One of the disadvantages when deciding to sell online is to face the initial merchandise costs to obtain an available product stock. Add to this the problems you may have to manage your logistics and distribution if you have no experience in this aspect.
For those who fail to decide to sell online due to these inconveniences, there is Drop Shipping.
What is Dropshipping?
Drop Shipping is an e-commerce method in which the wholesale supplier sends the product to the final customer. This allows you to sell products in your online store without worrying about having acquired stock (and the cost that that represents) or managing a deposit and the corresponding shipments for each purchase.
The idea is simple:
- You associate with a wholesale Shopify Dropshipping supplier that is willing to work with this modality.
- Your supplier receives your orders and shipping information, based on the purchases you receive in your Shopify store.
- Your supplier is responsible for delivering the product to the final customer.
This will make your customers receive their products without having to manage the shipments, and you can buy the merchandise as you receive purchases in your store, reducing the costs of initial stock.
Benefits of Dropshipping
1. Start selling online without buying an initial stock, significantly reducing the initial costs of setting up your online store.
2. Offer thousands of products in your store without investing in a large inventory of merchandise and making a selection between different suppliers.
3. Achieve an efficient operation of your business without having to worry about managing shipments or taking care of the logistics of a warehouse for your merchandise.
4. With the time you save on these logistics efforts, you can focus on marketing actions, customer service and get new products for your store.
5. Manage your company online, from anywhere with an internet connection.
How to get suppliers?
To use the Dropshipping mode, you must get Shopify dropshipping suppliers that work with that modality.
In general, wholesale suppliers will request commercial documentation from your company to work with you. Make sure you have a registered company, issue an invoice and pay the corresponding taxes.
Some recommendations to search for suppliers on Google:
Extensive search: In general, the wholesale suppliers that work with Dropshipping do not stand out for their knowledge of SEO and marketing, so you probably won’t find them on the first pages of the search. You must be patient and review 10-20 pages of results to find these types of providers.
Without prejudice: Generally, providers often have outdated and poorly designed sites, which does not mean they offer bad products, but on the contrary, you can find there just what you were looking for.
Variety of terms: When searching, try several terms, instead of just looking for wholesalers, try supplier, distributor, reseller and the like.
Disadvantages of Drop Shipping
Despite all the benefits mentioned above, obviously, you should consider some negative aspects of this methodology.
1. Broad competition and low-profit margins
You must keep in mind that, just as you agree to work with certain suppliers, the rest of your competitors can also do so. As a result, you probably cannot implement a competitive pricing strategy, so your margins will be reduced.
You can also go to other strategies, focusing on excellent customer service and making an exhaustive selection of products according to the concept of your brand.
2. Synchronization of inventories and sold out products
When working with a supplier in a non-exclusive way, there may be cases where some of the products you sell are out of stock, and the inventory has not been synchronized fast enough, resulting in the sale of an out-of-stock product in your store. To avoid this, the idea is to work with more than one supplier of the same product, to overlap stock and prevent products from running out.
The latter does not guarantee that the products will always be available, so you need to have an action plan in the event that a product was sold in your store that you cannot get with any supplier. You can choose to offer the buyer to send a similar product of greater value, which despite not leaving you profit margin, will serve as a loyalty action with the customer. And you always have the option of returning the money, if the client requests it.
3. Lack of product knowledge
It’s hard to sell a product you never see. This is why you should educate yourself about all the products you publish in your store, ask for details that are not clear to the supplier.
If you have some products that are frequently sold in your store, you can take advantage to buy stock units of each one and know them materially, and then sell them.
4. Delivery errors
It is possible for a supplier to make a shipping error at some time. You should consider an action plan in case this happens. Remember that, before your client, you are responsible for the delivery of the product and under no circumstances can you hold the supplier responsible for the failure to send it to your client.
From these mistakes, some extra costs may arise that you should include in your planning.
Drop Shipping is another methodology of e-commerce, it is neither the best nor the worst, and it may be suitable for some businesses and not for others. If you handle this methodology properly, you may quickly achieve the success of your online store.
How to be successful with dropshipping?
So if your goal is to improve your income through dropshipping, do not get carried away by negative comments or the experiences of others. Simply be sure to create a good plan and start with your project.
In this sense, below we want to let you know four tips that will help you to be successful with dropshipping.
Analyze the profitability of the business
First, make an account of what you are going to spend and the profits you will get. This way, you can have a much clearer idea of what you will need to make your project profitable. Second, analyze the type of niche that is related to the products you want to sell and check the sales statistics.
Know your business a little more
It is essential that before starting with your project, you know very well how the business works, how you will develop it, and how you will seek to innovate in the market to differentiate yourself from others.
Maintain a good relationship with your provider
This aspect is very important since the supplier will be your support when selling, and if you have any problems with the products, you will need to go to this to find a solution. For this reason, we advise you to advise you very well when choosing a provider and thus not have any inconvenience.
Loyalty to your customers
One of the best ways to achieve this goal is to make customers feel comfortable with the services you offer and notice that you are really worried about providing them with the best possible care. Also, try to make promotions frequently and offer special discounts to your best customers.
By implementing this or any other e-commerce methodology, you should always invest time in a marketing plan and the best customer service to achieve the success of your online Shopify store.