You might have heard the word dropshipping Business on social media or from your friends before, but what does it mean exactly? What does this term really mean in the world of e-commerce?
Dropshipping business models are new and exciting because they put less responsibility on you as an entrepreneur. Let’s take a look at how dropshipping works and what you need to know to get started with your very own dropshipping business!
What is dropshipping?
Before we get into how to start a dropshipping business, it’s important to understand what exactly dropshipping is. Essentially, when you drop ship a product, you buy it from a wholesaler and have it shipped directly to your customer.
The difference between droppinghiping and selling wholesale products is that when you sell wholesale, there are some costs involved in manufacturing, shipping, etc., so your profit margins aren’t as high as if you were just selling straight off of Alibaba or an e-commerce store. With dropshipping there are no cost.
How does dropshipping work?
When you sell products on a website, you don’t actually own them. Instead, they are stored in a warehouse somewhere. Dropshippers allow you to easily sell these items on your website without having to buy or ship them yourself.
When someone buys something from your dropship site, you tell your supplier to send it to them. This can be automated through e-commerce platforms and software like Oberlo and Shopify.
For example, if someone buys something for $10 from an e-commerce site that sells items for $5 wholesale, then dropshipping is great because it allows websites to get a larger share of profit than other traditional stores can receive by selling at retail price levels only.
The benefits of starting a dropshipping business
1. Scalability : One of dropshipping’s main benefits is its scalability. The business model allows e-commerce sellers to cater to an unlimited number of customers and receive orders in bulk, without having to purchase inventory or handle shipping themselves.
This eliminates high upfront costs and headaches like storage, which saves time and effort for business owners who would rather focus on marketing and sales instead.
2. Accessibility : Another benefit of dropshipping is that it’s a very accessible business model—especially when compared with other types of businesses, such as retail stores or manufacturing companies. In fact, anyone with internet access can easily start a dropshipping store using simple platforms like Shopify, StitchLabs and Oberlo.
Disadvantages of dropshipping Business
When you’re running a dropshipping business, it can be a bit more difficult to track your returns and your customer satisfaction. As opposed to an e-commerce store where you handle customer service and shipping yourself, when you’re selling other people’s products through your store, you don’t have that direct relationship with customers.
They communicate directly with their seller or manufacturer for returns or exchanges instead of working through you. If there are issues or problems with a customer order, that customer will contact their merchant directly.
Is dropshipping Business Legal?
In some cases, dropshipping might be illegal. It depends on what you’re selling and whether your customers are paying for those items. Dropshippers often sell brand-name products that are in high demand.
If you’re reselling a copyrighted item (like a software application or video game), you may need to purchase it wholesale from an authorized distributor, and then resell it without making any changes or modifications to it.
Check out your local laws and make sure that your dropshipping business is 100% legal before getting started.
Is dropshipping Business worth it ?
Dropshipping is a great business model that can be extremely profitable, however, many people see it as an easy way to make money online. It’s not! You have to work hard and you have to be smart with your choices if you want to see success in dropshipping.
When you’re just starting out, there are going to be some mistakes that you make along the way and these mistakes will cost you time and money.
How to Pick the Most Effective dropshipping Suppliers
Dropshipping suppliers are essential for your dropshipping business success. When you first start dropshipping, it is easy to get taken in by suppliers that promise you a whole lot. However, when you look at it closely, you will realize that they don’t really help you achieve much.
Therefore, it is important to be careful as you sort through all these options and to look at them critically. The following tips will help make sure that you choose reliable and effective dropship suppliers
Tips for success
Use tools to simplify your dropshipping business . Dropship through Oberlo, it allows you to search for products on Aliexpress, find suppliers and automate everything. This makes your job much easier than having to go product by product trying to find a supplier.
Use Oberlo today with your free trial and see how easy it can be. Start with Instagram: Find a niche that will work well with Instagram and get followers. I recommend that you try small consumer goods like jewelry, stickers, etc.
Once you’ve set up your Instagram account, check out our How To Start An Etsy Shop And Grow Your First 1k Customers post which gives more info on drop shipping from Etsy accounts as well as all of our other guides related to starting an ecommerce store