If you have been studying or have interest in online business, am sure you have come across this term several times. It’s a simple term and easy to monetise.
As, ecommerce evangelist I have seen people come for my services to develop a drop shipping ecommerce website and end up not been able to manage the online store. Very few people actually understand the full process of drop shipping and how it works. What’s involved? Why do we hear about it more every year? And, most importantly, how can it help you grow your individual business?
This questions are going to guide us to learn more on the topic of drop shipping.
What is dropshipping? What are the benefits of dropshipping?
How do I find a dropshipper?
How do I choose the best dropshipper for my business?
How do I integrate dropshippers with my CMS?
What is dropshipping?
Dropshipping means shipping goods directly to your customers without storing the goods at your physical business location. Drop shipping is a business model where you send your customers’ orders to a manufacturer, wholesaler or retailer, and they send the physical products directly to your customer.
The process of sending a customers’ orders to the person with the physical product is done online manually or sometimes automated. In a drop shipping business model we have three parties in one trade: the customer (the person buying the product), the marketer (the owner of eCommerce website marketing the product the buyer is buying) and supplier (the person with the physical product). When a customer purchase a Blue Jeans from an online store (Astore.com) the owner of Astore.com forward the order with the customer detail to Supplier of the blue jeans and the blue jeans supplier send the product to the customer who purchased it. Sound complicated and long process right?
What are the benefits of dropshipping?
Dropshipping is a great business model because of its many benefits it offers those who practice it:
The ease to start. Without dropshipping starting eCommerce business would be very difficult considering a lot of factors it involves to start. For someone who has never created an online store before, getting started with drop shipping is fairly easy. You just need to find a supplier, create a website and start selling. Dropshipping have made it easy for individuals and firms with low budget to sell product from different niche and sizes online.
Low startup cost. The biggest cost to starting a retail operation is purchasing inventory to sell - you don’t have to buy any inventory. Your only expenses are the costs of creating your website and applying for a tax ID.
Very low overhead. Since you don’t own any inventory you don’t need to rent a warehouse space. Being an online store you also don’t need a physical space. Your only fixed costs are what it takes to run your website, taking into consideration advertisement and other technical services.
Large pool of product
. You’d be hard pressed to find a product that can’t be drop shipped. There are drop ship suppliers for almost anything. Lately successful online stores have started given proposal to suppliers who don’t want to drop ship but the authority of the online stores are getting them to drop ship. Today anything can be drop shipped if only you understand and master the business model. Continue Reading