study, 3 out of 4 people shop online! Thousands of online stores have opened and have now become an integral part of the daily lives of their users with varying degrees of success.
And while one of the main advantages of an online store is the huge reduction in fixed costs (you do not have to pay rent for a space, there is no sales staff and there are no bills for water or electricity) there is a common problem for offline but and online entrepreneurs: the stock. If you want to sell, you need to store your products to prepare them for shipment to your customers. This can increase the cost of your online store and reduce the benefits of having a physical store. But you can stay calm, Dropshipping is here!
Dropshipping is "a business model that allows you to start an e-commerce website with thousands of products without having to save any inventory." And once you get over the "blocking" which is inventory management, everything else will happen much faster.
But let's take a closer look at this
Dropshipping: What it is and how it works
Dropshipping essentially consists of the following: The customer buys a product in an online store and the seller collects the order. Once finalized, the dropshipping supplier himself sends his product to the consumer.
To make sure there is no doubt about what dropshipping is and how it works, let's look at a specific example:
Suppose you buy an e-shop and want to sell tablets.
You have found a supplier for example AliExpress that sells it for $ 50.
In your e-shop you sell the same product for $ 90.
Attention: I do NOT have in any warehouse or I have not bought the product. It is located as I said in the supplier's warehouse.
The customer buys the product from you (which you have not bought yet). He pays $ 90 for the purchase. Then you order it from the supplier paying the amount he asks for, ie $ 50. Send your customer details to the supplier who undertakes to send the product to the customer. From the difference I keep $ 35 (minus site costs or shipping costs, etc.)
The advantages of dropshipping
Now that we have explained what dropshipping is, we will briefly look at the key benefits of working with this method.
You can of course save money on managing your inventory. But this should have already become clear from the previous paragraphs! As expected, this entails significant savings (which reduces the risk of loss in case your business does not do well). So since you do not need to manage stocks, you will not need to invest in storage or maintenance.
"This is the key attraction of dropshipping, allowing you to commit to sales and generate full profit without considering aspects of the management."
Starting your own business has become easier and faster than ever before, it will only cost you what you need to set up your online store. If you also assign this part, then you will be able to have your ecommerce page ready in much less time than one would expect. Your dropshipping provider will take care of everything.
"Your supplier must become your logistics' global operator."
Not having to worry about storage and delivery leaves a lot of time for what is really important for an ecommerce website: selling. By outsourcing the work to a dropshipping wholesaler you will be able to attract the most appropriate traffic to your store, and convince your potential customers to buy the products that you so carefully placed there so that they can see them. You will be able to dedicate your money and time to the e-commerce website to get it where it deserves.
Having a dropshipping wholesaler allows you to offer a wide range of products, which would be really difficult to do on your own.
This distribution model allows you to attract all the traffic you want to your store, without risking excessive sales that you will not be able to handle all of them.